Friday, October 06, 2017

Precedential No. 31: TTAB Dismisses Section 2(d) Claim Due to Lack of Use of Opposer's Foreign Mark in USA

Because opposer failed to allege use of her mark SULBING in the United States, the Board dismissed her claim of likelihood of confusion under Section 2(d). The Board observed that the "well known mark" doctrine does not provide a basis for a Section 2(d) claim, nor does the United States-Korea Free Trade Agreement. However, opposer's claim that the opposed application was void ab initio due to non-use survived the motion to dismiss. Sun Hee Jung v. Magic Snow, LLC, 124 USPQ2d 1041 (TTAB 2017) [precedential].

Opposer Sun Hee Jung alleged, in a second amended notice of opposition, that she filed applications with the USPTO to register her marks (containing the word SULBING) under Sections 1(b) or 66(a) of the Trademark Act, and that her marks had become famous to Korea-Americans in the United States and had acquired secondary meaning by means of her website, social media, and persons traveling between Korea and this country. However, she did not allege that her marks were in use in the United States. [Note: her applications were filed after applicant's filing date, and so the applications could not provide priority].

Section 2(d) expressly requires that an opposer establish either a mark registered in the United States or "a mark or trade name previously used in the United States." Opposer was relying on the so-called "well-known mark" doctrine, under which "a party asserts that its mark, while yet unused in the United States, has become so well known here that it may not be registered by another." Fiat Grp. Autos. S.p.A. v. ISM Inc.,  94 USPQ2d 1111, 1113 (TTAB 2010).

The Board pointed out, however, that this doctrine "provides no basis for a Section 2(d) ground for opposition because it does not establish use of the mark in the United States as required by the statutory language of the section." See Bayer Consumer Care AG v. Belmora LLC, 90 USPQ2d1587, 1592 n.4 (TTAB 2009). The Board does not recognize the well known marks doctrine as a basis for establishing priority in inter partes proceedings, and so opposer's pleading of priority under Section 2(d) was insufficient.

The Board therefore dismissed the Section 2(d) claim with prejudice, observing that further attempts to plead the claim would be futile.

Opposer also invoked the United States-Korea Free Trade Agreement ("KORUS"), but it was not clear whether she meant to assert an independent cause of action, or whether this was part of her claim of priority and likelihood of confusion under the "well known mark" doctrine. In any event, KORUS (like the Paris Convention) is not self-executing and does not provide an independent cause of action in Board proceedings. If KORUS was invoked in support of opposer's Section 2(d) claim, it failed, for the reasons discussed above, to establish priority.

Finally, turning to opposer's non-use claim, the Board observed that an application may be opposed on the basis that the mark was not in use in commerce on the identified goods or services at the time that the use-based application was filed, or at the time an allegation of use was filed in a Section 1(b) application.

Opposer Sun alleged that applicant Magic Snow had only one store, located in Virginia, at the time it filed its allegation of use, that applicant's sales were made in person to individuals at its store, and that such use was not in regulable commerce: i.e., applicant's use was intrastate and not in "commerce" as defined by the Trademark Act.

The Board, however, pointed out that goods need not cross state lines in order that Congress may regulate that activity under the Commerce Clause. Christian Fellowship Church v. adidas AG, 120 USPQ2d 1640, 1646 (Fed. Cir. 2016). Similarly, services need not be rendered in more than one state to satisfy the use-in-commerce requirement. Larry Harmon Pictures Corp. v. Williams Restaurant Corp., 18 USPQ2d 1292, 1295 (Fed. Cir.  1991).

Although Opposer alleged that Magic Snow's services are limited to intrastate commerce, she failed to allege that "Applicant's rendering of its services, in the aggregate, does not have an effect on commerce that is regulable by Congress." Therefore, the Board found that opposer had failed to adequately plead her non-use claim, and it granted the motion to dismiss.

However, the Board allowed opposer twenty days within which to re-plead her non-use claim.

Read comments and post your comment here.

TTABlog comment: Does opposer have a claim under Section 43(a)? The Fourth Circuit ruled that Bayer had such a claim even though its mark FLANAX is not used in the United States.

BTW, even if properly pleaded, opposer's non-use claim seems doomed to failure on the merits. What do you think?

Text Copyright John L. Welch 2017.


At 12:03 PM, Anonymous Anonymous said...

FWIW, the USPTO's information page on well-known marks states:

"The USPTO will refuse registration of, or a third party may seek to oppose or cancel, a mark that conflicts with registered or unregistered well-known marks, foreign or domestic, that meet the test under Lanham Act §2(a) and (d)."

Obviously, this isn't law, but if the USPTO won't deny registration based on an unregistered foreign mark, the page at least seems incorrect.

At 2:38 PM, Anonymous Anonymous said...

Isn't this statement from the case inaccurate to the extent it says a 1(b) "application" can be challenged if there was no use in commerce as of the SoU date?

Wouldn't it have to be a "registration" issued from a 1(b) application since the opposition period is over when the NoA issues?

At 9:11 AM, Anonymous Anne Gilson LaLonde said...

Another error -- The opinion says "Opposer has alleged that her pleaded marks were recognized in the United States prior to the filing of Applicant's application but she has not alleged use prior to that date in commerce that may be regulated by the U.S. Congress."

But to make a claim under Section 2(d), the opposer only needs to have used the mark in the U.S., not used it "in commerce." E.g., First Niagara Ins. Brokers, Inc. v. First Niagara Fin. Grp., Inc., 476 F.3d 867, 870–71 (Fed. Cir. 2007) (reversing a Board opinion that had erroneously held that an opposer could only succeed if it had used its marks in connection with commerce “lawfully regulated by Congress,” when the proper standard requires the opposer’s marks merely to have been “used in the United States”).


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