Trademark Cancellation and Abandonment Issues [Case Study]

Trademark cancellation due to abandonment is the subject of a recent decision by the Trademark Trial and Appeal Board.

In Yazhong Investing Ltd. v. Multi-Media Tech. Ventures, Ltd., the Petitioner sought to cancel four registrations of the Respondent.  The grounds for cancellation were fraud and abandonment.   Petitioner also sought to cancel two of the registrations on additional grounds of non-use.

All of the registrations were for the mark GIDGET for goods and services in multiple classes.

The entire list of goods and services of the collective registrations numbered in excess of one hundred distinct items.

Under Section 45 of the Trademark Act, a mark is abandoned if the following occurs:

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.

Since federal trademark registrations are presumed valid, the party seeking cancellation bears the burden of proving a prima facie case of abandonment.

If this preliminary burden is met, it then shifts to the trademark registrant to rebut the showing with evidence.

Proof of non-use of at least three consecutive years establishes a prima facie case of abandonment.

In response to Petitioner’s discovery requests, Respondent stated that it had used the GIDGET Mark continuously from 2005 through 2012.

Yet it could not produce any verifiable evidence of sales.  It also indicated that it did not realize that it had to have continuous use on all of its goods and services listed in the registrations.

Instead, it thought that the law required it to only have use on at least one of the goods.  It also indicated that it was making ongoing licensing efforts to license the mark.

However, the testimony of officers of Respondent’s predecessors in interest and third parties had shown that from at least 2008 through 2012, there was no use of the GIDGET mark. This was enough for Petitioner to establish a prima facie case of abandonment, with the burden of showing an intention to resume use of the mark shifting to Respondent.

To support that it had an intent to resume use of the GIDGET Mark, the Respondent was required to build a record with respect to the activities it engaged in during the non-use period or what outside events occurred to support an intent to resume use.

In short, evidence of an intent to resume use must be more than a subjective intention; rather, there must be verifiable objective facts.

Moreover, the intention to resume use must be “within the reasonably foreseeable future.”

Here, the Respondent could not produce any evidence of sales, advertising, negotiating of license agreements, other efforts to market goods and services associated with the GIDGET Mark.  Instead, the Board noted that Respondent’s evidence added up to little more than attempts to secure additional investors.

In totality, the Board concluded that Respondent’s activities did not constitute use or an intent to resume use, but rather merely an intent to reserve rights in the mark.

Accordingly, it ordered the trademark cancellation of the GIDGET Mark in the involved registrations due to abandonment.

An Important Note on Trademark Cancellation and Abandonment Issues

This case presents a lesson for trademark owners to carefully monitor whether they are using their trademarks on all of the goods and services contained in their registrations.

If not, it is recommended that a consultation with a qualified trademark attorney occur.

A trademark cancellation can have serious implications to brand marketing and sales efforts.

To obtain further information on trademark cancellation and legal strategies, contact James Hastings.