Monday, July 27, 2009

Precedential No. 30: TTAB Okays Warranty Services for Applicant's Goods Sold Under Third-Party Marks

The Board reversed a refusal to register the service mark HOP for "providing warranties to consumers and retailers on power-operated outdoor products, namely, power-operated chainsaws, edgers, ...." The Examining Attorney maintained that warranting one’s own products is an activity that is merely incidental or ancillary to the sale of the goods, and therefore is not a service within the meaning of the Trademark Act. Applicant Husqvarna, however, convinced the Board that its warranty services involve not only its own goods, but also goods sold through third parties under their marks. In re Husqvarna Aktiebolag, 91 USPQ2d 1436 (TTAB 2009) [precedential].

The question on appeal, then, was "whether applicant's activities, as set forth in its identification of services, constitute a service for which a service mark registration may be issued." The criteria for making this determination are now set out in Section 1301.01(a) of the TMEP: "(1) a service must be a real activity; (2) a service must be performed to the order of, or for the benefit of, someone other than the applicant; and (3) the activity performed must be qualitatively different from anything necessarily done in connection with the sale of the applicant’s goods or the performance of another service."

The Board noted the general rule stated in In re Sun Valley Waterbeds, Inc., 7 USPQ2d 1825 (TTAB 1988):

With respect to those cases which pertain to warranties, the general rule which emerges is that guaranteeing or warranting the performance of the goods of one's own manufacture is not normally considered a service within the contemplation of the Lanham Act unless, for example, the guaranty is offered or charged for separately from the goods, or is sufficiently above and beyond what is normally expected so that the warranty is raised to the status of a separate service activity.

Applicant Husqvarna explained that some of the products it manufactures are sold under its HUSQVARNA trademark, but others may be sold under the marks of third-parties (e.g. CRAFTSMAN products from Sears). Other than the HOP mark that identifies the warranty services, Applicant's trademarks do not appear on the goods. And so, Applicant urged, the consumer would regard the third-party seller as the manufacturer of the product, not Applicant. Thus "the provider of the service is different from the entity identified as selling the product to the consuming public."

The Board accepted Applicant's distinction:

Because purchasers would make a distinction between the provider of the warranty and the provider of the goods, the warranty services are not merely ancillary to the sale of the goods. Just as the sources of the goods and the warranty would be understood to be separate, the warranty services would be viewed as separate and distinct as well, and not as merely incidental to the sale of the goods.

Husqvarna also identified retailers as the beneficiaries of its services, including companies for whom it private-labels goods, the retailers then selling the goods under their own brands. These retailers would know that Applicant is the source of both the goods and the warranty services, so the distinction above would not apply. However, Husqvarna handles the warranty claims, provides a call-in center, settles claims with consumers, and provides support to the consuming public. Since these activities avoid the need for the retailers to provide a warranty, they constitute a service that applicant renders to retailers.

And so the Board reversed the refusal to register.

TTABlog note: This was an I-T-U application and the Board observed that "if the specimens applicant submits with its statement of use fail to show that the mark is used for services as described by applicant, it would be appropriate for the examining attorney, at the time he examines the statement of use, to refuse registration on this basis."

TTABlog comment: Maybe the Board should have affirmed unless Applicant amended its recitation of services to state that the services are rendered in connection with goods sold by others without using a trademark of Applicant?

Text Copyright John L. Welch 2009.


At 11:05 AM, Anonymous Anonymous said...

So how could Husqvarna have registered it if the services were for only its own products? For the goods themselves? Wouldn't that have been refused?

At 7:33 PM, Anonymous JLHDEA said...

Yes, that's the point and distinction. If the warranty is standard issue, e.g. on a Husqvarna product and provided/serviced by Husqvarna, then registration is refused. Here, however, Husqvarna provides a warranty program for, say, Sears, on, say, a Craftsman chainsaw. Since they are providing a warranty service on goods of others for others, then its a registrable service like any other.

At 10:36 AM, Anonymous Anonymous said...

But if I filed the application for chain saws, and provided a specimen that described warranty services for chain saws (albeit my own), it would be refused. It is a mark, though, so it should be registrable somehow, shouldn't it?

At 4:16 PM, Anonymous TM said...

This was a bad decision. Husqvarna was not providing a warranty on Craftsman goods. They were admittedly providing a standard warranty on their own goods. They were merely allowing Sears to label them. A warranty on one's own goods is not a service because it is not qualitatively different from anything necessarily done in connection with the goods. The UCC requires a warranty on the goods by the manufacturer, so this warranty was necessary. So whether consumer mistake who manufactured the goods should not be relevant. A poor decision without legal or evidentiary support.


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