The U.S. Court of Appeals for the Federal Circuit affirmed the Trademark Trial and Appeal Board’s (the Board) decision finding that Mattel overcame the statutory presumption of abandonment of its CRASH DUMMIES marks. Crash Dummy Movie, LLC v. Mattel, Inc., Case No. 09-1239 (Fed. Cir, Apr. 16, 2010) (Rader, J.).
Tyco Industries, Mattel’s predecessor-in-interest, first produced a line of toys under the CRASH DUMMIES marks in 1991 and sold its toys under this name through at least 1994. Tyco later assigned its trademark portfolio to Mattel, which recorded the assignment with the U.S. Patent and Trademark Office (USPTO).
In 1997, Mattel was approached by KB Toys to become an exclusive retailer of the CRASH DUMMIES toys. Mattel declined the offer because it needed to retool the CRASH DUMMIES toys in order to meet their stringent safety standards. At that time, the cost of retooling was too significant in light of KB Toys’ sales projections.
In 2000 Mattel began to research and develop its new toys, and in 2003 it reintroduced the CRASH DUMMIES toys into the market. While Mattel was developing the new toys, USPTO cancelled the registrations for the CRASH DUMMIES marks because Mattel was not using the marks. In March, 2003 Crash Dummy Movie (CDM) filed an application for the mark CRASH DUMMIES for games and playthings, which was opposed by Mattel. Both companies agreed that the marks were likely to cause confusion and that the only issue before the Board was whether Mattel was entitled to claim common law trademark rights to the CRASH DUMMIES marks predating CDM’s filing date of March, 2003. Under the trademark law, a registered trademark is considered abandoned if its “use has been discontinued with intent not to resume such use.” According to the statute, “nonuse for 3 consecutive years shall be prima facie evidence of abandonment.”
The Board found a prima facie abandonment of the CRASH DUMMIES marks based on three years of nonuse. However, the Board concluded that Mattel rebutted the presumption of abandonment of its common law trademark rights by showing “reasonable grounds for the suspension and plans to resume use in the reasonably foreseeable future when the conditions requiring suspension abate.”
CDM appealed, challenging the Board’s finding regarding Mattel’s intent to resume use during the period after it acquired the marks in 1997 until it began selling CRASH DUMMIES toys in December 2004.
The Federal Circuit affirmed the finding that Mattel had rebutted the statutory presumption of abandonment by its showing of intent to resume use. In that regard, the Court pointed to evidence that Mattel had discussed making products identified by the marks with a third party, had conducted research and development in connection with the product and had also recorded its trademark assignment.