Cancellation does not necessarily imply abandonment of common law rights

United States of America

In The Crash Dummy Movie LLC v Mattel Inc (Appeal 2009-1239, April 16 2010), the US Court of Appeals for the Federal Circuit has affirmed a decision of the Trademark Trial and Appeal Board (TTAB) to deny an application based on confusingly similar common law marks, finding that the marks had not been abandoned even though registrations for them had been cancelled (Mattel Inc v The Crash Dummy Movie LLC (Opposition 91159002, November 25 2008)).

On March 31 2003 The Crash Dummy Movie LLC filed an intent-to-use application for the trademark CRASH DUMMIES for games and playthings in Class 28 of the Nice Classification. Mattel Inc immediately filed an opposition claiming prior rights in various CRASH DUMMIES marks. Crash Dummy claimed that it had priority based on Mattel’s abandonment of the marks through non-use.

Mattel acquired the trademark portfolio of Tyco Inc in 1997 through an acquisition of Tyco’s assets, which included various CRASH DUMMIES registrations. In 1998 Mattel recorded these assignments at the US Patent and Trademark Office (USPTO). In 2000 Mattel failed to file a Section 8 declaration of use or excusable non-use for the CRASH DUMMIES marks and the registrations were cancelled. However, between 2000 and 2003 Mattel worked on a new line of Crash Dummies-related toys. The new products were released in 2003.

Crash Dummy claimed that Mattel’s conduct in relation to the marks, between 1997 when it initially acquired the marks and 2003 when the products bearing the marks were actually sold, constituted abandonment. The Lanham Act generally states that: 

[a] registered trademark is considered abandoned if its use has been discontinued with intent not to resume such use... Non-use for three consecutive years shall be prima facie evidence of abandonment.” (15 USC § 1127).

This presumption may be rebutted by the trademark owner by showing evidence that it used the mark during the three-year period or intended to resume use.

The TTAB and the Federal Circuit found substantial evidence that Mattel intended to resume use of the marks during the six-year period at issue. Both pointed to:

  • failed 1998 discussions with KB Toys regarding the latter possibly becoming the exclusive retailer of the Crash Dummies toys;
  • the fact that Mattel recorded the assignments from Tyco with the USPTO in 1998; and
  • extensive research and development that began in 2000 and spanned until 2003 for a new release of the Crash Dummies toys.

The fact that Mattel allowed the registration to lapse was not dispositive. The Federal Circuit noted that:

cancellation of a trademark registration does not necessarily translate into abandonment of common law trademark rights. Nor does it establish its owner’s lack of intent to use the mark.” 

The court also looked at the shipment of products bearing the CRASH DUMMIES mark as evidence of Mattel’s obvious intent to use, stating that:

[t]he [TTAB] may consider evidence and testimony regarding Mattel’s practices that occurred before or after the three-year statutory period to infer Mattel’s intent to resume use during the three-year period.”

Ron N Dreben and Monique Liburd, Morgan Lewis & Bockius LLP, Washington DC

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