In Second Stage of Cancellation Proceeding, TTAB Deems RASCAL HOUSE Abandoned for Restaurant Services

The parties to this cancellation proceeding opted to litigate the case under the Accelerated Case Resolution (ACR) regime. In accordance with the parties' stipulation, the case was divided into two stages, the first stage addressing the issue of whether Respondent Jerry's Famous Deli had ceased use of the registered marks RASCAL HOUSE, WOLFIE COHEN’S RASCAL HOUSE, and the word-and-design mark shown below, for restaurant services. The Board concluded that Jerry's had indeed stopped using the mark for a period of more than three years. [TTABlogged here]. In this second stage, the Board concluded that Jerry's failed to prove an intent to resume use that would avoid a finding that the marks were abandoned. Rascal House, Inc. v. Jerry’s Famous Deli, Inc., Cancellation Nos. 92075125, 92075180, and 92075185 (September 30, 2024) [not precedential] (Opinion by Judge David K. Heasley).

Section 45 of the Trademark Act provides that a mark shall be deemed abandoned: (1) When its use has been discontinued with intent not to resume such use. Intent not to resume may be inferred from circumstances. Nonuse for three consecutive years shall be prima facie evidence of abandonment. 

The proof that Respondent Jerry's failed to use the marks for a period of more than three years established a prima facie case of abandonment. The burden of production then shifted to Jerry's to rebut that presumption by submitting evidence of its intent to resume use. The burden of persuasion, however, remained with the petitioner.

“To prove excusable nonuse,” the Federal Circuit states, “the registrant must produce evidence showing that, under his particular circumstances, his activities are those that a reasonable business[], who had a bona fide intent to use the mark in United States commerce, would have undertaken.” “The intent must be to resume use of the mark within the reasonably foreseeable future once the reason for suspension abates.”

Respondent's president declared that his company always intended to resume use, but if a mere declaration of intent were enough to avoid abandonment, then no mark would ever be abandoned. Respondent also pointed to the display of the marks on menus and signage at its other establishments, but that was not probative:

Respondent may have continued to display the RASCAL HOUSE marks at its other establishments, along with other marks (such as PUMPERNIKS, a brand under which Respondent never provided services) because it wanted the residual goodwill that might emanate from those brands. But “residual goodwill does not negate a finding of abandonment based on nonuse.” * * * [T]hey do not reflect present use in commerce, much less intent to resume use.

Respondent established no special external circumstances that compelled it to cease using the RASCAL HOUSE marks.

Respondent’s evidence falls far short of establishing intent to resume use. Its evidence shows an intent to continue use of other marks, such as EPICURE or JERRY’S FAMOUS DELI, but not the RASCAL HOUSE marks. Respondent’s testimony relies exclusively on party witnesses, its president and former president, with no corroboration from nonparty witnesses or documentation focusing on the RASCAL HOUSE marks. 

Respondent’s evidence showed only "vague, desultory communications concerning potential use of some marks, not serious, sustained efforts directed toward execution of lease agreements for RASCAL HOUSE restaurants." "Importantly, Respondent’s efforts, feeble as they were, did not take place until 2014, six years after the RASCAL HOUSE restaurants closed in 2008."

Finally, Respondent's recent post-cancellation efforts to resurrect the RASCAL HOUSE marks, which took place in 2023, constituted "a new and separate use that does not cure the abandonment."

Read comments and post your comment here.

TTABlogger comment: Bifurcation worked well here. You may recall that earlier this month, the Board bifurcated the VELCRO case into two stages: entitlement to a statutory action, and genericness. [TTABlogged here].

Text Copyright John L. Welch 2024.