Seattle Trademark Lawyer

Last March the U.S. Trademark Trial and Appeal Board rolled out a pilot program to expedite the cancellation of abandoned registrations. 

The U.S. Patent and Trademark Office’s administrative law arm now randomly selects over half of all cancellation petitions that allege abandonment or nonuse as a claim. Participation is voluntary, but if the parties opt in, they can get a decision in about 50 days. They also enjoy streamlined discovery and a decision on summary judgment-style briefs.

Here’s how the TTAB describes the program:

“Under the pilot, the TTAB identifies newly-filed cancellation proceedings limited to abandonment or nonuse claims that may benefit by some form of the Board’s existing Accelerated Case Resolution (ACR) procedures. The TTAB has an established practice of offering ACR in inter partes proceedings to simplify and speed up proceedings, allowing the parties to save time and expense. The standards of proof in an ACR proceeding remain the same as those in a traditional proceeding, and a final decision rendered under ACR may be appealed in the same manner and under the same time frames as non-ACR decisions.”

If the only issue is whether the registrant is not using the mark in the marketplace, the process should be easy, right? That’s the TTAB’s thinking, and it’s smart. The normal process to test whether a registrant is entitled to maintain its registration is often too cumbersome and expensive to be useful.

The standard for abandonment is three years of consecutive nonuse of a trademark, coupled with an intent not to resume use. If a company is out of business or its branded product has been permanently shelved, the trademark owner’s registration shouldn’t block others. It’s a zombie that should be quickly cancelled when attacked.

The high cost of the usual process drives abandoned claims to the sidelines. In the TTAB’s words, the overall default rate is “fairly high.” That’s my experience as well. While that’s not necessarily a bad thing, it would be better to have as many claims as possible decided on their merits. Making the cancellation process quicker and easier should help more parties to do so.

On Dec. 17, the Northern District of California found on summary judgment that defendant grocery store Albertsons Inc. had not abandoned its LUCKY trademark even though it shuttered all of its LUCKY-branded stores by 1999 following its merger with the owner of that chain. In doing so, the court dismissed plaintiff Grocery Outlet Inc.’s claim that it had a right to open its own grocery stores under the LUCKY name.

The court found that Albertsons’ depletion of existing LUCKY-branded stock constituted bona fide continued use of the mark given the Ninth Circuit’s decision in Electro Source, LLC v. Brandess-Kalt-Atena Group, Inc., 458 F.3d 931 (9th Cir. 2006). This was a change from the court’s order on Albertsons’ motion for preliminary injunction two years earlier, in which the court reached the opposite conclusion. In light of the changed law, the court found its 2006 decision “that what it deduced from the evidence as sell off of residual inventory not constituting bona fide use of a trademark can no longer hold.”

The court also found: “There is sufficient evidence in the record to establish that Albertsons did not act with an intent not to resume use after the 2005 sales of inventoried Lucky-branded items. There is undisputed evidence that Albertsons intended to resume use of the LUCKY mark on grocery stores both before and after the conversion.”

Interestingly, the court noted it was unclear whether Grocery Outlet needed to prove abandonment by a preponderance of the evidence or by clear and convincing evidence.

“Abandonment of a trademark must be strictly proven. ‘Because a finding of abandonment works an involuntary forfeiture of rights, federal courts uniformly agree that defendants asserting an abandonment defense face a ‘stringent,’ ‘heavy,’ or ‘strict’ burden of proof.’ While the Ninth Circuit has still not defined the ‘strictly proved’ standard further, the majority of courts applying that standard have found that evidence of abandonment must be clear and convincing. It is not the law that ‘the slightest cessation of use causes a trademark to roll free, like a fumbled football, so it may be pounced on by any alert opponent.’”

Despite this uncertainty, the court found that Grocery Outlet failed to make the grade. “Because the Court finds that there was continued use through 2005 and there is undisputed evidence in the record indicating Albertsons’ intent to resume use within the relevant time period, the Court finds that summary judgment is appropriate under either the clear and convincing standard of proof or the preponderance of the evidence standard. Therefore, this Court need not decide the issue of what standard of proof is appropriate.”

The case’s discussion of the uncertain standard of proof in the Ninth Circuit is the subject of a recent Law.com story.

The case cite is Grocery Outlet Inc. v. Albertsons, Inc., No. 06-2173 (N.D. Calif. Dec. 17, 2008) (White, J.).

Tough times ahead: Message from WaMu’s Web site

Washington Mutual’s failure and subsequent fire sale to New York-based JPMorgan Chase will undoubtedly hurt the Seattle legal community, not to mention Seattle as a whole. WaMu was downtown Seattle’s biggest tenant. It was a leading supporter of local philanthropic and cultural causes. It employed 3,500 in its headquarters alone, including what must have been dozens of fine attorneys. I can think of at least three who used to work at my firm.

All of this will probably soon change.

On the trademark front, the collapse of the bank is also big news. WaMu owns hundreds of federal trademark applications and registrations — most of which would seem to be headed for abandonment, as JPMorgan apparently intends to fold WaMu’s operations into its CHASE brand.

Given WaMu’s 100-year history here, it’s a shame all that goodwill is seen more as a liability than an asset.  It’s disappointing — though I suppose not surprising — that five years of what people now view as reckless expansion, combined with countless ill-advised mortgages, can erase decades of good feelings about the brand.

It goes to show: goodwill is a fragile thing.

When the dust settles, it will be interesting to see how JPMorgan portrays its brand as it enters the Seattle market. The local papers on Friday ran an AP story about how JPMorgan’s staid image will contrast with WaMu’s efforts to present a more hip persona.

In these economic times, I suppose it’s hip to be staid.