Wednesday, September 28, 2016

Rejecting Abandonment by Naked Licensing, TTAB Sustains 2(d) Opposition to LUCKY DILL for Restaurant Services

The Board sustained this opposition to registration of LUCKY DILL in the design form shown below, for food kiosk and restaurant services, finding it likely to cause confusion with Opposer's common law mark LUCKY DILL and THE LUCKY DILL for restaurant services. Applicant asserted that opposer abandoned its mark through naked licensing, but the fact that LUCKY DILL continues to identify opposer negated any inference of abandonment. CB Specialists, Inc. v. Central Avenue Deli, LLC d/b/a Lucky Dill Deli, Opposition No. 91212366 (September 26, 2016) [not precedential].

The Mitow family opened the first LUCKY DILL restaurant in the Tampa area in 1991. Jason Mitow, son of the founder, opened three more LUCKY DILL restaurants. Applicant operates a restaurant on Central Avenue in St. Petersburg, which it purchased in 2008 as an ongoing business, under the name "Lucky Dill Deli."

Applicant contended that opposer abandoned its rights in the name LUCKY DILL by allowing Jason Mitow and then subsequent purchasers of his three restaurants to continue to use the name without quality control. The Board, however, found that Jason opened the three restaurants with the implicit consent of opposer, and that a license can be implied. Opposer relied on Jason to control the quality of the goods and services offered.

Jason was trained by his parents to run a restaurant. His mother developed standards that Jason followed. She knew Jason was using the marks, she was familiar with and visited the restaurants, and she taste-tested menu items and gave her approval.

While there was no formal system of quality control over the restaurants opened by Jason, an inference of abandonment is not drawn if satisfactory quality has been maintained such that no deception of purchasers has occurred.

The next question was whether, after Jason sold his three restaurants, opposer engaged in naked licensing with the subsequent owners, resulting in the abandonment of the LUCKY DILL mark. Applicant contended that opposer and two unrelated parties operated restaurants within 30 miles of each other under the name "Lucky Dill."

The Board, however, found that because LUCKY DILL continues to identify opposer as one of the sources of the restaurant services, opposer has not abandoned its mark. "[A] mark becomes abandoned only when the mark loses all significance as an indication of origin in the mark holder, not merely because it  may longer be viewed as indicating only the mark holder as a single source."

Moreover, unrestricted rights to use the LUCKY DILL name were not necessarily transferred with the sale of the business to applicant. Opposer did not give Jason the right to sell the name. Moreover, the mark involved in this proceeding is different from the name "The Lucky Dill Deli," which applicant received with its purchase of the restaurant in 2008. Applicant purchased only the rights to that trade name at one location. In 2008, the other two "Lucky Dill" restaurants that Jason sold were out of business.

[R]egardless of whether Applicant may have a right to use the Lucky Dill name at its location, the fact that LUCKY DILL continues to identify Opposer as one of the sources of the restaurant services, negates any inference of abandonment.

Turning to the Section 2(d) issue, the Board found that opposer has priority, that the services are identical in part, and that the marks are very similar.

And so the Board sustained the opposition.

Read comments and post your comment here.

TTABlog comment: Just what rights does Applicant own in "Lucky Dill Deli"? Will applicant oppose opposer's pending application, filed in 2013? On what ground(s)? Did you notice that I showed great restraint in not using the word "pickle" to describe applicant's predicament?

Text Copyright John L. Welch 2016.


At 8:19 AM, Blogger Brad Salai said...

So you need naked licensing, and the naked licensing has to destroy the distinctiveness of the Licensor's mark, or there is no abandonment. I've always thought that the naked licensing alone or even the failure to actually control quality even if an agreement permitted it, were enough to constitute abandonment, and I've advised clients in family owned businesses with lots of restaurants operated independently by family members, that they ought to have licenses, and actually do enough to ensure that quality is maintained, to protect themselves. The idea that if the Licensee maintains quality, whether or not the Licensor has the right and actually does police quality, that is enough is a new concept to me.
Seems like the board modified the law to achieve what it thought was a just result.
Hard cases make bad law.

At 9:25 AM, Blogger John L. Welch said...

Well, at least it's not precedential.

At 9:32 AM, Anonymous Anonymous said...

The board found itself in a pickle.


Post a Comment

<< Home