United States: Pole Dancer Takes On Black Belt At TTAB

Dancewear Maker Venm Cries Foul At Martial Arts Clothier Dragon Bleu
Last Updated: January 14 2015
Article by Scott J. Slavick

Colorful (and scant) costumes! Gravity-defying moves! Posturing, combat — and cries of cheating! Sounds like a match-up tailor-made for late-night TV, right?

But instead it's a case just decided at the TTAB. Let's look how the judges scored it.

Fraud in procuring a trademark registration occurs when an applicant to register a mark knowingly makes a false, material representation of fact in connection with an application, with the intent of obtaining or maintaining a registration to which that applicant is otherwise not entitled. In proving a fraud claim, an applicants' intent to deceive the USPTO is an indispensable element of the analysis.

Recently, the Trademark Trial and Appeals Board (TTAB) dealt with two interesting and seldom examined questions relating to a fraud claim. First, it examined whether limiting an application's identification of goods but then asserting the resulting registration against non-limited goods constitutes fraud in the prosecution of the registration. Second, it clarified a question that many practitioners have had for some time: to wit, from what date does a court start counting from to determine whether a 66(a) application has been abandoned.

Let's look at these two issues as they emerged in the TTAB's recent decision in Dragon Bleu (SARL) v. VENM, LLC. Venm, LLC markets what it bills as a range of artistic dancewear and active wear inspired by pole dancers. It applied to register VENM for dance costumes. Dragon Bleu, erstwhile a marketer of clothing for mixed martial arts, opposed Venm's application on the ground that VENM was likely to cause confusion with Dragon Bleu's own VENUM mark for martial-arts related clothing.

Facing this opposition, Venm counterclaimed to cancel Dragon Bleu's three asserted registrations, claiming that one was acquired based on fraud on the USPTO and that all of them had been abandoned. In arguing its position, Venm claimed that in the course of prosecuting one of its asserted registrations, Dragon Bleu had stated that it would limit the registration of the mark to martial-arts-related goods in order to evade a likelihood of confusion rejection. However, Venm claimed, Dragon Bleu subsequently used and attempted to assert its VENUM mark against non-martial-arts-related clothing.

VENM in essence argued that it was disingenuous of Dragon Bleu to limit its identification of goods to martial-arts-related goods when the company never intended to limit such use or restrict its enforcement of the mark to only such goods.

The Board disagreed. It held that the statements made by Dragon Bleu that Venm alleged to be false were not. Dragon Bleu stated during prosecution of its application that its mark VENUM was specifically and narrowly directed to clothing used in connection with the sport of martial arts and that its goods were limited to clothing used in connection with a particular sport, namely martial arts. Those statements, the Board held, were not representations regarding Dragon Bleu's actual use of its VENUM mark or the enforcement thereof; they were simple statements regarding limitations that Dragon Bleu agreed to, in order to overcome a likelihood of confusion refusal.

The TTAB also held that Venm's allegations regarding the materiality of Dragon Bleu's statements were nonsensical. In approving the application for publication, the Board noted that the USPTO's examiner relied only on the limitations to Dragon Bleu's identification of goods. Any planned use of the mark, if Dragon Bleu's statements were so construed, would be irrelevant to the examiner's decision.

 

This is because the Board rightly concluded that the issuance of a registration for specified goods or services and the scope of protection to which that registration later may be entitled are not the same thing. Registrations, it pointed out, are frequently asserted against applications or uses involving non-identical goods. Thus, the Board dismissed Venm's fraud counterclaim.

Next, Venm alleged that two of the three asserted Dragon Bleu registrations were invalid because Dragon Bleu's VENUM mark had not been used since the filing date of the underlying applications, in November 2008. According to the Lanham Act, nonuse of a mark for three consecutive years constitutes prima facie evidence that the mark has been abandoned. To adequately plead its abandonment claim, Venm had to recite facts which, if proven, would establish at least three consecutive years of nonuse, or alternatively, a period of nonuse less than three years coupled with proof of intent not to resume use by Dragon Bleu.

The Board went on to explain that when an applicant relies on use in commerce as a basis for registering a trademark under Section 1 of the Lanham Act, it is appropriate to include, in the period of nonuse, any pre-registration nonuse subsequent to the applicant's declaration of use. In contrast, an applicant relying on Section 66(a) of the Lanham Act is not required to use its mark at any time prior to registration of its mark in the U.S. Instead, once the U.S. registration issues, a Section 66(a) application is treated the same as any other U.S. trademark registration and the registrant must use the mark in commerce in order to avoid abandonment.

The question at issue here was one of first impression. The Board wanted to clarify for all future applicants what was the earliest point in time from which the period of nonuse may be measured for an abandonment claim with respect to a Section 66(a) registration.

In seeking precedent, the Board looked to the way a Section 44(e) registration is treated for abandonment purposes, because a Section 44(e) registration may also be obtained without use in the U.S. prior to the application maturing into a registration. In previous cases, the Court of Appeals for the Federal Circuit had held that the period of nonuse that constitutes prima facie evidence of abandonment does not start running until the registration issues.

The Board suggested that this was as good a starting point as any, thus holding that in order to cancel a Section 66(a) registration on the grounds of abandonment for nonuse, the plaintiff must allege either:

  • Three or more consecutive years of nonuse commencing no earlier than the date on which the registration was issued; or
  • If the period of non-use commencing no earlier than the date of registration and extending to the filing of the claim is less than three years, facts supporting nonuse after the date of registration, coupled with an intent not to resume use.

The Board then found that Venm, LLC did not plead a prima facie case of abandonment in Dragon Bleu's case. Venm filed its counterclaims on Dec. 13, 2013, less than three years after the issuance of two of Dragon Bleu's registrations (on Dec. 28, 2010 and March 8, 2011). Because Venm did not plead facts that would allow the Board to conclude that Dragon Bleu did not intend to commence use of its marks, VENM's counterclaim failed to state a claim upon which relief can be granted.

This case is important, which is most likely why the Board listed it as precedential. It clarifies that what a trademark owner applies to register the mark with and what that owner ultimately uses the mark for — even if they are inconsistent  —is not grounds for a fraud claim. It also clarifies once and for all when to start the stopwatch on a foreign trademark holder's deadline to use its mark. These are two really important concepts; as a result, this holding may be cited by many cases from now on.

This article is intended to provide information of general interest to the public and is not intended to offer legal advice about specific situations or problems. Brinks Gilson & Lione does not intend to create an attorney-client relationship by offering this information and review of the information shall not be deemed to create such a relationship. You should consult a lawyer if you have a legal matter requiring attention. For further information, please contact a Brinks Gilson & Lione lawyer.

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