From June through August 2015, the Trademark Trial & Appeal Board issued eleven precedential decisions.  Over the course of the upcoming weeks, we are briefly summarizing each opinion and a “take away” for brand owners and practitioners.  We continue our series with summaries ofUVeritech, Inc. v. Amax Lighting, Inc. and In re Driven Innovations, Inc.

UVeritech, Inc. v. Amax Lighting, Inc. – The Dealer Wins

In this dispute, the parties, who used to have a business relationship, each claimed trademark rights in the mark UVF861 for light bulbs. The Board observed that adjudication of the petition for cancellation depended on which party’s claim of ownership prevailed.

Petitioner UVeritch sells devices to detect counterfeit currency, which devices use ultraviolet bulbs. UVeritech’s first bulbs were offered under the name UVF-461. In order to lower costs, UVeritech began sourcing these bulbs from Respondent Amax Lighting. UVeritech then approached Amax about manufacturing larger, more powerful bulbs producing twice the wattage of the 4-watt UVF-461 bulbs. Amax informed UVeritech it could produce such bulbs, and the bulbs were sold under the mark UVF861. Because of concerns with the quality of the bulbs produced by Amax, UVeritech, for a time, moved production of the bulbs to a competitor of Amax’s; these bulbs continued be marketed under the UVF861 mark. After similar quality issues, UVeritech moved production back to Amax, and the parties’ relationship was ultimately severed when a large order of bulbs to a major client of UVeritech’s was defective.

Shortly after their relationship ended, Amax filed an application to register UVF861 with the PTO for “lighting fixtures, light bulbs, and internal lighting in the nature of lighting tracks and lighting tubes.” UVeritech only found out about this application when its own application to register UVF861 was refused based on Amax’s prior registration.

UVeritech’s principal claim to ownership of the mark was that Amax manufactured the bulbs at issue to UVeritech’s specifications, and, thus, it owned the UVF861 mark used on the bulbs. Amax, on the contrary, argued that it owned the mark because it was the manufacturer of the goods, while UVeritech was simply the goods’ U.S. distributor. The parties had not entered into any written agreement determining ownership of the mark.

In beginning its analysis of who owns the UVF861 mark, the Board noted that “[t]he presumption that the manufacturer is the owner of a disputed mark may be rebutted.” The relevant factors for resolving the dispute are:

  1. Which party created and first affixed the mark to the product;
  2. Which party’s name appeared with the trademark on packaging and promotional materials;
  3. Which party maintained the quality and uniformity of the product, including technical changes;
  4. Which party does the consuming public believe stands behind the products, e.g., to whom customers direct complaints and turn to for correction of defective products;
  5. Which party paid for advertising; and
  6. What a party represents to others about the source or origin of the product.

Applying these factors, the Board found that UVeritech was the owner of the mark. The evidence established that UVeritech designed the bulbs at issue and that Amax manufactured them according to UVeritech’s direction and specifications. UVeritech undisputedly owned the UVF-461 mark, which was the basis for the adoption of the UVF861 mark. Amax never produced bulbs under UVF861 (or UVF-461) prior to its relationship with UVeritech, and, tellingly, ceased production of bulbs under UVF861 when UVeritech moved production to a competing company. Also, customers approached UVeritech, not Amax, when it had problems with defective UVF861 bulbs.

The Board noted its decision was consistent with prior Board decisions finding the dealer, not the manufacturer, to be the owner of the contested mark when the dealer’s goods are manufactured for it, it controls their production, or “that the goods pass through its hands in the course of trade and that it gives the goods the benefit of its reputation or of its name and business style.”

Take Away: When determining ownership of a mark, examine the facts underlying the creation and sale of the goods and services at issue, not just the titles applied to those in the chain of production, e.g., manufacturer, producer, dealer, and distributor.

In re Driven Innovations, Inc. – What Clear Error?

This case germinates from a factual situation known to frustrate trademark practitioners. Specifically, after applicant Driven Innovations, Inc.’s application to register DOTBLOG had been published without opposition and it had submitted its statement of use, the examining attorney determined it was “clear error” to have failed to refuse registration of the mark during its initial examination on the grounds that DOTBLOG failed to function as a mark and is descriptive. Among the issues before the Board was whether the examining attorney must prove that its failure to refuse registration of the mark during the initial examination was “clear error” according to some criteria above and beyond the basis for the refusal itself.

TMEP § 1109.08 provides that examination of a statement of use is generally limited to determining issues related to the statement of use itself, but a refusal unrelated to the statement of use may be made if the failure to issue the refusal at the time of the initial office action was a clear error or evidence supporting a new refusal or requirement becomes available during the time that has elapsed since initial examination. How to determine “clear error” has changed over time. A prior version of the TMEP advised that descriptiveness refusals not issued until examination of the statement of use must be supported by “substantial and unequivocal” evidence of descriptiveness. The current version of the TMEP has deleted this language, only advising that clear error is that which, if not corrected, would result in the improper issuance of a registration. Furthermore, the TMEP expressly states that “the internal ‘clear error’ standard is merely an administrative guideline [and] does not confer on an applicant any entitlement to a showing of clear error.” Accordingly, the Board held that an applicant may not challenge an examining attorney’s belated refusal to register under the clear error standard; instead, an applicant’s recourse lies in appealing the merits of the examining attorney’s refusal to the Board.

To add insult to injury, the Board then determined that DOTBLOG was descriptive and affirmed the examining attorney’s refusal to register.

Take Away: An examining attorney is not precluded from refusing registration of a mark after it has been published, and need not support any such refusal according to a heightened standard.