Trademark cancelled, new application filed by original owner - can I win opposition?

[jawjadawg]

Here is my situation:

I have a longstanding signed agreement with a company that owned a trademark. The agreement granted me exclusive regional (several States) use of the trademark and associated products, etc. The trademark owner intentionally breached the contract because he found it more profitable to do so. We served notice under the contract that they were to exercise their duties to protect our intellectual property rights under the contract, which they declined and continued to abuse our situation. We discussed filing a civil suit, but doing so was going to be costly and the contract had a venue clause. My attorney advised that defendants in their situation were going to be likely to spend a lot of money and fight very hard to defend the case because they would probably be out of business if they lost. He loved my case, but being an intentional tort, was also not willing to take the case on contingency. This made sense, and was supported by numerous other attorneys with whom I spoke. What I ultimately decided was that I would try to beat him at his own game of dirtbaggery.

During this process I was a little bullied by the prospect of having my distribution and use rights cancelled by the trademark owner. During the exploratory process of examing a civil suit, several attorneys advised me to be sure I had all of my ducks in a row before making a move because the smart strategy on the part of the trademark owner would be to cancel our agreement before I could obtain an injunction, which would result in all sorts of other costly issues and no choice but to go to court OR ELSE lose my business. I have spent a lot of money building brand awareness of this trademark in my area, and was never quite ready to risk it all in a lawsuit.

Well, as it turns out, the trademark was cancelled in 2008, and was already cancelled during the time I was requesting the trademark owner's help in enforcing our rights. I just checked on the USPTO website and the original owner (Mr. Dirtbag), has filed a new application. The application is dated May 2012. The files says that someone will be appointed to look at the mark after 90 days. I know that in the trademark owner's eyes he would probably like to cancel my distributorship and force me to stop using my/his business name, but I haven't done enough to provide him cause. What would be really beautiful is if I could successfully oppose the new registration on the grounds that I have been using the mark for many years, and should not be subject to the whims of a major scumbag in regard to my continued business operations. Will my contract granting me use of the trademark, and his resulting breach of that contract, carry any weight with the USPTO folks in a petition to oppose? Additionally, there are other people who are in the same situation that also continued to use the trademark during the time period that the trademark was cancelled.

I think it is clear that I would be damaged by a regranting of the trademark rights to my business name, as the guy has already demonstrated a willingness to act in bad faith regarding the use of the trademark. Thoughts?

 

[justalayman]

trademark rights are earned by usage first and then supported by registration.


from the USPTO faq's

What are the benefits of federal trademark registration?

Owning a federal trademark registration on the Principal Register provides several advantages, including:
Public notice of your claim of ownership of the mark;
A legal presumption of your ownership of the mark and your exclusive right to use the mark nationwide on or in connection with the goods/services listed in the registration;
The ability to bring an action concerning the mark in federal court;
The use of the U.S. registration as a basis to obtain registration in foreign countries;
The ability to record the U.S. registration with the U.S. Customs and Border Protection (CBP) Service to prevent importation of infringing foreign goods;
The right to use the federal registration symbol ® and
Listing in the United States Patent and Trademark Office’s online databases.

If you notice, it does not state that it not being registered prevents an entity from using and claiming the mark.
I suspect the current registration is to allow the holder to lay claim in court to the mark in the possible battle that is brewing.

like in this statement:

I know that in the trademark owner's eyes he would probably like to cancel my distributorship and force me to stop using my/his business name, but I haven't done enough to provide him cause.

I have no idea what your contract calls for but if it included your right to use the mark, then as long as the contract stands, you would be able to use it. Once the contract ends, it would be presumed so would your right to use the mark. If you do not intend to demand enforcement of the contract, your right to use the mark could very well cease. It appears you were allowed to use the mark due to the contract. As such, I do not see you having a right to claim the mark as yours.

 

[jawjadawg]

Thank you for your response. I hope you wont take offense if I debate your points for better understanding.

trademark rights are earned by usage first and then supported by registration.

If you notice, it does not state that it not being registered prevents an entity from using and claiming the mark.
I suspect the current registration is to allow the holder to lay claim in court to the mark in the possible battle that is brewing.

However, trademark rights are not guaranteed if not properly registered and can be lost without registration if someone else starts using them, and/or the original user fails to protect them. Correct, or incorrect? That doesn't mean that the original user loses his right use the mark, but it does mean they can lose their rights to keep others from using the mark. Is that correct? For the record, I am not trying to take away his right to use the mark. I am trying to preserve my right to also use the mark.

He does not yet have a completed application. I guess they could not simply reinstate. They were forced to file a new application, which places their application in the review status. The file says that someone will be appointed to review the application after 90 days. After the review, the application will be posted in the Gazette for opposition. Is that correct? I am inquiring about successfully opposing the new application on the grounds that I have been using the mark during the time period in which it was not protected, and also under the premise that the original owner did not take steps to protect the mark during his earlier registration period. In fact, he exercised his right to decline to protect the mark.

 

[justalayman]

However, trademark rights are not guaranteed if not properly registered and can be lost without registration if someone else starts using them, and/or the original user fails to protect them. Correct, or incorrect?

both depending on the circumstances.

That doesn't mean that the original user loses his right use the mark, but it does mean they can lose their rights to keep others from using the mark. Is that correct?

yes but the facts of the situation make a difference.

For the record, I am not trying to take away his right to use the mark. I am trying to preserve my right to also use the mark.

but were you not using it by permission (specifically by contract)?

He does not yet have a completed application. I guess they could not simply reinstate. They were forced to file a new application, which places their application in the review status. The file says that someone will be appointed to review the application after 90 days. After the review, the application will be posted in the Gazette for opposition. Is that correct?

I'll take your word on the situation of application but yes, after a point it will be published for opposition.

I am inquiring about successfully opposing the new application on the grounds that I have been using the mark during the time period in which it was not protected,

ah but that is where you are misconstruing the situation. It isn't that he wasn't protected therefor you can use the mark without opposition. It was that while it was not registered, he simply could not sue you.

and also under the premise that the original owner did not take steps to protect the mark during his earlier registration period.

from the description of the situation, it would appear he never stopped using the mark. Your use was by permission so what is he required to protect?

In fact, he exercised his right to decline to protect the mark.

again, protect it from whom?

 

[jawjadawg]

Good points. There is more to the story, so I may not be getting it all out there in a usable manner. The point I would argue is that he has improperly licensed the use of the trademark (to me, and others) by granting exclusivity within a territory and then granting authority to market the trademark to others within the same territory. There are two parts to my business - a service business that utilizes the mark, and a do it yourself product. What is really causing all of the issues is that the man agreed to an exclusive use contract, and then violated that contract by allowing others to sell the product. That is a breach of contract issue, but what it also represents is a failure to defend the trademark rights he licensed to me. We requested he enforce those rights, and he declined. (Edit) - What I am not adding is that the others within the territory who are benefiting from my mark were able to do so because he sold them the product I was supposed to have exclusive rights to. There are also others outside of my territory who are drop shipping but who were not given the explicit right to sell the product to consumers within my territory. We also served notice regarding those violators of our service mark.

 

[justalayman]

The point I would argue is that he has improperly licensed the use of the trademark (to me, and others) by granting exclusivity within a territory and then granting authority to market the trademark to others within the same territory.

that does not affect his rights to the mark though. It may be a breach of your contract and you have remedies for that.

That is a breach of contract issue, but what it also represents is a failure to defend the trademark rights he licensed to me.

No, it doesn't. Why, or even how would he essentially sue himself for abusing his own mark? It would appear that everybody that used it used it by contractual permission. There is no reason he defend his own mark against entities he has licensed to use the mark. It simply gets back to a breach of contract issue between you and him.

- What I am not adding is that the others within the territory who are benefiting from my mark were able to do so because he sold them the product I was supposed to have exclusive rights to.

again, a breach of contract issue. Not one of trademark infringement.

There are also others outside of my territory who are drop shipping but who were not given the explicit right to sell the product to consumers within my territory.

still contract breach.

We also served notice regarding those violators of our service mark.

do you hold a service mark? If so, that would be up to you to defend. If you are allowed to use the service mark along with the trademark by contractual permission, again, breach of contract but not a trademark issue.

 

[jawjadawg]

Well then how about this angle -

After I served notice to the owner that they were obligated to take action to defend our ip rights, their response was that the exclusivity of my contract was no longer in force. My attorney laughed at it because he said they didn't have the right to unilaterally alter the contract. However, now that I think about it, their contention that I no longer held those rights under the contract came during the time period the trademark was cancelled. I continued to use the mark, despite being told that my permission was essentially no longer valid. Shouldn't I then continue to retain my rights to use the mark, since my use was no longer tied to their contractual permission?

I have also discussed this with a local attorney. She is a boutique firm, but her experience was with the 'Big Boys'. She has suggested that I file right now for the same trademark as a service mark, requesting regionally protected use of the mark for my territory. We will then oppose when the other mark is listed for opposition in the Gazette, and hope to be granted at least concurrent use - or at least find ourselves in a situation forcing the other scumsucker to negotiate a buyout. Her theory is that filing an opposition by itself does not really protect our rights from anyone else if we prevail. Thoughts?

 

[justalayman]

ok, back way up.

What is really causing all of the issues is that the man agreed to an exclusive use contract, and then violated that contract by allowing others to sell the product.

he sold them the product I was supposed to have exclusive rights to.

did you before and during the dispute and are you still purchasing whatever products you speak of from them?

 

[jawjadawg]

Yes. I did continue buying the product, but I have now secured an alternate source, and could have also obtained the product from other people other than them due to their actions of making it available to everyone. Additionally, the product in question does not bear the mark in question. There are two trademarks involved in the contract. One is the actual name of the product, and the other was used primarily as a service mark. The service mark is the one they stupidly allowed to cancel. The trademark in question can not be found on the product in question.

 

[justalayman]

Yes. I did continue buying the product, but I have now secured an alternate source, and could have also obtained the product from other people other than them due to their actions of making it available to everyone. Additionally, the product in question does not bear the mark in question. There are two trademarks involved in the contract. One is the actual name of the product, and the other was used primarily as a service mark. The service mark is the one they stupidly allowed to cancel. The trademark in question can not be found on the product in question.

You had obviously considered the contract to still be in force as evidenced by your continued purchases from them. If the contract controls your rights to the marks, then it is what it is.

 

[jawjadawg]

I very much appreciate your input, and the debate you allowed me. I guess your quote below is why I think what's right should be that I be able to successfully oppose the new trademark application and retain service rights.

If you do not intend to demand enforcement of the contract, your right to use the mark could very well cease. It appears you were allowed to use the mark due to the contract. As such, I do not see you having a right to claim the mark as yours.

It is correct that I was originally allowed to use the mark due to the contract. I just don't believe that a trademark owner's rights do not become endangered after assigning those rights to others and then failing to honor said licensing agreements. Is the only point of action to sue in civil court? Surely not. My point is that I already DID demand enforcement of the contract. We have followed the terms of the contract. How is it that I lose my rights due to their scumbag refusal to enforce their end of the contract? If by "demand enforcement of the contract" you mean "cough up enough money to sustain an expensive civil lawsuit", then that's just not right in the ways of the World and leaves the little man with no chance.
,

 

[justalayman]

My point is that I already DID demand enforcement of the contract.

You said you refused to litigate the issue. Seeking a court order directing the other party to act in any particular manner is how you demand enforcement of the contract.

I just don't believe that a trademark owner's rights do not become endangered after assigning those rights to others and then failing to honor said licensing agreements.

I suggest he did not assign any rights but licensed them and that was through the contract.

Is the only point of action to sue in civil court?

where else would you suggest? That is how civil issues are addressed.

If by "demand enforcement of the contract" you mean "cough up enough money to sustain an expensive civil lawsuit"

exactly

then that's just not right in the ways of the World and leaves the little man with no chance.

well, I have to agree with you there but it is what it is.