TTAB Grants Petition To Cancel Based On Trademark Common Law Rights

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.

The first issue to be addressed was standing. Here the Petitioner must demonstrate that he has a “real interest” in the outcome of the proceeding and a reasonable basis for his belief that he will suffer damage. This is accomplished by alleging prior use of an identical trademark or of a mark that is similar to that of the subject mark and used with goods or services that are related to those goods or services identified in the Respondent’s application or registration. Moreover, the Petitioner must allege that he will sustain damage as a result of the use of the Respondent’s mark. The Petitioner submitted a declaration attesting to these matters. He provided evidence that he was selling his music under a similar trademark and submitted proof of sales of his albums. Standing was found based on common law use.

The next issue to be addressed was priority of use. Respondent now has the obligation to show that he used the mark in commerce before Petitioner’s use. The Respondent alleged first dates of use anywhere as of October 5, 2011 and in commerce as early as November 20, 2011. However, the Respondent could not produce competent evidence to support these allegations. Trademark Rule 2.122(b)(2) states that the dates of use alleged in the registration must be proven and Respondent could not satisfy this burden. However, 15 U.S.C. §1057(c) states that you may rely on your filing date as your constructive use date for purposes of priority, without any further proof. Respondent’s priority date was March 9, 2012.

The Petitioner demonstrated through use of competent evidence the release of three music albums in 2005, 2008, and in 2012. There was further proof of online sales of streamed music and downloads by the Petitioner. The Board concluded that the marks were legally identical, no difference existed other than the article “the” that has no trademark significance.

In addition, the goods were found to overlap, because both parties used the mark in connection with audio recordings in CD form and for downloadable music files. Since the Petitioner established priority of use based on his common law rights and the Board held there was a likelihood of confusion between the sources of the two marks, the petition for cancelation was granted. This matter could have been avoided had the Registrant conducted a thorough U.S. clearance search prior to filing his trademark application. If you wish to learn more about trademark clearance searches, kindly contact our office for a courtesy trademark consultation.