Articles Posted in Common Law Rights & Priority

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If the parties are disputing priority rights, and one party is relying on use-analogous-to-trademark use or trade name use, public use of the mark is necessary. Although, technical trademark use is not necessary another standard is applied to determine if there has been a sufficient and substantial impact on the purchasing public to show proprietary rights. See our blog post entitled, Common Law Rights And Use Analogous To Trademark Use, where we define technical trademark use for both goods and services.

To prevail in a priority dispute, the party attempting to demonstrate use-analogous-to-trademark use must submit evidence to show use of the trademark created an association in the minds of the relevant purchasing public between the mark and the goods/and or services. For example, if you are submitting evidence of use of the mark on a live website, you must also show how many users visited the site to demonstrate the extent of public exposure. Something more than a de minimis public association of the term with the goods or services is required. Great Seats, Inc. v. Great Seats, Ltd., Opposition No. 91189540 (August 12, 2013). Prior case law demonstrates that mere sporadic, minimal use of a mark generally is insufficient as a basis for prevailing in a priority dispute. See Pet Inc. v. Bassetti, 219 USPQ 911 (TTAB 1983); Lever Brothers Co. v. Shaklee Corp., 214 USPQ 360 (TTAB 1982).

For trade name use, something more than incorporation must be shown. There needs to be open and public use of the name before proprietary rights can accrue. See Dynamet Tech. v. Dynamet, Inc., 593 F.2d 1007, 201 USPQ 129 (CCPA 1979). The use must be calculated to come to the attention of customers and prospective customers. A party can tack this type of use on to subsequent technical trademark use for purposes of prevailing in a priority dispute. See Peopleware Sys., Inc. v. Peopleware, Inc., 226 USPQ 320 (TTAB 1985). It is common for a party to submit evidence of trade name use in advertising, promotional material, brochures, social media, on letterhead, envelopes, invoices, annual reports, and on websites. If trade name use is of the type to create an association with the purchasing public between the mark and the goods and/or services, then this could establish trademark priority. TutorTape Laboratories, Inc. v. Halvorson, 155 USPQ 268 (TTAB 1967).

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In the United States trademark common law rights are significant rights that cannot be overlooked. Our trademark system recognizes legal rights from trademark registration and from trademark use in commerce. Common law trademark rights can be used to prove priority in a priority determination and such rights can be the basis to oppose a trademark application or to cancel a trademark registration. In addition, a party in a trademark dispute does not have to demonstrate technical trademark use to prevail in an opposition or cancellation proceeding. Instead, a party can rely on “use analogous to trademark use”. See our Web page entitled, Priority Determinations Based on Common Law Use, where we discuss how common law rights must be pleaded in the Notice of Opposition or the Petition to Cancel.

Technical trademark use is the type of use required to file a federal trademark application with the United States Patent & Trademark Office (“USPTO”). This means for goods the trademark must be placed on a container, the display associated with the product, the tag, label, packaging or associated documents. The goods have to be sold or transported in “commerce” as defined by the Trademark Act.

For services, there must be use in the sale or advertising of the services and the services must be rendered in commerce. Use analogous to trademark use is a looser requirement. Examples of this type of use would include pre-sales activities, use at a trade show, use in promotion or advertising, use in catalogs or brochures, use in trade publications, direct mail use, use directed at prospective purchasers, or trade name use. Use analogous to trademark use has to have an impact on consumers and prospective purchasers to create an association between the mark and the goods and services in the minds of the public. This association must have been created with more than an insubstantial number of potential consumers. The use must be visible to the public and if the public exposure is lacking, the use will not be sufficient even for a priority determination.

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Janco, LLC (the “Applicant”) applied to the United States Patent & Trademark Office (the “USPTO”) to register the mark FLATIZZA for pizza in international class 30. Doctor Associates, Inc. (the “Opposer”) filed an opposition with the Trademark Trial and Appeal Board (“the Board” or the “TTAB”) claiming prior use of the mark FLATIZZA for flat sandwiches. Opposer claimed that the Applicant did not use the mark in “commerce” prior to filing its trademark application. If Opposer can prove this allegation the application will be deemed void ab initio.

The parties do not contest that the marks are confusingly similar and that the goods are related. Therefore, the only issue to resolve in this matter is who maintains priority of use over the mark FLATIZZA. Applicant filed its trademark application on February 24, 2014. At this time, Applicant owned one restaurant in a single location. Under the Trademark Act Section 1(a) the owner must use the trademark in “commerce” and “commerce” has a legal definition. The definition includes the following types of commerce: (1) interstate; (2) territorial (commerce within a territory of the United States, Guam, Puerto Rico, American Samoa or the U.S. Virgin Islands or between the U.S. and a territory of the U.S.); and (3) between the United States and a foreign country. Commerce within one state only will not qualify as a basis for filing a federal trademark application unless it impacts one of the three types of commerce that Congress can regulate. If there is only intrastate commerce, see our web page entitled, State Trademark Registration, for details on how to file a state application.

In prior holdings, courts and the Board have found that a single restaurant location using its mark for restaurant services is engaged in commerce that Congress can regulate. See Larry Harmon Picture Corp. v. Williams Rest. Corp., 929 F.2d 662, 18 USPQ2d 1292 (Fed. Cir. 1991), where the court held that a single restaurant location used its mark in commerce based on customers traveling across state boundaries to reach the restaurant location. In that case, it was shown that the restaurant was approximately one hour from a city that contained a population from three different states and that the restaurant had been featured in publications from different states. The Court concluded that while there is no requisite level of interstate commerce required before filing a federal trademark application, some use in commerce must be shown.

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Failure to conduct a proper trademark clearance search can cause significant legal issues for a trademark owner at some point in the future. It is our practice to continually reiterate and encourage our clients to take the time to conduct a proper full U.S. trademark search before filing an application with the United States Patent & Trademark Office (“USPTO”). A recent case from the Trademark Trial and Appeal Board (“TTAB” or the “Board”) illustrates why this due diligence is so important to a trademark owner. See Daniel P. Matthews v. Black Clouds, Cancellation No. 92058978 (TTAB July 31, 2015).

On April 8, 2014, the Petitioner based on his common law rights in the mark THE BLACK CLOUDS for audio and video recordings via hard media and for streaming and downloading digital music, petitioned the TTAB to cancel a registration for the mark BLACK CLOUDS. The registration for BLACK CLOUDS, among other goods, identified audio and video recordings featuring music and artistic recordings. Petitioner claimed priority of rights and likelihood of confusion.

The Petitioner made a motion for summary judgment. This type of motion is made pretrial and it is intended to prove to the Board that there is no genuine dispute of material fact. The party filing a summary judgment motion is hoping to dispose of the matter early in the proceedings. The burden falls on the moving party to meet a certain level of proof and if met, the onus shifts to the respondent to demonstrate that there are facts in genuine dispute that must be resolved at trial. In this case the petitioner had to prove that it had priority rights in the mark THE BLACK CLOUDS and that use of the marks simultaneously would be likely to cause confusion, mistake or deceive consumers.

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A recent decision of the Trademark Trial and Appeal Board (the “Board”) highlights what the Board looks for when determining which user of the trademark has priority of use. See Parley, LLC v. Vi-Jon, Inc., Cancellation No. 92055751 (February 27, 2015). One common issue often raised in cancellation proceedings is who is the senior user of the trademark. This recent Board decision reminds trademark owners that use in commerce is a legal term that a trademark owner may not be able to satisfy if sales of the goods were token sales made to personal friends or relatives.

In this case, Vi-Jon Inc. (the “Respondent”) owns a registration for the mark DIP-IT in standard characters for nail polish remover. Parley LLC (the “Petitioner”) claims prior use of and ownership of a pending trademark application for an identical mark for identical goods and other related nail products. Petitioner alleges that Respondent’s use of the mark will cause a likelihood of confusion with Petitioner’s mark. Petitioner further alleges that his trademark application was refused based on a likelihood of confusion with Respondent’s registered mark for DIP-IT. Respondent denied the allegations in the Petition, but admitted that its first use of the trademark was on October 25, 2010. In fact, the Respondent was able to prove that he did continuously use the trademark DIP-IT for nail products since October 25, 2010. The pressing issue in this case was could the Petitioner establish a priority use date earlier than October 25, 2010.

Tuan Nguyen M.D. is one of the founders of the Petitioner. He and his family have been in the nail industry since 1996. During the first week of October 2010, the Petitioner alleged that he started to promote its nail products on its website and later promoted DIP-IT goods at trade shows. However, the receipts produced by the Petitioner in connection with participation in a nail tradeshow indicated that the tradeshow occurred in 2011 and not 2010. Additional receipts produced by Petitioner showed sales of DIP-IT nail products in 2011 and 2012.

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The Trademark Trial and Appeal Board (TTAB) recently answered this question on January 2, 2014, in the case of Blast Blow Dry Bar LLC v. Blown away LLC d/b/a Blast Blow Dry Bar, Opposition No. 91204769 (January 2, 2014). The applicant is a hair salon located in Minnesota marketing its services under the trademark BLAST BLOW DRY BAR for hair care services. The opposer is located in Texas, and is using the mark BLAST BLOW DRY for hair salon services that include wash and blow-dry services. The Board held that the trademarks were highly similar. The only difference was a diacritic circle and the disclaimed word “bar”. Apparently, the applicant did not conduct its due diligence. It is critical to conduct a clearance search prior to filing a trademark application so that you can avoid encountering similar marks for identical services during your trademark prosecution.

The Board concluded that the services were essentially identical. Therefore, it held that there was a likelihood of confusion between the trademarks. Since the issue of likelihood of confusion was determined, the case turned into a question of priority. To resolve this issue, one party must demonstrate they used the mark in commerce before the other party, thereby entitling that party to register the trademark at the United States Patent & Trademark Office (USPTO). The legal definition of “use is commerce” will be discussed as well as what types of action rise to this level.

hairstyle-835170-mTo establish priority a party can rely on their trademark registration, trademark filing date, trade name use, trademark or service mark use, use equivalent to service mark or trademark mark use, or demonstrate another use that rises to this level. The opposer pleaded rights based on use and use tantamount to service mark use. For a service mark to be legally used in commerce, it must be used in advertising or in the sale of the services and the services must be rendered. The opposer used its trademark in advertising and specifically on a banner as early as December 5, 2011. The opposer also attended a party as a promotional effort and styled several guests’ hair while distributing marketing brochures. However, the hair styling services were rendered as a courtesy and the opposer was never paid for such services. The TTAB held that this was sufficient for use in commerce under the Trademark Act. See 15 U.S.C. §1127 for the legal definition of commerce.

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To receive the broadest type of trademark protection, we recommend registration with the United States Patent and Trademark Office.  However, in the United States, if you have not registered your trademark rights, but you can prove trademark use in commerce, you will build common law (unregistered rights) rights. Common law trademark rights have been developed under a system of rights governed by state law.  However, they will be limited to the geographic area in which the trademark is used. Of course in today’s global economy, common law rights are defined slightly differently due to trademark use on the Internet. Although, the same principal of a case-by-case analysis that is applied to infringement matters, will also apply to define one’s common law rights when Internet use is involved.

It can be particularly difficult to discover whether a third party has common law trademark rights in a specific mark.  It is critical to search, not only state and federal registers, but also unregistered use. Common law trademark rights can prevail against a registrant based on priority of use. The two cases discussed below demonstrate this point.

In a recent Trademark Trial and Appeal Board decision, Barnhardt Manufacturing Company v.Wildwood Gin, Inc., Cancellation No. 92053237 (June 17, 2013) [not citable as precedent], the Board ruled that the petitioner established priority by a preponderance of the evidence, based on its common law rights. The petitioner proved that it shipped its product to a customer in Israel before the registrant/respondent first used the mark in interstate commerce.  The Board held that in order to establish priority, a plaintiff is only required to show prior use, not continuous of its mark, unless the defendant has asserted the affirmative defense of abandonment. Here, the sale to a single foreign customer was enough to win on priority, and thus the Board granted the cancellation petition.

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