Did the TTAB Get it Right in In re RaceTrac Petroleum, Inc. by Affirming the Examiner’s Refusal to Register the Mark Under Section 2(d) of the Trademark Act?

On March 28, 2017 in In re RaceTrac Petroleum, Inc. (RPI), the TTAB (“Board”) held that the applicant could not use prior use as a ground for securing registration of a mark where the examining attorney had found that the applied-for design mark Swirl World was confusedly similar to the registered design mark Swirlz World (the “Z Mark”) and therefore could not be registered.  The Board reached this conclusion even though the applicant/appellant itself had 4 registered marks for Swirl World as either standard character marks or design marks under IC class 30 (frozen yogurt) or IC class 35 (self-serve yogurt shop services), all of which predated the registration date of the Z Mark.  The registered mark for the Z Mark was registered on the Principal Registered for IC 35.

Interestingly, the mark application at issue in the In re RPI proceeding was for a mark that was basically equivalent to the two design marks previously registered by the applicant except color was claimed as a feature of the mark and the designated classes were for both IC 30 and IC 35.  Compare application serial no. 8663641 with registration numbers 4246942 and 4238768.

At first blush, the TTAB’s holding seems unfair.  Nevertheless, the holding is consistent with the procedures available to contest the registration of a proposed mark during examination proceedings through the commencement of an opposition proceeding.   Once a mark registers, a party may also seek cancellation of the registered mark on the basis of priority and likelihood of confusion under 15 U.S.C. § 1064 within five (5) years of the registration date of a registered mark.  The owner of the Swirl World marks did not take the steps to commence either an opposition proceeding during the examination of the Z Mark for registration or a cancellation proceeding after the Z Mark was registered in 2013.   In reaching its conclusion that the appellant’s “prior use” argument was irrelevant during the application examination stage and the instant appeal, the TTAB relied on the holding in In re Calgon Corp., 435 F.2d 596 (CCPA 1071) (stating that “[a]s the board correctly pointed out, ‘the question of priority of use is not germane to applicant’s right to register in this ex parte proceeding.’ ”).  As the In re RPI decision states, “[e]ven though the appellant may well have good grounds related to prior use, a “priority of use in such a case constitutes a collateral attack upon the cited registration which cannot be entertained in an ex parte proceeding.”  Slip opinion at 15.

It is noted that RPI did file an intent to commence opposition proceedings against the applicant of the Z World mark but never formerly commenced the proceeding.  The Board held that the issuance of the Applicant’s four prior registrations does not compel the issuance of a fifth registration if it would be otherwise improper to do so.  In this case, there was a likelihood of confusion between the application and the registered Z World mark and the fifth registration would not have been improper.

The Board did not discuss whether the Z World mark should even have been registered in the first place.  It would seem that RPI would have prevailed in an opposition proceeding or even been successful in a cancellation proceeding.  For example, clearly frozen yogurt and self-serve yogurt shop services are often provided in the same marketplace to all relevant classes of purchasers.   That is, the trade channels for the goods and services are the same.  Slip opinion at 11.  Moreover frozen yogurt classified as a good under IC 30 is a natural extension of self-serve frozen yogurt services under IC 35 (and vice versa) under a likelihood of confusion analysis.  Also, the literal portions of the Z Mark and the Swirl World are virtually equivalent.  RPI should also have been able to establish prior use of its marks over the registered Z Mark (2011 as opposed to 2012).

The Importance of the Five Year Incontestability Status

The appellant had argued that the holding in In re Strategic Partners, Inc., 102 USPQ2d 1397 (TTAB 2012) should apply.  There, the Board had held that the proposed mark in an application which had been submitted by the owner of a previously registered mark could be registered even though it was substantially similar to the mark in a prior registration owned by another.  See TMEP 1207.01.  The In RPI Board distinguished the two cases by noting that, in In re Strategic Partners, the applicant’s previously registered mark had reached incontestable status because it had coexisted with the cited later registered mark for over five years.  Because the appellant’s prior registration was over five years old, it was not subject to challenge by the owner of the later cited registration based on a likelihood of confusion.

In the In re RPI proceeding, on the other hand, the Board noted that the applicant’s earlier four registrations are still subject to cancellation on the basis of priority and likelihood of confusion and had not reached the “incontestable status” five-year threshold. The Strategic Partners, Inc. decision is a good example of the Board’s invocation of the thirteenth du Pont factor in a likelihood of confusion analysis which “relates to any other established fact probative of the effect of use.” In re du Pont de Nemours & Co., 476 F.2d 1357, 1361 (CCPA 1973), the seminal case in trademark law for articulating the factors that are still relied on today to conduct a likelihood of confusion analysis.

Conclusions and Take-Home Points

As the decision illustrates, the filing of an ex parte appeal after the examiner’s rejection of the proposed mark was not the way to obtain registration of the Swirl World “color” design mark based on the applicant’s past registration history versus the “intervening” registered Z World Mark.   RPI had other options available even once the appeal proceeding was commenced.  For example, the Board noted that RPI could have sought suspension of the appeal and commenced cancellation proceedings of the Swirlz World mark.  Slip opinion at 14.  Although an applicant has the right to appeal the examining attorney’s rejection of an applied-for mark, the Board will generally not entertain issues concerning the validity of a previously registered mark(s) which the examiner relied on to reject the applicant’s mark.

Unfortunately for small business owners in particular, opposition and cancellation proceedings can be expensive.  An attempt to file an application to register a mark and hope for the best may seem like a much cheaper alternative.  In the In re RPI proceeding, however, the resultant appeal process was undoubtedly itself expensive.  Had it gone ahead with the appropriate procedures, whether an opposition proceeding at the time the Z Mark was undergoing examination for registration or a cancellation proceeding of the registered Z mark, RPI may well have prevailed and the fees and costs would at least have been well spent.

What are the take home points? The USPTO publishes proposed marks in the Official Gazette on a regular basis.  Also, all information pertinent to trademark applications and registrations is publicly available at www.uspto.gov.  Registered trademark owners and companies/individuals contemplating trademark registration should regularly check out these two sources of information.  If there appears to be a “problematic” trademark up for registration, the registered trademark owner or owner might consider speaking with an attorney about filing an opposition proceeding.  As another example, if the owner of a common law trademark is considering filing for registration of the mark and can prove priority of use prior to the usage of a similar registered mark which could prevent registration of the common law mark on likelihood of confusion grounds, the common law trademark owner may wish to file a cancellation proceeding within five years of the registered mark’s registration date.

Trademarks are essential to branding and can be very valuable business assets.  If your business strategy includes building a strong brand presence through registered trademarks, don’t make a procedural mistake in protecting your rights by commencing the wrong type of action with the USPTO.  Be careful about selecting company names, where a trademark infringement lawsuit by the owner of a registered mark could also become a costly problem.  And also keep an eye on the five year deadline for contesting a previously registered mark on likelihood of confusion grounds and prior use.

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