Precedential No. 10: Section 66(a) Registrant With No Use of Mark Defeats Abandonment Claim

On October 20, 2015, Striatum Ventures B.V. (a Netherlands company) obtained a registration for the mark ZUPR in the word-plus-design form shown below, for software and various business services, via the Madrid Protocol (Section 66(a) of the Trademark Act). On October 22, 2018, Wirecard AG filed a petition for cancellation of that registration on the ground of abandonment. The parties agreed to litigate the case as an expedited cancellation proceeding, invoking the Board's Accelerated Case Resolution (ACR) procedure. They stipulated that during the period from the issuance of the registration through the dated of the stipulation (May 28, 2019), no goods or services had been sold in the United States under Striatum's mark. The Board found, however, that Striatum carried its burden of proving an intent to commence use of its mark in commerce during the three-year statutory period of nonuse and therefore had rebutted Wirecard's prima facie showing of abandonment. Wirecard AG v. Striatum Ventures B.V., 2020 USPQ2d 10086 (TTAB 2020) [precedential] (Opinion by Judge Elizabeth A. Dunn).

Although use in commerce is not required in order to obtain a Section 66(a) registration, Trademark Act Section 68(a)(3), an applicant for extension of protection must declare its intention to use the mark in the United States. Section 66(a). Such a registration is subject to the same grounds for cancellation as a registration issued under Section 1 or Section 44(e), including abandonment. See Saddlesprings, Inc. v. Mad Croc Brands, Inc., 104 USPQ2d 1948, 1951 (TTAB 2012).

Section 45 states that abandonment occurs when “use [of a mark] has been discontinued with intent not to resume such use. Intent not to resume use may be inferred from circumstances,” and that “[n]onuse for 3 consecutive years shall be prima facie evidence of abandonment." The presumption of abandonment shifts the burden of production to the party contesting the abandonment claim, but the burden of persuasion remains with the claimant.

The CAFC has ruled that, although the Trademark Act refers to "abandonment," the allegation that a mark was never used "pleads the necessary non use for abandonment," so long as the period of nonuse is at least three years or, if less that three years, is accompanied by a lack of intent to resume or commence use. See Imperial Tobacco Ltd. v. Philip Morris Inc., 899 F.2d 1575, 14 USPQ2d 1390, 1395 (Fed. Cir. 1990); Saddlesprings, Inc., 104 USPQ2d at 1950.

To overcome the presumption of abandonment, the party must submit evidence of either (1) use of the mark during the statutory period, or (2) activities reflecting an intent to resume (or begin) use during that period. Because the subject registration issued under Section 66(a), the earliest date on which the three-year period for the statutory presumption of abandonment may begin in this case is the registration date. Dragon Bleu (SARL) v. VENM, LLC, 112 USPQ2d 1925, 1931 (TTAB 2014).

Based on the parties' stipulation, on a declaration by Striatum's founder, and on the reports of two investigators, the Board found that Petitioner Wirecard had established a prima facie case that Striatum had abandoned the mark through nonuse "from October 20, 2015 through the present, that is, through nonuse for three consecutive years subsequent to the date of registration. Thus, there is a rebuttable presumption that the mark was never used by Respondent, and thus has been abandoned without intent to resume use."

Striatum offered a YouTube video posted during the time period in question, but the Board found that the video showed only goods and services to be offered in the future, and thus it was insufficient to show use in commerce. See Couture v. Playdom, Inc., 778 F.3d 1379, 113 USPQ2d 2041, 2043 (Fed. Cir. 2015) (single page website offering more information about services not yet provided does not meet the use in commerce requirement); Aycock Eng’g, Inc. .v. Airflite, Inc., 560 F.3d 1350, 90 USPQ2d 1301, 1306 (Fed. Cir. 2009) (“Without question, advertising or publicizing a service that the applicant intends to perform in the future will not support registration.”).

The question then was whether Striatum had an intention to commence use of the mark in commerce. To prove such an intention, a party must show that "its activities are those that a reasonable businessman with a bona fide intent to use the mark in United States would have undertaken." Rivard v. Linville, 45 USPQ2d at 1376; Reynolds Televator Corp. v. Pfeffer, 173 USPQ 437, 439 (TTAB 1972) (“A resolution of this question [of intent to commence use] involves a consideration of a number of factors including the nature and character of the goods, the feasibility of producing the goods, the actual or potential market for the goods, and the steps taken by respondent which could possibly result in the movement of the goods under the registered mark ‘in commerce’ within the foreseeable future.”).

Declarations from Striatum and from two third-parties led the Board to conclude that, during the period at issue, Striatum's activities were of the type that would be undertaken by a reasonable business with a bona fide intent to use the mark in U.S. commerce in connection with its retail software platform and related services.

Following registration in the U.S., Respondent entered into a contract for a U.S. marketing strategy, retooled its platform in response to that marketing strategy, demonstrated the retooled products to its public relations firm, and reached agreement at least orally with a retailer’s representative to use the ZUPR goods and services in the U.S. following the product launch in 2019. On October 22, 2018, the petition to cancel was filed, forestalling the planned 2019 launch.

The Board noted that had the platform launch occurred in 2019, it would have supported the testimony regarding intent, even though outside the pertinent three-year period. See Crash Dummy Movie, LLC v. Mattel, Inc., 601 F.3d 1387, 94 USPQ2d 1315, 1317 (Fed. Cir. 2010). In view of the filing of the petition for cancellation in October 2018, "the failure to launch does not detract from the activities demonstrating intent to commence use. See Ralston Purina Co. v. On-Cor Frozen Foods, Inc., 746 F.2d 801, 223 USPQ 979, 982 n. 6 (Fed. Cir. 1984) ((“Ralston has rebutted any prima facie showing of abandonment arising from nonuse of its mark for two consecutive years by evidence of its intent to resume such use … it was only prudent for Ralston to refrain from use of its mark following ON-COR’s filing of its opposition on August 10, 1981”)."

Considering the nature of the registered goods and services, their interrelationship, and the timing of the petition to cancel, we find the record demonstrates that Respondent had the requisite intent to commence use in commerce of its ZUPR mark with the International Class 9 goods, and the International Class 35 and 42 services.

The Board therefore concluded that Striatum had carried its burden of proof and had rebutted Wirecard's prima facie case of abandonment. And so the Board denied the petition for cancellation.

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TTABlog comment: A primer on Section 66(a) abandonment.

Text Copyright John L. Welch 2020.