SaddleSprings, Inc.v.Mad Croc Brands, Inc.

Trademark Trial and Appeal Board

Sep 25, 2012

No. 92055493 (T.T.A.B. Sep. 25, 2012)

Goodman

Mailed: September 25, 2012

Cancellation No. 92055493

SaddleSprings, Inc.

v.

Mad Croc Brands, Inc.

Before Bucher, Zervas and Bergsman, Administrative Trademark
Judges.

By the Board:

This case now comes up for consideration of
respondent’s motion, filed May 29, 2012, to dismiss the
petition for cancellation under Fed. R. Civ. P. 12(b)(6) for
failure to state a claim upon which relief may be granted.
Petitioner opposes the motion.
Background and Petitioner's Allegations

By way of background, respondent owns a registration
for the mark displayed below

UNITED STATES PATENT AND TRADEMARK OFFICE
Trademark Trial and Appeal Board
P.O. Box 1451
Alexandria, VA 22313-1451
Cancellation No. 92055493
2
for “beers; beverages, namely, mineral and aerated waters,
fruit drinks, fruit juices, energy drinks, carbonated soft
drinks; frozen concentrated fruit drinks; concentrates and
preparations for use in making all the aforesaid beverages”
in International Class 32 and “alcoholic beverages, namely,
wine, distilled spirits, ready to drink mixed alcoholic
drinks; alcoholic extracts; alcoholic beverages containing
more than one and two-tenth % of alcohol by volume, namely,
ready to drink mixed drinks based on wine and distilled
spirits” in Class 33.1
Petitioner seeks to cancel respondent’s registration,
alleging in the petition for cancellation that its pending
intent-to-use application to register CROCTAIL for “wine and
spirits” in International Class 33 has been refused
registration under Section 2(d) based on respondent’s
registration. Petition for Cancellation ¶¶ 2-3. Petitioner
further alleges abandonment, namely that respondent has
“either never used the Registered Mark in commerce or
completely ceased using Registered Mark, in connection with
the goods identified in the Registration for a period of at
least three consecutive years,” and petitioner alleges
additional facts to support these claims. Petition for
Cancellation ¶¶ 4, 6-10.

1 Registration No. 3211610 issued February 20, 2007 under Section
66(a) of the Trademark Act, based on International Registration
No. 0872639, registered September 23, 2005.
Cancellation No. 92055493
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The Parties’ Contentions

In its motion to dismiss, respondent argues that the
registration is subject to Section 71, of the Trademark Act,
15 U.S.C. § 1141k, which provides that “an extension of
protection remains in force for the term of the
international registration, except that the Director may
cancel the extension if the affidavit required by Section
1141k is not timely filed.” Respondent submits that the
“Director has no authority to cancel the registration prior
to the expiration of the time periods set out in Section
1141k, and in no event earlier than August 20, 2013,” the
expiration of the grace period for filing an affidavit or
declaration of use or excusable nonuse, pursuant to Section
1141k. Respondent further argues that petitioner has
“failed to plead any facts relevant to Section 1141k,” and
therefore fails to state a claim.
In response, petitioner argues that respondent’s
arguments are contrary to Section 69 of the Trademark Act,
15 U.S.C. § 1141(i)(b)(1), which provides that an “extension
of protection shall have the same effect and validity as a
registration on the Principal Register.” Petitioner argues
that extensions of protection obtained under Section 66(a)
are not, as respondent urges, “exempt from the normal
conditions and requirements specified under 15 U.S.C.
Cancellation No. 92055493
4
§ 1064” and that under respondent’s interpretation, “even a
fraudulently obtained, abandoned, generic or functionable
[sic] trademark would be unassailable and remain on the
Principal Register for as long as the international
registration existed.” Petitioner points out that if
respondent’s interpretation were correct, “extensions of
protection that are subject to the requirements of Section
1141(k) would be wholly immune from attack.”
Decision

In order to survive respondent’s motion to dismiss for
failure to state a claim under Fed. R. Civ. P. 12(b)(6),
petitioner’s complaint must allege facts which would, if
proved, establish that: (1) petitioner has standing to
maintain the proceeding; and (2) there is a valid ground for
cancelling the Registration. Young v. AGB Corp., 152 F.3d
1377, 47 USPQ2d 1752, 1754 (Fed. Cir. 1998); TBMP § 503.02
(3d ed. rev. 2012). The complaint must provide “sufficient
factual matter, accepted as true, to ‘state a claim to
relief that is plausible on its face.’” Ashcroft v. Iqbal,
556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v.
Twombly, 550 U.S. 544, 570 (2007)). For purposes of a
motion to dismiss, all of petitioner’s well-pleaded
allegations in the petition for cancellation must be
accepted as true and the complaint must be construed in a
light most favorable to petitioner. See Advanced
Cancellation No. 92055493
5
Cardiovascular Systems Inc. v. SciMed Life Systems Inc., 988
F.2d 1157, 26 USPQ2d 1038, 1041 (Fed. Cir. 1993).
Turning first to the question of standing, petitioner
must allege facts in the petition for cancellation which, if
ultimately proven, would establish that petitioner has a
“‘real interest’ in the cancellation proceeding.” Herbko
International Inc. v. Kappa Books Inc., 308 F.3d 1156, 64
USPQ2d 1375, 1377 (Fed. Cir. 2002)(citing Int'l Order of
Job's Daughters v. Lindeburg & Co., 727 F.2d 1087, 220 USPQ
1017, 1020 (Fed. Cir. 1984)); Lipton Industries, Inc. v.
Ralston Purina Co., 670 F.2d 1024, 213 USPQ 185, 189 (CCPA
1982). We find that petitioner has adequately alleged a
real interest in this proceeding by the allegation that it
filed an intent-to-use trademark application with the USPTO
for the mark CROCTAIL for “wine and spirits” in
International Class 33, and that the Office issued a refusal
to register in view of respondent’s registration. See e.g.,
ShutEmDown Sports Inc. v. Lacy, 102 USPQ2d 1036, 1043 (TTAB
2012) (standing shown by evidence that plaintiff’s
application was refused registration in view of defendant’s
registration).
With regard to the ground for cancellation, petitioner
has alleged that respondent has either never used the
registered mark in commerce or completely ceased using the
mark in commerce, in connection with the goods identified in
Cancellation No. 92055493
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the registration, for at least a period of three consecutive
years. Petition for Cancellation ¶¶ 4, 6-10. The facts
alleged by petitioner set forth a prima facie claim of
abandonment. Section 45 of the Trademark Act, 15 U.S.C.
§ 1127 (“A mark shall be deemed to be ‘abandoned’... [w]hen
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”); Imperial Tobacco Ltd.
v. Philip Morris Inc., 899 F.2d 1575, 14 USPQ2d 1390, 1395
(Fed. Cir. 1990) (a presumption of abandonment based on
three years nonuse may be invoked against a Section 44(e)
registrant who never begins use of the mark or who
discontinues using the mark; the presumption of nonuse may
be rebutted). However, respondent claims that these
allegations are insufficient for a Section 66(a) extension
of protection absent the pleading of any facts alleging the
invalidity of the international registration or the failure
of the registrant to file an affidavit of use pursuant to
Trademark Act Section 71, 15 U.S.C. § 1141k.
The question before us raised by respondent’s motion to
dismiss is whether abandonment is an available claim with
respect to a registration based on Section 66(a) for which
the underlying international registration is valid and
subsisting.
Cancellation No. 92055493
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Under Section 66(a) of the Trademark Act,2 15 U.S.C.
§ 1141f(a), the holder of an international registration may
file a request for extension of protection of that
registration to the United States. An applicant who files
such a request must declare its intention to use the mark in
the United States, Section 66 of the Trademark Act, 15
U.S.C. § 1141f(a), and the resulting U.S. application is
subject to examination and opposition, Section 68 of the
Trademark Act, 15 U.S.C. § 1141h.
Once a request for an extension of protection has been
approved and cleared the opposition period, the USPTO will
issue a certificate of extension of protection which is
referred to as a “registration” or a “registered extension
of protection” or a “section 66(a) registration.” 37 C.F.R.
§ 7.25. From the date of issuance of the certificate, the
Section 66(a) registration “shall have the same effect and
validity as a registration on the Principal Register,” and
“the holder of the international registration has the same

2 Section 66(a), enacted as part of the Madrid Protocol
Implementation Act, Public Law 107-273, § 13401, et seq., 116
Stat. 1758, 1762 (2003), added Sections 60-74 of the Trademark
Act, 15 U.S.C. §§ 1141-1141n, implementing the provisions of the
Madrid Protocol, an international system to facilitate the
filing, registration, and maintenance of trademarks across
national boundaries. Pursuant to the Madrid Protocol, a
trademark owner may apply for an “international registration”
based on a national application or registration in a member
country, and then request that trademark protection be extended
to any other member countries. The international registration is
granted for a period of ten years, renewable indefinitely, which
in turn governs the term of all national registrations based upon
it.
Cancellation No. 92055493
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rights and remedies as the owner of a registration on the
Principal Register.” Section 69(b) of the Trademark Act, 15
U.S.C. § 1141i(b).3
While there are some distinctions among registrations
with different bases in the Trademark Act, the availability
of particular grounds for cancellation is not such a
distinction. A Section 66(a) registration differs from one
under Section 44(e) because it always remains part of and
dependent upon the international registration, in contrast
to a Section 44(e) registration which stands independent of
the underlying foreign national registration. TMEP
§ 1904.05 (8th ed. 2011). See also Section 70 of the
Trademark Act, 15 U.S.C. § 1141j (“Dependence of extension
of protection to the United States on the underlying
international registration”).4 Further, an applicant for a

3 See also Madrid Protocol Implementation Act; and Trademark Law
Treaty Implementation Act, Hearings Before the Subcomm. on Courts
and Intellectual Property of the House Comm. on the Judiciary,
105 Cong., 1st Sess. (1997) (testimony of Commissioner Lehman) at
8. Available at: http://commdocs.house.gov/committees/judiciary/
hju41670.000/hju41670 0f.htm; Accessed: 9/11/12.
(“While the Protocol would provide an additional basis for a
foreign national to register a trademark in the United
States, such a request would be subject to the same
substantive requirements as exist in the law today for
domestic and foreign applicants . . . . This bill, H.R. 567,
contains only provisions necessary to implement the Protocol
in a separate Title to the Trademark Act of 1946. . . .
[and] incorporates by reference the substantive
requirements, obligations, rights and remedies of the
existing Titles I through XI of the Trademark Act.”).
4 “[S]tatutory titles and section headings are tools available
for the resolution of a doubt about the meaning of a statute.”
Florida Dep’t of Revenue v. Piccadilly Cafeterias, Inc., 554 U.S.
33, 47 (2008) (citations and internal quotation marks omitted).
Cancellation No. 92055493
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Section 66(a) registration is not required to show use in
commerce of its mark prior to registration, as is an
applicant under Section 1. See Section 68(a)(3) of the
Trademark Act, 15 U.S.C. § 1141h(a)(3). However, once a
U.S. registration issues based on Section 66(a), the
registration is subject to the same grounds for cancellation
as those registrations issued under Section 1 or Section
44(e). Cf. Imperial Tobacco Ltd. v. Philip Morris Inc., 14
USPQ2d at 1393 (a trademark filed under Section 44(e) “is
not entitled to either initial or continued registration
where the statutory requirements for registration cannot be
met”)(emphasis in original). See also Sinclair v. Deb
Chemical Proprietaries Ltd., 137 USPQ 161, 163 (TTAB 1963)
(registration based on Section 44(e) on equal footing with
registration issued based on Section 1, use in commerce).
Contrary to respondent’s argument, Section 71 of the
Trademark Act, 15 U.S.C. § 1141k (“Duration, affidavits and
fees”) is clearly not a limitation on cancellation of a
Section 66(a) registration any more than Section 8 of the
Trademark Act, 15 U.S.C. § 1058 (“Duration, affidavits and
fees”) is with respect to registrations issued under
Sections 1 or 44. In fact, the two sections are similar by
design.5 The language in Section 71(a) (“Each extension ...

5 Trademark Act Sections 8 and 71 were both recently amended
pursuant to the Trademark Technical and Conforming Amendment Act
of 2010, Public Law 111–146, 124 Stat. 66 (2010). It is clear
Cancellation No. 92055493
10
shall remain in force for the term of the international
registration”) tracks parallel language in Section 8(a)
(“Each registration shall remain in force for 10 years...”).
This language in both sections of the Trademark Act sets out
the normal duration or term of a registration, but neither
section contains language that expressly limits the right of
others to petition for cancellation during that term under
Section 14 of the Trademark Act, 15 U.S.C. § 1064. Although
respondent’s arguments appear to suggest that Section 71
implies such a limitation, such a reading finds no support
in the text of Section 71 and is at odds with the structure
of the Lanham Act. Indeed, if respondent’s interpretation
of Section 71 were correct, we would be bound to interpret
the similar provisions of Trademark Act Section 8 (“Each
registration shall remain in force for 10 years....”) to
prohibit cancellation of registrations based on Trademark
Act Sections 1 or 44, except as provided in Section 8. Such
an interpretation would prohibit the cancellation of any
registration under Trademark Act Section 14, rendering that
section meaningless. To the contrary, the USPTO has long
interpreted Section 14 to permit inter partes proceedings to
cancel registrations notwithstanding compliance by the
registrant with Section 8.

that the parallel language in the two sections was intended to be
interpreted consistently.
Cancellation No. 92055493
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Our interpretation of the statute is entirely
consistent with Article 5(6) of the Madrid Protocol,6 which
expressly acknowledges that a request for extension of
protection may be subject to cancellation:
Invalidation, by the competent authorities of a
Contracting Party, of the effects, in the
territory of that Contracting Party, of an
international registration may not be pronounced
without the holder of such international
registration having, in good time, been afforded
the opportunity of defending his rights.
Invalidation shall be notified to the
International Bureau.7

See also TMEP § 1904.07 (“An extension of protection to the
United States may be invalidated in an administrative or
judicial proceeding governed by United States law, such as a
cancellation proceeding before the Trademark Trial and
Appeal Board or a federal court proceeding”).
Trademark rights are acquired and maintained in this
country through use in commerce, that is, bona fide use of
the mark made in the ordinary course of trade. Section 45
of the Trademark Act, 15 U.S.C. § 1127. See also Sinclair,
137 USPQ at 164 (to avoid abandonment, a Section 44(e)
registrant must use the mark in commerce in the United

6 Protocol Relating to the Madrid Agreement Concerning the
International Registration of Marks, June 27, 1989 (as amended),
828 U.N.T.S 1185, S. Treaty Doc. No. 106-41.
7 See Rule 19, (WIPO) Common Regulations under the Madrid
Agreement Concerning the International Registration of Marks and
the Protocol Relating to that Agreement, in force Jan. 1, 2012
(available at http://www.wipo.int/madrid/en/legal_texts
/common_regulations.htm#P540_75572), setting out the requirements
for notifying the International Bureau of the invalidation (i.e.,
cancellation) of an extension of protection.
Cancellation No. 92055493
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States or in other commerce which may be lawfully regulated
by Congress). Because the validity of a Section 66(a)
registration must be determined on the basis of the
Trademark Act, a Section 66(a) registrant must, in the same
way as a registrant of a mark used “in commerce” or a
registrant of a mark issued under Section 44(e), use the
registered mark in commerce in the territorial jurisdiction
of the United States in order to avoid abandonment of its
mark. See Imperial Tobacco Ltd. v. Philip Morris Inc., 14
USPQ2d at 1393 (under the Trademark Act, “an abandoned mark
is not entitled to continued registration regardless of the
basis on which the registration was originally obtained”).
In the absence of justifiable non-use, Section 66(a)
registrations which have never been used, or for which use
has been discontinued with no intent to resume use, may be
subject to cancellation for abandonment even if the
international registration remains valid and subsisting.
Thus, once having obtained a U.S. registration, an
owner of a Section 66(a) registration is subject to the same
treatment and conditions which prevail in connection with
any other registrant. We hold that this includes the
possibility that the registration may be cancelled on any
available ground under Section 14 of the Trademark Act, 15
U.S.C. § 1064.
Cancellation No. 92055493
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Inasmuch as petitioner has sufficiently pleaded its
standing and an abandonment claim, the motion to dismiss is
denied.
Proceedings are resumed.
Dates are reset as follows:
Time to Answer 10/27/2012
Deadline for Discovery Conference 11/26/2012
Discovery Opens 11/26/2012
Initial Disclosures Due 12/26/2012
Expert Disclosures Due 4/25/2013
Discovery Closes 5/25/2013
Plaintiff's Pretrial Disclosures 7/9/2013
Plaintiff's 30-day Trial Period Ends 8/23/2013
Defendant's Pretrial Disclosures 9/7/2013
Defendant's 30-day Trial Period Ends 10/22/2013
Plaintiff's Rebuttal Disclosures 11/6/2013
Plaintiff's 15-day Rebuttal Period Ends 12/6/2013

In each instance, a copy of the transcript of testimony
together with copies of documentary exhibits, must be served
on the adverse party within thirty days after completion of
the taking of testimony. Trademark Rule 2.l25.
Briefs shall be filed in accordance with Trademark
Rules 2.128(a) and (b). An oral hearing will be set only
upon request filed as provided by Trademark Rule 2.l29.