Pattishall, McAuliffe, Newbury, Hilliard & Geraldson
Chicago, Illinois
312-554-8000
Companies occasionally discontinue use of registered marks and resume use later. They should realize the legal dangers inherent in this pattern. The United States Trademark Trial and Appeal Board recently granted summary judgment confirming that the validity of trademark registration cannot be revived after abandonment by resumption of use of the mark or intent to resume its use. Nabisco Brands, Inc. v. Keebler Company , Cancellation No. 21,498, June 29, 1995. This decision offers important insight for U.S. trademark holders seeking to avoid the loss of rights.
Trademark nonuse is a greater threat to trademark rights under U.S. law than under the law of many foreign countries where nonuse is curable. For example, in the British law countries, Argentina and France, the courts have concluded that resumption of trademark use before the commencement of a cancellation action will cure nonuse and avoid cancellation. Similarly, the European Community Directive to approximate national trademark laws and the draft Community Trademark Regulation provide, with certain qualifications, that resumption of use cures prior nonuse. In contrast, in the U.S. and in over thirty other jurisdictions, as a general rule, nonuse for the statutory period is not curable and will result in loss of trademark rights.
Nabisco Brands Inc. (Nabisco) filed a petition to cancel a registration for the mark SUPREME for "biscuits, cakes, crackers, cookies, wafers," owned by the Keebler Company (Keebler). Nabisco claimed that Keebler had not used the mark since at least 1970 and had no intent to resume use of the mark between at least 1970 and 1983. Keebler argued that its good faith intent to resume use of the SUPREME was demonstrated by market testing of the mark on numerous product lines after 1983. Keebler also claimed that the issue of abandonment had already been decided in Keebler's favor in a prior preliminary injunction action between the parties and that the district court's preliminary injunction ruling had preclusive effect in the cancellation proceeding.
A. CLAIM PRECLUSION
The Board ruled that Nabisco's claims were not precluded by the prior civil action for two reasons. First, the Board noted that a court's determination on a preliminary injunction generally will not have preclusive effect on a subsequent proceeding because the ruling is interlocutory and does not constitute a final determination on the merits of the case. Second, the Board recognized that preclusion does not apply where the parties voluntarily stipulate to dismiss an action without prejudice. In the instant case, the written agreement between the parties that resulted in the voluntary dismissal specifically stated that "Nabisco shall have the right to pursue Cancellation No. 21,498 with respect to Keebler's Registration No. 124,976 for the mark before the Trademark Trial and Appeal Board or by appeal of its decision to the United States Court of Appeals for the Federal Circuit."
B. ABANDONMENT
Under U.S. trademark law at the time of the proceeding, a mark is deemed abandoned when "its use has been discontinued with intent not to resume such use. Nonuse for two consecutive years shall be prima facie abandonment." 15 U.S.C. 1127. Effective January 1996, the period of uninterrupted nonuse constituting prima facie abandonment will be extended from two to three years. This amendment to the U.S. trademark statute is the result of the Trade-Related Aspects of Intellectual Property Rights Agreement (TRIPS), part of the Uruguay Round of the General Agreement on Tariffs and Trade (GATT).
Nabisco established that Keebler had made no use of the SUPREME mark in connection with the goods identified in the disputed registration during at least the period from 1970 to 1979. Keebler did not disprove the underlying fact of nonuse and failed to introduce any evidence, such as development plans, market tests or advertisements, to demonstrate an intent to resume use of the mark during the period from 1970 through 1979. Its evidence of marketing plans and tests involving the SUPREME mark after 1979 was unavailing. The Board held that later efforts cannot cure a prior abandonment. Even subsequent re adoption of the involved mark would represent a new and separate use, but would not prevent cancellation of the registration. Accordingly, Nabisco's motion for summary judgment was granted on the claim of abandonment.
Under U.S. trademark law, nonuse alone is not sufficient to establish abandonment. There must also be an "intent not to resume use." That intent may be presumed when there has been two years of nonuse. To prevent abandonment in the face of two years of nonuse, the registrant must come forward with evidence of an intent to resume use sufficient to rebut the presumption of an intent not to resume use. Although such evidence may include marketing plans, market tests, or similar activities that do not constitute actual use, the evidence must be relevant to the period of nonuse. It is not sufficient to show such efforts after the mark has been abandoned.
Attorneys responsible for trademark maintenance should evaluate their clients' portfolios to determine if any marks may have been abandoned due to nonuse. If so, counsel should advise management that the nonused marks are at risk and attempt to document any marketing efforts during the period of nonuse that may demonstrate an intent to resume use.
Pattishall, McAuliffe, Newbury, Hilliard & Geraldson represented Nabisco in the cancellation proceeding. We welcome any questions you may have about abandonment or other trademark matters.