Monday, April 24, 2023

Precedential No. 13: TTAB Allows Cancellation Respondent to Correct Registration Ownership

The underlying application for the registered mark FAT BEAR for motor scooters was filed in the name of Fatbear Scooters, LLC on December 19, 2019, but that entity did not exist as of the filing date. Petitioner Phat Scooters moved for partial summary judgment on its claim that the registration is void ab initio because the application was not filed by the rightful owner of the mark. The Board, however, allowed the respondent to correct the misidentification because the error was "inadvertent, made in good faith, and has been formalized through the filing of and issuance of the limited liability certificate." Phat Scooters, Inc. v. Fatbear Scooters, LLC, Isaac Ashkenazie and Isaac D. Ashkenazie d/b/a Fatbear Scooters, 2023 USPQ2d 486 (TTAB 2023) [precedential].

There was no dispute that the corrective action was taken after this proceeding commenced, and the certificate of formation for Fatbear Scooters,LLC was issued one day after the answer was filed. Respondent submitted the affidavit of one of the two co-owners of the entity, Isaac Ashkenazie, stating that the belated incorporation was due to an "oversight," but they intended to create the entity at the same time the application was filed. He further averred that he and his cousin (of the same name) started the business in about November 2019, that it has continued to the present under the same ownership, and that no other entity has owned or used the FAT BEAR mark.

The Board construed the response to the summary judgment as a "cross-motion to amend the registrations due to a correctable owner's mistake." The Board noted that under Rule 2.133, a registration that is the subject of a Board proceeding may be amended upon motion granted by the Board, without the consent of the other party. 

A use-based application filed in the name of an entity that is not the owner of the mark is void. Rule 2.71(d). However, when a use-based application is filed by the owner of the mark, the Trademark Act and Rules allow for correction of certain mistakes in the manner or form in which the owner’s name is set out in the application or resulting registration. Trademark Act § 7(h), 15 U.S.C. § 1057(h); Trademark Rule 2.71(d).

For example, if the named applicant did not exist as of the application filing date, the name may be corrected. See Accu Personnel, Inc. v. Accustaff, Inc., 38 USPQ2d 1443, 1446 (TTAB 1996) (holding application filed in name of non-existent entity not void ab initio so long as application filed by correct person).

Such a correction requires a showing that the applicant be the same, single commercial enterprise that filed and owned the mark at the time of filing the application. Argo & Co. v. Springer, 198 USPQ 626, 635 (TTAB 1978) (holding that application may be amended to name three individuals as joint applicants in place of originally named corporate applicant which was never legally incorporated, because individuals and non-existent corporation were found to be same, single commercial enterprise); U.S. Pioneer Elec. Corp. v. Evans Mktg., Inc., 183 USPQ 613, 614 (Comm’r Pats. 1974) (finding applicant’s name may be corrected where application was mistakenly filed in name of fictitious and non-existent party).

The Board found this case similar to Accu Personnel. In both cases, the entity named as owner of the mark did not exist as of the filing date.

Fatbear Scooters, LLC is “merely a later manifestation of the same, single commercial enterprise which filed the application.” Id. The same single commercial enterprise operated by the Ashkenazie cousins has owned the mark, the application, and the resulting registration the entire time, and the misidentification of the commercial business as a New Jersey limited liability company is a correctable mistake. See id. at 1446. Compare Great Seats, Ltd. v. Great Seats, Inc., 84 USPQ2d 1235, 1244 (TTAB 2007) (application void ab initio where two separate commercial entities were in existence on application filing date and application was filed in name of wrong existing entity).

The Board found that chain of title in the same, single commercial enterprise did exist between the LLC and the Ashkenazie cousins (d/b/a Fatbear Scooters). The evidence was sufficient to allow correction of the misidentification of Respondent, and to demonstrate that "the error was inadvertent, made in good faith, and has been formalized through the filing and issuance of the limited liability certificate." The Board further found the evidence sufficient to allow joinder of Messrs. Ashkenazie d/b/a Fatbear Scooters as party defendants.

And so, the Board denied the petitioner's motion for partial summary judgment.

Read comments and post your comment here.

TTABlogger comment: Nice to see that substance prevailed over form.

Text Copyright John L. Welch 2023.


At 10:39 AM, Anonymous Anonymous said...

Today I learned that a legal entity doesn't need to even exist to own a trademark or file a use-based federal trademark application, but only as long as they later pay the government a fee for letting them off the hook.

There are so many things that don't sit well with me here, but it is what it is. Maybe someday I will have a sloppy client that makes this same mistake and I can use this precedential decision to bail them out after they get busted and come to me for help.

At 10:57 AM, Blogger John L. Welch said...

Who is harmed by the Board allowing this correction and what is the harm? The cousins would have the same common law priority date anyway. The LLC could file a new application and claim the same first use dates. Even if the registration was cancelled, the cousins or the LLC could challenge later users of similar marks.

At 5:09 PM, Anonymous Anonymous said...

Who is harmed by the Board allowing this correction and what is the harm? EVERYONE WHO FOLLOWS THE RULES including ALL YOUR CLIENTS who pay you good money to follow the rules and make sure their application is proper. I wish the TTAB instead set a deadline to correct ownership errors, like 6 months from filing or publication.

I had a client who filed her own trademark application. She used a name for her company that was misspelled by ONE LETTER. She hired me to help with an Office Action. I noticed the problem with the name of the company and asked the examining attorney to correct because it was a mistake made by the Applicant in good faith. Did the EA grant this? Of course not. We had to refile. SO who is harmed - my client because she did the exact same thing but got no relief.

At 10:29 PM, Blogger BOB KELSON said...

The same outcome may occur in Australia, but not always. Ownership or authorship of the trademark are two initial criteria by which the proper applicant is assessed. Post-filing correction is not an option.

However, there are provisions which allow for an application for registration to be made by a person claiming to be the owner of the trademark and uses or intends to use the trademark, or authorises or intends to authorise another person to use the trademark, or intends to assign the trademark to a yet-to-constituted body corporate which is to use the trademark in relation to the goods and/or services covered by the application.

Intention in good faith is crucial. In the absence of actual use the requisite intention must be present at the time of filing the application.

Bob Kelson

At 8:02 PM, Blogger Maria Speth said...

I think the main problem is that it encourages bad actors. The TTAB devotes much rhetoric and rules to protecting the integrity of the register. This result tells bad guys that they can make up an entity name that is just the trademark with an LLC after it. Absent a petition to cancel, they have succeeded in filing anonymously at best and filing fraudulently at worst.

At 12:08 PM, Blogger John L. Welch said...

If the applicant signs his namesto the application and gives the business address, is that really filing "anonymously"?

At 3:55 PM, Blogger Maria Speth said...

The applicant did not sign his name. The attorney signed. The only name that appeared in the application or anywhere in the record until the cancellation proceeding was a non-existent entity name.

At 8:08 PM, Blogger John L. Welch said...

The address of the business was in the original application, as was the name and address of the attorney.


Post a Comment

<< Home