Thursday, June 17, 2021

Precedential No. 17: TTAB Dismisses ADVENTIST Cancellation Petition Due to Failure to Maintain "Standing"

Finding that Petitioner failed to demonstrate its entitlement to maintain its genericness claim (f/k/a standing), the Board tossed out this petition for cancellation of two registrations for the mark ADVENTIST for religious publications, film production and distribution, educational services, and religious and missionary services. The Board concluded that Petitioner did not to satisfy either prong of the Lexmark test at the time of trial: its interests did not fall with the protectable zone of interests of Section 14, and there was no reasonable basis in fact for a belief in damages proximately caused by the continued existence of the challenged registrations., Inc. v. The General Conference Corporation of Seventh-day Adventists, 2021 USPQ2d 643 (TTAB 2021) [precedential] (Opinion by Judge Jonathan Hudis).

In every inter partes proceeding the plaintiff must establish its entitlement to a statutory cause of action, Empresa Cubana Del Tabaco v. Gen. Cigar Co., 753 F.3d 1270, 111 USPQ2d 1058, 1062 (Fed. Cir. 2014), and must maintain that entitlement throughout the proceeding, including at the time or trial. In its case-in-chief, a plaintiff must introduce evidence to support the allegations in its pleading that relate to its entitlement. See Lipton Indus., 213 USPQ at 189; TBMP 309.03(b).

For a cancellation proceeding under Section 14, a plaintiff must demonstrate “an interest falling within the zone of interests protected by the statute and … proximate causation.” Corcamore, LLC v. SFM, LLC, 978 F.3d 1298, 2020 USPQ2d 11277, at *4 (Fed. Cir.) (citing Lexmark Int’l, Inc. v. Static Control Components, Inc., 572 U.S. 118, 109 USPQ2d 2061, 2067-70 (2014)), cert. denied, ___ S. Ct. ___ (2020).

Another way of stating the requirement is that a plaintiff must prove a real interest in the proceeding and a reasonable belief of damage. Australian Therapeutic Supplies Pty. Ltd. v. Naked TM, LLC, 965 F.3d 1370, 2020 USPQ2d 10837, at *3 (Fed. Cir. 2020); see also Empresa Cubana, 111 USPQ2d at 1062. The CAFC has found “no meaningful, substantive difference between the analytical frameworks expressed in Lexmark and Empresa Cubana.” Corcamore, 2020 USPQ2d 11277 at *4.

Thus, “a party that demonstrates a real interest in cancelling a trademark under [Trademark Act Section 14, 15 U.S.C.] § 1064 has demonstrated an interest falling within the zone of interests protected by [the Trademark Act]. … Similarly, a party that demonstrates a reasonable belief of damage by the registration of a trademark demonstrates proximate causation within the context of § 1064.” Corcamore, 2020 USPQ2d 11277, at *7. 

Often a party that challenges a term as generic will base its entitlement on the fact that it is engaged in marketing goods or services that are the same or similar to those of the other party. That was not the case here. Petitioner's business is the acquisition and sale of domain names. 

Although Section 14 states that any person "who believes that he is or will be damaged" may petition for cancellation, "there are limits to this statutory right – that is, the cancellation plaintiff must meet the 'zone of interests' and 'proximate causation' tests set out in Lexmark, 109 USPQ2d at 2068-70."

“The purpose of the zone-of-interests test is to ‘foreclose[] suit … when a plaintiff’s interests are so marginally related to or inconsistent with the purposes implicit in the statute that it cannot reasonably be assumed that Congress authorized that plaintiff to sue.’” Corcamore, 2020 USPQ2d 11277, at *7 (quoting Lexmark, 109 USPQ2d at 2068 (citation and quotation marks omitted)).

In November 2016, Respondent sent a cease-and-desist letter to Petitioner, demanding transfer of the domain name <> to Respondent. Petitioner refused, but offered to sell the domain name for $1.2 million. When that offer was declined, Petitioner filed the instant petition for cancellation in January 2017, a few days before the National Arbitration Forum ruled against Respondent in a UDRP proceeding seeking transfer of the domain name. Respondent did not appeal the UDRP decision or take any further action with regard to the domain name.

Petitioner has never published any content at any website resolving to the domain name. "All Petitioner has ever done is to hold it for future sale at an inflated price (a practice known as 'warehousing'), or to redirect Internet users to the TTABVUE docket page for these proceedings."

Petitioner claimed that it was under a "legal threat" from the ADVENTIST registration, but the Board noted that the cancellation petition included only three of the four classes of goods and services in the registrations, and so even if Petitioner prevailed in this proceeding, it would ostensibly remain under threat from Respondent's continuing ownership of one of the registrations (covering employee health care programs and insurance). The Board concluded that Petitioner failed to satisfy either prong of the Lexmark test:

We find that Petitioner’s interests, which do not have anything to do with trademark concerns (whether its own trademark concerns or concerns about how others’ trademark rights might endanger its business model), are outside the zone of interests reflected in Trademark Act Section 14. Further, it cannot reasonably be assumed Congress intended to authorize a party in Petitioner’s circumstances to bring and maintain these cancellation proceedings. Corcamore, 2020 USPQ2d 11277, at *7. We further find that Petitioner’s claim of proximate causation (its belief in damage) has no “reasonable basis in fact.” Ritchie v. Simpson, 170 F.3d 1092, 50 USPQ2d 1023, 1027 (Fed. Cir. 1999). To the extent Petitioner’s belief in damage may have existed at the time Petitioner brought these proceedings in January 2017, clearly it has not been maintained. We therefore conclude that Petitioner has not shown its entitlement to the statutory cause of action it asserts here.

And so, the Board denied the petition for cancellation.

Read comments and post your comment here.

TTABlogger comment: Readers, you cannot ignore Lexmark any more. "Standing" is no longer a slam dunk.

Text Copyright John L. Welch 2021.


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