Monday, March 16, 2009

Carroll Shelby's Cobra Design Marks Survive Feeble TTAB Challenge

Unique Motors spent more than seven years on the TTAB track, but got nowhere in its oppositions to registration of the product configuration marks shown below, for automobiles. Unique, a maker of replica Cobra vehicles, pleaded lack of acquired distinctiveness, abandonment, genericness, and fraud, but it made a big mistake: Unique failed to submit any admissible evidence during its testimony period. Unique Motorcars v. Carroll Hall Shelby Trust, Oppositions No. 91150352 and 91155242 (March 4, 2009) [not precedential].

Unique did submit one item of evidence during its testimony period: a discovery deposition of its own witness. That was plainly improper, and the deposition was stricken on Shelby's motion. Shelby could then have moved for judgment based upon Unique's failure to present a prima facie case [TTABlog query: why couldn't the Board just pull the plug right there?], but instead Shelby decided to proceed with its case. An evidentiary carwreck ensued.

Shelby submitted thousands of pages of evidence by way of notice of reliance, but none of its was appropriate for such a notice. However, Unique did not object to admissibility, and in fact relied on much of Shelby's evidence in its own briefs. Nor did Unique object to evidence Shelby submitted after Unique had filed its main brief. So the Board chose to consider all of Shelby's evidence.

Unique did submit evidence with a rebuttal notice of reliance, some of which was excluded in response to Shelby's objection, as was evidence submitted for the first time with Unique's main brief.

Acquired Distinctiveness: Because Shelby sought to register its designs under Section 2(f), Opposer Unique had the initial burden of coming forward with evidence challenging or rebutting Shelby's 2(f) evidence. If that initial burden were met, the ultimate burden of proof would shift to Shelby. However, Unique failed to meet this initial burden because all its evidence submitted during its testimony period had been stricken. End of story.

Abandonment: Unique argued that because Shelby had stopped making its automobiles from 1970 to 1990, the subject marks had been abandoned. However, Shelby's uncontroverted testimony established that since 1989 he has been building and selling his Cobra 427s. Since priority is not in issue here (there was no Section 2(d) claim), Shelby's purported abandonment of the marks for 20 years is irrelevant here.

Genericness: Unique contended that dozens of automobile manufacturers have made and sold replicas of Shelby's designs, without control by or permission of Shelby. The Board noted the paucity of its precedents on the issue of genericness of designs. However, the CAFC and other courts have recognized such a claim for common, non source-identifying designs.

Unique's witness testified that in 2006 there were 25 to 26 Cobra replica builders in the United States, that such companies go in and out of business over the years, and that his company had sold about 300 replicas. The Board, however, found the evidence insufficient to show that these designs "are so common in the industry that they cannot be said to identify a particular source."

At a minimum, the evidence does not reflect when the third-party manufacturers sold their replicas, how many they sold or the market share of opposer and the third-party manufacturers. Without such evidence, we cannot conclude that the configurations are generic.

As to Shelby's alleged failure to police infringers, the Board noted that "complete failure to police the product design is evidence that a product configuration is generic." For this discussion, the Board assumed arguendo that there are third-party manufacturers "with more than a minor market share."

Mr. Shelby testified that he sent six to eight letters to replica manufacturers beginning in 1990, and that Shelby's counsel sent three letters in 2008. In addition, Shelby commenced two legal proceedings involving its product configurations. The Board therefore accepted that "Mr. Shelby had made some effort to protect the configurations which are identified in the subject applications. This evidence of policing favors applicant and weighs against opposer's claim that the configurations are generic."

The Board concluded that Unique had failed to meet its burden to prove genericness by a preponderance of the evidence.

Fraud: Unique failed to discuss its fraud claim in its brief, so the Board deemed it waived.

Finally, in its brief, Unique trotted out three unpleaded claims, two of which were the subject of some evidence: res judicata and laches.

Res Judicata: Unique argued that the Board is bound by a 2002 decision of the U.S. District Court for the District of Massachusetts, in which the court dismissed Shelby's trade dress claims on summary judgment because Shelby had failed to prove acquired distinctiveness.

The Board ruled that res judicata (claim preclusion) does not apply here because the issue of acquired distinctiveness in the Massachusetts case is not the same as that in this proceeding: first, the court did not apply the same burdens of persuasion as are applicable here; and second, "acquired distinctiveness must be considered in view of the facts that exist at the time registrability is being considered." In short, "facts based on events occurring subsequent to the filing date of the application may be considered."

Laches: Unique argued that Shelby was guilty of laches due to its delay in seeking to register the marks. The Board, however, pointed out that laches is an affirmative defense, not a ground for opposition.

And so, the Board dismissed the oppositions.

TTABlog comment: It seems that Unique's best claim, lack of acquired distinctiveness, was simply thrown out the window by its failure to gets its evidence into the record at the right time.

Suppose Unique were to seek review of this decision by way of civil action under 15 U.S.C. Section 1071(b), and it submitted its evidence during its case-in-chief? Different story?

Text Copyright John L. Welch 2009.


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