Most trademark holders understand that a trademark must be used in business to be maintained. A more complicated issue is how and when time gaps in the use of a mark may lead to cancellation. A new ruling by the Trademark Trial and Appeal Board (TTAB) reviews many of the basic rules in this area. Read the full case here: Ziebarth v Del Taco, LLC; TTAB Cancellation 92053501
In 1988, Del Taco bought the Naugles restaurant chain, which had been in business since the 1970’s, acquiring the brand name along with all other assets. Del Taco apparently phased out the use of the Naugles name, with the last Naugles restaurant closing in 1995. A blogger, Christian Ziebarth, posted a blog entry in 2008 reminiscing about the old Naugles chain. Apparently, there was a considerable response by people who had remembered the restaurant fondly, and who wanted to see it return. After some investigation, Ziebarth decided to open his own “Naugles” restaurant, and applied for registration for the NAUGLES mark in “cafeteria and restaurant services.” The application was rejected under Section 2(d)(likelihood of confusion), due to Del Taco’s previously owned mark. The case became somewhat more complex when, in 2011, Del Taco applied to register the mark NAUGLES for use on clothing, which was granted in 2012.
A good portion of the ruling dealt with Ziebarth’s standing to petition for cancellation of Del Taco’s mark (the TTAB found that he did have a bona-fide intent to use the mark sufficient to support his application), but its rulings and explanations of trademark use are the most interesting to us here.
Del Taco was in a difficult position to defend against abandonment, having closed the last Naugles restaurant some 15 years earlier. Observing that the original NAUGLES mark was for restaurant services, the TTAB rejected the purported use of the mark on clothing as having relevance, stating that even if the clothing could be considered an advertisement for restaurant services, the lack of actual, provided food services would be fatal to the mark. So, take away #1 is, as the TTAB wrote “‘rendering of services’ to obtain a trademark registration requires the actual provision of such services.” In other words, nothing can support a service mark, including trademark use, if the underlying service is no longer provided.
Secondly, the TTAB found that any incidental use in advertising did not occur until before 2003, when the restaurants had already been closed for eight years, and that the abasement had already occurred by that time. Take away # 2, according to the TTAB is, “subsequent use of a mark cannot retroactively cure past abandonment.” This is a vital point. Once abandonment occurs, actions that would have been sufficient to keep a mark alive are no longer able to reverse the abandonment. Abandonment, like death, is a permanent condition.
To us, however, the most interesting aspect of this case is that made in brief observation almost at the end of the decision:
“Lastly, we note that Respondent (Del Taco) contends that it holds “considerable goodwill” in the Naugles mark, sufficient to defeat [Ziebarth’s] claim of abandonment. The Board has never found residual goodwill to be a defense to abandonment, and we decline to do so here. The continued existence of enthusiasts of the old Naugles food items does not negate the statutory presumption of abandonment.”
Is this all there really is to “residual goodwill?” If I could demonstrate a bona-fide interest in making a line of cars called “Oldsmobile,” could I register the mark, since General Motors stopped making the cars in 2004? Wouldn’t there still be more than a trivial likelihood of confusion between my company and GM? Can’t a mark be so-identified with a source that even after discontinuation or abandonment, the likelihood of confusion remains? There is more to this than simply the “continued existence of enthusiasts,” but for now, it seems that the argument for “residual goodwill” will go nowhere in the TTAB’s views on abandonment.