Trademark Review | May 2016

Surname Not Registrable Absent Substantially Exclusive Use

As a result of various third-party uses of the surname “Ayoub” for similar services, Applicant’s use of AYOUB did not meet the requirement of Section (f) that use be “substantially exclusive.”

Applicant operated a rug and carpet cleaning and repair business in the Washington D.C. metropolitan area under the name ACS Ayoub Carpet Service. Applicant filed an application to register the mark AYOUB, claiming use of the mark since 1952. The application was initially rejected on the basis the mark was primarily merely a surname, but was approved following Applicant’s amendment to seek registration under Section 2(f) of the Trademark Act based on Applicant’s claim that the mark had acquired distinctiveness.

Opposers Ayoub, Inc and Ayoub Supply opposed registration of the mark on the basis that the proposed mark is merely a surname that has not acquired distinctiveness.

All parties to the opposition acknowledged that AYOUB is primarily a surname and that the only issue in the opposition is whether the AYOUB surname had acquired distinctiveness for the relevant services. Registration based on acquired distinctiveness under Section 2(f) requires “substantially exclusive and continuous use” of the mark in commerce for at least five years immediately before the date of the claim of acquired distinctiveness.

Applicant submitted evidence to show its use of the mark, including advertising in telephone directories, testimony as to sales revenue and advertising expenditures, and policing efforts against third-party uses of “Ayoub” for similar services. Some of those third parties agreed to discontinue use of the Ayoub name, but others continued use with additional terms (such as “George Ayoub Carpet & Rug Care”) in an effort to avoid consumer confusion. In fact, Applicant and the Opposers were involved in litigation which was resolved when the parties agreed Opposers could use the name Ayoub if always used in combination with the term “N&H.”

Opposers argued that “Ayoub” is a prominent surname in the rug and carpet cleaning and repair business in the Washington D.C. area. In support, Opposers submitted evidence of seven other rug and carpet cleaning businesses unrelated to Applicant that have used the surname Ayoub for decades in the Washington D.C. metropolitan area for services similar to those provided by Applicant.

The evidence showed use of the surname Ayoub by various third parties that are, or were, in the same business as Applicant and who were using the name Ayoub at least some of the time during which Applicant claimed substantially exclusive use. The evidence also showed that Applicant knew its use of AYOUB was not substantially exclusive, because Applicant had placed a notice on its website to clarify that the owners of Ayoub-owned businesses in the Washington D.C. metropolitan area are wholly separate unaffiliated business entities. Applicant’s notice went so far as to say:

Some of you might be confused of (sic) the various “Ayoub” entities serving the Washington DC metro are in the cleaning and flooring business. Although we are all related and do a good job, we each run our business separately and uniquely apart from one another.

The Board ruled that Applicant had not demonstrated that AYOUB has acquired distinctiveness due to a lack of substantially exclusive use. While absolute exclusivity is not required, widespread use of the surname Ayoub by unaffiliated businesses offering the same services is inconsistent with a claim of acquired distinctiveness.

Ayoub, Inc. and Ayoub Supply LLC v. ACS Ayoub Carpet Service, Opposition No. 91211014 (TTAB March 31, 2016) [precedential].

Noble House Fails to Show Trademark Use Where Use and Control Was By Its Parent Entity

Noble House sought to cancel a registration for the mark NOBLE HOUSE owned by Floorco Enterprises, LLC, alleging Floorco had abandoned the mark.

Floorco filed its Statement of Use on August 18, 2011 claiming it had used the NOBLE HOUSE mark in commerce since at least as early as December 3, 2010. At the time Floorco filed its Statement of Use, it had not sold any furniture under the mark since July 14, 2009. Its parent entity, Furnco International Corporation, had, however, sporadically marketed the furniture since that date.

The Board commented that “nonuse due to lack of demand may not constitute abandonment if the trademark owner continues its marketing efforts.” Floorco’s problem, however, was that the marketing and advertising of goods under the NOBLE HOUSE mark was done by Furnco International Corporation, not Floorco. Further, Furnco controlled the nature and quality of the NOBLE HOUSE furniture sold prior to August 18, 2011.

The issue before the Board was whether use of a mark by a parent entity inures to the benefit of the wholly-owned subsidiary when the parent controls the nature and quality of the goods, and there is no agreement between the parent and subsidiary.

If a mark is used by a related company, the use inures to the benefit of the owner who controls the nature and quality of the goods. The Trademark Act defines a “related entity” as any entity whose use of a mark is controlled by the owner of the mark as to the nature and quality of the goods and service with which the mark is used. If a parent company owns the mark and use is by the wholly-owned subsidiary, the “inherent nature of the parent’s overall control over the affairs of a subsidiary” is sufficient to presume the parent is exercising adequate control over use of the mark, even absent an agreement between the parent and subsidiary.

A subsidiary, however, does not inherently control the operation of its parent entity. Thus, any control over and use of the mark by the parent would need to be set out in an agreement between the parent and subsidiary. The Board held that the use of the mark Furnco did not inure to the benefit of Floorco, where Furnco also controlled the nature and quality of the furniture sold under the mark. The Board ruled there was a sufficient showing of three years of non-use by Floorco, with no intent to resume use, and thus, Floorco abandoned the NOBLE HOUSE mark.

Noble House Furnishings, LLC v. Floorco Enterprises, LLC, Cancellation No. 92057394 (TTAB April 4, 2016) [precedential].