Source: http://legalarium.com/ttabquotes/Abandonment.html
Timestamp: 2019-04-21 14:25:16+00:00

Document:
Quality Candy Shoppes/Buddy Squirrel of Wisconsin, Inc. v. Grande Foods, Cancellation No. 92044407, (TTAB 2007).
The Trademark Act provides for the cancellation of registrations if the registered mark has been abandoned. See Section 14 of the Trademark Act, 15 U.S.C. §1064.
Section 45 of the Trademark Act, 15 U.S.C. § 1127.
Abandonment of mark. A mark shall be deemed to be "abandoned" if either of the following occurs: (1) When its use has been discontinued with intent not to resume such use. Intent not to resume may be inferred from circumstances. Nonuse for 3 consecutive years shall be prima facie evidence of abandonment. "Use" of a mark means the bona fide use of such mark made in the ordinary course of trade, and not made merely to reserve a right in a mark. (2) When any course of conduct of the owner, including acts of omission as well as commission, causes the mark to become the generic name for the goods or services on or in connection with which it is used or otherwise to lose its significance as a mark. Purchaser motivation shall not be a test for determining abandonment under this paragraph.
Section 14(3) of the Trademark Act, (15 U.S.C. §1064(3), lists, as one of the grounds for cancellation, abandonment, and Section 45 of the Act, 15 U.S.C. §1127, in pertinent part, defines "abandonment" of a mark as follows: "When its use has been discontinued with intent not to resume such use. Intent not to resume may be inferred from circumstances. Nonuse for 3 consecutive years shall be prima facie evidence of abandonment. "Use" of a mark means the bona fide use of such mark made in the ordinary course of trade, and not made merely to reserve a right in a mark."
There are two elements to an abandonment claim: nonuse and an intent not to resume use. A plaintiff must show both of these elements unless it can show three years of nonuse, which prima facie establishes abandonment, in which case the burden shifts to the defendant to show either that it has used the mark, or that it has an intent to resume use. See Cerveceria Centroamericana S.A. v. Cerveceria India Inc., 892 USPQ2d 1307, 1309 (Fed. Cir. 1989).
Otto International, Inc. v. Otto Kern GMBH, Cancellation No. 92046167, (TTAB 2007).
The facts alleged must set forth a prima facie case of abandonment by a pleading of at least three consecutive years of non-use or must set forth facts that show a period of non-use less than three years coupled with an intent not to resume use. See Section 45 of the Trademark Act; Imperial Tobacco Ltd. v. Philip Morris Inc., 899 F.2d 1575, 14 USPQ2d 1390 (Fed. Cir. 1990).
A mark is prima facie abandoned after three consecutive years of non-use.
Section 45 of the Trademark Act, 15 U.S.C. § 1127, provides that a mark is abandoned when "its use has been discontinued with intent not to resume use… Nonuse for three consecutive years shall be prima facie evidence of abandonment."
Three consecutive years of non-use suggests an intent to discontinue use.
Proof of non-use for three consecutive years, however, constitutes prima facie evidence of abandonment, because it carries an inference of lack of intent to resume use. See supra, 15 U.S.C. §1127. See also Emergency One, Inc. v. American FireEagle, Ltd., 228 F.3d 531, 56 USPQ2d 1343 (4th Cir. 2000).
To establish abandonment, it is necessary to show not only acts indicating a practical abandonment, but an actual intent to abandon the mark.
Regarding intent, the predecessor court to the Court of Appeals for the Federal Circuit, our primary reviewing court, quoted the Supreme Court in saying: "To establish the defense of abandonment, it is necessary to show not only acts indicating a practical abandonment, but an actual intent to abandon. Acts which unexplained would be sufficient to establish an abandonment may be answered by showing that there never was an intention to give up and relinquish the right claimed." Miller Brewing Co. v. Oland's Breweries Ltd., 192 USPQ at 267, citing Saxlehner v. Eisner & Mendelsohn Co., 179 U.S. 19, 31 (1900).
To fall under the three-year non-use statutory presumption, the use must have been discontinue with intent not to resume such use.
However, to fall under the statutory presumption, the use must have been discontinued "with intent not to resume such use." 15 USC §1127.
Intent not to resume use may be inferred from the circumstances, and use of a mark means the bona fide use of such mark made in the ordinary course of trade, and not made merely to reserve a right in a mark.
Intent not to resume use may be inferred from the circumstances, and "use" of a mark means "the bona fide use of such mark made in the ordinary course of trade, and not made merely to reserve a right in a mark." Id.
A mark is deemed abandoned when it has lost all capacity as an indication of source.
Nobelle.com, LLC v. Qwest Communications International, Inc., Cancellation No. 92030454, (TTAB 2003).
In short, a mark is deemed to be abandoned only when it has lost all capacity as an indication of source. Wallpaper Manufacturers, Ltd. v. Crown Wallcovering Corporation, supra, 214 USPQ at 335-36.
A trademark registration may be cancelled if the mark has become "abandoned." See Trademark Act §45, 15 U.S.C. §1127. A mark can become abandoned by any act or omission of the registrant which causes the mark to lose its significance as an indication of origin. Thus, uncontrolled and "naked" licensing can result in such a loss of significance of a trademark that a registration should be cancelled. See J. Thomas McCarthy, 3 McCarthy on Trademarks and Unfair Competition §18:48 (4th ed. 2007).
Opposer should allege the mark has lost its capacity as an indication of source.
Leatherwood Scopes International, Inc. v. James M. Leatherwood, Opposition No. 122,064, (TTAB 2002).
We find that Paragraph nos. 19 and 20 are a legally insufficient pleading of abandonment because they fail to include any allegation that the mark has lost all capacity as a source-indicator for applicant's goods.
A mark is not abandoned so long as at least some purchases identify the owner with its mark.
Opposer's theory essentially is identical to the theory which the Board, relying on Wallpaper Manufacturers, Ltd. v. Crown Wallcovering Corp., 680 F.2d 755, 214 USPQ 327, 335 (CCPA 1982), rejected in Woodstock's Enterprises Inc. (California) v. Woodstock's Enterprises Inc. (Oregon), 43 USPQ2d 1440, 1446 (TTAB 1997): "We begin our analysis with the premise that maintenance of exclusivity of rights in a mark is not required in order to avoid a finding of abandonment ... Instead, so long as at least some purchasers identify respondent with the registered mark, it cannot be said that respondent's course of conduct has caused the registered mark to lose its significance as a mark ... As in Crown, it is necessary to remember the following: [There is a] distinction between conduct of a trademark owner which results in a loss of right to enjoin a particular use because of an affirmative defense available to that user and conduct which results in a loss of all rights of protection as a mark against use by anyone. Only when all rights of protection are extinguished is there abandonment." [Crown, 214 USPQ at 335.].
A mark is abandoned when the owner discontinues use and does not intent to resume use.
Under Section 45 of the Trademark Act, 15 U.S.C. §1127, a mark is considered abandoned when "its use has been discontinued with intent not to resume such use."
Abandonment is a question of fact.
Abandonment is a question of fact. See Stock Pot Restaurant, Inc. v. Stockpot, Inc., 737 F.2d 1576, 1579, 222 USPQ 665, 667 (Fed. Cir. 1984).
An inference of abandonment must be based on proven fact.
Thus, any inference of abandonment must be based on proven fact. A party claiming that a mark has been abandoned must show "non-use of the mark by the legal owner and no intent by that person or entity to resume use in the reasonably foreseeable future." See Stetson v. Howard D. Wolf & Associates, 955 F.2d 847, 850 (2d Cir. 1992).
Burden of Proof: The party seeking abandonment bears the burden of proof, by a preponderance of the evidence.
In a cancellation proceeding on the ground of abandonment, because registrations are presumed valid under the law, the party seeking cancellation bears the burden of proving a prima facie case of abandonment by a preponderance of the evidence. See On-Line Careline Inc. v. America Online Inc., 229 F.3d 1080, 56 USPQ2d 1471 (Fed. Cir. 2000); and Cerveceria Centroamericana S.A. v. Cerveceria India Inc., 892 F.2d 1021, 13 USPQ2d 1307 (Fed. Cir. 1989).
To the extent that respondent is alleging that petitioner has abandoned its mark "even after the date that Registrant adopted and used the present mark" (Brief at 22), it has the burden of coming forward with evidence of abandonment. West Florida Seafood, 31 USPQ 2d at 1666.
Burden of Proof: After a proper showing by petitioner, the trademark holder must rebut the showing with evidence.
If petitioner presents a prima facie case of abandonment, the burden of production, i.e., going forward, then shifts to the trademark holder to rebut the prima facie showing with evidence. Cerveceria v. Cerveceria, supra.
Burden of Proof: Respondent bears burden of establishing intent to abandon the mark where there is no three-year period of non-use to create presumption of abandonment.
Here we do not have the three-year period of non-use to create a presumption of abandonment. Thus, the burden of establishing an intent to abandon the mark falls on respondent. See Online Careline Inc. v. America Online Inc., 229 F.3d 1080, 56 USPQ2d 1471 (Fed. Cir. 2000).
Burden of Proof: The burden of proof does not shift to respondent until petitioner has made a prima facie case of abandonment.
Petitioner points out that respondent has not submitted any evidence into the record. However, the burden does not shift to respondent unless petitioner has made a prima facie case of abandonment. In short, petitioner must first make his case by showing that petitioner has not used the ECSTASY mark on the identified goods for at least three consecutive years, as set forth in the statute, or by showing non-use with no intent to resume use. This, petitioner has not done.
Uncontrolled licensing can result in abandonment of a mark.
To rebut period of nonuse, trademark holder must produce evidence that its actions were similar to a reasonable businessman intending to continue using a mark.
Further, petitioner has not provided an excuse for this long period of nonuse. "To prove excusable nonuse, the registrant must produce evidence showing that, under his particular circumstances, his activities are those that a reasonable businessman, who had a bona fide intent to use the mark in United States commerce, would have undertaken." Rivard v. Linville, 133 F.3d 1446, 45 USPQ2d 1374, 1376 (Fed. Cir. 1998).
Holding a mark "in esteem" doest not demonstrate an intent to continue using a mark.
Petitioner's nebulous statement that it was holding the mark "in esteem" is not sufficient to demonstrate that it had a bona fide intent to use the mark in commerce.
Abandonment after three consecutive years of non-use also applies to unregistered common-law marks.
The statutory presumption of abandonment after three years non-use does apply to marks established via common-law usage. 15 USC §1127; see also Miller Brewing Co. v. Oland's Breweries Ltd., 548 F.2d 349, 192 USPQ 266, 267 (CCPA 1976); Lesley Hornby a/k/a Lesley Lawson a/k/a Twiggy v. TJX Companies, Inc., 87 USPQ2d 1411 (TTAB 2008); and L. & J.G. Stickley Inc. v. Cosser, 81 USPQ2d 1956, 1967 (TTAB 2007).
As indicated above, a three-year period of non-use establishes a presumption that even a federally registered mark is abandoned. The board has applied the statutory presumption of abandonment "to a party's unregistered common-law mark." Miller Brewing Company v. Oland's Breweries  Limited, 548 F.2d 349, 192 USPQ 266, 267 (CCPA 1976).
License for a common law mark may be based on an oral agreement.
Petitioner has testified that to the extent he has briefly stopped use of the mark in Colorado, he intended, and continues to intend, to resume such use. (B. Giersch depo. at 90:11-21). Meanwhile, his brother has continuously used the mark to run a parallel business in Dallas, Texas since before the time of alleged abandonment. (G. Giersch depo. at 19:20). It is clear that Mr. Gerald Giersch's use has been undertaken by permission from petitioner and is controlled by petitioner. Basic, Inc. v. Rex, 167 USPQ 696 (trademark license may be oral); see also McCarthy on Trademarks and Unfair Competition §18:43 and § 18:54 (4th ed. 2008), citing the Trademark Manual of Examination Procedure 1201.03(b)(common law rights may be licensed, and federal registration may even be based on such license).
Sale agreement containing general quality-control provisions may prove that party has not affirmatively abandoned common-law rights to a mark.
As to the sale of petitioner's business, it is apparent from the Agreement to Sell Business, that while petitioner sold his Colorado business in 2004, petitioner intended to maintain use of the DESIGNED2SELL mark for himself and his licensees. (B. Giersch, Ex. 25). The agreement stipulates that "Seller is the owner of that trade name [DESIGNED2SELL]." Id., Para. 6. The agreement further includes general quality-control provisions, consistent with a valid licensing agreement. Id. Accordingly, we find that petitioner has not affirmatively abandoned his common-law rights via sale of his business.
Whether petitioner has a right to continue to use the registered mark is not determinative of the question of abandonment; rather, the focus must be on what rights, if any, respondent has in the registered mark.
"Thus, under Crown, whether petitioner in this case has a right to continue to use the registered mark is not determinative of the question of abandonment; rather, the focus must be on what rights, if any, respondent has in the registered mark ... Moreover, as emphasized by the court in Crown, "a mark becomes abandoned only when the mark loses its significance as indication of origin, not the sole identification of source." ... In other words, regardless of whether petitioner has the right to use the WOODSTOCK'S mark, the fact that the registered WOODSTOCK'S PIZZA PARLOR and design mark identifies respondent as one of two sources of the restaurant services negates any inference of abandonment." Woodstock's Enterprises, supra, 43 USPQ2d at 1446.
A mark becomes abandoned only when the mark loses its significance as indication of origin, not the sole identification of source.
The ground of abandonment is not applicable to intent to use applications (Section 1b).
With respect to the ground of abandonment, this ground is not available when the opposed application is based on Section 1(b). Use of a mark that is the subject of an application alleging a bona fide intent to use is not required until the applicant files a statement of use. See Consolidated Cigar Corp. v. Rodriguez, 65 USPQ2d 1153 (TTAB 2002).
The doctrine of licensee estoppel prevents the licensee from seeking abandonment of a mark.
In Paragraph no. 21 of the proposed amended pleading, opposer alleges that applicant has abandoned the mark due to its naked licensing thereof, in view of opposer's uncontrolled use of the mark since 1995. We find that this allegation fails to state a claim for relief. Even accepting opposer's allegations of naked licensing as true, we find that they fail to state a claim for relief in this case because opposer, as the alleged licensee, is estopped to challenge applicant's ownership of the mark, under the doctrine of licensee estoppel. See, e.g., Estate of Biro v. Bic Corp., 18 USPQ2d 1382 (TTAB 1991). Because, as a matter of law, opposer cannot prevail on this proposed abandonment claim, it would be futile to allow opposer to amend the notice of opposition to assert such claim.
As discussed above in connection with opposer's Rule 15(a) motion to amend its pleading to add these abandonment claims, the mere fact that opposer might be entitled to use the mark, or that applicant therefore cannot claim the exclusive right to use the mark, is legally insufficient to establish that applicant has abandoned the mark. Opposer has not presented any evidence from which a reasonable factfinder might conclude that applicant's mark has lost all capacity to act as a source-indicator for applicant's goods; absent such a finding, no abandonment exists. Moreover, for the reasons discussed above, opposer is legally estopped to challenge applicant's ownership of the mark on the basis of applicant's alleged abandonment of the mark due to his granting of a "naked license" to opposer.
Petitioner's "naked licensing" abandonment argument fails because there is no evidence that respondent licenses the Bell logo mark to Unical, or to anyone else, for use in connection with telecommunications services. Because respondent does not license the mark for use in connection with telecommunications services, there is no basis for finding that respondent engages in naked licensing with respect to such services; the question of whether respondent exercises adequate quality control over use of the mark in connection with such services does not even arise. Moreover, even if petitioner is correct in contending that respondent has failed to exercise quality control over Unical's marketing of telephones and telephone products (a question we need not and do not decide), such failure by respondent is irrelevant to the issue to be decided in this case, i.e., whether respondent has abandoned the mark with respect to the telecommunications services recited in the registration petitioner seeks to cancel.
Nor are we persuaded by petitioner's argument that the Bell logo mark has lost its significance as a mark and should be deemed abandoned because, since it is used by multiple, unrelated sources (i.e., the other RBOCs), it does not identify a single source. This argument ignores the fact that respondent's registration is a concurrent use registration. A concurrent use registration, by its very nature, contemplates that the registered mark can and does function to identify more than one source. The registered mark can identify more than one source because each source's use of the mark is subject to conditions and limitations which eliminate likelihood of confusion (such as, in the present case, the trade modifiers the RBOCs use in conjunction with the Bell logo mark). Petitioner's "single source identifier" requirement would render every concurrent use registration invalid due to abandonment.15 This is not to say that a concurrent use registration can never be cancelled on the ground of abandonment, but a petitioner asserting such ground must do more than merely show that the registered mark is being used concurrently by the concurrent use registrants in accordance with the conditions and limitations set forth in their concurrent use registrations. FOOTNOTE 15 "Indeed, petitioner's "single source identifier" abandonment requirement is untenable even outside the context of a concurrent use registration. See Wallpaper Manufacturers, Ltd. v. Crown Wallcovering Corporation, 680 F.2d 755, 214 USPQ 327, 332-33 (CCPA 1982)(specifically rejecting as "bad law" the view that abandonment occurs "when a mark loses its capacity to point out uniquely the single source or origin of goods, that is, unless one maintains exclusivity of rights" (emphasis in original))."
There exists no genuine issue of material fact that respondent contracts with foreign companies for the manufacture of its goods. On this point, the declaration of respondent's president submitted in support of its motion is consistent with the declaration submitted in the Canadian proceeding. In the present proceeding, respondent's president elaborated on the nature of the relationship between respondent and the foreign manufacturers. Based on the evidence of record, there is no genuine issue of material fact that respondent does not license its mark but, rather, contracts for manufacture of the goods under its mark. Nothing argued by petitioner raises a genuine issue of fact as to this. Thus, as a matter of law, respondent has not abandoned its mark due to naked licensing.
Evidence: Various evidence that was not found probative as to issue of abandonment.
In particular, petitioner has failed to show that respondent has not used the mark ECSTASY for its identified products for a period of at least three consecutive years. Petitioner did testify to having checked respondent's website "on more than one occasion." Id. at 8. However, there is no evidence that he checked over a period of at least three years. To the contrary, the exhibits he submitted show printouts spanning merely a few weeks. Id. Exs. 2 (dated March 23, 2009) and 3 (dated March 25, 2009). Furthermore, as petitioner notes, the copyright date on respondent's website as of the date of the printouts reads 2002, leaving open the possibility that respondent has simply not updated its website since 2002, which would explain why its ECSTASY fragrance (with the registration claiming a first use in commerce in 2004) is not listed thereon. Respondent's identification is not limited in its channels of trade, and respondent need not market via the Internet if it chooses not to do so. Petitioner noted no other type of investigation into other possible sales channels beyond calling the listed number for respondent's corporate office, the relevance of which is questionable since clearly respondent must exist in some form, as is evident from respondent's appearance in this proceeding. As for petitioner's notice of reliance, the third-party registrations he submitted do not contain the term ECSTASY, and thus are not probative of the issue under consideration in this proceeding.
Case Finding: Where TTAB found usage of the mark to be permissive and controlled, there was no need to determine whether such use constitutes a "related company" under 15 USC § 1055.
Since we find Mr. Gerald Giersch's use to be permissive and controlled, we do not need to examine whether such use constitutes a "related company" under 15 USC § 1055.

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