Wednesday, March 31, 2021

TTAB Rejects Fraud Counterclaim, Finds ZOOMPAY Confusable With XOOM for Electronic Payment Services

Another fraud claim bit the dust in this opposition to registration of the mark ZOOMPAY for electronic payment services. Opposer PayPal claimed a likelihood of confusion with the registered mark XOOM (in standard character form) for overlapping money transfer services. Applicant ZT Holdings charged PayPal with fraud in procuring five of the pleaded registrations, but ZT failed to prove that any false statements by PayPal were made with an intent to deceive the USPTO. End of fraud story. PayPal, Inc. v. ZT Holdings, LLC2, Opposition Nos. 91208416 and 912173743 (March 29, 2021) [not precedential] (Opinion by Judge Peter W. Cataldo).

Fraud: The Board discussed at length Applicant ZT's claim of fraud. To establish fraud, a party must prove that: (1) the applicant made a false representation to the USPTO; (2) the false representation was material to the registrability of the mark; (3) the applicant had knowledge of the falsity of the representation; and (4) the applicant made the representation with the intent to deceive the USPTO. Bose, 91 USPQ2d at 1941, cited in ShutEmDown Sports, 102 USPQ2d at 1044.

ZT alleged that PayPal intentionally represented to the USPTO that it used its marks in connection with electronic payment and bill payment remittance services when it was engaged exclusively in international money transfers prior to 2014. The Board discussed in detail the the testimony and evidence and found "no direct evidence of an intent to deceive the USPTO, and no clear and convincing evidence to warrant the inference of an intent to deceive." It zoomed in on the testimony of PayPal's witness, Mr. King, who testified that "at all relevant times he believed, and still believes, the truth of the statements about ongoing use of the marks in the pleaded registrations for all the listed services," and who explained the basis for those beliefs.

The Board dismissed the claim of fraud: "Considering the testimony and evidence in its entirety, we do not find that it supports an inference of deceptive intent regarding Opposer’s use of its marks."

Likelihood of Confusion: Since the services of the parties overlap in part, the overlapping services are presumed to travel in the same, customary channels of trade to the same consumers. The Board found the mark XOOM to be inherently distinctive and it concluded, based on sales figures and contextual evidence, that the XOOM mark enjoys widespread recognition among its customers (the general public). ZT's third-party registration evidence, purportedly showing the weakness of the word "zoom," was ineffective since there was no evidence regarding extent of use of those marks and since most of the registrations covered unrelated goods and services.

As to the marks, ZT pointed to the testimony that many of PayPal's customers do not speak English and may not pronounce "xoom" as "zoom." However, PayPal introduced evidence that it promotes the pronunciation of XOOM as "zoom," and also evidence that consumers refer to its products and services as "zoom." Applicant ZT did not provide any evidence of alternative pronunciations. The Board acknowledged that the word PAY at the trailing end of ZT's mark somewhat distinguishes the marks visually and aurally. However, it concluded that the marks are more similar than dissimilar, and so the first DuPont factor favored PayPal

ZT pointed to the lack of evidence of actual confusion during a six-year period of concurrent use, but because of the lack of evidence regarding the extent of use of the ZOOMPAY mark, the Board found this factor to be neutral.

And so the Board found confusion likely and it sustained the opposition.

Read comments and post your comment here.

TTABlogger comment: The Board has said that you don't need a "smoking gun" to prove fraud, but you do need clear and convincing evidence. See the only Board decision upholding a fraud claim since In re Bose, namely, Nationstar Mortgage LLC v. Mujahid Ahmad, 112 USPQ2d 1361 (TTAB 2014) [TTABlogged here].

Text Copyright John L. Welch 2021.


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