The Moral of the Blog: Perhaps one of the most misunderstood requirements for obtaining and maintaining the registration of a service or trademark is that the mark’s recited services/goods must be being offered in commerce to maintain a viable registration. Otherwise, the registered mark is subject to cancellation by the USPTO as this blog discusses.
A Little Personal Background. Wolfie Cohen’s Rascal House, once located in Sunny Isles, Florida, was one of my late mother-in-law’s favorite restaurants. Despite her background as a famous dress designer in the 1950s and 1960s who introduced petite-sizing to the fashion world, she never stopped enjoying the food she grew up with in New York City where her stellar career was launched. The commentator still has fond memories of family lunches at this restaurant last century where the tween kids would try and outdo each other with grossness much to the chagrin of their elegant grandmother.
Introduction. Rascal House (located in Boca Raton, Florida) and Wolfie Cohen’s Rascal House (both word marks) and Wolfie Cohen’s Rascal House (design mark) are registered service marks owned by Jerry’s Famous Deli, Inc. All three Registrations recite services for “restaurants and carry-our restaurant services.” All three registrations were renewed by the 6th, 10th, and the 20th year of registration. The renewals were based on the Registrant’s submission of specimens ostensibly showing use of the marks in commerce consistent with the Registration’s recited services.
A critical tenant of trademark law is that a registered trademark must be used in commerce. Once registration is granted, the submission of renewal documents known as declarations 8 are periodically required to establish continued usage. Registered trademarks will be cancelled by the USPTO for failure of the Registrant to renew the registration by the timely submission of these declarations.
Registered trademarks may also be cancelled as the result of cancellation proceedings brought by third parties before the Trademark Trial & Appeal Board (“Board”). One of the grounds for cancellation is non-use/abandonment of the registered mark as discussed in the Sept. 30, 2023 opinion by the Board in Rascal House, Inc. v. Jerry’s Famous Deli, Inc. Here, Rascal House, Inc. (“Petitioner”) filed petitions to cancel all three of the registered “Rascal House” marks alleging abandonment of the marks when the last of the two Rascal House restaurants closed its doors in 2008. The TTAB consolidated the proceedings and bifurcated the case into two stages. This first stage, which this blog discusses, addressed the issue as to whether the Respondent (Jerry’s Famous Deli, Inc.) had abandoned the marks.
Registrations are presumed valid under the law, and a party seeking cancellation bears the burden of providing abandonment. The cancellation standard is preponderance of the evidence. For cancellation on the basis of abandonment, Section 45 of the Lanham Act requires that “usage of the mark has been discontinued with intent not to resume such use. Non-use for 3 consecutive years shall be prima facia evidence of abandonment.” The Act defines “use” of the mark as bona fide use of the mark in the ordinary course of trade, and not merely to reserve a right in the mark. For service marks, a mark is used in commerce on services when (1) when it is used or displayed in the sale or advertising of services; and (2) the services are rendered in commerce. Accordingly, mere display of the mark is insufficient to establish use unless the associated services, in this case, restaurant services, are actually being rendered.
In Rascal House, the Respondent relied on its on-going usage of specimens showing the marks after the two Rascal House restaurants closed in 2008. The problem with this argument is that the Respondent merely displayed the specimens at its other establishments including Miami’s Epicure Market and at a California restaurant bearing the name Jerry’s. According to the Respondent’s own corporate representative, the usage of the marks was intended to cause customers to associate the Respondent’s non-Rascal House businesses with the Rascal House restaurants. That is, to take advantage of Rascal House’s iconic brand to “associate what they are getting [at the Respondent’s businesses] with the Rascal House.”
As the Board pointed out, such a display would have constituted legitimate advertising of the Rascal House restaurants had the restaurants still been open. The restaurants could have been located anywhere. However, the Respondent’s display of the registered marks did not constitute rendering of the services recited in the Registrations. At most the usage “constituted an attempt to take advantage of residual good will in a past [local] iconic brand with services rendered under other brands such as JERRY’S or EPICURE. Residual goodwill will does not negate a finding of abandonment based on non-use.”
Not surprisingly, the Board found that the RASCAL HOUSE marks were abandoned and emphasized what the Federal Circuit had stated in Imperial Tobacco Ltd. v. Phillip Morris: “The Lanham Act was not intended to provide a warehouse for used marks.”
The Board will next determine if the Respondent had an intent to actually use the marks. Based on the testimony of the corporate representative in stage 1 of the proceedings and the facts of the case, the commentator believes that the marks will be cancelled. This is because the restaurants have been closed since 2008 or far beyond the three (3) years which the law implies may be a reasonable period of non-use to prevent cancellation, e.g., where the business had supply chain issues or was confronted with events that affected its business operations such as a fire.
Discussion. The commentator is a stickler for ensuring that a registration’s recited services/goods are indeed being offered in interstate commerce at the time of registration and when renewal declarations are filed. The USPTO cannot verify that every piece of information provided to it is true and accurate. It depends on the forthrightness of the filing attorney and registrant to be truthful. Moreover, when working with clients who are considering purchasing a registered mark as part of an asset acquisition, the commentator always reviews the prosecution and renewal history of the registered mark(s) to ensure there are no red flags concerning the registration status of the mark which could make it susceptible to cancellation.
With the “Rascal House” marks’ renewal documentation, the documentation filer was representing that the marks were still being used in commerce (i.e., the restaurant services were being provided) when in fact they were not after 2008. Although the marks were renewed by the USPTO, the situation caught up with the Registrant when a cancellation proceeding was filed in 2020.
It should be noted that defendants in a trademark infringement lawsuit involving a registered mark may also seek cancellation of the registered trademark by the court.
Take Home Point: A registered mark is only as “good” as its usage status in commerce. Use it or lose it so to speak.
In Need of Legal Counsel on Trademark Matters? Trademark law is a complex area of the law. Contact Susan at 305-279-4740 for all matters related to trademark law from registration to proceedings before the Trademark Trial & Appeal Board and courts of law.
THANK YOU FOR YOUR INTEREST IN THIS BLOG. AS USUAL, THE CONTENT IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT LEGAL ADVICE.
© 2023 by Troy & Schwartz, LLC
