Tuesday, July 16, 2013

Sale to Single Foreign Customer Sufficient for Priority, Says TTAB

The Board granted a Section 2(d) petition for cancellation of a registration for the mark ULTRACLEAN for "raw cotton," finding it likely to cause confusion with the previously-used, identical mark for "specially cleaned raw cotton." On the crucial issue of priority, petitioner proved that it shipped its products to a customer in Israel before respondent's earliest first-use date (its filing date). Barnhardt Manufacturing Company v.Wildwood Gin, Inc., Cancellation No. 92053237 (June 17, 2013) [not precedential].

Respondent did not question the distinctiveness of the ULTRACLEAN mark, and so the Board found  the mark to be distinctive. Petitioner submitted three invoices showing sales of its product, the invoices bearing the ULTRA-CLEAN mark, [The hyphen was deemed immaterial - ed.] and respondent admitted that the goods were shipped in three separate shipments in December 2006. The earliest date on which respondent could rely was May 9, 2008, the filing date of the application that issued as the subject registration.

Respondent pointed to the lack of evidence that petitioner's goods were labeled with the mark, but petitioner's testimony established that the packaging for the goods was so labeled, and it provided a label of the type that had been used.

Respondent also claimed that the sale to a single, foreign customer did not demonstrate such "market penetration" as would suffice for establishment of trademark rights, but instead constituted a mere "token use." The Board, however, noted petitioner's lack of cited authority for the proposition that a single sale is not sufficient to establish priority. Instead the Board pointed out that petitioner's shipment of product to a company in Israel "was clearly a sale of product in commerce," which satisfies the definition of "use" in Section 45 of the Trademark Act.

The "market penetration" test applies in the concurrent use context, for the purpose of determining the geographic extent of common law rights; it does not apply here. "Our precedent does not require use in commerce or any particular degree of market penetration in order to establish priority." Petitioner needed to show only that it made a bona fide use of the mark in the ordinary course of trade, and not merely to reserve a right in the mark. Here, there was an arms-length, legitimate commercial transaction, and nothing suggested that the transaction was not genuine.

Respondent also argued that petitioner's use of the mark was not continuous. The Board observed, however, that a party is required to show only prior use to establish priority, absent a claim of abandonment. Respondent made no such claim, and in any event, the non-use by petitioner was less than three years.

And so the Board ruled that petitioner established priority by a preponderance of the evidence, and it granted the petition for cancellation.

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Text Copyright John L. Welch 2013.


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