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Can A Laches Defense Justify A Dismissal Of A Petition To Cancel?

Equitable considerations play a role in the Trademark Trial and Appeal Board’s (the “Board”) deliberations when determining whether or not to grant a Petition to Cancel a trademark registration. See Teledyne Technologies, Inc. v. Western Skyways, Inc., 78 USPQ2d 1203 TTAB (2006) [precedential], where the Board denied a cancellation petition based on laches even though the petitioner established by a preponderance of the evidence that confusion was likely. This is a notable precedent of the Board and a respondent facing a Petition to Cancel should be aware of the facts and prior Board findings so parallels can be drawn between relevant circumstances and precedential decisions.

Teledyne Technologies, Inc. (“Petitioner”) petitioned the Board to cancel Western Skyways, Inc.’s (“Respondent”) registration for the mark GOLD SEAL for aircraft engines based on grounds of likelihood of confusion between the sources of the goods and prior rights. The Petitioner’s mark is identical (GOLD SEAL) to Respondent’s and the mark is used for “airplane parts, namely ignition harnesses”. There was testimony from Petitioner’s senior project manager that an ignition harness is an essential part of an aircraft’s engine. There was further evidence that the Petitioner commenced use of the mark with ignition harnesses in 1991 while the Respondent’s use was not until 1994. The Board held that the Petitioner had priority of use and the Respondent did not contest this fact.

Regarding likelihood of confusion, the Board commented that the identical marks impact the relatedness requirement to the effect that the degree of similarity required between the parties’ goods declines. The Board held that the goods were commercially related. It was further held that aircraft engines and ignition harnesses for aircraft engines travel in the same or similar channels of trade. However, the Board found two du Pont factors that weighed in the Respondent’s favor: a sophisticated consumer base and the absence of actual confusion despite the marks simultaneous use in the same trade channels for about ten years. However, after weighing all the du Pont factors the Board determined that Petitioner proved its likelihood of confusion claim by a preponderance of the evidence. See our web page entitled, Likelihood of Confusion Refusals – 2(d) Refusals, to review all the factors involved in this analysis.

Next the Board examined the Respondent’s defense of laches. This defense essentially argues that since there was an unreasonable delay in filing the petition proceeding and prejudice resulted from the delay, the petition to cancel should be denied. The Petitioner must have actual or constructive notice of the trademark use in order to measure the length of the delay. Here, Petitioner was put on constructive notice as of the date of the issuance of the Respondent’s registration on March 2, 1999. The cancellation petition was filed on October 18, 2002 (resulting in a delay of action for 3 years and eight months). It should also be emphasized that there was no communication between the parties during this delay. The first time the Respondent heard from the Petitioner was when the Petition to Cancel was filed. Petitioner had no reasonable excuse for the delay.

The Respondent asserts that there was financial prejudice to his business directly resulting from the delay. During the period of Petitioner’s inaction, Respondent invested in and developed its business and good will, all of which was centered around the trademark GOLD SEAL. Examples of economic prejudice may include documenting the resources spent on promotion, advertising, and branding during the period of delay, and simple use of the mark over a period of time.

The last factor to consider is if the confusion between the parties was inevitable. If it is, then the laches defense would not apply since equitable defenses are not applicable where the marks are identical and the goods are the same or essentially the same. The reasoning is if confusion is inevitable, the injury to the respondent is outweighed by the public’s interest to prevent confusion in the marketplace. The Board concluded that although the marks are identical, the goods were not essentially the same. Contributing factors to this conclusion were a sophisticated consumer base and lack of actual confusion in the marketplace. Respondent successfully established a laches defense and the Board denied the Petition to Cancel. There are many factors to consider if a third party challenges your trademark rights, please feel free to contact our office for a courtesy consultation.