Wednesday, May 02, 2018

Precedential No. 15: Laches Dooms Petition to Cancel TRAILERTRADERS.COM Supplemental Registration

The Board dismissed this petition for cancellation of a Supplemental Registration for the mark TRAILERTRADERS.COM, in standard character form, for advertising and informational services in the field of trailers, ruling that petitioner unreasonably delayed for more than four years before filing the petition, and finding that petitioner could not prove that confusion was inevitable between respondent's mark and its alleged but unproven family of "-TRADER" marks. TPI Holdings, Inc. v., LLC and Trailer Central LLC, 126 USPQ2d 1409 (TTAB 2018) [precedential] (Opinion by Judge Thomas W. Wellington).

The defense of laches requires that the defendant prove two elements: "(1) unreasonable delay in assertion of one’s rights against another; and (2) material prejudice to the latter attributable to the delay." See Lincoln Logs Ltd. v. Lincoln Pre-Cut Logs Homes Inc., 971 F.2d 732, 23 USPQ2d 1701, 1703 (Fed. Cir. 1992).

Delay: In measuring the period of delay, the Board recognized that there are important differences between registrations on the Supplemental Register and those on the Principal Register. Applications for registration on the Supplemental Register are not published for opposition and, although the issuance of a registration on the Supplemental Register is published in the Official Gazette, this does not give constructive notice of a claim of rights in the mark. Loma Linda Food Co. v. Thompson & Taylor Spice Co., 279 F.2d 522, 126 USPQ 261, 263 (CCPA 1960); see Section 26 of the Trademark Act.

Therefore, in the present case, one must look to the date when Petitioner first had actual notice of the issuance of the Supplemental Registration. Here, the challenged registration issued on October 23, 2012, and Petitioner admitted that its counsel received notice of the registration on or about October 29, 2012. Therefore, the date that laches began to run was October 29, 2012. This cancellation proceeding was commenced on December 8, 2016, more than four years later, a period of delay that is "within the realm of time found to be sufficient for purposes of laches." See Ava Ruha Corp., 113 USPQ2d at 1580-81 (three years and two months); Teledyne Tech. Inc. v. Western Skyways Inc., 78 USPQ2d at 1211 (more than three and one-half years).

The Board found, in view of the record evidence, that it was unreasonable for Petitioner to hold off as long it did before filing the petition to cancel. Petitioner admittedly had actual knowledge of Respondent’s filing of the underlying application as early as December 2010, and sent a cease-and-desist letter in April 2011 alleging likelihood of confusion and acknowledging the existence of Respondent's website. Respondent's reply made it clear that it would not comply with Petitioner's demands for a cessation of use. Petitioner's asserted excuses for its subsequent delay had little or no merit, or were unsubstantiated.

Prejudice: The Board found that respondent and its predecessor "made significant efforts to grow their businesses, which are based in large part on the website and the mark
TRAILERTRADERS.COM." Consequently, cancellation of respondent’s registration would result in severe economic prejudice.

Therefore, the Board found merit in respondent's laches defense. However, laches cannot serve as a bar to a Section 2(d) claim when confusion is, in fact, inevitable. In such a case, injury to the respondent is outweighed by the public’s interest in preventing confusion. See, e.g., Ultra-White Co. v. Johnson Chem. Indus., Inc., 465 F.2d 891, 175 USPQ 166, 167 (CCPA 1972).

Inevitable Confusion: Generally, in cases where confusion is found to be inevitable, the marks and goods/services are identical or nearly so. The Board applied the du Pont factors in assessing the inevitability of confusion.

Rather than rely on any individual mark, petitioner relied on an alleged family of TRADER marks for "classified advertising listing services for vehicles and vehicle-related equipment," contending that Respondent's mark is "confusingly similar to the TRADER family of marks in that it also consists of a vehicle/category followed by the term 'TRADER.'" Petitioner therefore had the burden to prove priority by showing that it established a "-TRADER" family of marks before respondent's first use date (July 2010).

To establish a family of marks, Petitioner had to prove three elements:

(1) prior use of marks that share the common characteristic (the TRADER family “surname”); (2) the common characteristic, the –TRADER formative, is distinctive and not highly descriptive or suggestive and is not so commonly used as not to constitute a distinguishing feature; and (3) prior to July 2010, Respondent’s first use of its mark, Petitioner’s marks were used in advertising or sales so as to create common exposure to and recognition by purchasers of the common characteristic as indicating origin. Wise F & I, LLC v. Allstate Ins. Co., 120 USPQ2d 1103, 1109 (TTAB 2016) (citing Truescents, 81 USPQ2d at 1337-38).

As to the first and third elements, the record evidence showed that since the 1970s,  petitioner has used various -TRADER marks in connection with print publications. As early as 1996, it expanded to websites, using similar mastheads for both its print and online publications, and it launched a TRADER ONLINE website highlighting the different publications. Sales of its publications have been substantial and impressive: from 2007 to 2012 revenues exceeded $500 million. By 2005, petitioner's various websites were averaging 30 million hits per month. It spent $250 million on advertising between 2000 and 2005.

The second element, however, proved to be Petitioner's downfall. "A term cannot serve as a separate, distinctive family element if it is descriptive or highly suggestive and commonly adopted by others." The evidence revealed that numerous third parties have adopted -TRADER formative marks preceded by generic or descriptive terms, in connection with the sale or advertisement of various types of goods. Respondent provided copies of 67 live, third-party registrations for such marks, accompanied by printouts or photographs showing use of the marks. In addition, other third-party, unregistered -TRADER marks were shown to be in use.

The Board observed that the term "trader" is inherently weak, and perhaps descriptive, in this context. Indeed, "the weakness is accentuated when it is preceded by terms that are descriptive or generic for the particular type or field of goods being offered for sale." In view of the third-party "-TRADER" formative marks, this case is similar to Juice Generation, in which evidence of widespread third-party formative marks was "powerful" evidence of weakness, even without evidence of the extent of use.

The Board concluded that -TRADER formative marks are so commonly used that the shared element -TRADER does not constitute a distinguishing feature, and therefore Petitioner cannot claim a family of marks based on this common element. Consequently, Petitioner's claim of likelihood of confusion could not succeed.

The question of inevitable confusion was therefore moot, but the Board noted that even if it had found that Petitioner had established prior rights in a family of marks, it did not find confusion inevitable. This conclusion was based on the weakness of the -TRADER formative marks, the numerous third-party uses, and the lack of actual confusion despite more than seven years of coexistence of respondent's mark and petitioner's marks.

Conclusion: Petitioner's Section 2(d) claim was barred by the doctrine of laches, and the petition for cancellation was therefore denied.

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TTABlog comment: The Supreme Court has held that laches does not apply to patent or copyright damages because there is a stated "statute of limitations" in the Patent Statute and in the Copyright Act. What about the Trademark Act's 5-year statute of limitations in Section 14? Is laches an appropriate defense to a Section 2(d) cancellation claim brought within 5 years of registration? Maybe equitable estoppel applies, but laches? HOLD IT! See Section 20 of the Trademark Act: "In all inter partes proceedings equitable principles of laches, estoppel, and acquiescence, where applicable, may be considered and applied." [Hat tip to Anonymous].

Text Copyright John L. Welch 2018.


At 11:30 AM, Anonymous Anonymous said...

I would think that TM law is different because Congress, in 15 USC 1069, specifically authorized laches as a defense in inter partes proceedings.

At 3:29 PM, Anonymous Anonymous said...

As a consumer, I've got to say I think the Board got it wrong here based on my consumer survey of one. I don't know what evidence the petitioner had to support its family claim, but I always assume all the -trader publications are from the same source. If I saw TRAILERTRADER, I'd think the same.


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