Abusive Trademark Applications Muddy the USPTO Database

"United States Patent and Trademark Office where trademark applications are filed"

Andrei lancu – the Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office – recently testified before a Congressional oversight committee that he could use help tackling the problem of abusive trademark applications. From 2013 to 2018, the USPTO reported an 1100% increase in trademark applications from China. The problem, however, with foreign applications is not just with China.

The problem with foreign applications stems from the fact that trademark applications in a foreign applicant’s native country are filed differently than in the U.S. Most countries do not require proof of use before issuing a registration, and some countries will let the applicant apply for every good or service in a particular International Class even if the applied-for mark will not be used with the vast majority of those goods or services.

Given the foreign applicant’s experience in their native country, the problem in the U.S. becomes obvious. Foreign applicant’s file U.S. trademark applications like they file trademark applications in their native country. The USPTO does not currently require a U.S. licensed attorney to file the applications for the foreign applicant. Accordingly, U.S. trademark applications filed by foreign applicants contain broad descriptions of goods that will never be used with the mark.

These foreign applications can cause all sorts of havoc for trademark searchers because of the Trademark Office’s presumptions. When goods or services descriptions are unrestricted the Trademark Office assumes the description covers all goods of a similar nature, travel in all channels of trade, and appeal to all classes of consumers. When a trademark searcher encounters a broad description with a similar mark, you have to assume it could be cited against the registration of your proposed mark. Then you are left with deciding how to respond to the issue. In the case of a foreign applicant, the likely response is a petition to cancel either on the ground of fraud or void ab initio.

Trademark owners should not have to incur this expense. Foreign applicant’s should ensure their applications comply with U.S. filing requirements. Director lancu testified that the agency has ramped up training for trademark examiners to them help spot troublesome applications, escalated a process to cancel fraudulent marks, and started piloting software that can help detect images in applications that have been tampered with on Photoshop. The agency is also considering requiring all foreign applicants to be represented by a licensed U.S. attorney.

TTAB Hint Into How Similar Wine and Beer Marks Can Co-Exist

"Tempus beer bottles can't co-exist with Tempus Two wine"

The case law is legion at the Trademark Trial and Appeal Board that “wine” and “beer” are related goods. Nevertheless, time and time again, breweries and wineries attempt to persuade the TTAB that wine and beer are different only to meet the same fate over and over again. The story was the same in a recent TTAB decision and so was the fate, but this time the TTAB provided a potential common ground where similar beer and wines marks may be able to co-exist.

Cerveceria Primus, S.A. de C.V. sought to register the mark TEMPUS for “beer.” The Trademark Office refused registration of the TEMPUS mark based on a prior registered mark for TEMPUS TWO for “wines,” and Cerveceria Primus S.A. de C.V. appealed.

Cerveceria Primus lost the conceptual weakness argument by offering only three third-party registrations, seven less than the 10 minimum. The marks were also found to be similar because both shared the TEMPUS term. The central issue was the relatedness of the goods.

Cerveceria Primus started down the right path by attacking the context of the Trademark Office’s evidence. A majority of the Examining Attorney’s third party evidence did not show the same party producing both wine and beer under the same mark. Instead, it showed the same retail outlet selling both wine and beer. However, in this case, as opposed to recent TREK case, the Board discounted the retail store evidence.

Cerveceria Primus then attempted to put into context the remaining evidence by arguing the examples represent .1% of microbreweries in the U.S. With such a small percentage, the evidence did not demonstrate that enough consumers were exposed to wine and beer appearing under the same mark.

However, the goods descriptions in the case contained no limitations. The descriptions remained broadly “beer” and “wine.” Had the descriptions been narrowed to “beer produced by a microbrewery” or a similar limitation on a winery. Had those limitations been made, then Cerveceria Primus’ evidence concerning the small representative sample of microbreweries would have carried more weight.

This is the path breweries and wineries will need to take if they are going to co-exist given that the industry becomes more and more saturated.

Bicycles and Snack Bars Related Because Some Retailers Sell Both

"TREK snack bar packaging related to bicycles"

Most bicycle manufacturers do not make bicycles and snack foods. In fact, in a recent Trademark Trial and Appeal Board decision there was no evidence presented of a bicycle manufacturer also owning a federal trademark registration for the same mark in connection with any type of snack food. Nevertheless, the Trademark Trial and Appeal Board held that bicycles and snack bars are related goods.

Natural Balance Foods Limited sought to register the mark TREK for a variety of snack bars. The Trademark Office approved the TREK mark for opposition and Trek Bicycle Corporation (“Trek”) timely opposed the registration of Natural Balance Foods’ mark. Trek alleged that the TREK mark for snack bars was likely to cause confusion with its prior registered marks for TREK in connection with bicycles, online retail store services, and powders used in the preparation of sports drinks and energy drinks.

Based on the goods descriptions alone, snack bars, bicycles, online retail store services, and sport drink powders are different goods. However, when no restrictions are identified in the goods or services descriptions, these different goods are deemed to travel in all normal channels of trade and appeal to all classes of consumers. Natural Balance Foods made it easy for Trek to win its case.

Trek offered several third-party websites that sold bicycles and snack bars. The snack bars sold by the retailers were a different brand owner from both the retailer and bicycle manufacturer. But the fact that these goods were sold by the same retailer was enough for the Board to conclude that the channels of trade overlapped. And because the marks were identical, this overlap was enough for the Board to conclude that a likelihood of confusion was likely.

This decision highlights the challenge for trademark searchers. It is not enough to rely on the good or services descriptions because on their face these descriptions may lead to an incorrect analysis. It is imperative to consider past decisions to determine whether a relatedness finding had been found.

List of the Top 500 Global Bank Brands Released

"cover page for top 500 bank brands report"

Brand Finance released its annual list of the top global bank brands. China’s banks topped the list with ICBC coming in at the number one spot, valued at $79,823M. The U.S. banks cracking the top ten are Wells Fargo at number five; Bank of America at number six; CITI at number seven; and Chase at number eight. The Visual Capitalist created a helpful visual showing the rise and fall of the top ten brands over the last ten years. As a sector, banks lagged behind hotels, autos, tech, beer, oil & gas, airlines, insurance, and utilities.

The methodology used by Brand Finance to value a bank brand is the Royalty Relief approach. This methodology estimates the likely future revenues attributable to a brand by calculating a royalty rate that would be charged for its use, to arrive at a “brand value” understood as a net economic benefit a licensor would achieve by licensing the brand in the
open market.

Brand Finance assigns a Brand Strength Index number, which is applied to the prevailing royalty rate ranges for like goods or services based on prior licensing deals or court decisions. For example, if the prevailing royalty rate range is 0-5% and the Brand Strength Index number is 80, then the royalty rate would be set at 4%. Basically, the stronger the brand the higher on the range a particular brand will land.

For Brand Finances analysis, it is key get a high Brand Strength Index number. The Brand Strength Index is made up of three variables: Marketing Investment, Stakeholder Equity, and Business Performance. Of the three variables, Stakeholder Equity is the most subjective, but one metric considered in this analysis is “awareness.”

We talked before about what is takes to build a strong brand worth billions of dollars. Starting with a unique mark that is conceptually strong and not part of a crowded field is an important first launch pad.

2018 Trademark Weakness Trend Carries Over to 2019

"bmx biker landing on RED BULL branded ramp which does not have conceptual weakness"

In 2018, we wrote frequently on the strength trend we saw emerging from the Trademark Trial and Appeal Board decisions. The emerging trend was that in order to demonstrate conceptual weakness a trademark applicant had to be able to introduce a minimum of 10 third-party registrations for marks: (1) sharing the same term; and (2) registered for identical or related goods or services. The ability to meet this minimum threshold had a direct bearing on the success of one of the more common arguments made by trademark applicants to overcome a registration refusal.

In 2019, we have seen the first TTAB case to carry over this trend. Morganti Flavio Innovaciones Gastronomicas, S.L. applied to register the mark PINKCOW & Design for, among other goods, “soft drinks.” Anticipating a potential issue with Red Bull GmbH, Morganti voluntarily excluded “energy drinks” from its entire goods description in International Class 32. The Trademark Office found no issue with Morganti’s PINKCOW & Design mark and published the mark for opposition.

Red Bull, on the other hand, had an issue with Morganti’s application and opposed the registration of its mark. Red Bull alleged that the PINCOW & Design mark was likely to cause confusion with its prior registered marks RED BULL for, among other goods, “soft drinks.”

Morganti unsuccessfully argued that Red Bull’s product was an energy drink not a soft drink. Therefore, the goods descriptions at issue were legally identical because they both included the phrase “soft drinks” and the evidence showed that Red Bull’s product satisfies the ordinary definition of an “energy drink” and “soft drink.”

Red Bull was able to demonstrate that its RED BULL was commercially strong. Consequently, Morganti had to demonstrate the conceptual weakness of the RED BULL mark to counteract Red Bull’s evidence. Unfortunately, Morganti fell two short of the minimum number of the third-party marks target with a showing of eight.

Because the Board found that Red Bull’s mark was strong and the goods at issue were legally idential, Red Bull’s mark was entitled to a broad scope of rights. Those rights extended to Marganti’s PINKCOW mark, and so the TTAB granted Red Bull’s opposition.

A New Trend for the Relatedness of Goods or Services Factor?

"White Horse Auto dealership related goods or services to car washes"

A recent Trademark Trial and Appeal Board decision involving car dealerships and car washes may signal a change in how the Board will assess the relatedness of goods or services likelihood of confusion factor. White Horse Auto, LLC filed a service mark application to register the mark WHITE HORSE AUTO (in standard characters) for “automobile dealerships.” White Horse Wash, LLC opposed the registration of White Horse Auto’s application on the ground of priority and likelihood of confusion.

Not surprisingly, the Board found that the marks were virtually identical. And White Horse Auto failed to demonstrate that the WHITE HORSE phrase was diluted for automobile related goods and services. Ultimately, this case came down to whether the services at issue were sufficiently related to likely cause confusion.

The Board held that providing automobile-related services by the parties was not enough by itself to establish the services at issue were related. “A finding that the goods are similar is not based on whether a general term or overarching relationship can be found to encompass them both.” This a departure from cases the TTAB decided as early as last year. For example, in the SONIA SONI LIFE IS A RECIPE, the broad description “spices” was enough for the Board to conclude that the applicant’s goods covered the registrant’s goods. The only time the Board departed from this interpretation was when the goods or services descriptions at issue were vague or involved technical goods.

In the present case, there is nothing vague nor technical about “automobile dealerships” or “car washes,” nor is either description vague. Nevertheless, the Board looked at the real world marketplace to determine what the actual services were. And based on the similarities the Board found in the circumstances surrounding the marketing of the two marks, the Board concluded the services at issue were related. Unfortunately for White Horse Auto, its application was denied registration. But if at first you don’t succeed, it’s okay to try again.

More importantly for trademark searchers, could we be seeing a change in how the Board assesses the relatedness of the goods and services factor? This is definitely an issue to watch in 2019 as the Board decides more cases because the relatedness of goods or services factor is critical to not only conducting trademark searches but also assessing whether a likelihood of confusion exists between two marks.

Addition of House Mark Did Not Eliminate Confusion

"Sealy house mark does not distinguish COCOON trademark"

To add or not to add the house mark, that is the question. This is a good question because the Trademark Trial and Appeal Board has gone both ways on the question. In some cases, the Board has found that the addition of a house mark is sufficient to avoid confusion, and in others the Board has found that it aggravates the likelihood of confusion. In a recent decision involving the COCOON BY SEALY mark, the Board gave us some guidance on when to add the house mark.

Cocoon International Sales, LLC filed an application to register the mark COCOON BY SEALY (in standard characters) for “mattresses; pillows.” The Trademark Office refused registration of this mark on the ground that it was likely to cause confusion with the prior registered mark SLEEP COCOON (in standard characters) for “mattresses; pillows.”

The Trademark Office found the goods are identical and because the descriptions are unrestricted the channels of trade and class of consumers factor overlap. Cocoon International Sales tried the conceptual weakness argument but was only able to offer 4 third-party registrations (but in reality only two because three of the four were owned by the same entity), a number well below the 10 minimum we have posited is required.

Facing an uphill battle, Cocoon International Sales tried to distinguish its mark by arguing the addition of the famous SEALY house mark was enough to tip the mark similarity factor in its favor along with the ultimate finding of no likelihood of confusion. In finding that it did not adequately distinguish the COCOON marks, the Board identified when a house mark can distinguish two marks:

  1. When there are recognizable differences between the marks, then adding a house mark may help.
  2. When the marks are highly suggestive or merely descriptive, then adding a house mark may help.
  3. When the marks are conceptually weak, then adding a house mark may help.
  4. When the house mark precedes instead of follows the mark, adding it may help.

Unfortunately for Cocoon International Sales the Board found that COCOON was “mildly suggestive” of mattresses and pillows. Therefore, adding SEALY to the mark was not enough to avoid a likelihood of confusion finding.

Trademark Fame Lacking Admissible Evidence

"Misel Disel preshave liquid too similar to Diesel despite no trademark fame finding"

Plaintiffs arguing trademark fame for purposes of the likelihood of confusion analysis is about as common as defendants arguing the plaintiff’s trademark is conceptually weak. Plaintiffs want to establish trademark fame because strong marks are entitled to a broad scope of protection. For the record, trademark fame for likelihood of confusion purposes is different from fame for trademark dilution purposes.

More often than not, a trademark fame argument fails not because the evidence of fame does not exist, but because the plaintiff fails to properly admit the evidence to the Trademark Trial and Appeal Board. During the discovery period it is easy to get fixated on obtaining the evidence the party needs and not on the admissibility of the evidence being acquired. This was the problem Diesel S.p.A. encountered in its recent case before the Trademark Trial and Appeal Board.

Misel Disel, LLC filed an application seeking registration on the Principal Register of the mark MISEL DISEL (in standard characters) for “smooth shave enhancer, namely, pre-shave liquid.” The Trademark Office reviewed the application and found no conflicting marks that would bar registration under Trademark Act Section 2(d). The MISEL DISEL mark was published for opposition and Diesel S.p.A. opposed the registration of the mark.

Diesel was the owner of several prior registrations for DIESEL (in standard characters) and DIESEL formative marks, but the Trademark Trial and Appeal Board focused on one:  DIESEL (in standard characters) for, among other goods, “pre- and after shave creams and lotions.” The Board found that the MISEL DISEL and DIESEL marks were similar, the goods closely related, and there was no weakness based on the co-existence of third-party registrations. Misel only came up with three registrations for DIESEL and none were for goods remotely close to pre- and after shave creams and lotions.

Diesel argued that its DIESEL mark was famous for likelihood of confusion purposes. To support this argument, it relied on documents only. It offered no testimony, which was Disel’s fatal mistake.

Financial information is key to establishing trademark fame, but this information must be offered through testimony. It is not self-authenticating evidence. Web pages can be self-authenticating, but the Web pages are admissible of what they show on their face only, not to prove the truth of any matter asserted in the them.

Documents produced in response to a Document Request are also inadmissible unless other authenticated through a Request for Admission.

Because Diesel did not give any consideration to admissibility, it was left with minimal evidence on trademark fame and the Board was unable to find that the DIESEL was famous for likelihood of confusion purposes.

How to Win the Relatedness of Goods Argument

"jar of Sonia Soni Life is a Recipe spices which won the relatedness of goods factor against Mexican sauces"

Once again we see a trademark applicant trying to win the relatedness of goods argument without first narrowing the descriptions, and trying to win the conceptual weakness argument by not hitting the 10 third-party registration threshold. If you intend to make a real world marketplace argument, then the identifications of goods and services must reflect the real world. Unfortunately, this was a lesson Productos Verde Valle, S.A. de C.V. learned the hard way.

Productos Verde Valle applied to register the mark SONIA (in standard characters) for “sauces; chili sauce; hot sauce.” The Trademark Office refused registration of this mark on the ground that it was likely to cause confusion with the prior registered mark SONIA SONI LIFE IS A RECIPE (in standard characters) for, in relevant part, “spices, spice blends; spice rubs.”

The Trademark Office offered evidence showing the same mark being used for both sauces and spices. This evidence was sufficient to put the Tradmark Office in the first position to win the relatedness of goods argument. Productos Verde Valle argued the goods are unrelated because its sauces are sold as a Mexican food product whereas the SONIA SONI LIFE IS A RECIPE spices were sold as an Indian food product. However, the identification of goods descriptions were unrestricted as to a type of cuisine and an applicant may not restrict the scope of its goods or the scope of the goods covered in the cited registration by extrinsic argument or evidence.

The Trademark Trial and Appeal Board also noted that certain spices may be used in both Mexican and Indian cuisine. What this last sentence tells is the level of detail that may be required in order to differentiate the goods. In this case, for example, it would have been sufficient to say “Mexican sauces” and “Indian spices.” To win the relatedness of goods argument, it may be necessary to get very detailed about the real world marketplace. This requires examining the goods and services at issue in detail including not only the nature of the goods, but where they are marketed and who the target consumers are.

When it came to the conceptual weakness factor, Productos Verde Valle did not find any SONIA mark only marks that shared the letters “S”, “O”, “N”, and “A.” Unlike what happened in the CARDITONE case a few days ago where the Board refused to give any weight to the 69 CARDIO third-party registrations because the mark at it issue was CARDI, the Board gave some weight to the third-party registrations offered by Productos Verde Valle. Nevertheless, Productos Verde Valle was only able to find four third-party registrations to support its conceptual weakness argument. Accordingly, the Board did not find that the SONIA mark was weak.

Even if it was found to be a weak term, Productos Verde Valle’s mark was incorporated in its entirety in the SONIA SONI LIFE IS A RECIPE mark. If you are going to make the conceptual weakness argument, you must have something to point to that distinguishes your mark from the other mark that shares the weak term. Therefore, the Board affirmed the registration refusal.

Reinforcement that Trademark Classes are Irrelevant

"woman putting postits on a wall showing that trademark classes are irrelevant"

The Trademark Trial and Appeal Board has said before that trademark classes are irrelevant to determining likelihood of confusion. A recent decision involving the SWISS certification mark reinforces this point. Pearl 9 Group, LLC filed a trademark application to register the mark I.W. SUISSE for “clocks and watches; parts for watches; watch bands and straps; ***; timepiece dial faces, and parts for timepieces ***” in International Class 14. The Trademark Office refused registration of Pearl 9’s mark on the ground that it was likely to cause confusion with the prior registered certification mark SWISS for “horological and chronometric instruments, namely, watches, clocks and their component parts and fittings thereof” in Class A.

The Board held that the classification as a certification mark has very little effect on our determination as to whether or not there is a likelihood of confusion. Because the certification mark owner does not itself use the mark, the question of whether there is a likelihood of confusion is based on a comparison of the mark as applied to the goods or services of the certification mark users.

Using trademark classes in a trademark search only helps to narrow the universe of marks that trademark searchers need to evaluate. From there, the trademark searcher is left to sift through the results using only intuition to determine whether anyone of those marks is likely to prevent the registration of the proposed mark being searched.

And any software program that includes only the similarity of the marks and irrelevant International Class numbers yet provides a “score” for the search results begs the question of what that score represents. If all the search is telling is that there are similar marks registered with the United States Patent and Trademark Office, that information is largely unhelpful and something you can discover by yourself and for free.

And over reliance on trademark classes will result in overlooked trademarks that may be consequential marks in the likelihood of confusion analysis. That may have been the case in the Pearl 9 case. Focusing solely on International Class 14 where jewelry and watches are classified, would have resulted in missing the SWISS certification mark in Class A.