Friday, June 05, 2020

Precedential No. 21: Oral Intra-Family License With Informal Control Sufficient to Qualify Licensee as Related Company

The Board dismissed this opposition to registration of SOCK IT UP for "socks," rejecting opposer's claim of likelihood of confusion with the registered mark SOCK IT TO ME for "socks and stockings" [SOCK disclaimed] due to the dissimilarity in the marks. Perhaps more importantly, the Board first denied opposer's claim that Applicant Aiping Fan was not the owner of the mark at the time of filing of the opposed application, the Board ruling that an oral, intra-family license with informal quality control sufficed to make the licensee a related company under the Trademark Act. Sock It To Me, Inc. v. Aiping Fan, 2020 USPQ2d 10611 (TTAB 2020) [precedential] (Opinion by Judge David K. Heasley).

Non-ownership: Opposer claimed that the mark was used in the United States not by Applicant Fan, but by JY Instyle, a California corporation, and therefore that JY Insyle owned the mark, not Fan. Of course, a use-based application filed by a person who does not own the mark is void ab initio. Lyons v. Am. Coll. of Veterinary Sports Med. & Rehab., 859 F.3d 1023, 123 USPQ2d 1024, 1027 (Fed. Cir. 2017). Applicant Fan contended that JY Instyle's use of the mark inured to her benefit.

Sections 5 and 45 provide that use of a mark by a "related company" inures to the benefit of the licensor. "Related company" is defined as "any person whose use of a mark is controlled by the owner of the mark with respect to the nature and quality of the goods or services on or in connection with which the mark is used."

The issue, then, was whether Applicant Fan exercised sufficient control over the quality of JY Instyle's socks bearing the SOCK IT UP mark for that use to inure to Applicant’s benefit.

Applicant Fan has been in the sock industry in the People’s Republic of China for over a decade. JY Instyle is a family business owned and operated by her son and daughter-in-law, Junxia Yao. Fan granted JY Instyle an oral license to use the mark. Fan and Yao are in daily communication, and Fan provides strict guidelines as to quality, source of manufacturing, and types of fabrics used, and Yao inspects the goods for quality. Sales have increased steadily and there is no indication of a decline in quality.

The Board found these informal arrangements to be sufficient to qualify JY Instyle as a related company.

“Sufficient control by a licensor may exist despite the absence of any formal arrangements for policing the quality of the goods sold or services rendered under the mark by its licensee(s),” Woodstock’s Enters., v. Woodstock’s Enters., 43 USPQ2d at 1446. An informal, rather than formal, system of quality control may suffice. Winnebago Indus., Inc. v. Oliver & Winston, Inc., 207 USPQ 335, 341 (TTAB 1980) cited in Ballet Tech Found. Inc. v. Joyce Theater Found. Inc., 89 USPQ2d 1262, 1266 (TTAB 2008), judgment vacated pursuant to settlement, 2013 WL 6199539 (TTAB 2013). This holds true especially where the licensor and licensee have a close working relationship, such as a familial relationship.

Therefore, the Board concluded that Applicant Fan was the owner of the mark at the time she filed the application to register.

Likelihood of Confusion: The involved goods overlap, and so the Board must presume that they travel in the same, normal channels of trade to the same classes of consumers. Socks are relatively inexpensive items that are subject to impulse purchases. Thus the second, third, and fourth du Pont factors favored opposer.

As to the strength of opposer's mark SOCK IT TO ME under the fifth and sixth du Pont factors, the Board found that the mark had enjoyed a "moderate degree of commercial success:" more than 12 million pairs of socks sold between 2007 and 2017, extensive advertising, and some media coverage.

Applicant Fan argued that many registered marks include the word SOCKS, but she provided no evidence of use of those marks. Therefore they were not probative with regard to commercial strength. AMF Inc. v. Am. Leisure Prods., Inc., 474 F.2d 1403, 177 USPQ 268, 269 (CCPA 1973)
quoted in In re Inn at St. John’s, LLC, 126 USPQ2d 1742, 1746 (TTAB 2018), aff’d, 777 F. App’x 516 (Fed. Cir. 2019).

However, third-party registrations are probative as to the conceptual strength of the mark because they may “demonstrate the meaning of a word which comprises the mark, or a portion thereof, to show that there is a well-known and commonly understood meaning of that word and that the mark has been chosen to convey that meaning." In re Melville Corp., 18 USPQ2d 1386, 1388 (TTAB 1991) (internal citations omitted); see also Juice Generation, Inc. v. GS Enters. LLC, 794 F.3d 1334, 115 USPQ2d 1671, 1675 (Fed. Cir. 2015).

The Board concluded that the mark SOCK IT TO ME is inherently distinctive, "although its strength is somewhat limited by its first word, SOCK, which is generic for socks." Nine third-party registrations for marks containing the word SOCKS (several comprising a play on words, like THINK OUTSIDE THE SOCKS) corroborated the Board's conclusion, as did opposer's disclaimer of the word SOCKS. In short, "Opposer’s mark is not entitled to such a broad scope of protection that it bars registration of every mark containing the wording 'SOCK' or even 'SOCK IT' for use on socks."

As to the marks, the Board found them to be more dissimilar than similar. End of story.

Even though the marks share the words “SOCK IT,” their additional words—TO ME and UP— yield completely different connotations: from “give it to me” to “stand up and take it.” * * * A multitude of differing meanings can be ascribed to the two different marks. Taken in their entireties, there is no indication that the relevant public would perceive their connotation and commercial impression as similar. Rather, the public would likely perceive them as different marks from different sources among the numerous marks using a play on “SOCK(S)” to sell socks.

* * *

In sum, the dissimilarity in the marks’ connotation and commercial impression outweighs their shared wording.

Conclusion Finding the first du Pont dispositive, the Board dismissed the opposition.

Read comments and post your comment here.

TTABlogger comment: I don't see how a consumer could find these marks confusable. It would be like confusing the White Sox with the Red Sox.

Text Copyright John L. Welch 2020.


At 10:03 AM, Anonymous Anonymous said...

So, the related company requirement is satisfied as long as the applicant/registrant and the party using the trademark testify to an informal oral quality control understanding, even in the absence of the applicant/registrant having used the mark or stated any standards.

I guess I can appreciate that on a theoretical basis. It may surprise the many similarly placed sibling entities who lost their trademark due to insufficient license and quality control evidence.

As a practical matter, the "as long as" exception seems to swallow the rule and be at odds with the TTAB's discovered requirement that bona fide intent to use be supported by prefiling documentary evidence on pain of shifting the bona fide intent evidentiary presumption


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