Wednesday, April 24, 2013

TTAB Dismisses YENKO Cancellation Petition, Finding Laches Based On 14-Year Delay

Terri Yenko Gould, executor of the estate of Donald Frank Yenko, petitioned to cancel a registration for the mark YENKO for toy cars, alleging that the mark falsely suggests a connection with the Estate and heirs of Don Yenko, in violation of Section 2(a), and that Respondent violated Section 14(3) by misrepresenting the source of its goods. The Board ruled that Gould failed to prove either claim, and further that laches, based on a 14-year delay in bringing the petition for cancellation, barred her claims. Terri Yenko Gould v. General Marketing Capital, Inc. and Supercar Collectibles Limited, Cancellation No. 92052197 (March 26, 2013) [not precedential].

From the mid-1960s to 1981, Mr. Yenko designed, modified and sold approximately 800 high-performance Chevrolet automobiles, a so-called “muscle car.” He produced his last vehicle in 1981, and made no effort thereafter to support replacement parts, memorabilia, etc. In 1987, Mr. Yenko was killed in a plane crash, and his businesses were closed and liquidated. Mr. Yenko’s estate documents listed no trademarks as assets, and claimed that Yenko Sportscars, Inc. had no value.

In the mid-1990’s, Respondent’s predecessor recognized an unserved market for scale models of YENKO Chevrolets and, believing Mr. Yenko had abandoned his trademark, began use of the
Mark in connection with model cars. It obtained the involved registration in 1997. Over the years, Respondent and its predecessor developed and sold over 20 different scale models of YENKO Chevrolets and licensed them to several companies.

Standing: With respect to the Section 2(a) ground for cancellation, petitioner is not required to prove proprietary rights in her name for standing purposes; even the owner of an abandoned mark (as here) may have standing to raise this claim.

Abandonment: In finding abandonment, the Board considered the nature of petitioner’s goods. It acknowledge that certain automobiles are long-lasting products, and that the goodwill value of a mark used for certain automobiles may persist long after production of automobiles with that mark has ceased

Here, however, the period of more than three decades of nonuse on automobiles presented a persuasive case for abandonment. Petitioner's predecessor, Donald Yenko, discontinued use in 1981 and abandoned the mark with intent not to resume such use. "[T]here is not a single statement or document indicating that petitioner ever had an intention to resume use of the mark on cars or for that matter, on any other product or service."

Section 14(3): In order to prevail on this claim, Petitioner must show that Respondent took steps to deliberately pass off its goods as those of Petitioner: i.w, Petitioner must establish "blatant misuse of the mark by respondent in a manner calculated to trade on the goodwill and reputation of petitioner."

Petitioner’s proofs fell far short. "Respondent and its predecessor SCL took adequate steps, prior to adopting the mark YENKO for toy cars in 1996, to confirm that any prior rights in the mark had been abandoned. Indeed, as indicated above, petitioner’s mark was abandoned at that time." Therefore, there could be no deliberate misrepresentation of the source of respondent’s products, blatant misuse of the mark, or conduct amounting to the deliberate passing-off.

Section 2(a): The critical date for determining this claim is the date of issuance of Respondent's registration, April 1997. Again, Petitioner's proofs fell well short of the mark. There is insufficient proof that the mark YENKO, in April 1997, pointed uniquely and unmistakably to the Donald Yenko, and that the Yenko name was of sufficient fame or reputation so that, when the mark YENKO was used on toy cars in 1997, a connection with petitioner was presumed.

Although Yenko Chevrolets may be quite valuable today, there is little in the record to show that Mr. Yenko or his estate took any action to perpetuate his alleged fame and reputation after production ceased in 1981, and after Mr. Yenko’s death in 1987

Laches: To prove the defense of laches, one must show (1) unreasonable delay in assertion of one’s rights against another; and (2) material prejudice to another attributable to that delay.

Petitioner is charged with constructive notice of the challenged registration dating back to 1996, when Respondent's application was published for opposition. The record established that petitioner had actual notice of respondent’s use in 1998 when Yenko family members attended the first annual car reunion at which Respondent had a vendor booth selling its toy cars.

The petition for cancellation was filed on March 11, 2010. The delay in taking action against the involved registration dates from March 5, 1996 to March 11, 2010, a period of fourteen years. Petitioner failed to explain the reason for this delay and inaction.

The Board found that respondent’s business grew during the fourteen years of inaction, and that respondent and its predecessor expended time, effort and money in building their business under the YENKO mark. Respondent continued to use and invest in the mark YENKO, expanding its business and obtaining registrations along the way. Respondent thereby created a valuable business and goodwill under the mark YENKO while Petitioner remained silent. The Board therefore concluded that Respondent suffered economic prejudice during period of delay, and that Respondent had established the affirmative defense of laches.

Morehouse defense: Once again, the Morehouse defense failed because the goods identified in the involved registration and the goods identified in Respondent’s other registrations are not the same or substantially identical goods.

Read comments and post your comments here.

TTABlog comment: There is no more useless doctrine than the Morehouse defense. It only applies when the marks and goods/services are the same or substantially identical, in which case why do you need the defense at all if all you are looking at is a possible duplicate registration?

Text Copyright John L. Welch 2013.


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