Friday, November 15, 2019

On Remand, TTAB Denies Abandonment Claims But Finds That "ADD A ZERO" Fails to Function as a TM for Shirts and Caps

On remand from the CAFC, the TTAB denied Petitioner adidas's claim that Respondent Church abandoned it marks ADD A ZERO (in standard character and design form), but the Board agreed that the phrase itself fails to function as a source indicator for shirts and caps. However, the Board found that the word+design form (shown below) is unitary and does function as a trademark. adidas AG v. Christian Faith Fellowship Church, Cancellation No. 92053314 (November 13, 2019) [not precedential] (Opinion by Judge Cindy B. Greenbaum).

In 2015, the Board granted adidas's petition for cancellation on the ground on nonuse, finding that the sale of two caps to an out-of-state resident at the Church's bookstore prior to rhe filing date of the underlying application was de minimis and therefore insufficient to satisfy the "use in commerce" requirement of the Lanham Act. The Board declined to consider adidas's abandonment and failure-to-function claims. adidas AG v. Christian Faith Fellowship Church, Cancellation No. 92053314 (TTAB September 14, 2015) [not precedential]

In 2016, the CAFC reversed the TTAB decision, ruling that the Church's sale of the two hats was regulable by Congress under the Commerce Clause and therefore constitutes “use in commerce” under the Lanham Act. The CAFC remanded the case to the Board for consideration of adidas’s other grounds for cancellation: abandonment-and failure-to-function. Christian Faith Fellowship Church v. adidas AG, 120 USPQ2d 1640 (Fed. Cir. 2016) [precedential]. [TTABlogged here].

Abandonment: Petitioner adidas relied on the lack of any sales of caps and the minimal sales of shirts during the four-year period from the issuance of the registrations (November 21, 2006) to the date of filing of the petition for cancellation (November 23, 2010). The Church's receipt journal listed the sale of one hoodie in 2007, one crew shirt in 2019, and no caps. However, the Church's executive pastor, secretary, and treasurer, Mr. Mason, testified that the Church offered shirts and hats continuously during that time period except for 2008, when the bookstore was closed for renovation. In addition, the Church launched its online bookstore in December 2010 and it sold three shirts that month and a number of shirts and caps thereafter.

Petitioner addidas pointed to the presumption of abandonment that arises under Section 45 if a mark has not been used during a three-year period. However, the Board found no three-year period in which the marks were not used for shirts. Nothing in the record suggested that the sale of two shirts was not bona fide use of the marks in trade. As the CAFC ruled, there is no de minimis test for "use in commerce," and so the sale of two shirts was sufficient use to defeat the abandonment claim as to shirts.

As to caps, the lack of sales for four years did establish a prima facie case of abandonment, but the Church rebutted that presumption because any nonuse that occurred in 2008 was excusable due to the closure of the bookstore for renovation. Moreover, the evidence of increasing sales beginning in December 2010, when the Church launched its online bookstore, was evidence of the Church's intent to resume use during the nonuse period.

Therefore the Board dismissed adidas's abandonment claims.

Failure to Function: adidas argued that "add a zero" is a commonly-used fundraising slogan that the Church used as an informational message to its members in connection with its building fund. Therefore relevant consumers would not perceive the phrase as a source indicator for the Church's goods. Numerous new articles, webpages, and blog posts demonstrated that "add a zero" is widely used in connection with fundraising. Mr. Mason testified that the phrase was used in support of the Church's building campaign.

The Board found adidas's evidence sufficient to establish that "the slogan 'add a zero' is informational and would be understood as such by the relevant public."

Respondent is not entitled to exclusively appropriate the slogan to itself and thereby attempt to prevent competitors from using it to promote the sale of their own caps and shirts. It has been noted that “as a matter of competitive policy, it should be close to impossible for one competitor to achieve exclusive rights” in common phrases or slogans. 1 J.THOMAS MCCARTHY,MCCARTHY ON TRADEMARKS AND UNFAIR COMPETITION § 7:23 (5th ed. September 2019).

Therefore, the Board granted the petition for cancellation of the Church's registration for the standard character mark ADD A ZERO.

As to the word+design mark, however, the Board found cancellation of the registration to be inappropriate. "Notwithstanding the informational nature of the wording, the specific combination, placement and shading of the wording and design elements of this special form mark create an integrated whole with a single and distinct three-dimensional commercial impression; that is, the mark is unitary."

Read comments and post your comment here.

TTABlog comment:  adidas's applicaton to register ADIZERO was blocked by the Church's registratons, which is why adidas petitioned for cancellation. What do you think adidas might do next?

Text Copyright John L. Welch 2019.


At 10:31 AM, Blogger Unknown said...

Interesting. So the way around the "failure to function" refusal is to make it a design mark. Apparently there is no requirement to disclaim the words that fail to function apart from the design. There's an upside of a failure to function refusal (at least as to the corresponding standard character mark) vs. a 2(e)(1) refusal!!

At 11:15 AM, Blogger Eddie said...

Here's the real question. Why does Adidas care?

Are their trademark attorneys bored?


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