TTAB clarifies standard of use to avoid abandonment of Section 66(a) registration

United States of America

In a precedential decision, the Trademark Trial and Appeal Board (TTAB) has clarified the standard for pleading abandonment of a registration that issued from an application filed under Section 66 of the Trademark Act, 15 USC § 1141f(a).

A Section 66(a) registration is based on a request for an extension of protection to the United States under the Madrid Protocol. Under its recent decision in Dragon Bleu (SARL) v VENM LLC (Opposition No 91212231), the TTAB held that, because a mark that is the subject of an application filed under Section 66(a) does not need to be used in the United States before the mark is registered in this country, a party seeking the cancellation of such a registration must allege, as of the date the claim for cancellation is filed, either:

  1. three or more consecutive years of non-use commencing no earlier than the date on which the registration was issued; or
  2. if the period of non-use commencing no earlier than the date of registration and extending to the filing date of the claim for cancellation is less than three years, facts supporting non-use after the date of registration coupled with an intent not to resume use.

This case involved an opposition brought by Dragon Bleu, which owned registrations for VENUM for martial arts-related goods, against an application filed by VENM to register VENM for dance costumes. VENM then filed a counterclaim seeking the cancellation of three of Dragon Bleu’s registrations, all of which issued from applications that were filed under Section 66(a). The cancellation claims were based on allegations of fraud, non-use and abandonment. Dragon Bleu sought to dismiss the cancellation counterclaims at the pleading stage for failure to state a claim under Section 12(b)(6), Fed R Civ Proc.

The fraud counterclaim was based on statements Dragon Bleu made while prosecuting its applications, in which Dragon Bleu represented that it would limit the registration of the mark to martial arts-related goods to avoid the citation of a third party’s mark as a bar to registration. The TTAB dismissed the fraud claim because it did not allege that a false statement was made. The TTAB did not understand the allegedly fraudulent statements as constituting a representation that Dragon Bleu would not use or assert its VENUM mark for goods that were not martial arts clothing. Rather, these statements were limitations Dragon Bleu agreed to to overcome the citation of a potentially confusing third-party mark, and the application was so limited by amendment. Consequently, this statement was not false. Without a false statement, there cannot be a claim for fraud. The fraud claim also failed because it did not include a pleading of Dragon Bleu’s intent to deceive the US Patent and Trademark Office, which is an essential element of such a claim. Accordingly, the TTAB granted the motion to dismiss the fraud claim.

The second ground alleged for cancellation was Dragon Bleu’s “lack of bona fide use” of its marks. However, Dragon Bleu obtained its registrations under Section 66(a) of the Trademark Act, 15 USC § 1141f(a), which does not require use in commerce prior to obtaining a registration. To the extent, therefore, that the claim of non-use was based on Dragon Bleu’s lack of use of the mark prior to the issuance of Dragon Bleu’s registrations, the claim for cancellation failed to state a claim and was dismissed.

The claim for cancellation based on abandonment alleged that Dragon Bleu had not used its mark for the five years that had elapsed since it filed its applications. Under Section 45 of the Trademark Act, 15 USC § 1127, a mark is abandoned when its use has been discontinued with intent not to resume such use. Non-use for three consecutive years is prima facie evidence of abandonment. Therefore, to plead a claim for abandonment, a plaintiff must recite facts which, if proven, would establish at least three consecutive years of non-use or, in the alternative, a period of non-use of less than three years combined with proof of intent not to resume use. When an applicant who relies on use in commerce as a basis for its application discontinues use of its mark, it is appropriate to include in the period of non-use any pre-registration non-use that occurred after the applicant’s declaration of use. In contrast, an applicant under Section 66(a) is not required to use its mark in the United States or to declare that its mark is in use prior to obtaining a registration. Once the registration issues, however, a Section 66(a) registration is treated the same as any other registration, and like all registrants, a Section 66(a) registrant must use the registered mark in commerce to avoid abandonment of its registration.

Because there is no precedent as to how an abandonment claim must be pleaded for a Section 66(a) registration, the TTAB looked to how an abandonment claim must be pleaded for a Section 44(e) registration, which is based on a registration in applicant’s home country and does not require that the mark be used in the United States before the registration issues. For a registration issued under Section 44(e), the period of non-use that constitutes prima facie abandonment does not begin until the registration issues and runs until the time the petition to cancel is filed. The TTAB adopted the same rule for Section 66(a) registrations.

Susan Progoff, Dorsey & Whitney LLP, New York

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