Recently, in a potentially far-reaching decision, the Trademark Trial and Appeal Board (TTAB) of the U.S. Patent and Trademark Office ruled that PlayCore IP Sub, Inc., a Tennessee playground equipment manufacturer and owner of the ROCKSCAPE mark, still had standing to seek the cancellation of a rival's mark, Delaware Quarries’ ROCKSCAPE mark. This ruling came even after the TTAB ruled that there was no likelihood of confusion between the two parties’ marks.
Delaware Quarries had opposed PlayCore's application to register the mark ROCKSCAPE for use in connection with "playground equipment, namely, climbing units," claiming that PlayCore’s mark was likely to cause confusion with Delaware’s identical ROCKSCAPE mark for "stone, gravel or similar products, namely boulders, stone veneer, and crushed stone for use in landscaping, building construction, and paving."
The TTAB dismissed Delaware Quarries' opposition on the grounds that there was no likelihood of confusion. Among other reasons, the Board held that the company had not shown a viable relationship between its stone products and children’s playgrounds. “The evidence must show at least a viable relationship between the goods, which opposer has not done,” the Board held. “Similarly, there is no evidence that the goods will travel in the same or similar channels of trade in a manner that consumers will be likely to confuse their source.”
That makes for a pretty standard opposition finding. (Win some, lose some.) But in this case, Delaware lost a lot more than your typically disappointed opposer. In defending the opposition, PlayCore had also brought a counterclaim to cancel Delaware’s ROCKSCAPE mark. In support of that counterclaim, PlayCore had submitted evidence of dozens of websites using the term "rockscape" in connection with landscaping with rocks, stones, etc.
The Board concluded that those uses “clearly establish” that “rockscape” would be understood by relevant consumers as a generic term for Delaware's identified goods. Therefore, the Board ruled that Delaware's mark was at least merely descriptive. Further, since Delaware did not claim acquired distinctiveness, the Board sustained the petition for cancellation on that alternative ground as well.
Delaware immediately requested reconsideration of the Board's decision. The company argued that once the Board dismissed its likelihood of confusion claims against PlayCore’s application, the latter company no longer had standing to seek cancellation of Delaware’s own ROCKSCAPE registration. The Board disagreed. It held that because standing is assessed at the time the counterclaim is filed and as a general rule a defendant in an opposition has inherent standing to assert its counterclaims PlayCore’s counterclaim was valid and could be ruled on.
The Board had previously considered these circumstances as raising an issue of standing. But the Supreme Court, in Cardinal Chemical Co. v. Morton Int'l Inc., made it clear that the issue is one of mootness: That is, the court is to consider whether the dismissal of the opposer's claims rendered the counterclaims moot.
In Cardinal Chemical, the Supreme Court ruled that a counterclaim for a declaratory judgment of patent invalidity was not rendered moot when the Court of Appeals for the Federal Circuit affirmed the district court's finding of non-infringement. The Court based its decision on two points: (1) a party faced with a charge of patent infringement will remain concerned about possible future infringement charges if it markets similar products in the future; and (2) the public has an interest in resolving questions of patent validity.
The Board felt that similar concerns were raised in the dispute between Delaware and PlayCore. An applicant might later face an infringement action to enjoin its use of the mark, and a finding of genericness — even in the narrow context of an opposition proceeding — would undoubtedly be "of interest" to the applicant. In addition, the Board felt that the public has an interest in resolving questions regarding the genericness of a registered trademark, such as in Loglan Inst., Inc. v. Logical Language Group, Inc., where the court noted “the public interest in a cancellation proceeding to rid the register of a generic mark.”
So the Board denied the request for reconsideration.
The Board’s holding raises two major questions. First, is a trademark registration really that similar to a patent for purposes of the mootness question? It is clear that once a patent is declared invalid in a final decision, it is finished — end of story. In contrast, once a federal trademark registration is cancelled, the trademark, if there is one, in many cases can and does live on in the common law. All trademark rights are not immediately extinguished. For example, in the United States, if a trademark owner ceases use of a trademark without intent to resume use of the trademark in the future, the trademark will be deemed abandoned. Under the Lanham Act, the United States’ trademark act, non-use of a trademark for three consecutive years creates a rebuttable presumption of abandonment of the trademark (whether registered or at common law). Temporary or seasonal non-use of a trademark, particularly when such cyclical use is typical in an industry or market, generally does not constitute grounds for abandonment under U.S. trademark law. Rather, periods of non-use must be accompanied by the “intent not to resume use.”, Thus, as you can see, that is not necessarily the end of the story. Are the two really that compatible?
Second, is a Board finding of genericness binding in a subsequent federal court action? Oppositions and cancellation decisions before the Board are based primarily on the parties’ marks and the marks on goods they have registered or applied for. The Board does not necessarily consider all the market realities that a federal district court would consider in a trademark infringement action brought between the same parties. Is it fair to have a Board decision, typically based on a more narrow factual record than a federal district court action, bind a subsequent federal district court with regards to trademark validity?
Answers to both of these questions appear cloudy in the aftermath of the PlayCore decision. Would-be opposers who own arguably descriptive/generic marks might want to think twice before bringing an opposition/cancellation: If the holding in this case gains traction, they might not only lose the opposition/cancellation but their trademark rights as well.