Monday, December 14, 2020

Precedential No. 43: TTAB Dismisses Major League Soccer's Section 2(d) Claim Due to Lack of Prior Rights in INTER Mark

Major League Soccer ("MLS") celebrated its 25th anniversary on Saturday night, with the Columbus Crew besting the Seattle Sounders 3-0 in MLS Cup. The league did not, however, find much to celebrate in this Board opinion. MLS (which recently added a team known as "Inter Miami") opposed the application of  F.C. Internazionale Milano S.p.A. (a famous Italian soccer club) to register the mark INTER for goods and services in seven International Classes, including "entertainment services, namely, organizing, conducting, and staging professional soccer games and exhibitions and production of radio and television programs in the nature of professional soccer games and exhibitions." Opposer MLS alleged two grounds: Section 2(d) likelihood of confusion and Section 2(e)(1) mere descriptiveness. As to the Section 2(d) claim, MLS relied on use of the mark INTER by third-parties prior to Applicant's filing of its intent-to-use application (Inter Miami having been created after Applicant's filing date). Applicant moved to dismiss this claim under FRCP 12(b)(6) for failure to state a claim upon which relief can be granted. The Board granted the motion. Major League Soccer, L.L.C. v. F.C. Internazionale Milano S.p.A., 2020 USPQ2d 11488 (TTAB 2020) [precedential] (Opinion by Judge Thomas W. Wellington).

The Board generally has held that in order to set forth a valid ground for opposition under Section 2(d) and withstand a motion to dismiss for failure to state a claim, an opposer need only allege that (1) it has valid proprietary rights in a mark that are prior to those of the applicant, or that it owns a registration, and (2) the applicant’s mark so resembles the opposer’s mark as to be likely to cause confusion. Nike, Inc. v. Palm Beach Crossfit Inc., 116 USPQ2d 1025, 1030 (TTAB 2015). See also Lanham Act § 2(d), 15 U.S.C. § 1052(d); Otto Roth & Co. v. Universal Foods Corp., 640 F.2d 1317, 209 USPQ 40 (CCPA 1981).

However, the Board has also recognized that a plaintiff’s “proprietary interest” need not be present if the plaintiff alleges some other “legitimate interest” in preventing a likelihood of confusion between the pleaded mark on which it predicates the Section 2(d) claim. Three prior decisions are "most relevant" to the issue: Jewelers Vigilance Comm., Inc. v. Ullenberg Corp., 823 F.2d 490, 2 USPQ2d 2021 (Fed. Cir. 1987) (“Jewelers Vigilance I”), Jewelers Vigilance Comm., Inc. v. Ullenberg Corp., 853 F.2d 888, 7 USPQ2d 1628 (Fed. Cir. 1988) (“Jewelers Vigilance II”), and the Board’s later decision in Holmes Prods. Corp. v. Duracraft Corp., 30 USPQ2d 1549 (TTAB 1994).

MLS did not claim a prior proprietary interest in the pleaded marks, nor did it claim privity with the entities that own those marks (four youth soccer organizations and a youth soccer team). Thus, the question here was whether MLS had "a 'legitimate interest' in preventing a likelihood of confusion with the pleaded marks owned by the third parties, as that term was contemplated in Holmes and in accordance with the Jewelers Vigilance I and Jewelers Vigilance II decisions."

In Holmes, the opposer, a corporation, did not have any proprietary rights in the pleaded third-party marks, nor was it in privity with their owners. The Board held that the opposer failed to establish any legitimate interest in the other corporations' trademark uses of the term at issue.

The Jewelers Vigilance decisions involved a nonprofit jewelry trade association that represented 2500 firms in the United States, including suppliers, wholesalers, distributors, and retailer of diamonds and diamond jewelry. The association was able to rely on third-party marks.

[T]he trade association [opposer] convincingly established that it was not a mere intermeddler in asserting a claim predicated on a third party’s name and had sound reasons for fearing damage to itself and its members if [applicant’s] mark were registered. In sum, [opposer] asserted its own claim which happened to involve the proprietary rights of a third party. Jewelers Vigilance II, 7 USPQ2d at 1631.

The Board in Holmes cautioned that the Jewelers Vigilance decisions should be read in the factual context of that case: "Specifically, the plaintiff’s interest was to see that the continued use of the DEBEERS mark by its members was protected against a potential claim by applicant, a junior user of the DEBEERS mark, of a right to exclusive use of the DEBEERS mark and likelihood of confusion." Holmes, 30 USPQ2d at 1552. It noted that in Jewelers Vigilance, the trade association had a connection with DBCM, the owner of the DEBEERS name "such that any confusion that arose from contemporaneous use by DBCM of its name and by applicant ... would affect the association [the opposer]."

Here, although Opposer MLS is a professional league comprising teams from around the country, it did not sufficiently plead a “legitimate interest” in avoiding a likelihood of confusion between Applicant’s mark and the pleaded third-party marks.

One major difference in this proceeding from Jewelers Vigilance is that Opposer here is not seeking to protect any prior proprietary rights of its member teams. In contrast, the opposer in Jewelers Vigilance was a trade association seeking to protect use of the term DEBEERS by its members and, through them, itself. Although Opposer pleads ownership of several applications for marks containing the term INTER which have been refused registration based on the involved application and these pleaded facts help show Opposer is statutorily entitled to bring this opposition, it has not pleaded a valid basis for the necessary element of priority with respect to Opposer’s applied-for marks.

The facts alleged by MLS (taken as true for purposes of the motion to dismiss) revealed only that MLS and the prior users of INTER may draw the same fans and that some of the players from these prior user may mature into MLS players. "Such a general shared interest in the development of the sport of soccer in this country does not demonstrate how Opposer itself or any of its members would be detrimentally affected by the likelihood of confusion between Applicant’s mark and those of third parties or prior U.S. INTER users."

In sum, Opposer’s likelihood of confusion claim is legally insufficient because it has not sufficiently alleged priority, i.e., its section 2(d) claim is not based on any allegations of prior proprietary rights in a mark of Opposer and Opposer has not set forth factual allegations that, all taken as true, constitute a legitimate interest in preventing likelihood of confusion between Applicant’s mark and those of the “prior U.S. INTER users.”

And so the Board dismissed the Section 2(d) claim and issued a new scheduling order vis-a-vis the remaining mere descriptiveness claim.

Read comments and post your comment here.

TTABlogger comment: IMHO, American soccer fans recognize "INTER" as a nickname for the Italian powerhouse club, "Inter Milan" - at least when it comes to soccer-related goods and services. But what about dog leashes, toothbrushes, oven mitts, and various other goods included in the opposed application? 

Text Copyright John L. Welch 2020.


At 10:44 AM, Blogger Steve Abreu said...

A shout-out to the Columbus Crew and a write-up of a Board decision involving MLS! What a championship caliber post, sir.

At 4:24 PM, Anonymous Anne Gilson LaLonde said...

This comes out the opposite way from the opinion Ted Davis chose as the one that got it wrong this year, Royal Palm v. Pink Palm from the 11th Circuit. There, the court let the plaintiff assert the rights of totally unrelated third parties when making a claim under 2(d).

At 1:59 PM, Blogger John L. Welch said...

Impressive performance by the Crew and a fun match to watch. Too Bad teh Revolution let the Crew squeak by in the semi-final.

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