Friday, January 04, 2019

Precedential No. 38: TTAB Finds Allegations of Abandonment Legally Sufficient Under Iqbal/Twombly

Respondent Firebrand LLC moved to dismiss this petition for cancellation of its registration for the mark FIREBRAND for a "newsletter dealing with brand and product development" and for "business consultation services," asserting that Petitioner Lewis Silkin LLP had failed to state a claim for abandonment under the Iqbal/Twombly standard. Petitioner Silkin alleged that "On information and belief, Respondent is not using Respondent’s Mark on or in connection with Respondent’s Goods and Services with no intent to resume such use." The Board found these allegations to be legally sufficient, and so it denied respondent's motion. Lewis Silkin LLP v. Firebrand LLC, 129 USPQ2d 1015 (TTAB 2018) [precedential].

The standard of notice pleading requires that the complaint “state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)) (“the Iqbal/Twombly standard”). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Ashcroft v. Iqbal, 556 U.S. at 678.

The CAFC has not applied the Iqbal/Twombly standard to an abandonment claim, but the TTAB has on three occasions considered the legal sufficiency of an abandonment claim under that standard. The Board did not find that the standard "required more than the traditional pleading of nonuse plus intent not to resume." See Dragon Bleu (SARL) v. VENM, LLC, 112 USPQ2d 1925, 1931 (TTAB 2014); SaddleSprings Inc. v. Mad Croc Brands Inc., 104 USPQ2d 1948, 1950 (TTAB 2012); and Johnson & Johnson v. Obschestvo s Ogranitchennoy, 104 USPQ2d 2037 (TTAB 2012).

Under Section 45 of the Lanham Act, a mark shall be deemed to be abandoned "[w]hen its use has been discontinued with intent not to resume such use." The Board found that Respondent Silkin's allegation of “no intent to resume use” is equivalent to the statutory language of “intent not to resume use” for an abandonment claim. See Cerveceria Centroamericana S.A. v. Cerveceria India Inc., 13 USPQ2d 1307, 1312 (Fed. Cir. 1989). In Johnson & Johnson, the Board found that a counterclaim “sufficiently pleaded a ground for partial cancellation by alleging abandonment of the mark as to particular goods through nonuse with no intent to resume use.”

The Board concluded that Silkin's allegations that respondent is not using the mark and services, and has no intent to resume use, were legally sufficient "in the context of the Board’s narrow jurisdiction limited to trademark registrability." The Board rejected the argument that the pleader must include additional allegations demonstrating how it will prove the allegations of nonuse plus intent.

We see no purpose to such detailed pleading requirements for an abandonment claim, besides unnecessarily complicating the pleadings. As noted above, there is no list of activities which always show trademark use, and thus there is no list of activities whose cessation would always show trademark nonuse. Actual intent not to resume use (as opposed to the statutory period of nonuse which gives rise to the presumption of intent not to resume use) does not exist in a vacuum, but also must relate to the use in  commerce of the mark. The Board is reluctant to see pleadings devolve into wrangling over whether specific factual allegations offered to demonstrate nonuse and intent not to resume use are sufficient to support the abandonment claim. These matters addressing what activities constitute use in commerce under the Trademark Act are best, and traditionally, left to trial.

The Board noted that there has been an increase in parties arguing that "every pleading must demonstrate that the party undertook a reasonable inquiry or investigation before filing its pleading."  The Board "strongly" disagreed that this is a pleading requirement.

FRCP 8(a)(2) and (e) state that a pleading must include “a short and plain statement of the claim showing that the pleader is entitled to relief” and must be “construed so as to do justice.” Whether the plaintiff will be able to prove its abandonment claim is "irrelevant to assessment of the legal sufficiency of the complaint." Guess? IP Holder LP v. Knowluxe LLC, 116 USPQ2d 2018, 2019 (TTAB 2015).

Finding the petition for cancellation to be legally sufficient, the Board denied respondent's FRCP 12(b)(6) motion to dismiss.

Read comments and post your comment here.

TTABlog comment: When it comes to proving, as opposed to pleading, abandonment, Section 45 facilitates that proof by stating that "Nonuse for 3 consecutive years shall be prima facie evidence of abandonment."

Text Copyright John L. Welch 2019.


At 9:56 AM, Anonymous Anonymous said...

While 3 years nonuse is prima facie evidence,federal courts (also TTAB??)treat that as shifting the burden of production only,the challenger retains the burden of proving abandonment -- which includes proving intent not to resume.

At 4:19 PM, Anonymous Anonymous said...

That's literally just a recitation of the elements he has to prove, which Twombly explicitly says is insufficient...


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