NXT Generation Petv.Pura Naturals, Inc.

Trademark Trial and Appeal BoardApr 1, 2020

92068609 (T.T.A.B. Apr. 1, 2020)

This Opinion is Not a Precedent of the TTAB Mailed: April 1, 2020 UNITED STATES PATENT AND TRADEMARK OFFICE _____ Trademark Trial and Appeal Board _____ NXT Generation Pet v. Pura Naturals, Inc. _____ Cancellation No. 92068609 Michael F. Hoffman of Hoffman Warnick LLC for NXT Generation Pet. Andrew S. Dallmann of Eastman McCartney Dallmann LLP for Pura Naturals, Inc. _____ Before Lykos, Adlin and Lynch, Administrative Trademark Judges. Opinion by Lynch, Administrative Trademark Judge: I. Background Petitioner NXT Generation Pet seeks to cancel the following three registrations owned by Respondent Pura Naturals, Inc. based on nonuse as of the filing dates of the underlying statements of use, abandonment through nonuse, abandonment through naked licensing, and fraud: Cancellation No. 92068609 - 2 - PURA TIPS in standard characters1 for: Cleaning swabs for household purposes; sponges impregnated with cleaning preparations in International Class 3; and Bath products, namely body sponges; Bath sponges; Cleaning sponges; Facial cleansing sponges; Sponges for applying body powder; Sponges for household purposes; Sponges used for applying make-up; Swabs and sponges for cleaning medical instruments; Toiletry sponges in International Class 21. PURA NATURALS PET in standard characters,2 with a disclaimer of “NATURALS” and “PET,” for: Deodorants for pets; Deodorizers for pets; Odor removers for pets; Pet care kits comprising shampoo, conditioner, body spray; Pet fragrances; Pet stain removers; Shampoos for pets in International Class 3; Pet beds for therapeutic veterinary use; Therapeutic pet beds; Vibrating massage mitts for pets in International Class 10; Disposable house training pads for pets; Disposable housebreaking pads for pets in International Class 16; Beds for household pets; Crate covers for pets; Device for scratching pets and humans, namely, a glove for scratching pets and humans; Non-metal pet kennel with pet-actuated entry; Non-metal pet tags; Non-metal portable stairs for use by pets for pools and water spas; Non-metal safety gates for babies, children, and pets; Pet caskets; Pet crates; Pet cushions; Pet furniture; Pet ramp; Pillows for 1 Registration No. 5228748 issued June 20, 2017 on the Principal Register from an underlying intent-to-use-based application filed August 12, 2015. The registration states that “The English translation of the word ‘PURA’ in the mark is ‘PURE.’” 2 Registration No. 5156967 issued March 7, 2017 on the Principal Register from an underlying intent-to-use-based application filed August 1, 2015. The registration states that “The English translation of the word ‘PURA’ in the mark is ‘PURE.’” Cancellation No. 92068609 - 3 - household pets; Play yards for pets; Playhouses for pets; Portable beds for pets in International Class 20; Brushes for pets; Cages for household pets; Cages for pets; Electric pet brushes; Feeding vessels for pets; Grooming tools for pets, namely, combs and brushes; Hand-operated devices for scratching pets; Household storage containers for pet food; Litter boxes for pets; Pet brushes; Pet feeding and drinking bowls; Pet feeding dishes; Pet litter box liners; Pet litter boxes; Pet treat jars; Racks and stands for elevating pet feeding bowls and dishes; Scoops for the disposal of pet waste in International Class 21; Pet toys; Toys for domestic pets in International Class 28; and Beverages for pets; Consumable pet chews; Edible organic pet treats for dogs, cats and other domestic animals; Edible vegan pet treats for dogs, cats and other domestic animals; Pet beverages; Pet food; Pet treats in International Class 31. with a disclaimer of “NATURALS” and “PET,”3 for: Deodorants for pets; Deodorizers for pets; Odor removers for pets; Pet care kits comprising shampoo, conditioner, body spray; Pet fragrances; Pet shampoos; Pet stain removers; Shampoos for pets in International Class 3; 3 Registration No. 5228749 issued June 20, 2017 on the Principal Register from an underlying intent-to-use-based application filed August 12, 2015. The registration states that: “[t]he mark consists of three leaves, green in color, placed above the words ‘PURA NATURALS PET’, black in color. The white represents background only and is not claimed as a feature of the mark. The color(s) green and black is/are claimed as a feature of the mark. The English translation of the word ‘PURA’ in the mark is ‘PURE.’” Cancellation No. 92068609 - 4 - Beds for household pets; Crate covers for pets; Pet crates; Pet cushions; Pet furniture; Pet ramp; Pillows for household pets; Play yards for pets; Playhouses for pets; Portable beds for pets in International Class 20; Brushes for pets; Cages for household pets; Cages for pets; Electric pet brushes; Feeding vessels for pets; Grooming tools for pets, namely, combs and brushes; Hand-operated devices for scratching pets; Pet feeding and drinking bowls; Pet feeding dishes; Pet litter box liners; Pet litter boxes; Pet treat jars in International Class 21; Pet blankets in International Class 24; and Pet feeding mats; Pet litter pan floor mats in International Class 27. Respondent’s Answer denies the salient allegations in the Petition to Cancel. Respondent also asserts a sizable list of “Affirmative Defenses,” many of which are not true affirmative defenses. Regardless, Respondent did not pursue these at trial, and we therefore consider them waived. See Alcatraz Media, Inc. v. Chesapeake Marine Tours Inc. dba Watermark Cruises, 107 USPQ2d 1750, 1753 n.6 (TTAB 2013), aff’d, 565 F. App’x 900 (Fed. Cir. 2014) (mem.). Both parties submitted testimony, as well as documents offered under notice of reliance. To their credit, the parties raised no evidentiary objections. This cancellation proceeding arises out of a soured business relationship. On July 15, 2015, the parties entered into a contract,4 under which: • Petitioner’s owner, Anthony Fortunato, invested $1.5 million in Respondent for a 13.04% ownership stake and Respondent agreed to use $1 million of the 4 9 TTABVUE 21. Cancellation No. 92068609 - 5 - investment “for facility and manufacturing expansion” and $500,000 “for operations.”5 • Petitioner and Respondent agreed that Respondent would be Petitioner’s exclusive manufacturer of certain pet-related products that Respondent would make only for Petitioner.6 • “Subject to all other terms and conditions of [the Exclusive Manufacturing Agreement],” (EMA) Respondent granted Petitioner “a non-exclusive, non- sublicensable, non-transferable, royalty-free right and license to use the name ‘Pura Naturals Pet’ … and any variations thereof, solely in connection with” Petitioner’s “marketing, advertising and provision” of “products related to the pet industry.”7 Ultimately, however, for reasons disputed between the parties, Respondent never manufactured products for Petitioner under the EMA,8 and Petitioner marketed under the subject marks at least some pet-related products that were manufactured by others.9 Respondent had previously used and registered the mark PURA NATURALS for goods intended for people rather than pets, but the EMA contemplated Respondent 5 9 TTABVUE 204. 6 Id. at 220. 7 Id. at 221-22. 8 9 TTABVUE 38; 8 TTABVUE 10-11. 9 8 TTABVUE 11. Cancellation No. 92068609 - 6 - branching out into pet goods?.10 Shortly after entering into the contract, in August 2015, Respondent filed the intent-to-use trademark applications that matured into the challenged registrations. In each application, Respondent submitted statements of use (SOUs) on the January 5, 2017 SOU deadline, relying on Petitioner’s alleged use under the EMA license, taking the position that Petitioner’s use inured to Respondent’s benefit. In briefing and through witness testimony, each party makes general allegations that the other breached the EMA.11 However, the record does not reflect that either party provided a formal “Notice of Default” to the other as required under Section 6.3 of the EMA to terminate the agreement.12 Specifically, the EMA includes Section 6 titled “Default and Termination,” setting forth what constitutes a default and specific procedures for alleged defaults: Except as otherwise specified, in the event of any Default, the non-defaulting party shall have the right to terminate this Agreement, without liability to the defaulting party, 60 days after providing notice of Default to the Defaulting Party if the Defaulting Party fails to cure such Default within such 60 days. In the event of any Default as specified in this Section 6, the prevailing party shall recover all costs and expenses, including reasonable attorney’s fees, incurred in connection with any action taken with respect thereto.13 10 11 TTABVUE 3. 11 E.g., 15 TTABVUE 24 (Petitioner’s Brief refers to Respondent’s “obvious inability to perform on the agreement”); 16 TTABVUE 12 (Respondent’s brief refers to Petitioner’s resort to third-party manufacturers of pet products “for manufacturing in breach of the EMA”). 12 Id. at 224. 13 9 TTABVUE 223-24 Cancellation No. 92068609 - 7 - Neither party has pointed to any “Notice of Default” allowing the other the requisite 60-day period to cure, or to any termination of the EMA. While on August 28, 2017 Respondent sent a cease-and-desist letter accusing Petitioner of breaching the EMA by infringing marks including those at issue here, the letter did not seek to terminate the EMA, but instead demanded that Petitioner stop using the marks and produce records related to prior use.14 The record includes no indication that the parties treated this letter as a Notice of Default under the EMA, or that there was any subsequent written notification that either party considered the EMA terminated. Accordingly, given the record before us, we treat the EMA as in force during the relevant timeframe for this case. II. Standing A party must prove standing by showing a real interest in the outcome of the proceeding and a reasonable basis for believing that it would suffer damage if the mark remains registered. See 15 U.S.C. § 1063; Empresa Cubana Del Tabaco v. Gen. Cigar Co., 753 F.3d 1270, 111 USPQ2d 1058, 1062 (Fed. Cir. 2014), citing Ritchie v. Simpson, 170 F.3d 1092, 50 USPQ2d 1023, 1025 (Fed. Cir. 1999). Petitioner relies on its use of PURA-formative marks for pet products”15 and its receipt of an August 28, 2017 cease-and-desist letter from Respondent to establish its standing.16 The letter accuses Petitioner of infringing the marks in the three registrations that are the 14 9 TTABVUE 407. 15 8 TTABVUE 3, 4, 6. 16 8 TTABVUE 3, 4, 6. Cancellation No. 92068609 - 8 - subject of this proceeding and demands that Petitioner “immediately cease and desist from any further use of these trademarks.17 Respondent also introduced evidence that Petitioner has a pending application for the standard-character mark PURA NATURALS PET for “pet shampoos and conditioners, pet moisturizers, flea and tick spray for pets, pet dental gels and solutions,” that has been refused based, inter alia, on likelihood of confusion with Respondent’s registered marks.18 We find Petitioner’s refused application to register PURA NATURALS PET, common law use of PURA NATURALS PET and PET-TIPS and the cease-and-desist letter sufficient to establish Petitioner’s standing in this proceeding. See Miller v. Miller, 105 USPQ2d 1615, 1619 (TTAB 2013) (“These cease and desist letters provide additional evidence that opposer has business interests that have been affected, i.e., a real interest in the proceeding, and thus, has standing.”); Saddlesprings Inc. v Mad Croc Brands Inc., 104 USPQ2d 1948, 1950 (TTAB 2012) (standing adequately alleged by allegation that petitioner’s intent-to-use application has been refused based on respondent’s registrations); Ipco Corp. v. Blessings Corp., 5 USPQ2d 1974, 1976-77 (TTAB 1988) (cease and desist letter sent by applicant found sufficient to demonstrate opposer’s standing). III. Nonuse/Abandonment Based on Nonuse Claims Because Petitioner’s abandonment and nonuse claims rest on the same allegations that Respondent never used the marks, we have merged the discussion and address 17 9 TTABVUE 407. 18 11 TTABVUE 4, 18-65. Cancellation No. 92068609 - 9 - nonuse only.19 “[A]n applicant cannot obtain a registration under Section 1 of the Trademark Act for goods or services upon which it has not used the mark. 15 U.S.C. § 1051.” Grand Canyon West Ranch, LLC v. Hualapai Tribe, 78 USPQ2d 1696, 1698 (TTAB 2006). Nonuse as of the statement of use (SOU) deadline can provide an “independent basis to cancel Respondent’s registration.” Tao Licensing, LLC v. Bender Consulting Ltd., 125 USPQ2d 1043, 1064 (TTAB 2017). However, nonuse on some, but not all, of the identified goods as of the deadline for the underlying statements of use is not grounds for voiding the registrations in their entireties. See Grand Canyon West Ranch, 78 USPQ2d at 1697-98.20 Rather, an applicant’s nonuse of the involved mark on some of the services identified in the involved underlying application results in partial judgment to delete the goods on which the mark was not used. Id. To prevail on its claim of nonuse, Petitioner must prove that Respondent had not used the marks in commerce for the identified goods as of the January 5, 2017 SOU deadline. See Ashland Licensing & Intellectual Property LLC v. Sunpoint Int’l Grp. USA Corp., 119 USPQ2d 1125, 1131 (TTAB 2016) (any legally sufficient nonuse claim 19 Petitioner also addressed these claims together in one section of its Brief. 15 TTABVUE 30-34. 20 As the Grant Canyon West Ranch decision notes, a successful fraud claim as to any goods in a class may result in loss of the entire class, but “[b]ecause there is a clear distinction between the situations in which an applicant has committed fraud, or has not used the mark on any of the goods or services identified in its application, and the present situation, in which opposer claims only that applicant did not use its mark in connection with some of the services identified in its application as of the filing of the application, we believe that the remedy for the two former claims is inappropriate in the present situation.” 78 USPQ2d at 1698. Cancellation No. 92068609 - 10 - must plead that respondent failed to use its mark in commerce by the expiration of the time for filing an SOU); Embarcadero Techs., Inc. v. Delphix Corp., 117 USPQ2d 1518, 1526 (TTAB 2016) (issue is “whether Respondent actually used its mark in commerce prior to the expiration of its time for” the SOU). The Trademark Act defines “use in commerce” for goods as: the bona fide use of a mark in the ordinary course of trade, and not made merely to reserve a right in a mark…. A mark shall be deemed to be in use in commerce … on goods when— (A) it is placed in any manner on the goods or their containers or the displays associated therewith or on the tags or labels affixed thereto, or if the nature of the goods makes it impracticable, then on documents associated with the goods or their sale, AND (B) the goods are sold or transported in commerce[.] Section 45 of the Trademark Act, 15 U.S.C. § 1127 (emphasis added). Section 5 of the Trademark Act further provides: Where a registered mark or a mark sought to be registered is or may be used legitimately by related companies, such use shall inure to the benefit of the registrant or applicant for registration, and such use shall not affect the validity of such mark or of its registration, provided such mark is not used in such manner as to deceive the public. If first use of a mark by a person is controlled by the registrant or applicant for registration of the mark with respect to the nature and quality of the goods or services, such first use shall inure to the benefit of the registrant or applicant, as the case may be. 15 U.S.C. § 1055. A licensee may be a related company. “It is well-settled that use of a mark by a licensee inures to the benefit of the trademark owner.” Moreno v. Pro Boxing Supplies, 124 USPQ2d 1028, 1035 (TTAB 2017); Pneutek, Inc. v. Scherr, 211 USPQ 824, 833 (TTAB 1981) (“[R]ights to a mark may be acquired and maintained through the use of that mark by a controlled licensee even when the only use of the mark has been, and is being, made by the licensee.”). “As a ‘related company,’ the Cancellation No. 92068609 - 11 - licensee’s use of the mark inures to the benefit of the licensor-registrant.” 3 MCCARTHY ON TRADEMARKS AND UNFAIR COMPETITION § 18:51 (5th ed. 2020 update). In this case, Petitioner argues that “[Respondent] (alone or via a licensee) never use [sic] the subject marks in connection with a large majority of the recited goods.”21 Respondent has conceded that it has not used the registered marks directly, and instead relies on Petitioner’s use under the license to support the marks’ use in commerce.22 According to Respondent, its license to Petitioner to use the name “‘Pura Naturals Pet’ … and any variations thereof, solely in connection with” Petitioner’s “marketing, advertising and provision” of “products related to the pet industry”23 means that Petitioner’s use inures to Respondent’s benefit. Noble House Home Furnishings, LLC v. Floorco Ents., LLC, 118 USPQ2d 1413, 1421 (TTAB 2016) (“Section 5 of the Trademark Act permits an applicant or registrant to rely on use of the mark by related companies.”). In its Brief, Respondent cites testimony and argues that “Petitioner sold shampoos, pet cleaners, sprays, pet beds, swabs and soap infused sponges and mitts using the Subject Trademarks pursuant to the [license]. These products fall squarely within the goods listed in Class 003 and 020 of the Subject Trademarks.”24 However, according to Petitioner, Respondent “took no steps to contact Petitioner to inquire about what goods were being sold, to collect specimens 21 15 TTABVUE 32. 22 9 TTABVUE 335-38, 344-48. Also, in several interrogatory answers, Respondent states “[Respondent] had no intention of selling pet products other than through Petitioner.” 9 TTABVUE 353-56. 23 9 TTABVUE 221-22. 24 16 TTABVUE 17. Cancellation No. 92068609 - 12 - from Petitioner, or amend the application. Instead, Registrant concocted specimens which were nothing more than mock-ups that were never used, nor ever seen by Petitioner.”25 Respondent acknowledges that the marks have not been used for at least some of the goods in the registrations, and further states that it “agrees to forfeit all classes that neither [Respondent] nor Petition[er] has used.”26 A heading in Respondent’s Brief states that it “Concedes Partial Abandonment of the Classes of Goods Petitioner Never Used.”27 While the ensuing section of the Brief does not explicitly set out those classes, both before and after this section, Respondent refers to use by Petitioner on the SOU deadline of the marks on “branded products … sold in Classes 003 and 020.”28 In fact, in the Fraud section of Respondent’s Brief, it argues that “the TTAB should find that [Respondent] lacked fraudulent intent as to Class 003 and 020, the classes that Petitioner was using at the time [Respondent] filed its statements of use using the parties [sic] agreed-upon artwork. As discussed above with respect to non- use, [Respondent] agrees to forfeit those classes that Petitioner did not use.”29 Ultimately, Respondent contends that to the extent Petitioner used the marks in commerce on the identified goods, Respondent is entitled to rely on that use, and the 25 15 TTABVUE 37. 26 Id. at 19. 27 Id. at 20. 28 Id. at 26. 29 Id. at 27. Cancellation No. 92068609 - 13 - registrations should not be cancelled as to those goods. We address the registrations in turn. A. PURA TIPS Registration No. 5228748 First, as to the PURA TIPS registration, Petitioner argues that it does not fall within the scope of the license agreement because it cannot be considered a “variation” of PURA NATURALS PET. Respondent counters that it should be deemed a “variation,” allowing Respondent to rely on Petitioner’s use of PURA-TIPS. The EMA confers a “license to use the name ‘Pura Naturals Pet’ (the ‘Name’) and any variations thereof, solely in connection with the Business.”30 The license is not drafted to explicitly cover all PURA-formative marks. The EMA specifically refers to the name “Pura Naturals Pet,” which is set out in quotes in the document, rather than, for example, the name “Pura” standing alone. With that background, we must determine whether the scope of “variations” of “Pura Naturals Pet” (quotation marks in original) extends to PURA TIPS. Pursuant to the choice of law provision in the agreement (8.5 Governing Law),31 we apply California contract law, under which contract terms have their ordinary and usual meaning. See Cal. Civ. Code § 1638-39 (“language of a contract is to govern its interpretation, if the language is clear and explicit, and does not involve an absurdity”). In accordance with the doctrine that the “words of a contract are to be understood in their ordinary and popular sense,” id. at § 1644, we take judicial notice of the relevant definition of 30 9 TTABVUE 222. 31 9 TTABVUE 225. Cancellation No. 92068609 - 14 - “variation,” the term used in the parties’ agreement, as “a different form of something; variant.”32 See In re White Jasmine LLC, 106 USPQ2d 1385, 1392 n.23 (TTAB 2013) (Board may take judicial notice of online dictionaries that exist in printed format or have regular fixed editions). The parties have not offered evidence or even argument about the nature and significance of the differences between the marks at issue to illuminate why PURA TIPS might or might not be considered a variation of PURA NATURALS PET. Therefore, on the record before us, we apply the ordinary meaning of “variation,” and find that the license would not extend to the mark PURA TIPS. While the marks share the term PURA in common, we find that because of the different remaining portions of each mark, PURA TIPS differs so significantly from PURA NATURALS PET that the former cannot be considered merely a “different form of” the latter, especially where the EMA refers to “PURA NATURALS PET” in quotation marks. Based on the plain language of the EMA, which purports to “embod[y] the entire agreement and understanding of the Parties related to its subject matter,”33 we agree with Petitioner that PURA TIPS is not a variation of PURA NATURALS PET. Even assuming, arguendo, the contract language “variations thereof” introduced an ambiguity, so as to allow resort to extrinsic evidence of the parties’ intent and 32 Dictionary.com entry for “variation,” sourced from The Random House Dictionary, accessed March 25, 2020. 33 9 TTABVUE 226. The parties written contract embodying their “entire agreement and understanding” does not comport with Ms. Sommers’ testimony about the development and ownership of the marks at issue, which is parol evidence and thus essentially irrelevant. See 8 TTABVUE 8. Cancellation No. 92068609 - 15 - surrounding circumstances, e.g., Rosen v. E. C. Losch Co, 234 Cal. App. 2d 324, 44 Cal. Rptr. 377. (Cal. App. 2d Dist. May 12, 1965), our interpretation would remain the same, given that the record does not convincingly reflect the parties’ intent to cover PURA TIPS in the license. Although Mr. Doherty testified that “based on conversations with Riccardi and Robert Switzer,” the license was intended to cover PURA TIPS,34 other testimony undermines the reliability of the foundation for Mr. Doherty’s testimony as well as its probative value. First, Mr. Doherty’s testimony gives the impression that he does not have direct knowledge of the alleged discussions between Mr. Riccardi and Mr. Switzer on this issue: Q Do you know for certain what trademarks are covered under this clause? Mr. Dallman: If you know. The Witness: I – I don’t – there was conversations between Jason Riccardi and Robert Switzer. I know Pura Tips, Pura Natural Pet and Pura Pet for certain. I don’t know the other trademarks. That was conversations with Robert Switzer and Jason Riccardi.35 Thus, although Mr. Doherty purports to express certainty about PURA TIPS, it appears to be based on alleged conversations to which he was not privy. Also, upon further probing of his understanding of the parties’ intent with regard to “variations,” when asked whether the license would “cover slight variations to spellings of the term Pura Naturals Pet,” Mr. Doherty responded “I don’t know how 34 9 TTABVUE 30. 35 9 TTABVUE 33. Cancellation No. 92068609 - 16 - to answer that,” and “I don’t know.”36 As another example, when asked about , and whether “a two-leaf logo with the name Pura Naturals Pet…would be a variation covered under this clause,” Mr. Doherty responded “I’m not – I’m not a trademark attorney. I can’t answer that.”37 Overall, we do not find Mr. Doherty’s testimony probative about the intent of the parties regarding “variations” of PURA NATURALS PET. Second, although Mr. Switzer submitted a declaration, it does not address the alleged conversations he had with Mr. Riccardi about the scope of “variations” covered under the license. In fact, while Mr. Switzer’s declaration discusses how he “worked closely with Jason Riccardi … on marketing material and the artwork that would form the basis of product labels,” the declaration addresses only the “Pura Pet marks” described as “nearly identical to the Pura Naturals mark, with the addition of the word ‘pet.’”38 He does not address PURA TIPS.39 Given that Mr. Doherty repeatedly pointed to conversations that Mr. Switzer participated in as the source of the parties’ understanding of “variations,” we find telling Mr. Switzer’s omission of any discussion of PURA TIPS. 36 9 TTABVUE 35. 37 9 TTABVUE 36. 38 11 TTABVUE 3. 39 11 TTABVUE. Cancellation No. 92068609 - 17 - Third, the “Action Plan” related to the parties’ agreement shows the mark in the upper right corner and does not refer to PURA TIPS.40 Although some evidence in the record shows email correspondence between representatives of the parties about USPTO submissions including for the PURA TIPS registration, the correspondence may only indicate an exchange of information about business-related activities and does not suggest that these marks necessarily fall within the license. Along those lines, we note that the email correspondence also addresses the mark HUMAN SAFE, for example, which surely could not be considered a variation of PURA NATURALS PET.41 We cannot conclude from the record that Petitioner’s use of PURA TIPS falls under the license, and therefore Petitioner’s use of this mark does not inure to Respondent’s benefit. Because Respondent relied only on Petitioner’s use and has stated that Respondent “did not directly sell products using the PURA TIPS mark,”42 we find that the PURA TIPS mark in Registration No. 5228748 was not in use in commerce as of the deadline for Respondent’s statement of use, and the Petition for Cancellation on this ground is granted, so the registration therefore will be cancelled in due course. 40 14 TTABVUE 45. 41 9 TTABVUE 409-10. 42 9 TTABVUE 338. Cancellation No. 92068609 - 18 - B. PURA NATURALS PET Registration No. 5156967 The PURA NATURALS PET standard-character mark clearly falls under the EMA, which was never terminated. As a result, we find that Petitioner’s use of this mark inured to Respondent’s benefit as the licensor. However, the record reflects that Petitioner used the mark on a very limited subset of the goods identified in this registration. Petitioner submitted testimony that it never used the registered mark on most of the identified goods.43 The goods on which Ms. Sommers testified Petitioner has not used the mark are shown below in strikethrough, and the exceptions – i.e., goods in the registration which Petitioner’s witness did not include in the declaration as to nonuse – remain as follows: Deodorants for pets; Deodorizers for pets; Odor removers for pets; Pet care kits comprising shampoo, conditioner, body spray; Pet fragrances; Pet stain removers; Shampoos for pets in International Class 3 Pet beds for therapeutic veterinary use; Therapeutic pet beds; Vibrating massage mitts for pets in International Class 10 Disposable house training pads for pets; Disposable housebreaking pads for pets in International Class 16 Beds for household pets; Crate covers for pets; Device for scratching pets and humans, namely, a glove for scratching pets and humans; Non-metal pet kennel with pet-actuated entry; Non-metal pet tags; Non-metal portable stairs for use by pets for pools and water spas; Non-metal safety gates for babies, children, and pets; Pet caskets; Pet crates; Pet cushions; Pet furniture; Pet ramp; Pillows for household pets; Play yards for pets; Playhouses for pets; Portable beds for pets in International Class 20 43 8 TTABVUE 3-7. Cancellation No. 92068609 - 19 - Brushes for pets; Cages for household pets; Cages for pets; Electric pet brushes; Feeding vessels for pets; Grooming tools for pets, namely, combs and brushes; Hand-operated devices for scratching pets; Household storage containers for pet food; Litter boxes for pets; Pet brushes; Pet feeding and drinking bowls; Pet feeding dishes; Pet litter box liners; Pet litter boxes; Pet treat jars; Racks and stands for elevating pet feeding bowls and dishes; Scoops for the disposal of pet waste in International Class 21 Pet toys; Toys for domestic pets in International Class 28 Beverages for pets; Consumable pet chews; Edible organic pet treats for dogs, cats and other domestic animals; Edible vegan pet treats for dogs, cats and other domestic animals; Pet beverages; Pet food; Pet treats in International Class 31. Given this uncontradicted testimony, we find that the PURA NATURALS PET mark in Registration No. 5156967 was not in use in commerce as of the deadline for Respondent’s statement of use for the goods shown in strikethrough above, and therefore the registration is cancelled as to those goods, which will be deleted. However, Petitioner has failed to demonstrate nonuse as to the remaining goods, for which cancellation is denied. Accordingly, Registration No. 5156967 will be amended so that only the following goods remain: Deodorizers for pets; Odor removers for pets; Pet fragrances; Shampoos for pets in International Class 3 Disposable house training pads for pets; Disposable housebreaking pads for pets in International Class 16 Beds for household pets; Pet cushions in International Class 20 Feeding vessels for pets; Pet feeding and drinking bowls; Pet feeding dishes in International Class 21 Cancellation No. 92068609 - 20 - C. Registration No. 5228749 We find that the PURA NATURALS PET and design mark shown above falls under the EMA as a clear “variation” of PURA NATURALS PET, and therefore Petitioner’s use of this mark inured to Respondent’s benefit as the licensor. However, again the record reflects that Petitioner used the mark on a limited subset of the goods identified in the registration. Petitioner submitted testimony that it never used the registered mark on many of the identified goods.44 The goods on which Ms. Sommers testified Petitioner has not used the mark are shown below in strikethrough, and the exceptions – i.e., goods in the registration which Petitioner’s witness did not include in the declaration as to nonuse – remain as follows: Deodorants for pets; Deodorizers for pets; Odor removers for pets; Pet care kits comprising shampoo, conditioner, body spray; Pet fragrances; Pet shampoos; Pet stain removers; Shampoos for pets in International Class 3 Beds for household pets; Crate covers for pets; Pet crates; Pet cushions; Pet furniture; Pet ramp; Pillows for household pets; Play yards for pets; Playhouses for pets; Portable beds for pets in International Class 20 Brushes for pets; Cages for household pets; Cages for pets; Electric pet brushes; Feeding vessels for pets; Grooming tools for pets, namely, combs and brushes; Hand-operated devices for scratching pets; Pet feeding and drinking bowls; 44 8 TTABVUE 7-9. Cancellation No. 92068609 - 21 - Pet feeding dishes; Pet litter box liners; Pet litter boxes; Pet treat jars in International Class 21 Pet blankets in International Class 24 Pet feeding mats; Pet litter pan floor mats in International Class 27 Given this uncontradicted testimony, we find that the mark in Registration No. 5228749 was not in use in commerce as of the deadline for Respondent’s statement of use for the goods shown in strikethrough above, and therefore the registration is cancelled as to those goods, which will be deleted. However, Petitioner has failed to demonstrate nonuse as to the remaining goods, for which cancellation is denied. Accordingly, Registration No. 5228749 will be amended so that only the following goods remain: Deodorizers for pets; Odor removers for pets; Pet fragrances; Pet shampoos; Shampoos for pets in International Class 3 Beds for household pets; Pet cushions in International Class 20 Feeding vessels for pets; Pet feeding and drinking bowls; Pet feeding dishes in International Class 21 Pet blankets in International Class 24 IV. Abandonment by Naked Licensing Petitioner also alleges naked licensing, by which the registered marks would be deemed abandoned because Respondent failed to exercise sufficient quality control to maintain their significance as marks. Trademark Act § 45, 15 U.S.C. § 1127, provides that a mark shall be deemed abandoned when “any course of conduct of the owner, including acts of omission as well as commission, causes the mark to … lose its Cancellation No. 92068609 - 22 - significance as a mark.” Uncontrolled or “naked” licensing can result in a loss of significance of a trademark such that a registration should be cancelled. Paris Glove of Canada Ltd. v. SBC/Sporto Corp., 84 USPQ2d 1856, 1864 (TTAB 2007). Because registrations are presumed valid under Trademark Act Section 7, 15 U.S.C. § 1057, however, the party seeking cancellation based on abandonment bears the burden of proving abandonment by a preponderance of the evidence. Rivard v. Linville, 133 F.3d 1446, 45 USPQ2d 1374, 1376 (Fed. Cir. 1998); Cerveceria Centroamericana S.A. v. Cerveceria India Inc., 892 F.2d 1021, 13 USPQ2d 1307, 1309-12 (Fed. Cir. 1989). “[S]ince abandonment is in the nature of a complete forfeiture, it carries a strict burden of proof.” Woodstock’s Ent. Inc. (Cal.) v. Woodstock’s Ent., Inc. (Or.), 43 USPQ2d 1440, 1446 (TTAB 1997), aff’d, 1998 U.S. App. LEXIS 3777 (Fed. Cir. 1998). Petitioner points to the lack of written quality control provisions in the EMA45 and to the testimony by Mr. Doherty that Respondent was not overseeing the quality of products being manufactured by or for Petitioner.46 Respondent counters that the doctrine of licensee estoppel bars Petitioner’s challenge to quality control under the license. The reason for applying licensee estoppel is that, by entering into a license agreement, the licensee recognizes the licensor’s rights in the licensed mark. We agree that licensee estoppel bars Petitioner’s claim of abandonment through uncontrolled licensing. See Leatherwood Scopes, Int’l v. Leatherwood, 63 USPQ2d 45 9 TTABVUE 220-28. 46 15 TTABVUE 23-24. Cancellation No. 92068609 - 23 - 1699, 1703 (TTAB 2002) (denying opposer’s motion for leave to amend pleading because proposed claim of naked licensing “fail[ed] to state a claim for relief” because it was barred by licensee estoppel); Freeman v. Nat’l Ass’n of Realtors, 64 USPQ2d 1700 (TTAB 2002) (barring a challenge to the validity of mark under licensee estoppel where the facts arose during the term of the license); Garri Publ’n Assoc. Inc. v. Dabora Inc., 10 USPQ2d 1694, 1696-97 (TTAB 1988) (finding licensee estoppel barred proposed abandonment claim based on allegation of an uncontrolled license from respondent to petitioner); see also 3 J. THOMAS MCCARTHY, MCCARTHY ON TRADEMARKS AND UNFAIR COMPETITION § 18:63 (5th ed. 2020) (“The licensee estoppel rule is founded on the view that a licensee should not be permitted to enjoy the use of the licensed mark while at the same time challenging the mark as being invalid.”). Because Petitioner was licensed to use the registered marks as per the parties’ written agreement, the doctrine of licensee estoppel prevents its claims of naked licensing against its licensor, Respondent. The abandonment claim based on naked licensing therefore is denied. V. Fraud Claims Fraud in procuring a trademark registration occurs when an applicant, with intent to deceive the USPTO, knowingly makes false, material representations of fact in connection with the application. See In re Bose Corp., 580 F.3d 1240, 1245, 91 USPQ2d 1938, 1941 (Fed. Cir. 2009); see also Swiss Watch Int’l Inc. v. Fed’n of the Swiss Watch Indus., 101 USPQ2d 1731, 1745 (TTAB 2012). Petitioner, as the party alleging fraud, bears the heavy burden of proving it with clear and convincing Cancellation No. 92068609 - 24 - evidence. Bose, 550 F.3d at 1243 (quoting Smith Int’l, Inc. v. Olin Corp., 209 USPQ 1033, 1044 (TTAB 1981)). A fraud claim will not succeed if the evidence shows that the applicant made a false statement with a reasonable and honest belief that it was true, rather than with the intent to mislead the USPTO into issuing a registration to which the applicant was not otherwise entitled. See id.; see also Woodstock’s Enters., 43 USPQ2d at 1443. The standard for finding intent to deceive is stricter than the standard for negligence or gross negligence, and evidence of deceptive intent must be clear and convincing. Id. According to the U.S. Court of Appeals for the Federal Circuit: Subjective intent to deceive, however difficult it may be to prove, is an indispensable element in the analysis. Of course, “because direct evidence of deceptive intent is rarely available, such intent can be inferred from indirect and circumstantial evidence. But such evidence must still be clear and convincing, and inferences drawn from lesser evidence cannot satisfy the deceptive intent requirement.” [Internal citation omitted]. When drawing an inference of intent, “the involved conduct, viewed in light of all the evidence … must indicate sufficient culpability to require a finding of intent to deceive.” Bose, 91 USPQ2d at 1941 (citation omitted). There is no dispute that Respondent has not used its involved marks on many of the goods originally identified in the underlying applications and submitted specimens that were not actually examples of the marks as used in commerce. Respondent filed the statements of use underlying all three registrations on the January 5, 2017 deadline. Even though Respondent was relying on Petitioner’s use of the marks under the license to support Respondent’s alleged use in commerce, Cancellation No. 92068609 - 25 - Respondent did not contact Petitioner to verify the goods on which the marks were used, the dates of use, or to obtain proper specimens of use. Robert Switzer’s declaration states that: By the time I received the Notice of Allowance on the Pura Pets marks in July 2016, the business relationship between the parties was so sour that I did not even call Mr. Riccardi to obtain specimens for the statements of use. Instead, knowing that NXT, through its president Jason Riccardi, had approved the artwork for the product labels and the product catalog, and with the understanding that NXT had been selling products, I filed the statement of use using the approved artwork. I used August 3, 2015 as the date of first use in commerce based on the parties’ signed Agreement, product catalog and attendance at the SuperZoo show, all of which took place by late July 2015. I understood that samples had been given out and believed that that was sufficient, along with the parties signed Agreement, to constitute a use in commerce.47 In his Rule 30(b)(6) deposition, Mr. Doherty stated that Jason Riccardi (of Petitioner) “was the one who gave us the product categories [for the identifications of goods in the registrations]. We did not make those categories up. He was the one who asked [attorney] Robert Switzer to file for all those product classes. We are not pet people. He was.”48 According to Mr. Doherty, Mr. Riccardi and Mr. Switzer collaborated to create the specimens.49 Mr. Doherty testified that he did not recall whether the specimen for the PURA TIPS mark in Registration No. 5228748 was ever used in commerce, and did not know “whether this [was] a mockup or an actual 47 11 TTABVUE 4. 48 9 TTABVUE 135. 49 9 TTABVUE 145. Cancellation No. 92068609 - 26 - label.”50 Similarly, as to the substitute specimen, Mr. Doherty testified that he did not recall where the specimen came from or who provided it, nor did he recall seeing it affixed to a product.51 And with the PURA NATURALS PET word-only and word- and-design marks, Mr. Doherty did not recall whether the supporting specimens were actually used in commerce.52 Mr. Doherty testified that his “awareness” of particular goods being offered for sale under the marks as of August 3, 2015 was based on his review of an NXT catalog dated July 2015, stating “I assumed it was the products in the catalogue [that were ready for sale on August 3, 2015].”53 According to Mr. Doherty, the date of first use provided in the statements of use came from Jason Riccardi, who provided it to Robert Switzer.54 Respondent’s actions in connection with the statements of use, basing averments and specimens on assumptions rather than certainties, cannot be condoned. However, Petitioner has not presented the requisite “clear and convincing” evidence, Bose, 91 USPQ2d at 1939, that Respondent’s admittedly inaccurate statements were made with the requisite subjective intent to deceive the USPTO. “[A]bsent the requisite intent to mislead the PTO, even a material misrepresentation would not qualify as fraud under the Lanham Act warranting cancellation.” Id. at 1940. 50 9 TTABVUE 78-79. 51 9 TTABVUE 82-83, 242. 52 9 TTABVUE 110-13. 53 9 TTABVUE 123-25; see also 9 TTABVUE 126-29. 54 9 TTABVUE 140. Cancellation No. 92068609 - 27 - Considering all the evidence, regardless of the falsity of at least some of the use allegations in these registrations, we find no direct evidence of an intent to deceive the USPTO, and no clear and convincing evidence to warrant the inference of an intent to deceive. Witness testimony from Mr. Switzer and Mr. Doherty suggests a belief in the truth of the statements. See id. at 1942 (“Sullivan testified under oath that he believed the statement was true at the time he signed the renewal application. Unless the challenger can point to evidence to support an inference of deceptive intent, it has failed to satisfy the clear and convincing evidence standard required to establish a fraud claim.”). While their assumptions about use were incorrect in part, “[w]e do not need to resolve the issue of the reasonableness as it is not part of the analysis.” Id. at 1942. The evidence does not “indicate sufficient culpability.” Id. at 1941. Because Petitioner has failed to establish fraud with clear and convincing evidence, the fraud claims are denied. VI. Conclusion The Petition for Cancellation is denied as to all three registrations on the grounds of abandonment based on naked licensing and fraud. The Petition for Cancellation is granted as to Registration No. 5228748 on the ground of nonuse, and this registration will be cancelled in due course. The Petition for Cancellation as to Registration Nos. 5156967 and 5228749 is granted in part on the ground of nonuse as of the deadline for the underlying statements of use, and the registrations will be amended in due course to delete goods as indicated on pp.15-18 above.