Thursday, October 13, 2011

TTAB Finds No Violation of Section 10 in Assignment of Intent-to-Use Application for YING YANG VODKA

IP Ownership maven Pamela Chestek, at her Property, intangible blog (here), discusses the Board's recent decision in Philip Restifo v. Power Beverages, LLC substituted for Paul Kidd (aka Ishmael Hassan), Opposition No. 91181671 (September 21, 2011) [not precedential], in which trademark ownership issues abound. The dispute grew out of discussions between Restifo and Kidd beginning in 2006 concerning the making and marketing of vodka.

This post will highlight one of the issues the Board decided: whether Kidd's assignment of his intent-to-use application to register the mark YING YANG VODKA & Design, shown here, for vodka to a company called Power Beverages, violated Section 10 of the Lanham Act. Kidd's business did not involve manufacturing or selling vodka, but only contemplated licensing to another for manufacturing and distribution.

Under Section 10, an ITU application may not be assigned prior to the filing of proof of use, except for an assignment to a successor to the business of the applicant, or portion thereof, to which the mark pertains, if that business is ongoing and existing.

Kidd filed his application on January 10, 2007, and recorded the assignment to Power Beverages on December 24, 2008. The question was whether Kidd had an "ongoing and existing business" that was transferred along with the intent-to-use application. The Board pointed out that Opposer Restifo had the burden of proof on the issue of whether the assignment was valid, and the Board concluded that Kidd did transfer an "ongoing and existing business."

After the relationship with opposer terminated, Mr. Kidd "brought in" a third party and, with Mr. Hills, sought to have the YING YANG VODKA branded vodka produced. Moreover, by the terms of the December 3, 2008 agreement (as incorporated into the December 12, 2008 Operating Agreement), Mr. Kidd assigned all rights he had acquired from Ying Yang Tours to Power Beverages 'upon formation' of [Power Beverages]. Finally, a review of the December 3 and 12, 2008 agreements reveals that Mr. Kidd relinquished any separate personal interest he had in the ongoing business; his remaining interest in the business thereafter was as a Member of Power Beverages, LLC.

The Board distinguished this factual scenario from that in The Clorox Co. v. Chemical Bank, 40 USPQ2d 1098 (TTAB 1996), where it was apparent from the assignment document itself that the assignee was not a successor to the business of the assignee since no assets were transferred other than the applications themselves.

TTABlog comment: As Pam Chestek suggests, owners of "zombie" trademarks should take note of this decision when contemplating an assignment of an ITU application. He or she should also note the FUNNY FACE decision [TTABlogged here] regarding challenges to the bona fides of an ITU applicant.

Text Copyright John L. Welch 2011.


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