Foreign companies that own U.S. trademark registrations based on Madrid Protocol extension rights should take care to use the marks in commerce after the U.S. registration issues. While a company need not allege use to obtain a U.S. registration via the Madrid Protocol, a recent Trademark Trial and Appeal Board decision confirms that any resulting U.S. trademark registration is subject to cancellation for nonuse at any time, regardless of the continued validity of the home registration. SaddleSprings, Inc. v. Mad Croc Brands, Inc., Cancellation No. 92055493, at 9 (T.T.A.B., Sept. 25, 2012).

Under Section 66(a) of the U.S. Trademark Act, a holder of an international registration under the Madrid Protocol may request that the United States Patent and Trademark Office (“USPTO”) extend protection of that international registration to the U.S. The applicant must declare its intention to use the mark in the United States, and the resulting U.S. trademark application is subject to examination and opposition in the USPTO. Once the request for the extension of protection has been approved and the opposition period has cleared, the USPTO will issue a certificate of extension of protection, referred to as a “registration of extension of protection” or a “Section 66(a) registration.1 In SaddleSprings, Inc. v. Mad Croc Brands, Inc., the USPTO Trademark Trial and Appeal Board (“TTAB”) considered the bases upon which such Section 66(a) registrations may be challenged.

SaddleSprings, Inc. v. Mad Croc Brands, Inc.

SaddleSprings, Inc. filed an intent-to-use application to register the mark CROCTAIL for wine and spirits. The USPTO refused registration based on a prior Section 66(a) registration for CROC-TAIL & Design (click here to see image), owned by Mad Croc Brands, Inc., for various beverages including wine and distilled spirits. SaddleSprings thereafter filed a petition to cancel Mad Croc’s registration based on abandonment, alleging that Mad Croc “either never used the Registered Mark in commerce or completely ceased using [the] Registered Mark, in connection with the goods identified in the Registration for a period of at least three consecutive years.” SaddleSprings, Inc. v. Mad Croc Brands, Inc., Cancellation No. 92055493, at 2 (T.T.A.B., Sept. 25, 2012).

Mad Croc filed a 12(b)(6) motion to dismiss the petition for cancellation, arguing that pursuant to Section 71 of the Trademark Act, “an extension of protection remains in force for the term of the international registration, except that the Director may cancel the extension” if a Section 8 affidavit of use is not timely filed between the fifth and sixth year after the registration date. Id. at 3. Mad Croc argued that its registration could not be cancelled because: (1) the underlying international registration was still in force; and (2) the Director had no authority to cancel the registration prior to the deadline to file the Section 8 affidavit. Id. at 3.

SaddleSprings noted that Section 69 of the Trademark Act provides that “an extension of protection shall have the same effect and validity as a registration on the Principal Register.” Id. at 3. Therefore, SaddleSprings contended that a Section 66(a) registration was subject to the same conditions and requirements as any other U.S.-based registration, including use of the mark in commerce.

The issue before the TTAB on the motion to dismiss was “whether abandonment is an available claim with respect to a registration based on Section 66(a) for which the underlying international registration is valid and subsisting.” Id. at 6. The TTAB held that: “once a U.S. registration issues based on Section 66(a), the registration is subject to the same grounds for cancellation as those registrations issued under Section 1 or Section 44(e).”2 Id. at 9. “[O]nce having obtained a U.S. registration, an owner of a Section 66(a) registration is subject to the same treatment and conditions which prevail in connection with any other registrant. We hold that this includes the possibility that the registration may be cancelled on any available ground under Section 14 of the Trademark Act….” Id. at 12.

The TTAB rejected Mad Croc’s contention that Section 71 somehow limited the bases for cancellation of a 66(a) registration. Noting that Section 71 tracks the language of Section 8, the TTAB concluded that the language in both sections “sets out the normal duration or term of a registration, but [does not contain] language that expressly limits the right of others to petition for cancellation during that term….” Id. at 10. In other words, the TTAB found that Section 71 only defined the maximum amount of time a valid international registration remained in force in the U.S., but did not shield that international registration from traditional cancellation challenges. The TTAB stated that its interpretation of the statutes was consistent with both Article 5(6) of the Madrid Protocol, which recognizes that a request for extension of protection may be subject to cancellation, and the U.S. Trademark Manual of Examining Procedure, which states that an extension of protection to the United States may be invalidated in an administrative or judicial proceeding.

Accordingly, the TTAB denied Mad Croc’s motion to dismiss and found that SaddleSprings could proceed with its cancellation petition based upon abandonment of use.

Practice Point: Standards for Cancellation for Nonuse

Now that SaddleSprings has survived the motion to dismiss, it must prove by a preponderance of the evidence that Mad Croc abandoned use of its trademark. If SaddleSprings makes a prima facie showing of abandonment, the burden shifts to Mad Croc to rebut the abandonment claim by providing objective evidence of the mark’s use, or its intention to resume use. See, e.g., On-Line Careline Inc. v. America Online Inc., 229 F.3d 1080 (Fed. Cir. 2000); Cerveceria Centroamericana S.A. v. Cerveceria India Inc., 892 F.2d 1021(Fed. Cir. 1989).

Holders of a U.S. trademark should be aware of the statutory presumption that three consecutive years of nonuse constitutes abandonment.3 If a party seeking cancellation can demonstrate that the registrant has failed to use the mark in commerce for three consecutive years, the burden then shifts to the registration owner to demonstrate use or objective evidence showing it intends to resume use of the mark.

Notably, while the evidentiary burden is greater, a party need not wait three years to challenge the mark for nonuse. If, at any time after registration, a party can prove that a registrant is not using and has no intention to resume use of the mark, the registration may be cancelled on the basis of nonuse. See e.g., ShutEmDown Sports, Inc. v. Carl Dean Lacy, Cancellation No. 92/049,692, at 26-27 (T.T.A.B. Feb. 22, 2012)(citing precedents).

Owners of U.S. trademark registrations pursuant to Madrid Protocol extension protection should therefore keep in mind that while use in U.S. commerce may not be required to obtain a Section 66(a) registration, such registrations are subject to cancellation at any time after they issue on the basis of nonuse.