Trademark Review | December 2014

The TTAB Sets the Rules for Pleading Abandonment of a Section 66(a) Registration

VENM seeks registration of the mark VENM for dance costumes. Dragon Bleu opposed registration of VENM’s mark based on 3 earlier registrations. VENM brought counterclaims to cancel all three of Dragon Bleu’s pleaded registrations for fraud, nonuse and abandonment. This ruling by the Board was on Dragon Bleu’s motion to dismiss VENM’s counterclaims.

VENM sought to cancel one of Dragon Bleu’s registrations for fraud, claiming Dragon Bleu made material, false statements to the PTO in obtaining its registration. To overcome a refusal of its application based on an earlier registration, Dragon Bleu agreed to limit the goods in its application to clothing related only to martial arts. VENM asserts that Dragon Bleu did not intend to limit its use or enforcement of the mark solely to martial arts clothing, thus, its statements to the PTO were false. The Board disagreed and found that a limitation of goods in an application is not a promise to limit use or assertion of rights in that mark. Thus, there was no false statement. The Board also found that the Examiner made a decision to allow registration of the Dragon Bleu mark based on the restricted identification of goods and would not have relied upon any promise to limit use of the mark.

VENM sought to cancel two of the pleaded registrations based on nonuse. The two registrations, however, were issued based on requests for extension of protection filed under Section 66(a) of the Trademark Act. Use in commerce is not a prerequisite for registration of a mark under Section 66(a). Thus, the Board ruled the claim of cancellation due to nonuse is “legally insufficient.”

Finally, VENM sought to cancel two of the pleaded registrations on the basis the marks have been abandoned. A mark is deemed abandoned if use has been discontinued with intent not to resume such use. Nonuse for 3 consecutive years is prima facie evidence of abandonment. Since the registrations issued pursuant to Section 66(a), there was no requirement to use the marks prior to issuance of the registrations. After registration, however, Dragon Bleu must use the registered marks to avoid abandonment. For the first time, the Board had to determine what is the earliest point in time from which the period of nonuse may be measured for an abandonment claim with respect to a Section 66(a) registration.

The Board looked to the Federal Circuit’s ruling in Imperial Tobacco Ltd. V. Philip Morris Inc. in which the Federal Circuit held that for a registration issued under Section 44(e) (based on a foreign registration), the three-year period of nonuse begins no earlier than the date of registration. The Board held review of a Section 66(a) registration is highly analogous to a 44(e) registration, and thus, a claim for cancellation of a Section 66(a) registration must plead three or more consecutive years of non use no earlier than the date of registration, or non-use after the date of registration coupled with an intent not to resume use.

The Dragon Bleu registrations were less than three years old when VENM filed its counterclaim. Thus, VENM was required to plead facts to establish intent not to resume or commence use. VENM alleged only that Dragon Bleu does not display or offer for sale some or all of its identified goods on its website. This was not a sufficiently plead claim to dismiss a Section 66(a) registration.

The Board dismissed all three claims but allowed VENM time to submit an amended abandonment counterclaim.

Dragon Bleu (SARL) v. VENM, LLC, Opposition No. 91212231 (TTAB December 1, 2014) [precedential].

An Update on Two Trademark Cases Pending Before the U.S. Supreme Court

The U.S. Supreme Court has not ruled on a substantive trademark case since 2004. Currently, there are two trademark cases pending before the U.S. Supreme Court. In B&B Hardware Inc. v. Hargis Industries Inc., the Court will decide whether an earlier ruling by the TTAB on likelihood of confusion should preclude a later, opposite ruling in an infringement case in federal court. The Court heard oral arguments in this case on December 2.

In Hana Financial Inc. v. Hana Bank, the Court is addressing the issue of tacking, which allows a company to slightly modify its trademarks while maintaining the original first-use date. Specifically, the Court will decide whether tacking is a question of law to be decided by judges, or a question of fact to be decided by a jury. The Court heard oral arguments in this case on December 3.