Precedential No. 20: Supplemental Registration for PERMITS.COM Cancelled by Prior User of PERMIT.COM Despite No Acquired Distinctiveness
In a "somewhat unusual" Section 2(d) cancellation proceeding targeting a Supplemental Register registration and involving "dueling claims of acquired distinctiveness," the Board granted a petition for cancellation of Fieldvine's Inc's registration for the mark PERMITS.COM for construction permit services. Although Petitioner State Permits, Inc. could not prove acquired distinctiveness for its mark PERMIT.COM, it did prove first use for identical services, and that was enough. State Permits, Inc. v. Fieldvine, Inc., 2024 USPQ2d 1458 (TTAB 2024) [precedential] (Opinion by Judge Thomas W. Wellington).
Under the rule of Otto Roth, a plaintiff must prove it has proprietary rights in a mark in order to succeed on a likelihood of confusion claim when challenging a registration on the Principal Register. However, the holding of Otto Roth was limited by the CAFC's decision in Books on Tape: if the challenged registration resides on the Supplemental Register and covers a descriptive term that lacks acquired distinctiveness, a prior user of a confusingly similar term may succeed in cancelling that registration even without establishing acquired distinctiveness for its own mark.
Here, both parties asserted rights in their respective marks based on acquired distinctiveness. Whichever party successfully demonstrated that it was first to acquire distinctiveness would prevail. If neither did so, then the prior user would prevail.
Each party acknowledged in its brief that the word PERMIT or PERMITS, combined with the top-level domain .COM, "constitutes, at the very least, a descriptive and non-inherently distinctive term in connection with their services." Respondent's registration on the Supplemental Register itself constitutes an admission that as of the registration date (February 18, 2020), PERMITS.COM was merely descriptive. Similarly, petitioner's invocation of Section 2(f) in seeking to register its PERMIT.COM is a concession that the mark is not inherently distinctive.
The Board first found that both marks are "highly descriptive" of the parties' services: "the term PERMIT, in each mark, describes the most important characteristic or end goal of the identified services, namely, assisting others in obtaining construction permits." The addition of .COM does not make the marks distinctive; "rather, it is a non-source-identifying generic top-level domain (gTLD) that merely indicates an Internet address for use by a commercial, for-profit organization." Consequently, "the commensurate burden of proving that it has acquired distinctiveness for either party is heavy."
In answering the question of acquired distinctiveness vel non, that Board applied the CAFC's Converse factors. Petitioner began using its mark in 2013, spent more than $500,000 in promotional efforts, and garnered some $49M in total revenue while securing approximately 70,000 permits for its customers. It also submitted testimony declarations from knowledgeable customers and others in the construction industry in support of the Section 2(f) claim.
The Board, however, concluded that petitioner failed to meet it "difficult burden," noting the lack of survey evidence, of media coverage, and of intentional copying. Furthermore, petitioner's sales and advertising figures were not placed in industry context.
Although Petitioner has not proven acquired distinctiveness, Petitioner has at least established that it began using PERMIT.COM in a manner consistent with service mark use as early as 2013.
Respondent Fieldvine claimed use of its mark since 2018, relying on the declaration of its CEO, but the sales and advertising figures he provided lacked industry context. Moreover, in light of petitioner's use of PERMIT.COM since 2012, Fieldvine's use of its mark "has not been exclusive." And Fieldvine did not introduce any third-party testimony to support its Section 2(f) claims
Indeed, as stated, the burden of proving that such a highly descriptive term has acquired distinctiveness is a particularly heavy one, and Respondent’s evidence falls woefully short.
As in Books on Tape the Board found that "it would be an 'anomalous result' if, in view of our finding of a likelihood of confusion, Respondent is permitted to keep its Supplemental Register registration for PERMITS.COM, in the absence of a showing of acquired distinctiveness and in the face of Petitioner’s prior use of PERMIT.COM."
And so, the Board granted the petition for cancellation.
Read comments and post your comment here.
TTABlogger comment: Since each party owns the corresponding ".com" domain name, how valuable is a Supplemental Registration anyway?
Text Copyright John L. Welch 2024.
posted by John L. Welch @ 8/19/2024
7 comments
7 Comments:
This yet another example of the inanity and illogic of having a Supplemental register on which appear non-trademarks.
These mutually-assured-destruction cases are always interesting. Now neither of them gets a registration, but both can continuing using their (nearly identical marks) and neither will ever be able to take any action against the other. We can predict there will eventually be some agreement between the parties to resolve this, which probably should have happened at the beginning.
In the Section 2(b) intent-to-use context, the TTAB rails against the "warehousing" of trademarks. Compare the Supplemental Register.
I have a real problem with the result in this case. Both the Federal Circuit and the Supreme Court (in B & B Hardware and other cases and restated most recently in the “Trump Too Small” case) have said that one who first uses a distinctive mark in commerce acquires rights in that mark and can prevent others from using the mark. Yes, the Books on Tape case said, I think in dicta, that the statute does not require the result that a junior user can keep its Supplemental Registration of a descriptive term vis-à-vis a prior user who also cannot show acquired distinctiveness. But this case was all about standing to challenge a registration, which the Board said petitioner did not have because the term it used was generic, but the Court disagreed with that conclusion and said it was not generic and that petitioner, as a competitor of respondent with an interest in the outcome, did have standing. Moreover, immediately after the sentence quoted about the statute not requiring that a junior user with a Supplemental Registration being allowed to keep its registration vis-à-vis a senior user of the same mark, the Court said: “In any event, once the issue of genericness is out of the case, the evidence of record here amply supports petitioner’s claim that it has established a trade identity in “Books on Tape” as its company name.” It is hornbook law that a plaintiff in a likelihood-of-confusion case must establish prior use of a mark or name which is either inherently distinctive or has acquired distinctiveness. There are no exceptions. A plaintiff who has no proprietary rights in a mark cannot prevail under Section 2(d), even against a Supplemental Registration. Period. The Supreme Court (and even the Federal Circuit) has stated the rule repeatedly—the first user of a distinctive mark in commerce prevails against the same mark.
So the TTAB should have dismissed the petition (not relying on dicta from the Books on Tape case). Respondent should be able to keep its registration a little bit longer until someone seeks to cancel it on the grounds of genericness, which wasn’t tried in this case.
Someone should write an article about this case. Or a guest blog post.
Not impressed by this opinion. No discussion of the Fed Cir's opinions in Towers v Advent Software or Hoover v Royal Appliance, or the numerous Board opinions that go either way (including most recently Comptime v. E. Frances Paper, which reached the exact opposite result). I wish someone would take one of these to the Fed Cir to get the issue finally resolved (preferably, IMO, requiring both priority and distinctiveness to cancel a Supp Registration). (*Disclaimer: I represented the prevailing Defendant in Comptime, and was hoping the Petitioner would appeal, but no such luck.)
Mark: I invite you to write a guest blog post.
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