Noble House sought to cancel a registration for the mark NOBLE HOUSE owned by Floorco Enterprises, LLC, alleging Floorco had abandoned the mark.
Floorco filed its Statement of Use on August 18, 2011 claiming it had used the NOBLE HOUSE mark in commerce since at least as early as December 3, 2010. At the time Floorco filed its Statement of Use, it had not sold any furniture under the mark since July 14, 2009. Its parent entity, Furnco International Corporation, had, however, sporadically marketed the furniture since that date.
The Board commented that “nonuse due to lack of demand may not constitute abandonment if the trademark owner continues its marketing efforts.” Floorco’s problem, however, was that the marketing and advertising of goods under the NOBLE HOUSE mark was done by Furnco International Corporation, not Floorco. Further, Furnco controlled the nature and quality of the NOBLE HOUSE furniture sold prior to August 18, 2011.
The issue before the Board was whether use of a mark by a parent entity inures to the benefit of the wholly-owned subsidiary when the parent controls the nature and quality of the goods, and there is no agreement between the parent and subsidiary.
If a mark is used by a related company, the use inures to the benefit of the owner who controls the nature and quality of the goods. The Trademark Act defines a “related entity” as any entity whose use of a mark is controlled by the owner of the mark as to the nature and quality of the goods and service with which the mark is used. If a parent company owns the mark and use is by the wholly-owned subsidiary, the “inherent nature of the parent’s overall control over the affairs of a subsidiary” is sufficient to presume the parent is exercising adequate control over use of the mark, even absent an agreement between the parent and subsidiary.
A subsidiary, however, does not inherently control the operation of its parent entity. Thus, any control over and use of the mark by the parent would need to be set out in an agreement between the parent and subsidiary. The Board held that the use of the mark Furnco did not inure to the benefit of Floorco, where Furnco also controlled the nature and quality of the furniture sold under the mark. The Board ruled there was a sufficient showing of three years of non-use by Floorco, with no intent to resume use, and thus, Floorco abandoned the NOBLE HOUSE mark.
Noble House Furnishings, LLC v. Floorco Enterprises, LLC, Cancellation No. 92057394 (TTAB April 4, 2016) [precedential].