Intent to sell does not equate to intent to use
In Vans Inc v Branded LLC (2022 USPQ2d 742, TTAB 2022 [precedential]), the TTAB determined that the intent to sell or license a mark does not prove use or intent to resume its use. Ultimately, the board granted the petitioners’ cancellation of two of the respondent’s marks, finding that it had discontinued use of the mark and had no intent to resume use.
Section 45 of the Trademark Act provides that a mark is considered abandoned “when its use has been discontinued with intent not to resume such use”. The key issues that the TTAB considered were whether the respondent had in fact abandoned the mark by way of non-use, and, whether they intended to continue using the mark.
When a mark goes unused for at least three years this is considered prima facie evidence of abandonment, the burden is on the petitioner to prove non-use. If shown, the respondent may rebut this presumption. In this case, the board found that the petitioner sufficiently asserted by preponderance of the evidence that the respondent had not used the mark in the ordinary course of trade since acquiring it in 2008. Though the subject mark appeared on the respondent’s website, consumers could not make purchases through this because the site redirected visitors towards corporate partners interested in licensing. The respondent’s only evidence of use was an agreement with an apparel sourcing and manufacturing company. However, the respondent failed to provide any documentation proving a formal agreement or relationship between the two companies. The sourcing company claimed to produce clothing with the OLD SCHOOL mark but failed to produce any credible records documenting sales of clothing displaying the mark. The TTAB determined that the respondent’s evidence pointing to the use of the mark was unreliable and vague and did not show a bona fide use of the mark.
The TTAB then considered whether the respondent intended to resume. To prove intent to resume use, one must identify circumstances or specific actions taken during the time of non-use which excuses this behaviour. Here the respondent again failed to provide any evidence showing their intent to resume use of the mark through licensing and contended that their intent to license or sell the mark alone sufficed to show legitimate intent to resume use. The TTAB found that the respondent had no intent to resume use, pointing to the lack of proof documenting any use or goodwill in the mark, as well as the absence of evidence showing an intent to sell or license the mark. The board explained that an intent to sell a mark is not considered intent to resume use because the new use of the mark would be by the buyer, so the intent would not relate back to the seller’s use of the mark. Even if it did, the TTAB established that the respondent provided no reliable evidence of its use of the mark, so there is no evidence of use before a potential sale. The board further explained that holding a mark with no business purpose and only to reserve it for a future sale or licensing opportunity is evidence of trademark trafficking which the Trademark Act aims to prohibit.
The respondent then argued that it policed the mark and that this was evidence of their intent to use it. However, the TTAB also found the evidence of policing the mark unpersuasive and insufficient. Since acquiring the mark, the respondent filed one trademark opposition in 2009 and nothing further for nine years until after the proceedings involving this cancellation began. The TTAB found that this lack of policing did not show any intent to enter the marketplace through use or intent to use the mark.
This case serves as a cautionary tale for practitioners and brand owners alike. Merely holding onto a mark with no intent to use it, and only an intent to sell or license the goods/services in the future, does not equate to an intent to resume use of the mark. The Trademark Act represents a strong effort to fight trademark trafficking in the United States.
This is an insight article whose content has not been commissioned or written by the WTR editorial team, but which has been proofed and edited to run in accordance with the WTR style guide.
Copyright © Law Business ResearchCompany Number: 03281866 VAT: GB 160 7529 10