Wednesday, June 28, 2017

Rejecting Laches Defense, TTAB Orders Cancellation of Two Registrations for Restaurant Services

The TTAB granted this petition for cancellation of registrations for the marks BLD and BLD's for bar and restaurant services on the ground of likelihood of confusion with petitioner's common law marks BLD, in standard character and design form (below), for restaurant and catering services. Respondent asserted the affirmative defenses of laches but failed to show any specific economic prejudice resulting from the 3-year delay in filing the petition for cancellation; in any event, because confusion was inevitable the laches defense was not available. 3 Square, Inc. v. San Pasqual Casino Development Group, Inc. , Cancellation No. 92056703 (June 22, 2017) [not precedential] (Opinion by Judge Heasley).

Priority: The principal issue for the likelihood of confusion discussion was the question of priority. The earliest date respondent could rely on was August 14, 2006, the filing date of the underlying ITU application for its BLD registration. It first used the mark in 2009.

Petitioner's co-owner testified that petitioner began using its marks on July 17, 2006. A bank statement reflected revenues received from July 18-21, 2006. The Board found petitioner's evidence and testimony to be sufficient to establish priority. "The testimony of a single witness with personal knowledge of the facts may be sufficient to prove first use if it is clear, convincing, consistent, uncontradicted, and sufficiently circumstantial to convince the Board of its probative value." Circumstantial evidence corroborated petitioner's use of both the block letters BLD interchangeably with the logo form of its mark.

Respondent asserted that it had decided to open its restaurant by February 20, 2006, adopted its intended logo form on July 17, 2006, and was the first to seek and obtain registration of its marks. The Board pointed out, however, that even if Respondent chose it marks first, the first party to use its mark is the senior user.

Laches: Laches "may be defined as the neglect or delay in bringing suit to remedy an alleged wrong, which taken together with lapse of time and other circumstances, causes prejudice to the adverse party and operates as an equitable bar."

Respondent’s registration for BLD issued on December 15, 2009, and for BLD'S on Jan. 12, 2010. The petition for cancellation was filed on January 12, 2013: approximately three years and a month after the BLD registration issued, and three years and ten days after the BLD'S second registration. The first issue was whether this delay was unreasonable.

Petitioner was unaware of Respondent until the USPTO issued an office action refusing registration of petitioner's two BLD marks in mid-2012. "The most Petitioner can be charged with, then, is constructive notice of Respondent’s registrations."

The Board noted that "[c]omparable periods of time have been found insufficient to establish laches [e.g., Plymouth Cordage Company v. Solar Nitrogen Chemicals, Inc., 152 USPQ 202, 204 (TTAB 1966) (slightly less than 3 year delay not sufficient to establish laches)], or sufficient to establish laches [e.g., Ava Ruha Corp. v. Mother’s Nutritional Ctr., Inc., 113 USPQ2d 1575, 1580-81 (TTAB 2015) (a little over 3 years, 2 months], depending on theircircumstances. The different outcomes can be explained by the degree of the plaintiffs’ unreasonableness and the magnitude of the defendants’ prejudice."

Respondent claimed that it made significant marketing and advertising investments in its two BLD marks and that cancellation of its two registrations would subject it to severe economic prejudice. However, the Board pointed out, those investments concerned respondent's hotels as a whole. Respondent was unable to say what portion was expended for the BLD venues themselves. Although a "significant portion" was for restaurant services, each hotel offered nine or ten restaurant options.

Without details regarding "the specific economic prejudice uniquely suffered by cancellation of its BLD and BLD’S registrations," the Board was "unable to say that Respondent has established its affirmative defense of laches."

Moreover, when confusion is inevitable, the equitable defense of laches will not be applied because any injury to respondent is outweighed by the public interest in avoiding confusion. Here, the marks and services are identical with no geographical limitation on respondent's rights.

Therefore the Board declined to uphold the affirmative defense of laches, and it granted the petition for cancellation.

Read comments and post your comment here.

TTABlog comment: Does the laches defense conflict with the 5-year "statute of limitations" of Section 14? If a registrant aggressively invests in its mark, it may be protected from cancellation as early as three years from registration (Ava Ruha). Does that doctrine inequitably favor the big guy over the little guy?

Text Copyright John L. Welch 2017.


At 8:04 AM, Anonymous Paul Reidl said...

To me, a laches defense makes little conceptual sense in a cancellation proceeding. Here in the 9th Circuit, there is a presumption that there is no laches if the lawsuit is brought within the applicable statute of limitations period. On this theory, hard to see laches applying given the 5 year "statute of limitations in the Lanham Act.


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