United States: Precedential No. 39: TTAB Denies Concurrent Use Registrations For Wine Because Applicant Failed To Prove Prior Lawful Use In Commerce

Last Updated: January 10 2019
Article by John L. Welch

Concluding that Applicant Scott Stawski was not entitled to concurrent use registrations for the marks PROSPER ESTATE and PROSPER RIDGE for wines, the Board dissolved this concurrent use proceeding. Stawski claimed rights to his marks in nine states, as an exception to John Gregory Lawson's registration for the mark PROSPER for wines, but Stawski failed to show prior, lawful use of his marks, and also failed to prove that confusion is not likely. Scott Stawski v. John Gregory Lawson, 129 USPQ2d 1036 (TTAB 2018) [precedential] (Opinion by Judge David K. Heasley).

To obtain the desired concurrent use registrations for his marks, Applicant Stawski was required to show (1) that he made lawful use of the marks in commerce before February 29, 2012, the filing date of the application that issued as Lawson's registration, and (2) that the concurrent use of his two marks with Lawson's mark is not likely to cause confusion.

Lawful Prior Use in Commerce: Stawski had to prove "technical use of his trademarks" in commerce prior to Registrant Lawson's February 29, 2012 filing date: i.e. use sufficient to support a trademark registration. Priority was not the issue, but rather whether Stawski could satisfy the jurisdictional requirement for a concurrent registration. "[E]evidence of analogous use, as opposed to technical trademark use, which could be considered when establishing priority for the purposes of likelihood of confusion, will not be considered in this concurrent use proceeding."

The Lanham Act's concurrent use provision expressly requires "lawful use in commerce" prior to the filing date of an excepted user's application or registration. 15 U.S.C. § 1052(d). "Use in commerce" means "the bona fide use of a mark in the ordinary course of trade, and not made merely to reserve a right in a mark." 15 U.S.C. § 1127.

Applicant Stawski failed to establish that his use was "in commerce," and likewise failed to prove that, if his use was in commerce, it was lawful. Thus he failed to meet the jurisdictional requirement of Section 2(d).

Use in Commerce: Stawski's selection of the trademarks in 2007 did not constitute use of the marks in commerce, nor did his 2007 registration of "Prosper Estate Vineyards" as an assumed business name, or his 2007 registration of PROSPER-formative domain names, or his 2009 registration of domain names that connect to a website.

Stawski knew that his grapevines would not mature for ten years after their planting in 2008, and that his vineyard would not become the source of commercially marketable wine for more than a decade. Although he did not have a product ready to market, Stawski attempted "to establish the reputation and brand identity of the vineyard and the Prosper Estate and Prosper Ridge wine labels" by placing the labels on bottled wine purchased from a third party. However, critical details and corroboration regarding these purchases was lacking, and there was no evidence that Stawski made any sales to customers. The Board noted that, "[w]hile actual sales are not required for statutory use in commerce,  . . .  in the context of test marketing, whether the goods are sold can help inform whether the activity is in the ordinary course of trade." Tao Licensing, LLC v. Bender Consulting Ltd., 125 USPQ2d 1043, 1054 (TTAB 2017). The Board deemed Stawski's evidence regarding the distribution of samples to be "vague, equivocal, mostly undated," and he failed to prove bona fide use in the ordinary course of trade.

The Board found that Stawski's placement of labels on wine ordered from the third-party vintner served "merely as a placeholder, until he had a product ready to market."  His minimal distribution under the private labels "tacitly acknowledges that his 'activity was preliminary and exploratory, and [he] was not yet ready to introduce the product in the ordinary course of trade.'" Tao Licensing v. Bender Consulting, 125 USPQ2d at 1054.

The Board concluded that Applicant Stawski had failed to carry his burden of proving prior use in commerce by a preponderance of the evidence, as required by Section 2(d).

Lawful Use: Registrant Lawson further contended that Stawski's purported use of his marks was not lawful because he did not comply with the regulations promulgated by the Alcohol and Tobacco Tax and Trade Bureau (TTB) concerning the labeling of wine that is introduced into interstate commerce. More specifically, Stawski (as he admitted) did not obtain from TTB the required Certificate of Label Approval (COLA) for his wines.

The Board ruled that, because Stawski did not obtain prior COLA approval, he could not prove that his use of the marks was lawful, as required by Section 2(d).

Likelihood of Confusion: For the sake of completeness, the Board went on to consider the issue of likelihood of confusion. Under Section 2(d), a concurrent use registration may issue only when "confusion, mistake, or deception is not likely to result from the continued use by more than one person of the same or similar marks under conditions and limitations as to the mode or place of use of the marks or the goods on or in connection with which such marks are used . . . ."

Applying the relevant du Pont factors, the Board found that Stawski's addition of the nondistinctive geographic elements, "RIDGE" and "ESTATE," to the registered mark PROSPER did not diminish the strong similarity between the marks.

Stawski argued that Lawson's channels of trade are limited because Lawson had few assets and is unlikely to expand his business. The Board found that discussion to be premature.

In a concurrent use proceeding, however, consideration of the parties' respective wherewithal, business activity, and planned expansion, among other factors, is relevant only in determining the extent of their respective geographic territories. See, e.g., Boi Na Braza v. Terra Sul, 110 USPQ2d at 1394 (listing factors, and citing Weiner King, 204 USPQ at 830). We do not reach those factors unless and until the applicant carries his burden of proving the two conditions precedent: that there was prior lawful use in commerce and that the geographic territorial division he proposes would be likely to avoid consumer confusion.

Since Lawson's registration is geographically unrestricted, the Board must consider him "as having rights to use his mark in the entire United States, but for that territory where Applicant could show actual use prior to Registrant's filing date."

Because the involved goods are identical, the Board must presume that they would be marketed to the same classes of customers―ordinary adult wine drinkers and purchasers―through the same channels of trade. See In re Viterra, 101 USPQ2d at 1908. Moreover, there are no limitations as to price or quality, and so there is no reason to believe that purchasers would be particularly discriminating or careful in distinguishing the parties' products.

The question, then, was whether a geographical restriction would suffice to prevent confusion. In this regard, the Board considered two ways in which wine may be distributed: directly to consumers, or through distributors to wine retailers. Consumers seeking to purchase directly would encounter the marks of both parties on the Internet and in national publications that review wine. "[O]rdinary wine consumers and purchasers encountering these highly similar marks on identical products could easily infer, mistakenly, that the brands are related or affiliated, even if they originate from different regions." The Board observed that, even if the parties' wines were marketed in different parts of the country and did not appear on the same store shelves, "that would not suffice to allay the likelihood of confusion."

Thus, we find that even if there were a geographic division of territories, the parties would still have overlapping classes of customers, whose susceptibility to confusion, engendered by the marked similarity of the parties' marks on identical goods, would not be appreciably reduced.

Conclusion: The Board ruled that Applicant Stawski was not entitled to concurrent registration of his marks, and so it dissolved the concurrent use proceeding.

The TTABlog

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