Tequila Cuervo petitioned for cancellation of a registration for the mark ROYAL RITA for "prepared frozen and non-frozen alcoholic cocktails; frozen and non-frozen alcoholic cocktail mixes," claiming that respondent does not sell alcoholic cocktails, does not use the mark on cocktail mixes, and does not own the mark. It also claimed that the mark is used only at a single location (Kauffman Stadium, home of the Kansas City Royals, and thus not in interstate commerce), that Respondent abandoned the mark through uncontrolled licensing, used the mark illegally, and committed fraud on the USPTO. The Board dismissed all claims. Tequila Cuervo La Rojena, S.A. de C.V. v. Mush, Inc. d/b/a Igloo’s Frozen Drinkss, Cancellation No. 92059500 (March 14, 2017 [not precedential].

Use of the mark: Respondent provides frozen drink mixes and equipment at several dozen large venues. For Kauffman Stadium, respondent created the name ROYAL RITA for the frozen drinks made from its mix. Respondent's revenues come from the sale of the mix, which does not bear the mark. The mark is shown on a sign above the machine from which the drinks are dispensed. [see photo above]. Respondent creates the signage. The mark also appears on "vending sticks" carried by vendors through the stands, and the ROYAL RITA drink is carried in cups on the stick.

Respondent trains the people who make the drinks, supplies the recipe, maintains the machines, and visits customers several times each season to check the machines and sample the product. It admitted that it does not have a trademark license with Kauffman Stadium regarding the use of the mark at the stadium.

The Board found that, although Respondent does not use the mark "on the goods," it placed the mark on displays associated with the goods, i.e., on signage above the dispensing machine, on magnets attached to the machine (see below), and on menus.

With regard to drink mix, respondent's witness testified that "[n]obody sees the box except the concessionaire who is pouring it into the containers so there's no need to have it on anything like [the cartons] since we’re not selling these boxes at retail."

Illegality of use: Respondent conceded that it is not licensed to sell alcoholic beverages, but the Board found that fact to be irrelevant since respondent is not selling alcoholic drinks, only mixes. In any case, the production and sale of alcohol is not per se illegal, and there was no evidence that any court or agency has found Respondent, Kauffman Stadium, or Aramark (the concessionaire) in violation of any law or regulation.

Interstate use:Although ROYAL RITA cocktails are sold only in Kauffman Stadium, those sales satisfy the use in commerce requirement. Christian Faith Fellowship Church v. adidas AG, 841 F.3d 986, 120 USPQ2d 1640 (Fed. Cir. 2016). In any case. respondent ships its drink mix interstate, from Texas to Kansas City. "In other words, the goods are 'transported in commerce,' which when combined with the ROYAL RITA mark being placed on 'displays associated' with the goods, constitutes 'use' in commerce. 15 U.S.C. § 1127.

Naked Licensing: The Board pointed out that a written license is not required.

"[w]here the license parties have engaged in a close working relationship, and may justifiably rely on each parties’ intimacy with standards and procedures to ensure consistent quality, and no actual decline in quality standards is demonstrated, we would depart from the purpose of the law to find an abandonment simply for want of all the inspection and control formalities." Taco Cabana Int’l, Inc. v. Two Pesos Inc., 952 F.2d 1113, 19 USPQ2d 1253, 1259 (5th Cir. 1991), aff’d, 505 U.S. 763, 23 USPQ2d 1081 (1992).

Petitioner Cuervo did not establish that respondent's quality control efforts were inadequate or that the quality of the ROYAL RITA drinks was unacceptable. "Kauffman Stadium serves drinks made with Respondent’s mix and machine, pursuant to Respondent’s recipe, and Respondent monitors the Stadium’s operations from time to time." In short, Petitioner did not prove abandonment via naked licensing.

Fraud: Petitioner's fraud claim was based on the various contentions that the Board rejected. Moreover, there was no evidence of any intent to deceive the USPTO.

And so the Board dismissed the petition for cancellation.