Friday, February 03, 2023

Precedential No. 6: TTAB Requires Explanation of Cancellation Respondent's Deletion of Goods

After the commencement of this proceeding for cancellation of a registration for the mark DISO for various electronic devices, on the grounds of fraud and abandonment, the registration was subject to a USPTO audit regarding respondent's Section 8 Declaration of Use The audit resulted in deletion of many of the identified goods, leaving only "earphones and headphones; portable media players, namely MP3 players." Observing that a registrant may not, by deleting goods from a registration, moot a proceeding to avoid a judgment as to the deleted goods, the Board allowed respondent twenty days to explain the reason for its deletions. Ruifei (Shenzhen) Smart Technology Co., Ltd. v. Shenzhen Chengyan Science and Technology Co., Ltd., 2023 USPQ2d 59 (TTAB 2023) [precedential].

Trademark Rule 2.134(b) applies when a respondent permits its registration to be cancelled under Section 8 during the pendency of a cancellation proceeding. Under that rule, "an order may be issued allowing respondent a set time ... in which to show cause why such cancellation .... should not result in entry of a judgment against respondent ...." If respondent shows that the cancellation was the result of an inadvertence or a mistake, judgment will not be entered against it. If the reason was abandonment of the mark, and such abandonment was not made for purposes of avoiding the proceeding, judgment will be entered only on the ground of abandonment.

Here, only certain goods were deleted from the registration. In Orange Bang (116 USPQ2d 1102 (TTAB 2015)), the Board found that the deletion of the specific goods that were subject to the cancellation petition was an attempt to moot the proceeding, and so the Board granted the petitions to cancel the involved registrations. 

Respondent's deletion of goods resulted from a post-registration audit, but applied to only some of the goods subject to the cancellation petition.

Nonetheless, Petitioner’s claims of abandonment and fraud related to nonuse rely in part on nonuse of the mark on the now-deleted goods, and therefore the same concerns raised in Orange Bang and the policies underlying Trademark Rule 2.134(b) apply. Namely, by deleting certain goods subject to this cancellation, Respondent may not moot this proceeding and avoid judgment as to the deleted goods. As set forth in TBMP § 602.02(b), we require Respondent’s response regarding the deletion of goods as it relates to abandonment.

Therefore, the Board ordered respondent to show cause "why its deletion of certain goods in the subject registration should not be deemed the equivalent of a partial cancellation of the registration by request of Respondent without Petitioner’s consent, and should not therefore result in judgment against Respondent on Petitioner’s abandonment claim as to the deleted goods."

If respondent shows that it allowed partial cancellation of goods because the mark had been abandoned as to those goods, and not to avoid judgment here, judgment will be entered only and specifically on the ground of abandonment as to the deleted goods.

If respondent shows that the deletion was not made to avoid judgment and shows "good and sufficient cause" why judgment should not be entered against it on abandonment, petitioner will be allowed time to choose whether to proceed with its abandonment claim and its fraud claim, including as to the deleted goods, or whether this proceeding as to the deleted goods should be dismissed without prejudice.

Update: Respondent subsequently stated that it “permitted the partial cancellation of those goods under Trademark Act Section 8 because its registered mark had been abandoned as to those goods, and that the abandonment was not made for purposes of avoiding the proceeding." The Board then granted Petitioner’s Amended Petition for Cancellation and entered judgment against Respondent only on the ground of abandonment and only as to the deleted goods. The proceeding continued on the ground of abandonment as to "earphones and headphones; portable media players, namely MP3 players," and on the ground of fraud as to all the goods. Petitioner did not pursue the abandonment claim, but did pursue the fraud claim as to the narrow list of goods.

Read comments and post your comment here.

TTABlogger comment: Got that? So you can't avoid judgment in a cancellation proceeding by deleting goods from the registration, unless it was an accident, which seems rather unlikely.

Text Copyright John L. Welch 2023.


Post a Comment

<< Home