Bison Products, LLCv.Red Bull GmbH

Trademark Trial and Appeal Board

Feb 2, 2022

92076894 (T.T.A.B. Feb. 2, 2022)

February 2, 2022 Cancellation No. 92076894 Bison Products, LLC v. Red Bull GmbH Before Kuhlke, Taylor and English, Administrative Trademark Judges. By the Board: Now before the Board is Red Bull GmbH’s (“Red Bull”) motion to dismiss for failure to state a claim upon which relief can be granted under Fed R. Civ. P. 12(b)(6), filed in lieu of an answer in this Cancellation No. 92076894 (the “Cancellation”), in which Bison Products, LLC (“BP”) seeks to cancel Red Bull’s Registration No. 3197810 (the ’810 Registration). The motion is fully briefed. I. BACKGROUND In a related opposition involving the same parties in opposite positions, Opposition No. 91268316 (the “Opposition”), filed March 23, 2021, Red Bull pleaded ownership of the subject Registration No. 3197810 in addition to three others. In the Opposition, UNITED STATES PATENT AND TRADEMARK OFFICE Trademark Trial and Appeal Board P.O. Box 1451 Alexandria, VA 22313-1451 General Contact Number: 571-272-8500 General Email: TTABInfo@uspto.gov Cancellation No. 92076894 2 Red Bull is opposing two of BP’s applications.1 Red Bull asserts prior use and ownership of four registrations for various marks incorporating the wording RED BULL and/or a Bull logo. The four prior registrations, including the ’810 Registration, are set out below:2 RED BULL’S REGISTERED MARK REGISTRATION NO. GOODS/CLASS 2946045 Non-alcoholic beverages, namely, energy drinks and hypertonic drinks, in Intl. Class 32 RED BULL 3092197 Non-alcoholic beverages, namely, energy drinks and hypertonic drinks, in Intl. Class 32 3197810 Soft drinks; and sports drinks, in Intl. Class 32 3838170 Clothing, namely, shirts, T-shirts, hats, caps, in Intl. Class 25 BP filed its petition to cancel the ’810 Registration on April 13, 2021, which serves as a compulsory counterclaim against the pleaded Registration in the Opposition.3 1 On July 29, 2020, BP filed each of the following applications based on Trademark Act § 1(b) intent-to-use filing basis: BP’S MARK SERIAL NO. GOODS/CLASS 90081580 Nutritional supplements, in Intl. Class 5 90081586 Mixed fruit juices, in Intl. Class 32 2 12 TTABVUE 13-39 (in Opposition). 3 We further note that On August 3, 2021, BP filed counterclaims against the ’170 and ’197 Registrations. Cancellation No. 92076894 3 II. STANDARD ON MOTION TO DISMISS A motion to dismiss under Fed. R. Civ. P. 12(b)(6) for failure to state a claim upon which relief can be granted is a test solely of the legal sufficiency of a complaint. See Advanced Cardiovascular Sys. Inc. v. SciMed Life Sys. Inc., 988 F.2d 1157, 26 USPQ2d 1038, 1041 (Fed. Cir. 1993). To withstand a motion to dismiss, a plaintiff need only allege sufficient factual content that, if proved, would allow the Board to conclude, or to draw a reasonable inference, that (1) the plaintiff is entitled to bring a statutory cause of action,4 and (2) a valid ground exists for opposing an application or cancelling a registration. Doyle v. Al Johnson’s Swedish Rest. & Butik Inc., 101 USPQ2d 1780 (TTAB 2012). The complaint, therefore, must allege “enough facts to state a claim to relief that is plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S. Ct. 1955, 1974 (2007). In particular, the claimant must allege well-pleaded factual matter and more than “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 1949 (2009). In determining a motion to dismiss under Fed. R. Civ. P. 12(b)(6), all of the plaintiff’s well-pleaded allegations must be accepted as true and the complaint construed in the light most favorable to the plaintiff. See Fair Indigo LLC v. Style 4 Our decisions have previously analyzed the requirements of Sections 13 and 14 of the Trademark Act, 15 U.S.C. §§ 1063-64, under the rubric of “standing.” We now refer to this inquiry as entitlement to a statutory cause of action. Despite the change in nomenclature, our prior decisions and those of the Federal Circuit interpreting Sections 13 and 14 remain equally applicable, as there is “no meaningful, substantive difference between the analytical frameworks ….” Corcamore, LLC v. SFM, LLC, 978 F.3d 1298, 2020 USPQ2d 11277, *4 (Fed. Cir. 2020); see also Spanishtown Enters., Inc. v. Transcend Res., Inc., 2020 USPQ2d 11388, *2 (TTAB 2020). Cancellation No. 92076894 4 Conscience, 85 USPQ2d 1536, 1538 (TTAB 2007). Matters outside the pleadings will not be considered on a motion to dismiss under Fed. R. Civ. P. 12(b)(6) as to do so would convert the motion to one for summary judgment, see Fed. R. Civ. P. 12(d), which the Board will not entertain prior to the moving party’s service of initial disclosures.5 See Trademark Rule 2.127(e)(1), 37 C.F.R. § 2.127(e)(1). III. ENTITLEMENT TO STATUTORY CAUSE OF ACTION Entitlement to a statutory cause of action under Sections 13 or 14 of the Trademark Act is required in every Board inter partes case. See Corcamore, 2020 USPQ2d 11277 at *5; Austl. Therapeutic Supplies Pty. Ltd. v. Naked TM, LLC, 965 F.3d 1370, 2020 USPQ2d 10837, *3 (Fed. Cir. 2020) (citing Lexmark Int’l, Inc. v. Static Control Components, Inc., 572 U.S. 118, 109 USPQ2d 2061, 2067 n.4 (2014)). To plead its entitlement to a statutory cause of action, a plaintiff must prove (i) an interest falling within the zone of interests protected by the statute and (ii) a reasonable belief in damage proximately caused by the registration of the mark. See Corcamore, 2020 USPQ2d 11277 at *4; Spanishtown Enters., 2020 USPQ2d 11388 at *1. BP’s entitlement to a statutory cause of action is inherent by virtue of its position as defendant in the Opposition. See Finanz St. Honore B.V. v. Johnson & Johnson, 85 USPQ2d 1478, 1479 (TTAB 2007). BP identified the Opposition as a related proceeding on the ESTTA cover sheet accompanying the petition and alleged in the body of the petition that Red Bull filed the Opposition against it.6 5 The only exceptions to this rule are motions for summary judgment based on claim or issue preclusion or lack of Board jurisdiction. See Trademark Rule 2.127(e)(1). 6 1 TTABVUE 2 (cover sheet) and 8, ¶9. Cancellation No. 92076894 5 IV. DISCUSSION-CLAIMS ASSERTED IN THE CANCELLATION In the Cancellation brought against the ’810 Registration, BP purports to allege the following claims: (1) misrepresentation of source under § 14(3) of the Trademark Act, 15 U.S.C. § 1064(3);7 (2) an illegal assignment of the underlying application in violation of § 10 of the Trademark Act, 15 U.S.C. § 1060(a)(1);8 (3) abandonment pursuant to § 45 of the Trademark Act, 15 U.S.C. § 1127 in view of the illegal assignment;9 and (4) fraud under § 14(3) of the Trademark Act, 15 U.S.C. § 1064(3) based on the illegal assignment.10 a. Misrepresentation of the Source of the Goods BP argues that Red Bull failed to address the misrepresentation of source claim in its motion to dismiss; Red Bull responds in its reply brief that no recognizable claim is in the petition for cancellation. It is the practice of the Board to review the entirety of a complaint when it is under challenge by a motion to dismiss, and the Board sua sponte considers the sufficiency of the pleading to determine whether it sets forth a misrepresentation of source claim. See NSM Res. Corp. v. Microsoft Corp., 113 7 1 TTABVUE 11-15, ¶¶25-37. 8 Id. at 15-17, ¶¶38-51. 9 Id. at 17-18, ¶¶52-57. While it appears clear from BP’s reply brief that it did not assert a nonuse claim separate from the abandonment claim, to be clear, such a claim is not available against this registration which is more than five years old. See Maids to Order of Ohio Inc. v. Maid-to-Order Inc., 78 USPQ2d 1899, 1906 n.6 (TTAB 2006) (“[W]here as here, MTO’s registration is incontestable, MTO-Ohio may not challenge the registration on the ground that the mark was not used in commerce.”); Pennwalt Corp. v. Sentry Chem. Co., 219 USPQ 542, 550 (TTAB 1983) (“[T]here is nothing in Section 14(c) which admits [nonuse] as a ground for cancellation of a registration after five years have elapsed, unless the misstatement was with fraudulent intent.”). 10 Id. at 18-20, ¶¶58-68. Cancellation No. 92076894 6 USPQ2d 1029, 1039 n.19 (TTAB 2014) (the Board may sua sponte dismiss any insufficiently pleaded ground for opposition or cancellation). Under Trademark Act Section 14(3), a registration is subject to cancellation if the mark “is being used by, or with the permission of, the registrant so as to misrepresent the source of the goods or services on or in connection with which the mark is used.” 15 U.S.C. § 1064(3). “Willful use of a confusingly similar mark is insufficient.” Bayer Consumer Care AG v. Belmora LLC, 110 USPQ2d 1623, 1632 (TTAB 2014), aff’d, 338 F. Supp. 3d 477 (E.D. Va. 2018), aff’d in relevant part, vacated and remanded on other grounds, 987 F.3d 284, 2021 USPQ2d 126 (4th Cir. 2021) (citing McDonnell Douglas Corp. v. Nat’l Data Corp., 228 USPQ 45, 47 (TTAB 1985)). Rather, the misrepresentation of source must involve a respondent deliberately passing off its goods as those of another. The claim “refers to situations where it is deliberately misrepresented by or with the consent of the respondent that goods and/or services originate from a manufacturer or other entity when in fact those goods and/or services originate from another party.” Belmora, 110 USPQ2d at 1632 (quoting Osterreichischer Molkerei-und Kasereiverband Registriete GmbH v. Marks & Spencer Ltd., 203 USPQ 793, 794 (TTAB 1979) and citing Global Maschinen GmbH v. Global Banking Sys., Inc., 227 USPQ 862, 864 n.3 (TTAB 1985)). The respondent’s use must be a “blatant misuse of the mark … in a manner calculated to trade on the goodwill and reputation of petitioner.” Otto Int’l Inc. v. Otto Kern GmbH, 83 USPQ2d 1861, 1863 (TTAB 2007) (emphasis added); see also Coca-Cola Co. v. Meenaxi Enter., Inc., 2021 USPQ2d 709 (TTAB 2021); J. THOMAS MCCARTHY, 5 MCCARTHY ON TRADEMARKS AND UNFAIR COMPETITION, § 20:60 (5th ed. June 2021) (“A valid § 14(3) misrepresentation claim must show that the Cancellation No. 92076894 7 respondent took steps to deliberately misuse the registered mark to obviously trade on the good will and reputation of petitioner.”). In fact, the Board has stated in the past that “application [of Section 14(3)] under the decisional law has … been limited to cases involving deliberate and blatant misrepresentation of source wherein the registration is merely a vehicle for the misuse rather than evidence of even a colorable ownership claim, and where the mark is intentionally displayed in such a manner as to facilitate passing off the goods as those of another.” Global Maschinen GmbH, 227 USPQ at 863, n.3. Rather than contending Red Bull took deliberate steps to trade off BP’s goodwill and reputation, BP merely alleges that “the U.S. consumer would be led to believe that [Red Bull’s] subsidiary Red Bull-Germany, which continues to operate after recordation of the Assignment Agreement, is the source of the goods for the mark of the Subject Registration.”11 Moreover, the allegations to the use and actions are of a third party, Red Bull-Germany, not Red Bull, the registrant. Specifically, BP alleges the following: 35. In view of the foregoing, Red Bull-Germany did not cease to operate after the recordation of the Assignment Agreement and continued to benefit from the goodwill associated with the use of the mark in the Subject Registration in the U.S. in connection with soft drinks and sports drinks. 36. In view of the foregoing, any or all goodwill associated with the use of the mark of the Subject Registration in connection with soft drinks and sports drinks continued to stay with Red Bull-Germany after the application transfer and recordation of the Assignment Agreement. 37. In view of the foregoing, the invalid Assignment Agreement, and on information and belief, Respondent [Red Bull] is using the Subject Registration to misrepresent the source of the goods for the mark of the Subject Registration 11 1 TTABVUE 15, ¶34. Cancellation No. 92076894 8 in violation of Section 14(3) of the Lanham Act and should be cancelled in its entirety.12 In short, BP is asserting that Respondent Red Bull is misrepresenting Red Bull- Germany as the source of its goods. BP has not alleged facts reflecting Red Bull’s deliberate misrepresentation of the source of its products, “blatant misuse” of the mark by Red Bull (the registrant), or conduct amounting to the deliberate passing-off of Red Bull’s goods or blatant use of the mark to trade on the good will and reputation of BP. Otto Int’l Inc., 83 USPQ2d at 1863; McDonnell Douglass Corp., 228 USPQ at 47. Therefore, the Board finds that BP has failed to set forth a basis for a misrepresentation of source claim. Moreover, because these allegations cannot support a claim of misrepresentation of source this claim is unavailable and is dismissed with prejudice. b. Violation of the Anti-Assignment Provision of § 1060(a)(1) Red Bull argues that BP’s claim that the assignment in the underlying application violates Section 10(a)(1) of the Trademark Act is time-barred under Section 14(3), 15 U.S.C. § 1064(3). BP responds that the “time-barred” argument is “devoid of any applicable legal authority or case law.” 5 TTABVUE 7. BP asserts that: Section 14(3) of the Lanham Act does not provide an applicant or registrant a loophole to circumvent the anti-assignment provision of Section 1060(a)(1) so long as they don’t get caught within five years of registration by a third party or the USPTO for its violation. Clearly, allowing a party to simply circumvent the anti-assignment provision of Section 10 of the Lanham Act after five years was not the intent of Congress under Section 10 nor Section 14(3). Logically, if an application and its subsequent registration are void (or void ab inito) effective as of the date of the violation of Section 1060(a)(1), then it never had a valid 12 Id., ¶¶35-37. Cancellation No. 92076894 9 registration to begin with that could have been afforded the protection of incontestability after five years. Id. It was the intent of Congress to protect registrations more than five years old and limit any attack on such registrations to a specific enumerated list set forth in Section 14(3). Violations of the anti-assignment provision are not in that list. The legislative purpose behind the five year limitation of cancellation actions for all grounds except those specified in Section 14(3) is to prevent registrations from being open to challenge in perpetuity, except for a limited set of claims. Pennwalt Corp. v. Sentry Chem. Co., 219 USPQ 542, 546 (TTAB 1983). There is no conflict between Sections 10 and 14(3), just as there is no conflict between Sections 2(d) (likelihood of confusion) or 1(a) (non use prior to filing use statements), and Section 10. See Id. at 547 (citations omitted) (“… on principles of statutory construction, we are obliged to consider the statute as a whole and the interrelation of its provisions. As stated by Chief Judge Markey in In re Nantucket, 677 F.2d 95, 213 USPQ 889, 892 (CCPA 1982), ‘[e]ach part or section of a statute should be construed in connection with every other part or section so as to produce a harmonious whole’”). In view thereof, Red Bull’s motion to dismiss the petition as to the violation of the anti-assignment provision is GRANTED and this claim is dismissed with prejudice.13 13 We address below, in the discussion on fraud, the impact of the deletion of the Section 1(b) basis and the registration issuing only under Section 44. Cancellation No. 92076894 10 c. Abandonment Claim For its abandonment claim, BP asserts that “Respondent’s mark in the Subject Registration was not used in commerce because the mark and the Subject Registration were void ab initio” … “Respondent is not to entitled continued registration [sic] of the Subject Registration as a result of its non-use and abandonment of its void and invalid mark and the Subject Registration should be cancelled under Section 14(3) of the Lanham Act, 15 U.S.C. § 1064(3).” 1 TTABVUE 17-18 ¶¶ 52-57. The claim of abandonment is based, not on a failure to use the mark, but instead on the contention that the alleged Section 10 violation rendered the underlying mark somehow invalid or incapable of being used.14 Hy-Cross Hatchery, Inc. v. Osborne, 303 F.2d 947, 133 USPQ 687, 689 (CCPA 1962) (“Nothing quoted tends to show than an invalid assignment is, ipso facto, an abandonment of a mark.”). Additionally, Red Bull points out that BP has not supplied any factual basis to support a claim of abandonment. Indeed, “use in commerce,” as defined by the Lanham Act, is not dependent on owning a valid registration.15 Section 45 of the Lanham Act provides (in pertinent part): For the purposes of this chapter, a mark shall be deemed to be in use in commerce- (1) 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 such placement impracticable, then on documents associated with the goods or their sale, and (b) the goods are sold or transported in commerce… 14 1 TTABVUE 18, ¶54. 15 4 TTABVUE 11. Cancellation No. 92076894 11 15 U.S.C. § 1127. Turning to how to plead abandonment as a ground for cancellation, the statutory definition of “abandonment” reiterates the same language in the statutory definition of “use in commerce.” Trademark Act Section 45 also provides: A mark shall be deemed to be “abandoned” … [w]hen its use has been discontinued with the 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 if abandonment. “Use” of a mark means the bona fide use of such mark made in the ordinary course of trade, and not made merely to reserve a right in a mark. Id. Essentially, the allegations appear to be that the use cannot support the registration because the assignment was invalid. These allegations go to a violation of Section 10, which is time-barred, and do not form the basis of an abandonment claim. BP has failed to allege that Red Bull has not used its mark for the identified goods for a period of at least three consecutive years, or that Red Bull has discontinued use with intent not to resume use. See Toufigh v. Persona Parfum Inc., 95 USPQ2d 1872, 1875 (TTAB 2010). In view thereof, Red Bull’s motion to dismiss the petition as to the abandonment claim is GRANTED and the claim is dismissed with prejudice. d. Fraud BP alleges Red Bull committed fraud on the USPTO by withholding material information (during prosecution of the underlying application) and providing material false information (during maintenance of the registration) with intent to deceive the USPTO by: 1) failing to disclose that Red Bull-Austria was not a successor Cancellation No. 92076894 12 to Red Bull-Germany’s business such that the assignment filed prior to an allegation of use violated Section 10; and 2) filing the Sections 8 & 15 Combined Declaration of Use when Red Bull knew that the assignment agreement violated Section 10, and the subject registration was invalid and “thus it could not have been using the mark of the Subject Registration in commerce for five (5) consecutive years after the date of registration because it was void.” 1 TTABVUE18-29 ¶¶ 58-68. Red Bull argues that “each of the asserted false material omissions of fact are all based on Red Bull’s alleged knowledge that the Assignment violated Section 1060(a)(1) and that the Registration was therefore void,” but because the registration issued under Section 44 such alleged omissions or false statements did not have “any bearing on the procurement or maintenance of the Registration.” 4 TTABVUE 10. The Court in In re Bose Corp., 476 F.3d 1331, 91 USPQ2d 1938, 1939 (Fed. Cir. 2009), set out the relevant standard for proving fraud: “Fraud in procuring a trademark registration or renewal occurs when an applicant knowingly makes false, material representations of fact in connection with his application.” Torres v. Cantine Torresella S.r.l., 808 F.2d 46, 48, 1 USPQ2d 1483, 1484 (Fed. Cir. 1986). A party seeking cancellation of a trademark for fraudulent procurement bears a heavy burden of proof. W.D. Byron & Sons, Inc. v. Stein Bros. Mfg. Co., 377 F.2d 1001, 1004, 153 USPQ 749, 750 (CCPA 1967). Indeed, “the very nature of the charge of fraud requires that it be proven ‘to the hilt’ with clear and convincing evidence. There is no room for speculation, inference or surmise and, obviously, any doubt must be resolved against the charging party.” Smith Int’l, Inc. v. Olin Corp., 209 USPQ 1033, 1044 (TTAB 1981). BP’s pleadings of fraud must allege sufficient underlying facts from which the Board may reasonably infer that Red Bull acted with the requisite state of mind. Asian & W. Classics B.V. v. Selkow, 92 USPQ2d 1478, 1479 (TTAB 2009). Cancellation No. 92076894 13 We begin by observing, as alleged, (1 TTABVUE 10 ¶ 16) the assignment clearly set out the terms in standard fashion assigning the mark “together with the good will of the business” and obviously does not include the additional language required under Section 10 “to a successor to the business of the applicant or portion thereof, to which the mark pertains, if that business is ongoing and existing.” Nothing is hidden from the USPTO by these terms. Further, during prosecution of the application the Section 1(b) basis was withdrawn and the registration issued under Section 44; thus, the USPTO did not rely on an omission of material fact to issue or maintain the registration. Cf. University of Games Corp. v. 20Q.net Inc., 87 USPQ2d 1465, 1468 (TTAB 2008) (deletion of goods during ex parte examination “constitutes a rebuttable presumption that [Applicant] lacked the willful intent to deceive the Office.”). The assignment provision in Section 10, limiting acceptable assignments for Section 1(b) applications to a “successor to the business,” on its face, is not applicable to Section 44 applications. Applications based upon Section 44 may be assigned without limitation. See Karsten Mnfg. Corp. v. Editoy AG; Editoy B.V.; Pingu B.V.; and Joker, Inc., 79 USPQ2d 1783, 1788 (TTAB 2006). See also TRADEMARK MANUAL OF EXAMINING PROCEDURE (TMEP) § 1006 (July 2021). Finally, the allegations which set out the dual filing basis, including Section 44 wherein such assignments are permitted, and Red Bull’s deletion of the Section 1(b) basis within the time allowed by Trademark Rule § 2.35(b)(1), 37 C.F.R. § 2.35(b)(1) (“applicant may delete a basis at any time”), do not support the required element of Cancellation No. 92076894 14 specific intent to deceive. See also TMEP § 806.04(b) (the option to delete a Section 1(b) basis available after issuance of a notice of allowance). Petitioner’s second basis for asserting the claim of fraud relating to the Section 8 filing suffers from the same infirmity as the abandonment claim. Respondent’s use of the mark for purposes of the Section 8 filing is separate from any issue concerning the assignment. There are no allegations that Respondent did not actually use the mark. In view thereof, Red Bull’s motion to dismiss the petition as to the fraud claim is GRANTED and this claim is dismissed with prejudice. Inasmuch as all claims have been dismissed, the petition for cancellation is dismissed with prejudice.