The TTAB recently held that a registration was not abandoned for nonuse when there was no evidence that the registrant intended to abandon the mark, despite nearly three years of nonuse of the challenged mark. Here, registrant announced its intention to cease use, and indeed did cease importing its branded goods into the United States for nearly three years due to high tariffs. Registrant’s evidence of an intention to resume use, and of actions taken towards resumption, were enough to avert cancellation of the registration.
In a recent precedential cancellation proceeding decision, the United States Trademark Trial and Appeal Board (“TTAB” or the “Board”)) held that a petitioner’s nonuse of a registration for almost three years did not constitute abandonment when there was no evidence that petitioner intended to permanently abandon the challenged mark.
Abandonment in the United States
Petitioner Double Coin Holdings Ltd. (“Double Coin”), a Chinese tire manufacturer, sought the cancellation of Respondent Tru Development’s (“Tru’s”) ROAD WARRIOR registration for tires on the basis of priority and likelihood of confusion with Double Coin’s WARRIOR (stylized) registration for tires. In response, Tru counterclaimed for cancellation on abandonment grounds, based upon evidence of Double Coin’s public announcement of its cessation of U.S. sales, and its actual cessation of product sales in the U.S. for nearly three years.
Double Coin’s Nonuse and the TTAB’s Decision
In the United States, abandonment can be established upon a showing of three or more years of nonuse coupled with evidence of an intent not to resume use. See 15 U.S.C. § 1127. Three consecutive years of nonuse can be treated as prima facie evidence of abandonment. Id. Nonuse for abandonment purposes has been defined as “no bona fide use of the mark made in the ordinary course of trade.” See Lewis Silkin LLP v. Firebrand LLC, 129 USPQ2d 1015 (TTAB 2018).
In support of its abandonment claim, Respondent Tru pointed to the registrant’s announcement in an industry publication of its intention to halt all shipments of tires into the United States because of extremely high tariffs (88%). Tru also presented evidence that Double Coin sold off its remaining inventory of tires in the United States between May 2014 and April 2015, in addition to the nearly three-year period of nonuse of the mark in U.S. commerce. Tru argued that this announcement, in conjunction with the sell-off and long period of nonuse, demonstrated Double Coin’s intention to permanently cease selling WARRIOR-branded tires in the United States.
In response, Double Coin offered evidence that it had a legitimate reason for nonuse as a result of high tariffs, and also that it intended to and did indeed develop and implement a plan to move its tire manufacturing operation to Thailand to avoid the tariffs. Double Coin also pointed out that upon completion of the construction of the new facility in Thailand, it resumed the importation of WARRIOR-branded tires. Double Coin offered this evidence in support of its efforts to refute any “intention not to resume use” of the mark.
In reviewing Tru Development’s evidence in support of cancellation of the registration, the Board emphasized that Double Coin’s announcement in an industry publication “falls far short of a statement of an intention permanently to discontinue the sale of WARRIOR tires in [The United States].” It emphasized that a determination of abandonment must be based on “the activities that Double Coin engaged in during the period following cessation of use to determine whether we may infer from those circumstances an intent to not resume use” and not “whether Double Coin’s decision to discontinue sales in the United States … in-and-of-itself, was … a reasonable judgment under the circumstances.”
The Board noted that in cases of cancellation, the challenger bears an affirmative burden of demonstrating an intention to abandon by a “preponderance of the evidence.” It concluded that Tru Development’s evidence of Double Coin’s industry announcement of intended cessation, its product sell-offs, and its lengthy period of nonuse in the U.S., were not sufficient, standing alone, to objectively satisfy that high burden of proof. The Board further concluded that Double Coin’s own evidence of its intention to relocate its manufacturing facilities, evidence of the steps taken towards that goal, and the actual resumption of sales in the U.S. under the mark, were all sufficient to avoid cancellation of the challenged mark.
What does this Mean for Trademark Registrants and Applicants?
The TTAB’s precedential decision highlights the U.S. presumption against the invalidation of valuable property rights absent evidence satisfying the “preponderance” standard, not only of a trademark owner’s nonuse, but also of its intention not to resume use. The decision also offers useful insight into the type of evidence a trademark owner should maintain in the event of periods of nonuse to successfully defend against a cancellation challenge.