This opposition involving the mark CITY CLUB for soft drinks boiled down to a priority contest. Applicant Day's Beverages relied on its filing date of July 15, 2014 as its priority date, and it claimed that opposer, although the first user, had abandoned its rights to the mark prior to that July date. The Board said, Have a TTABad day! 3rd Generation Enterprises Co., Corp. v. Day’s Beverages, Inc., Opposition No. 91220327 (April 24, 2017) [not precedential] (Opinion by Judge Quinn)

The Board pointed out that there are two elements to an abandonment claim: nonuse of the mark and intent not to resume use. If the mark has not been in use for a three-year period, Section 45 of the Act creates a presumption of abandonment and the mark owner bears the burden to produce evidence that it did not abandon the mark - i.e.,either that it has used the mark or that it intended to resume use. The ultimate burden of persuasion on the issue, however, remains with the party alleging abandonment.

Applicant contended that Opposer 3rd Generation began “liquidating” its CITY CLUB inventory in July 2011; that opposer has not used the mark since then; and that opposer failed to establish that its nonuse was excusable and that it had an intent to resume use. In response, opposer contended that applicant failed to make out a prima facie case of abandonment and that, in any event, any period of opposer’s nonuse is excusable.

The evidence provided by opposer 3rd Generation showed use of the mark in 2009 and continuing until 2012, when opposer lost its biggest customer. The latest invoice for that year was dated July 18, 2012.

On August 29-20, 2012, tropical storm Sandy struck New Jersey, flooding opposer's warehouse. As a result opposer lost all of its inventory as well as its computers and business records. Opposers sales of CITY CLUB brand soda resumed in 2014 and totaled a few thousand dollars for the year. The 2014 invoices were dated in October to December 2014 and showed sales to a single customer. At the time opposer's witness testified in 2015, sales that year had also totaled a few thousand dollars.

The Board found "substantial evidence" that opposer did not abandon its mark. Although 3rd Generation stopped using the mark in October 2012 due to Sandy, it intended to resume use and did so in 2014. Thus, the maximum period of nonuse was two years, and there was no prima facie abandonment. [In any event, this nonuse was excusable].

While "hardly impressive," opposer's sales were "certainly of a magnitude that demonstrates prior and continuous use of the mark with no abandonment, rather than, as Applicant contends, mere 'liquidation' of the brand."

And so the Board ruled that opposer had prior rights in the CITY CLUB mark and it sustained the opposition.