Wednesday, March 18, 2009

Precedential No. 7: TTAB Okays Amended Section 18 Petition for Partial Cancellation, if Amended a Bit More

Petitioner IdeasOne sought to register its mark WELLCORPS INTERNATIONAL for dietary supplements, but was blocked by Respondent's registration of WELLCORP in standard and design form, for "consulting services in the field of healthcare." IdeasOne filed a petition for partial cancellation under Section 18, but was met with a motion to dismiss under FRCP 12(b)(6) for failure to state a claim. It amended its petition to assert a revised claim under Section 18, but again was met with a motion dismiss. This time, however, Petitioner almost got it right, and the Board allowed it another 20 days to file a second amended petition. IdeasOne, Inc. v. Nationwide Better Health, Inc., 89 USPQ2d 1952 (TTAB 2009) [precedential].

In its first amended petition, IdeasOne alleged that Respondent has never used the WELLSCORPS INTERNATIONAL mark for "dietary supplements sold to the general public." So it sought to limit the recitation in the challenged registration as follows: "consulting services in the field of health offered to employers, not including the provisions [sic] of dietary supplements." Petitioner alleged that this amendment would "obviate" any likelihood of confusion with its marks. Respondent again moved to dismiss for failure to state a claim under FRCP 12(b)(6).

The Board reviewed the requirements for Section 18 partial cancellation, as set out in Eurostar Inc. v. "Euro-Star" Reitmoden GmbH & Co., 34 USPQ2d 1266, 1271 (TTAB 1994): the petitioner must plead that the proposed restriction would avoid a likelihood of confusion and that respondent is not using its mark for the services being excluded. And the pleading must give adequate and fair notice to the other party as to the restriction being sought.

The Board found that IdeasOne had satisfied the Euro-Star requirements, except for one small problem: the language used by Petitioner for the proposed restricted recitation of services did not "comport with trademark examination practice and procedure."

Petitioner, by its proposed restriction, effectively seeks to exclude goods (dietary supplements) that are not encompassed within the scope of a registration that only includes services.

The Board helpfully provided exemplary language that would be acceptable: "consulting services in the field of health offered to employers excluding consulting services in the field of dietary supplements."

Respondent asserted that the proposed amendment was frivolous and harassing, but the Board was unmoved: "petitioner's proposed restriction to respondent's proposed registration does have a bearing on the issue of likelihood of confusion with petitioner's pleaded applications, and therefore cannot be viewed as a frivolous or harassing legal maneuver." In fact, the Board has encouraged parties to seek a restriction under Section 18 in appropriate cases:

Section 18 provides an avenue of relief for a party, for example, who faces a cited registration with the no longer permitted identification of goods “computer programs,” and believes that a restriction may serve to avoid a likelihood of confusion. Thus, in bringing the instant petition for partial cancellation, petitioner was acting in a manner entirely consistent with accepted Board practice.

Observing that it freely grants leave to amend pleadings challenged for insufficiency, the Board gave IdeasOne 20 days within which to file a second amended pleading that states a proper Section 18 claim.

TTABlog comment:
As the Board noted in footnote 5, the fate of Petitioner's claim on the merits remains for trial.

Seems like a coexistence agreement would be a wise resolution of this dispute.

Text Copyright John L. Welch 2009.


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