United States Use Not A Prerequisite for §43(a) Claim -- Belmora LLC v. Bayer Consumer Care AG et al.

The Fourth Circuit Court of Appeals has concluded that a false advertising/false association claim under Lanham Act §43(a) need not be premised upon the ownership of a United States trademark registration or even use of a mark in the U.S.  Such a claim is available to “[a]ny person who believes that he is or will be damaged” as a result of a defendant’s activities.

Belmora LLC markets an analgesic in the U.S. called FLANAX, which it packages and promotes in a manner allegedly designed to create an untrue association or affiliation with an analgesic long marketed under the name FLANAX by Bayer in Mexico.  Notwithstanding the fact that Bayer did not use the FLANAX mark in the U.S. and did not own a U.S. registration, Bayer petitioned to cancel Belmora’s U.S. FLANAX registration under Lanham Act §14(3) alleging that Belmora’s use of the mark “misrepresent[ed] the source of [Belmora’s] goods.” The Trademark Trial and Appeal Board cancelled Belmora’s registration, concluding Bayer had standing to bring the cancellation action because it “lo[st] the ability to control its reputation and thus suffer[ed] damage.”

Belmora appealed the Board’s decision via a civil proceeding in the Eastern District of Virginia.  Meanwhile, Bayer filed suit in California alleging false association and false advertising under §43(a).  The cases were consolidated in Virginia.  Reversing the Board’s decision and dismissing Bayer’s false association/false advertising claims, the district court determined that Bayer lacked standing because it had never used or owned a registration in the U.S.  Bayer appealed to the Fourth Circuit.

Focusing on the language of §43(a), the Fourth Circuit found that the statute does not require a plaintiff to possess a U.S. registration or even to have used a trademark in U.S. commerce.  Rather, in contrast to the trademark infringement language of §32, Congress wrote §43(a) in terms of the putative defendant’s conduct, and did not include a Plaintiff’s registration/use as a precondition.  Thus, the district court had erred in reading such a requirement into the statute.  

The court then analyzed whether Bayer had properly alleged its false association/false advertising claims in light of the two-prong test established by the Supreme Court in Lexmark Int’l v. Static Control. The Fourth Circuit framed the issues as: Whether the alleged acts of unfair competition fell within the Lanham Act’s protected zone of interests? And if so, had Bayer pled proximate causation of a cognizable injury?

As to false association, the court found that that Bayer’s claim fell within the appropriate zone of interests because the complaint alleged that Belmora’s misleading association with Bayer’s Mexican product had caused customers to buy Belmora’s product in the U.S. instead of Bayer’s product in Mexico. These alleged lost customers, the court found, could reasonably translate to a cognizable injury in the form of lost sales revenue, satisfying Lexmark’s second prong.

Similarly, as to false advertising, Bayer’s claim fell within the Lanham Act’s zone of interests by “protecting persons engaged in commerce within the control of Congress against unfair competition.” Further, Bayer had sufficiently alleged that Belmora engaged in unfair competition by using deceptive advertisements that capitalized on Bayer’s goodwill, thus potentially causing Bayer to lose customers and demonstrating injury proximately caused by Belmora’s conduct.  

Although the decision appears to provide an avenue for foreign entities to reach into the U.S. to stop a domestic trademark use, it is premised upon whether Bayer had standing and whether its claims could survive a motion to dismiss.  Whether Bayer (or any similarly-positioned plaintiff) will ultimately prevail on the merits of its §43(a) claims remains to be seen.  

Omega S.A. (Omega AG) (Omega Ltd.) v. Alpha Phi Omega (Opposition Nos. 91197504 and 91197505)

The Trademark Trial and Appeal Board (TTAB) shed light on when fame must be shown in cases of dilution by blurring. Handing down two clarifications, the TTAB decided that (a) fame must be shown as of first use of an applicant’s trademark, not only as of the date of its registration application, and that (b) fame must be shown as of the date of first use of any kind by an applicant, not just as of the date of first use for those goods and services listed in its application.

The Alpha Phi Omega fraternity (“APO”) sought to register two trademarks under Section 2(f): a “Crest Mark” for jewelry, and the mark “ΑΦΩ” for “headwear; jackets; shirts; sweatshirts.” The Crest Mark is as follows:

Click here to view image.

Omega S.A. (“Omega”) opposed both of these applications, alleging that the applications would cause both likelihood of confusion and likelihood of dilution by blurring with its own marks. Omega owned registrations containing the term “OMEGA” in both stylized form and Greek alphabet form, used in connection with goods and services such as watches, clothing, scarves, neckties, and “apparatus for use in determining the results of sporting events.” Some of Omega’s registered marks are below:

Click here to view image.

The proceedings were consolidated before the TTAB. APO moved for summary judgment on both of Omega’s asserted grounds. The TTAB granted APO’s motion for summary judgment as to its Crest Mark for both likelihood of confusion and likelihood of dilution by blurring; however, APO’s motion was denied as to its ΑΦΩ mark on both grounds.

The TTAB first focused on likelihood of confusion. Considering the relevant factors from in In re E.I. du Pont de Nemours & Co., 476 F.2d 1357, 177 USPQ 563 (CCPA 1973), the TTAB found no genuine dispute of material fact as to the dissimilarity of APO’s Crest Mark and Omega’s marks. The marks were so “dissimilar in appearance, connotation, and commercial impression” that it was unlikely they would cause confusion. The word “Omega,” prevalent in many of Omega’s marks, played a very minor role in APO’s Crest Mark, and would not be considered separately from the remainder of the mark by viewers. Moreover, any similarities between the marks ended with the word “Omega.” However, the TTAB denied summary judgment on likelihood of confusion between APO’s ΑΦΩ mark and Omega’s marks, finding a genuine dispute of material fact.

Turning to the issue of dilution by blurring, the TTAB directed its attention to Omega’s argument regarding when fame should be established. Omega argued that it need only establish fame of its marks prior to APO’s filing of its involved applications, not when APO’s first use of its marks occurred.  Omega made this argument notwithstanding the fact that APO’s applications were use-based applications, not intent-to-use applications, and alleged use in commerce prior to APO’s filing date. In support of its argument, Omega cited a Federal Circuit holding that stated “in the case of an intent-to-use application, an owner of an allegedly famous mark must establish that its mark had become famous prior to the filing date of the trademark application.” Coach Services v. Triumph Learning LLC, 668 F.3d 1356 (Fed. Cir. 2012) (citing the TTAB’s decision in Toro Co. v. ToroHead Inc., 61 US 1164 (TTAB 2001)). Omega argued that this holding “reflected a conscious decision by the Federal Circuit to broaden application of the Toro rationale to use-based applications,” despite obvious differences between the two cases.

The TTAB disagreed, finding that Omega had misread the precedent. In the TTAB’s opinion, Omega’s interpretation of the Federal Circuit’s decision would nullify the Trademark Dilution Revision Act requirement that fame be shown before commercial use of the defendant’s mark. The TTAB therefore held that an opposer must show that its marks became famous prior to applicant’s first use in commerce of the marks asserted in the involved use-based applications. However, if an applicant fails to establish when this first use in commerce occurred, an opposer need only show fame prior to the constructive use date of the applicant’s marks, i.e., the filing date.

Next, the TTAB addressed a second question under dilution by blurring: whether a plaintiff must establish that its mark became famous prior to the defendant’s use of its mark in commerce as to any goods or services, or only prior to use in commerce as to the goods and services specifically identified in defendant’s opposed application. The TTAB found that a plaintiff must establish fame of its mark prior to “any established, continuous use” of defendant’s mark. The relevant provision in the Lanham Act did not contain any language limiting use of a mark to specific goods or services, while other sections of the Lanham Act did limit the term “mark” in this manner; according to the Board, if Congress had intended to limit use of a mark it would have done so. Furthermore, the TTAB reasoned that the purpose of a claim of dilution by blurring is to determine “whether any use by defendant of its involved mark has reduced the ability of the plaintiff’s mark to serve as a unique identifier of the plaintiff’s products and services,” not just in relation to the identified goods or services. Case law supported this claim.

Utilizing these now-clarified standards, the TTAB turned to APO’s motion for summary judgment on Omega’s claim of dilution by blurring. In regards to APO’s Crest Mark, the TTAB found that the mark was unlikely to dilute Omega’s marks by blurring, as no genuine dispute of material fact existed as to the relevant Lanham Act factors under Section 43(c)(2)(b). The marks were “strikingly dissimilar,” as shown in the likelihood of confusion analysis, there was no evidence that APO intended to create an association with Omega’s marks, demonstrated by ample evidence from APO with no evidence to the contrary offered by Omega, and the record had no evidence of actual association between the Crest Mark and Omega’s marks. However, the TTAB did find a genuine dispute of material fact as to whether APO’s ΑΦΩ mark was sufficiently similar to Omega’s marks, and as to when APO first used ΑΦΩ in interstate commerce, whether as a trademark for goods or a trade name for its fraternal organization.

The TTAB’s findings arguably make it more difficult for an opposer to assert a claim of dilution by blurring when an applicant has previously used its mark in commerce. By requiring an opposer to show that its mark was famous as of the date of first use of any kind of an applicant’s mark, the TTAB is requiring that an opposer prove that its mark was serving as a unique identifier of its goods at the time that the applicant began using the mark.

It is of note in this case that APO was founded in 1925, while Omega claims that it first used one of its marks in 1894. This could be interesting going forward with the claims against APO’s ΑΦΩ mark.

In re Highlights for Children, Inc.  (Serial No. 85838981)

The TTAB decided that a foreign-language translation of a mark registered in English is not the “same mark” as the previously-registered mark. This means that a prior registration in English does not necessarily give its foreign-language translation acquired distinctiveness.

Highlights for Children, Inc. (“Highlights”) is a producer of materials for children, such as its “Highlights” magazine. Highlights sought to register the standard character mark “Imágenes Escondidas” for “books and magazines for children,” alleging bona fide intent to use the mark in commerce. Highlights submitted a statement to the Examining Attorney (“Examiner”) that the English translation of “Imágenes Escondidas” is “Hidden Pictures.” Highlights also claimed that its “Imágenes Escondidas” mark had acquired distinctiveness under Section 2(f) of the Trademark Act. In doing so, Highlights put forth its ownership of three registrations, including a registration for “Hidden Pictures” for “magazines, puzzlebooks, and an ongoing feature in Highlights for Children magazine,” with “Pictures” disclaimed.

The Examiner refused registration of the “Imágenes Escondidas” mark under Section 2(e)(1) of the Trademark Act, finding that “Imágenes Escondidas” was equivalent to “Hidden Pictures,” which merely described Applicant’s goods; that the foreign equivalent of a term that is merely descriptive in English cannot be registered; and that the doctrine of foreign equivalents applied to Applicant’s mark. The Examiner did not accept Highlights’ alternative claim that “Imágenes Escondidas” had acquired distinctiveness. Highlights appealed.

On the matter of mere descriptiveness, the TTAB found that “Imágenes Escondidas” had a definite English transition and that an ordinary Spanish-speaking consumer would either stop and translate the proposed mark, or recognize the terms as equivalents because of the already-provided translation.  Highlights argued that “Imágenes Escondidas” was not merely descriptive of a feature of its product, maintaining that the definition of “hidden” is “kept out of sight, concealed,” while their puzzles involve locating objects “right before your very eyes.” The TTAB disagreed, stating that definitions of “hidden” can include terms such as “unseen” and “not readily apparent,” both of which were characteristics of Highlights’ product. Highlights’ registration on the supplemental register and under 2(f) for previous “Hidden Pictures” marks provided evidence that the mark was merely descriptive, and its registrations in foreign, Spanish-speaking countries were unpersuasive.

Next, the TTAB turned to Highlights’ claim of acquired distinctiveness. Highlights relied on a previous registration for “Hidden Pictures” with “Pictures” disclaimed and on alleged fame and recognition of the “Hidden Pictures” mark, claiming that Spanish-speaking consumers who translated the “Imágenes Escondidas” mark would “immediately recognize it as an indicator o[f] origin in Applicant.”

The issue of whether a foreign-language translation of a mark registered in English is the “same mark” as the previously-registered mark under Trademark Rule 2.41(b) was an issue of first impression for the TTAB. Turning to the case In re Dial-A-Mattress Operating Corp., 240 F.3d 1341, 57 USPQ2d 1807 (Fed. Cir. 2001), the TTAB reiterated that a proposed mark is the “same mark” as a previously-registered mark if it is the “legal equivalent” of that mark, and a mark is a “legal equivalent of another if it creates the same, continuing commercial impression such that the consumer would consider them both the same mark.”

Using this standard, the TTAB said that “Imágenes Escondidas” was not the same mark as “Hidden Pictures” due to the readily apparent visual and aural differences between the marks, and that meaning alone was not enough to find that two marks were the same. Highlights also provided no evidence that consumers would consider the two marks to be the same mark even if they knew the two marks had the same meaning. Thus, “Imágenes Escondidas” and “Hidden Pictures” could not be considered “the same mark,” and the prior registration for “Hidden Pictures” did not give “Imágenes Escondidas” acquired distinctiveness.

The TTAB finally considered Highlights’ argument of alleged fame and recognition of “Hidden Pictures.” Highlights offered information pertaining to alleged fame, but the submitted evidence was “minimal” and concerned Applicant’s “Highlights” mark more than its “Hidden Pictures” mark. The Board found that the evidence was enough to shown recognition of “Hidden Pictures” by consumers, but not enough to indicate that Spanish-speaking consumers who translated the mark would automatically recognize the mark as an indicator of Applicant. Therefore, the evidence was insufficient to demonstrate acquired distinctiveness of “Imágenes Escondidas.”

Thus, Highlights’ “Imágenes Escondidas” mark was merely descriptive of its goods, and Highlights failed to make an adequate showing that the mark had acquired distinctiveness. This decision should encourage applicants seeking a foreign-language mark with an already-registered English translation to offer substantial evidence that consumers would recognize the foreign-language mark as the “same mark” as the already-registered mark.

In re Bay State Brewing Co., Inc. (Serial No. 85826258)

The TTAB recently decided that a consent agreement between parties is not dispositive when determining whether a trademark is likely to cause confusion. Instead, the determining entity needs to look at the entirety of the relevant factors, and determine whether other factors for likelihood of confusion outweigh the existence of the consent agreement.

Bay State Brewing Company (“Bay State”), a brewing company out of Massachusetts, wanted to register the mark “Time Traveler Blonde” in standard characters for “beer,” with the term “Blonde” disclaimed. The Trademark Examining Attorney (“Examiner”) refused registration of the mark for likelihood of confusion with a previously registered mark – “Time Traveler,” in standard characters, for “beer, ale and lager.” The previously registered mark was owned by A&S Brewing Collaborative, doing business as Alchemy & Science (“A&S”).

Bay State and A&S had a previously-signed consent agreement involving the marks at issue. The agreement contained provisions such as geographic limitations restricting use, governance of use of “house marks” (or the marks of the brewing companies themselves, such as “Bay State Brewing”), and governance of use of trade dress.

Bay State argued that the terms of its consent agreement with A&S made likelihood of confusion between the two marks at issue highly unlikely. The Examiner disagreed, finding the pertinent terms of the agreement “inaccurate…irrelevant…or legally insignificant.” Specifically, the Examiner took issue with the claims by Bay State that “Blonde” would be shown more prominently than “Time Traveler” on Bay State’s product, due to both terms being in standard form in the application.  The Examiner also took issue with the relevancy of house marks, as well as the fact that A&S was free to use its mark in Bay State’s territory. Bay State appealed.

The TTAB first set the consent agreement aside and considered the relevant factors set forth In re E.I. du Pont de Nemours & Co., 476 F.2d 1357, 177 USPQ 563 (CCPA 1973). Bay State and A&S’s marks were identical as to both the identifications in the application and the registration, as both included “beer” and types of beer. Because the identified goods were “at least in-part identical,” the channels of trade and purchasers were also presumed to be the same. Moreover, the TTAB took judicial notice that beer is “often relatively inexpensive, subject to impulse purchase, and often ordered orally in a bar or restaurant,” indicating a lower standard of purchasing care and, correspondingly, a higher potential for confusion. Finally, the TTAB considered similarity between the marks, noting that “[t]he appropriate emphasis is on the recollection of the average customer.” The disclaimed term “Blonde” was highly descriptive of the product and likely to be dropped by consumers when ordering, leaving just the identical “Time Traveler” portion of the mark. Therefore, the marks were virtually identical.

Turning to the consent agreement, the TTAB first revisited In re Mastic Inc., 829 F.2d 1114 (Fed. Cir. 1987), and found that Mastic taught that there was “no per se rule” that a consent always tips the scale to finding no likelihood of confusion. A consent agreement, according to Mastic, should “reflect the reality of no likelihood of confusion in the marketplace,” and it must be determined whether the parties crafted an agreement beneficial to them alone, regardless of any confusion to the public.

Reviewing the actual agreement between A&S and Bay State, the TTAB took issue with the geographical limitation provision in the agreement, as Bay State was limited in its geographical scope of use while A&S was not. This disparity would allow both parties to use their marks in the same territories. Additionally, Bay State’s registration was for a nationwide registration, not a geographically limited registration; therefore, the restrictions in the consent agreement would not be reflected in any registration by Bay State. Even if Bay State only used its mark in the territory outlined in the consent agreement, searchers and attorneys who saw Bay State’s registration would assume Bay State was using its product nationwide.

In regards to Bay State’s argument that “house marks” and differing trade dress would be used, the TTAB found that use of those identifiers did not dispel confusion.  Use of a house mark generally does not prevent confusion. Furthermore, the agreement itself did not require a particular trade dress use by either party, but simply required that the parties not use the same trade dress. By asking for protection based on intent to use different house marks and different trade dress, Bay State was essentially asking for a determination of likelihood of confusion based on an overall mark that was not being registered, not in use at the time, and not required to be used by Bay State. The TTAB could not comply with this request

Thus, despite the fact that both parties purported to conclude that their consent agreement would abrogate any potential likelihood of confusion, the Board decided that the consent agreement did not hold enough sway to preclude a finding that Bay State’s mark was likely to cause confusion. This ruling means that parties attempting to contract away any potential trademark registrability issues, such as likelihood of confusion, need to take a careful look at their contracts. The contract should not only be beneficial to the contracting parties, but should also take into account whether the contractual provisions protect the public against any potential likelihood of confusion. Failure to do so could mean that the consent agreement plays a negligible role in supporting registration.

In re Fat Boys Water Sports LLC (Serial No. 86590930)

The TTAB recently concluded that the mark HOUSEBOAT BLOB, as a whole, was merely descriptive of the identified goods – water toys – and was likely to cause confusion with the already-registered mark “The Blob” for legally identical goods.

Fat Boys Water Sports LLC (“Fat Boys”) sells inflatable water toys, such as water trampolines or “launch pads.” Fat Boys filed an application to register the mark “Houseboat Blob” for “inflatable float mattresses or pads for recreational use, namely, mattresses and pads from which the user may be launched into the air and onto a body of water,” disclaiming the exclusive right to use “Blob” apart from the mark. On their website, Fat Boys describes their “Houseboat Blob” product as “a version of [their] launch pad that will accommodate Houseboats and Yachts,” which “fits well alongside [a] houseboat and has [an] extra protective pad for protection between BLOB and houseboat.”

Three other pertinent marks containing the term “Blob” were registered on the Principal Register by SSP Acquisition, LLC (“SSP”): “The Blob,” covering “giant inflatable, floating air bags…for use by…businesses as a component of their aquatic recreational facilities…such that patrons can jump from a diving platform onto, and be launched off of, such floating air bags and into the water”; “The Blob,” covering “retail services by telephone, online ordering, and direct solicitation by sales agents in the field” of the inflatable, floating air bags described in the previous registration; and “Waterblob,” a mark covering “inflatable mattresses for recreational use.”

The Trademark Examining Attorney (“Examiner”) refused the registration of the “Houseboat Blob” mark on the grounds that the mark was merely descriptive and was likely to cause confusion in light of the marks in SSP’s pre-existing registrations. Fat Boys appealed to the TTAB which affirmed the refusal to register.

On the issue of mere descriptiveness, a mark is merely descriptive of goods under Section 2(e)(1) of the Trademark Act if it “forthwith conveys an immediate idea of an ingredient, quality, characteristic feature, function, purpose, or use of the goods.” Fat Boys argued that “Houseboat Blob” was not merely descriptive under the three-part test set forth inNo Nonsense Fashions, Inc. v. Consol. Foods Corp., 226 USPQ 502 (TTAB 1985): the degree of imagination test, the competitors’ use test, and the competitors’ need test. The TTAB rejected this test, stating that it had been superseded by subsequent CAFC and TTAB rulings, and reiterated that the correct test was the test set out in Section 2(e)(1). However, the TTAB noted that elements of the No Nonsense test, such as the fact that others have used the mark at issue or need to use the mark, could be highly relevant when conducting the descriptiveness analysis under Section 2(e)(1).

Under this clarified standard and in light of the evidence of record (which included descriptive references to both “Houseboat Blob” and “The Blob” from Amazon and Wikipedia), the TTAB found that “Houseboat Blob” would be immediately understood to mean a blob-type inflatable launch pad that is specialized for use in association with a houseboat. The fact that Fat Boys was the first to use the mark – and, indeed, the only one to use the mark – was not persuasive from the descriptiveness perspective.  So long as the mark meets the Section 2(e)(1) test set forth above, it is descriptive.  Accordingly, the Board found the mark to be merely descriptive of the goods because it conveyed an immediate idea of the nature and purpose of the goods themselves.

Turning to the issue of likelihood of confusion with SSP’s registered marks, the TTAB decided to focus on only one of the marks, “The Blob,” reasoning that if refusal was not affirmed on the basis of this mark, it would not be affirmed for the other registered marks. The TTAB utilized the relevant factors from In re E. I. du Pont de Nemours & Co., 476 F.2d 1357, 177 USPQ 563, 567 (CCPA 1973) to determine likelihood of confusion, specifically focusing on similarity or dissimilarity of the marks and goods.

Looking at the marks themselves, the TTAB did not find evidentiary support for Fat Boys’ argument that SSP’s “The Blob” mark was fundamentally different in that it functioned as a double entendre utilizing both the fame of the classic movie “The Blob” and the descriptive/generic meaning of the term “blob.” Rather, the TTAB concluded that the evidence demonstrated that customers were more likely to perceive the mark’s meaning to be an inflatable, floating launch pad. In a similar vein, the TTAB found that consumers would perceive “Houseboat Blob” to be a special type of inflatable launch pad for use with a houseboat. Despite some differences in sound, appearance, and meaning, the two marks created commercial impressions that were sufficiently similar so as to be likely to give rise to confusion.

Furthermore, the goods themselves were legally identical. They were both inflatable, floating recreational devices designed to launch a person into a body of water. This similarity of goods led the Board to conclude that both would likely move in the same channels of trade and be offered to the same consumers. When taken with the commercial impressions of the marks, these findings weighed in favor of finding a likelihood of confusion between “Houseboat Blob” and “The Blob.”

Thus, the TTAB found “Houseboat Blob” both merely descriptive and likely to cause confusion. It will be interesting to watch whether this case is appealed, as the double-entendre issue did not appear resolved by the TTAB’s explanation. Nevertheless, for now, Fat Boys’ registration remains refused.

Noble House Home Furnishings, LLC v. Floorco Enterprises, LLC (Cancellation No. 92057394)

In a recent decision, the TTAB clarified two issues that tend to arise in cases where a claim of abandonment is made, for example where a petition is filed to cancel a registration due to non-use.  First, for intent-to-use applications, the period of nonuse does not begin to run until after the Statement of Use is filed. Second, the continuing marketing efforts of a parent entity do not inure to the benefit of its wholly-owned subsidiary when the two entities are not “related companies” under Section 5 of the Lanham Act.

Noble Home Furnishings, LLC (“Noble”), a seller of both outdoor and indoor furniture, filed a petition to cancel the word mark “Noble House” for furniture owned by Floorco Enterprises, LLC (“Floorco). Registration for this mark was based upon Floorco’s intent-to-use application. Floorco filed a Statement of Use on August 18, 2011, and registration issued on November 1, 2011. Noble had filed an application to register the mark “Noble House Home Furnishings” for various services, including online retail store services featuring furniture and home furnishings.  That application had been refused on likelihood of confusion grounds due to Floorco’s pre-existing registration.

In an effort to clear the way for its application, Noble filed a petition to cancel Floorco’s “Noble House” mark. Noble first alleged abandonment of the mark by Floorco, providing evidence that Floorco had not sold any furniture under the “Noble House” mark for three consecutive years; in fact, the last sale of furniture under the mark was July 14, 2009. After that date, products were sporadically marketed under the “Noble House” mark, but no sale was executed. Floorco countered that the mark was used in advertising and marketing by its parent company, Furnco International Corporation (“Furnco”), and that such use – which had actually provided the basis for the Statement of Use filed in support of the registration – was sufficient to prevent cancellation on the basis of abandonment.

Noble also alleged that Floorco had committed fraud on the United States Patent and Trademark Office (“USPTO”) when it submitted its specimen of use. In support of its Statement of Use, Floorco had submitted a specimen comprising a photograph of a package bearing the “Noble House” mark. Noble alleged that this specimen did not accurately depict the use of the mark in commerce.

The TTAB granted the petition to cancel “Noble House,” finding that Floorco had abandoned the mark through nonuse. In finding so, the TTAB stated that the three-year period for nonuse began after the Statement of Use was filed, because an intent-to-use applicant did not need to use its mark until it filed the Statement of Use.

Floorco’s counterargument that the mark had been used by its parent and that such use should “count,” was rejected by the TTAB.  The Board found that a company’s use of its subsidiary’s trademark does not inure to the subsidiary’s benefit when the parent company controls the nature and quality of the products sold under the mark or advertised and marketed with the mark, and when there are no agreements with the subsidiary concerning the mark. In this instance, the products offered for sale under the mark were not controlled by the Applicant Floorco, but rather by its parent Furnco who solely conducted all marketing and advertising of “Noble House” furniture products post-August 28, 2011, and manufactured all related materials.  There was no evidence in the record of any agreement between Floorco and Furnco regarding the “Noble House” mark. As such, the TTAB concluded that notwithstanding the “on paper” corporate relationship, Floorco and Furnco were not sufficiently “related entities” for trademark purposes because the essence of related-company use – the control exercised over the nature and quality of the goods or services on or in connection with which the mark is used – was missing.  Furnco’s marketing and advertising efforts, therefore, would not inure the benefit of Floorco, and thus there was no use to sustain Floorco’s “Noble House” registration.

Conversely, the fraud claim by Noble was dismissed. The TTAB found that Floorco did not willfully make a material misrepresentation; instead, it held the mistaken belief that “whatever the legal significance of the parent’s activities, they inured to [Floorco’s] benefit.” In short, Floorco did not intend to deceive the USPTO.