Thursday, January 31, 2013

TTAB Vacates ROLEX No-Dilution Decision After AFP Withdraws Application During Appeal

The TTAB has vacated its precedential decision in Rolex Watch U.S.A., Inc. v. AFP Imaging Corporation, 101 USPQ2d 1188 (TTAB 2011) [TTABlogged here]. In its December 2011 decision, the Board had dismissed Rolex's dilution-by-blurring claim, concluding that Opposer had failed to prove that the applied-for mark ROLL-X for "x-ray tables for medical and dental use" would, despite an "actual association" between the marks, impair the distinctiveness of Opposer's famous ROLEX mark. And in a further ruling, the Board dismissed Rolex's claim that Applicant AFP did not have a bona fide intent to use the ROLL-X mark when it filed its application to register. Rolex appealed to the CAFC and, while the appeal was pending, applicant AFP unilaterally withdrew its application to register. The CAFC then dismissed the appeal as moot and remanded the case to "allow the Board to consider a motion to vacate its decision in the first instance, in accordance with United States Bancorp Mortgage Company v. Bonner Mall Partnership, 513 U.S. 18, 29 (1994), and for any further proceedings deemed appropriate by the Board." The Board concluded that U.S. Bancorp mandated that the Board's decision be vacated. Rolex Watch U.S.A., Inc. v. AFP Imaging Corporation, 107 USPQ2d 1626 (TTAB 2013) [re-designated as precedential, July 17, 2013].

In U.S. Bancorp, the Supreme Court held that vacature is appropriate if a decision becomes moot as a result of the unilateral actions of the prevailing party (but not when due to a voluntary act by the losing party). Here, AFP, the prevailing party before the Board, took the unilateral action of abandoning its application without Rolex's consent while Rolex's appeal was pending before the CAFC. There was no evidence that the appeal was rendered moot by any voluntary action on Rolex's part. In fact, Rolex objected to AFP's abandonment of the ROLL-X application because it deprived Rolex of its right to obtain review of the Board's adverse decision.

AFP argued (without evidentiary support) that it was “forced” to withdraw its application due to the cost of litigation, but the Board found that to be irrelevant. AFP withdrew its application without Rolex's permission, thereby mooting the appeal. Under those circumstances, U.S. Bancorp mandated that the Board's decision be vacated.

Indeed, to decide otherwise would be manifestly unfair because applicant’s unilateral abandonment of the subject application has frustrated opposer’s statutory right to seek review of a decision it believes to be incorrect. In view thereof, the Board’s decision is vacated.

The Board then entered judgment against AFP under Rule 2.135.

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Text Copyright John L. Welch 2013.


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