The Board dismissed this consolidated opposition to registration of the marks MILEWISE and ALLSTATE MILEWISE for insurance services,based on claims of likelihood of confusion with opposers' family of WISE-formative marks. Applicant Allstate moved to dismiss under Rule 12(b)(6) for failure to state a claim, asserting that the pleaded marks are not owned by a single entity and therefore cannot, as a matter of law, comprise a family of marks. Allstate further asserted that Opposers failed to allege that the common characteristic of the alleged family of marks is distinctive and that the marks have been used and promoted in such a way that consumers would associate the common characteristic "WISE" with a single source. The Board ruled that the marks in a family of marks may be owned by different entities if there is "unity of control," but because opposer failed to plead unity of control the Board dismissed the opposition. Wise F&I, LLC; Financial Gap, Administrator LLC; Vehicle Service Administrator LLC; and Administration America LLC v. Allstate Insurance Company, Opposition No. 91226028 (parent)and Opposition No. 91226029 (September 23, 2016) [precedential].
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Family of Marks/Unit of Control: Relying on the Wella decisions, opposers maintained that the family of marks doctrine requires only that the shared characteristic of the marks be recognized as indicative of a common origin of the goods or services, and that the common origin need not be a single entity. In Wella, the CAFC vacated a TTAB decision that affirmed a refusal to register Wella AG's mark WELLASTRATE in view of several Wella-formative marks owned by its U.S. subsidiary, pointing out that "[i]f the Wella family of marks connotes to consumers only a single source for all Wella products, namely the Wella organization, it is difficult to see how Wella A.G.'s use of the mark 'WELLASTRATE' would cause confusion as to source because of Wella U.S.'s use of the other Wella marks." On remand, the Board observed that "[c]learly, the [Federal Circuit] views the concept of 'source' as encompassing more than 'legal entity.'"
The Board therefore agreed with opposers here that "in the context of the 'family of marks' inquiry, the concept of common origin ('source') may encompass more than one entity."
In view of the [TTAB's] Wella I and Wella II decisions, it logically follows that related entities can rely on a family of marks as a basis for a Section 2(d) claim – notwithstanding the fact that the pleaded marks are not all owned by a single entity – if the complaint contains sufficient factual allegations that they are related, and that there is unity of control over the pleaded marks such that the marks are indicative of a single source, and all of the other elements for pleading a family of marks are satisfied.
With regard to "unity of control," the TTAB stated in Wella II that:
Besides the existence of a legal relationship, there must also be a unity of control over the use of the trademarks. "Control" and "source" are inextricably linked. If, notwithstanding the legal relationship between entities, each entity exclusively controls the nature and quality of the goods to which it applies one or more of the various "WELLA" trademarks, the two entities are in fact separate sources.
Here, opposers pleaded only that three of the opposing entities are subsidiaries of Opposer Wise F&I. They failed to plead that use of the marks and control of the quality of the services "are controlled by one of the Opposers such that the marks identify a single source for all of the services identified by the respective marks." In Wella II, applicant Wella AG owned substantially all of the stock of Wells (USA), and thus "control[led] the activities and operations of Wella U.S., including the selection, adoption and use of the trademarks."
The Board ruled that an allegation of "unity of control" is a necessary element for claiming a family of marks for purposes of Section 2(d) when the marks are owned by separate legal entities. Opposers failed to make such an allegation and therefore failed to state a claim under Section 2(d) based upon ownership of a family of marks.
Pleading a Family of Marks: Aside from the ownership issue, opposers failed to allege that they have used the pleaded marks in such a way as to establish a family of marks.
To assert ownership of a family of marks a plaintiff must allege, and ultimately prove: (1) prior use of marks sharing a recognizable common characteristic; (2) that the common characteristic is distinctive (i.e., not descriptive or highly suggestive or so commonly used in the trade that it cannot function as the distinguishing feature of any party’s mark); and (3) that prior to the defendant’s first use (or constructive first use) of its involved mark, plaintiff’s marks have been used and advertised in promotional material or in everyday sales activities in such a manner as to create common exposure and thereafter recognition among the purchasing public such that the common characteristic is itself indicative of a common origin of the goods or services.
Opposers failed to plead that the common element WISE is distinctive and failed to plead that they have used and advertised the marks in such a manner that the public associates not only the individual marks, but also the common characteristic of the alleged family, with a single source. For that reason also, the notices of opposition fail to state a claim upon which relief can be granted.
Leave to Amend: The Board allowed opposers 30 days within which to submit amended notices of opposition (or a single consolidated notice).