In the case of Christian M. Ziebarth v. Del Taco, LLC, Cancellation No. 92053501 (March 31, 2015) [not precedential], the Trademark Trial and Appeal Board set forth the standards for trademark abandonment. Christian Ziebarth (the “Petitioner”) filed a petition to cancel the mark NAUGLES, a standard character mark for restaurant services. In the 1970s, Naugles, Inc. operated a chain of restaurants under the NAUGLES service mark. In 1988, Del Taco, LLC (the “Respondent”) purchased all the assets of Naugles restaurant business, including the brand name. The last restaurant using the NAUGLES name closed in 1995 and Respondent has not re-opened a NAUGLES restaurant since that time.
Petitioner believed that the mark was legally abandoned. Petitioner is an on-line blogger who writes about food and restaurants. He noted that his blog post about the NAUGLES restaurant received a lot of comments from people who loved the food. This inspired him to open a restaurant named NAUGLES. Soon thereafter, he filed an application with the United States Patent & Trademark Office to register the mark. The Examining Attorney refused the application under Section 2(d) of the Trademark Act citing the registration for NAUGLES owned by the Respondent. The Petition to cancel was then filed on grounds of abandonment.
The Trademark Act defines abandonment under 15 U.S.C. §1127. It states in part that a mark is abandoned, “[w]hen its use has been discontinued with intent not to resume such use. Intent not to resume may be inferred from the circumstances. Nonuse for three consecutive years shall be prima facie evidence of abandonment.” The burden of proof initially rests with the petitioner and once a prima facie showing is made the burden of production shifts to the trademark owner. The owner must show that the mark was used during the three-year period or that they intended to resume use within the reasonably foreseeable future. See Silverman v. CBS Inc., 870 F.2d 40, 9 USPQ2d 1778 (2d Cir. 1989).
In this case, during cross-examination of the Vice-President of Marketing of Del Taco, it was revealed that Del Taco stopped using the NAUGLES trademark as the actual name of the restaurant in 1995. The Vice-President of Marketing further stated that from the years of 1995-2010, it did not own a restaurant named NAUGLES. When asked if he currently owned a restaurant named NAUGLES, he responded no. However, the Respondent testified that use of the mark NAUGLES did continue in advertising and for clothing although it was not used for restaurants. Use of a mark on promotional goods such as clothing does not constitute service mark use. For more information on service marks, see our web page, What Is A Service Mark And How Can It Be Protected? The services identified in the trademark registration (restaurant services) must be rendered in commerce. Use of a mark for services requires more than merely advertising with the mark. Advertising a service is not the same as rendering the service. Therefore, the Respondents cannot rely on the sale of clothing even if such sale was considered advertising and the clothes were branded with the mark NAUGLES.
There was no evidence of record of Respondent’s use of the mark or its intent to resume use of the mark for restaurant services prior to 2003. Petitioner’s prima facie showing of abandonment for the years 1995-2003 was not rebutted. Although there was some evidence of use of the NAUGLES mark in 2003, these activities would start the use clock running again, but cannot cure the abandonment of the mark. In other words, later use of a trademark cannot retroactively cure a prior abandonment. In addition, Respondent was unable to provide any evidence of advertising dollars invested in advertising the NAUGLES brand for restaurant services after 1995.
Lastly, the Respondent argued that the NAUGLES brand maintained “considerable goodwill” from prior use. The Board has never found residual goodwill to be a sufficient defense to trademark abandonment. See Hornby v. TJX, 87 USPQ2d 1421 (2d Cir 1989). In the end, the Petition for Cancellation was granted. The Board determined that the Petitioner successfully proved a prima facie case of abandonment and the Respondent was unable to prove use or intent to resume use for restaurant services. Once a mark is determined to be legally abandoned, it goes back into the public domain for adoption by any third party. If you have questions regarded trademark abandonment, please contact our office for a courtesy consultation.