News & Press
Effective January 14, 2017, the U.S. Trademark Office will implement changes in some of its fees. In its continuing effort to encourage applicants to file documents electronically, its fees for filing any documents on paper are increasing substantially. Our firm utilizes the electronic filing system almost exclusively, and thus the higher fees for paper filings will rarely affect our clients. The fee changes noted below apply to electronic filings.
The fee for filing a Section 8 or Section 71 Declaration of Use will increase by $25/class, and will now be $125/class.
The fee for filing a request for an extension of time to file a Statement of Use will decrease by $25/class, and will now be $125/class.
Additional fees changes involved in appeals of refusals to register and in opposition and cancellation proceedings before the Trademark Trial and Appeal Board are detailed in the article below.
In the first update to the Trademark Rules of Practice since 2007, sweeping changes to the rules applicable to all Trademark Trial and Appeal Board (“TTAB”) proceedings take effect on January 14, 2017. The new rules apply to all proceedings pending on or after that date, including ongoing proceedings.
Notable among the rule changes are the following:
- New and Increased Fees.
- The fee for an ex parte appeal will increase from $100 to $200.
- The fee for opposition and cancellation proceedings will increase from $300 to $400 per opposed class.
- A fee will now be imposed for taking certain extensions of time to oppose, ranging from $100 to $300 depending on the length of the extension and whether the request is made electronically or on paper. A $100 fee applies to all extensions beyond the first 30 days, and an additional $200 fee applies to extensions beyond 90 days.
- An additional fee (generally, $100 above the standard fee) will be imposed for filings made by paper rather than electronically.
- Mandated Electronic Filing. The Trademark Rules of Practice previously permitted most filings to be submitted either by hard copy or electronically via the USPTO’s Electronic System for Trademark Trials and Appeals (“ESTTA”). The new rules mandate electronic filing except when technical problems or extraordinary circumstances prevent it, in which case the filing may be made on paper only if accompanied by a Petition to the Director of the USPTO and payment of a separate fee (in addition to the higher fee levied for paper filings). Filings made in respect of applications filed under Section 66(a) of the Lanham Act—i.e., applications for extension of protection of an international registration under the Madrid Protocol—still cannot be filed by paper under any circumstances.
- Service of Complaint. The current rules require the plaintiff to serve the complaint on the defendant. Under the new rules, the Board will serve the complaint.
- Mandated Electronic Service. Under the current rules, mail/courier or hand service is the default, with email or fax service permitted only with consent of the party being served. The new rules make email the default service method, permitting service by other methods only where the parties so stipulate (or if email service is not possible due to technical problems or extraordinary circumstances).
- Response Times. With the institution of mandated email service, the rule permitting five extra days for response in the case of mail service no longer applies. However, the new rules extend to 20 days the typical 15-day deadline for oppositions to motions other than summary judgment motions (the response time for which stays at 30 days).
- Codification of Strict Rules Regarding Oppositions Against Section 66(a) Applications. The new rules codify certain standards for opposing Section 66(a) applications that allegedly are implicit in the current rules as explained by TTAB decisions over the past several years. In particular, an opposition against a Section 66(a) application is limited to those goods, services and grounds set forth in the ESTTA cover sheet that is automatically generated through input made during electronic filing. The ESTTA cover sheet is determinative regardless of what is alleged in the underlying Notice of Opposition.
- Discovery. The new rules specify that “[l]imited extensions of the discovery period” may be granted; the current rules do not include the term “limited.” It is not clear what impact this change will have, if any, on the Board’s current generous granting of discovery extensions.
- Timing of Written Discovery and Responses. Under the new rules, written discovery requests (document requests, interrogatories, and request for admission) must be served sufficiently far enough in advance of the discovery deadline so that responses will be due (and must be made) no later than the close of discovery. The response deadline cannot be extended beyond the close of discovery either by stipulation of the parties or order of the Board. Therefore, discovery requests can no longer be served on the last day of discovery. Further, a party receiving document requests on the last day of possible service (that is, 30 days before the close of discovery) will be required both to provide written responses and produce the responsive documents by the close of discovery; the parties cannot stipulate to later production of documents without also receiving the Board’s approval of an extension to the discovery deadline.
- Limitations as to Written Discovery. Under the current rules, a party is limited to 75 interrogatories but may generally serve an unlimited number of document requests and requests for admission. The new rules limit the number of document requests and request for admission each to 75, unless the parties stipulate or the Board upon motion orders otherwise. The maximum number of interrogatories remains at 75.
- Timing of Discovery Motions. Under the current rules, most discovery motions must be filed only before the first testimony period opens. Under the new rules, discovery motions must be filed before the first pre-trial disclosures are due. The new rules also change the timing for motions to compel initial disclosures, which now must be filed within 30 days after the deadline for disclosure. The new rules do not change the timing for motions to compel expert disclosure, which still must be made before the close of discovery.
- Timing of Summary Judgment Motions. Under the current rules, summary judgment motions must be filed only before the first testimony period opens. Under the new rules, summary judgment motions must be filed before the plaintiff’s pre-trial disclosures are due.
- Trial Testimony by Declaration or Affidavit. The new rules permit the testimony of witnesses at trial to be submitted in the form of a declaration or an affidavit, whereas the current rules prescribed oral trial testimony unless the parties stipulated otherwise. The new rules also provide for oral cross-examination when testimony has been submitted in the form of declaration or affidavit.
The above merely highlights some of the more important rule changes, but is not a comprehensive discussion of either all the changes or their implications for opposition and cancellation proceedings going forward. If you have any questions about how these rule changes may impact ongoing or possible TTAB proceedings, please contact Fross Zelnick.
MPC Franchise, LLC v. Tarntino, 826 F.3d 652 (2d Cir. 2016)
In a recent decision affirming the district court’s finding that Defendant-Appellant Brent Tarntino (“Tarntino”) committed fraud on the United States Patent and Trademark Office (“USPTO”), the Court of Appeals for the Second Circuit clarified the scienter required to establish fraudulent trademark procurement.
The case arose out of a dispute among cousins over the ownership of the name “Pudgie’s” for pizza restaurants. In the early 1960s, three Cleary brothers opened two Pudgie’s pizza parlors in Elmira, New York. See MPC Franchise, LLC v. Tarntino, 826 F.3d 652, 655 (2d Cir. 2016). The pizza parlors were a success and, in 1973, the brothers formed Pudgie’s Pizza Franchising Corporation (“PPFC”) to sell franchises for additional Pudgie’s pizza parlors. Id. PPFC also registered the trademark PUDGIE’S with the USPTO. Id.
Shortly after the formation of PPFC, a sister of the three brothers, Bernadette Tarntino, purchased a Pudgie’s franchise and opened a Pudgie’s pizza restaurant several miles from the original pizza parlors in Elmira. Id. Bernadette Tarntino formed Pudgie’s Pizza Corporation Horseheads (“PPCH”) to manage the new location. Id.
In 1985, the USPTO cancelled PPFC’s registration for the PUDGIE’S mark after PPFC failed to file certain maintenance documents. Id. Then, in 1993, after one of the brothers passed away, PPFC dissolved. Therefore, the franchisee restaurants became independently-run operations. Id. at 656. Over fifteen years later, in 2009, two sons of one of the Cleary brothers formed MPC Franchise, LLC (“MPC Franchise”) to start franchising Pudgie’s pizza restaurants again. Id.
Meanwhile, in 2007, Bernadette Tarntino passed away, leaving a one-third interest in PPCH to each of her three children, one of whom was Defendant-Appellant Tarntino. Id. In 2010, Tarntino applied to register the mark PUDGIE’S with the USPTO for “pizza parlors” and “restaurant services featuring pizza, pasta, and subs.” Id. As is required of all applicants, Tarntino certified in his application that “to the best of his  knowledge and belief no other person, firm, corporation, or association has the right to use the mark in commerce, either in  identical form  or in such near resemblance  as to be likely . . . to cause confusion, or to cause mistake, or to deceive.” Id. The specimen that Tarntino submitted with his application was a photograph of a pizza box from the Pudgie’s location that his mother had opened, which displayed under the PUDGIE’S mark the words “® Pudgie’s Pizza Franchising Corporation 1972.” Id at 657. The USPTO issued Tarntino a registration for the PUDGIE’S mark. Id.
In 2011, MPC Franchise and MP Cleary, Inc. (“MP Cleary,” and together with MPC Franchise, “Appellees”), an entity that owned one of the original Pudgie’s pizza restaurants, filed suit against Tarntino in the District Court for the Western District of New York, asserting various causes of actions, including that Tarntino had fraudulently obtained the PUDGIE’S trademark registration. Id. The district court granted the Appellees’ motion for summary judgment on the fraud claim, finding that Tarntino “knew that [Appellees] were already franchising pizzerias, using the very same mark that he was attempting to register for that same purpose.” Id. Tarntino appealed to the Second Circuit.
The Second Circuit first explained that “[f]raud in procuring a trademark registration occurs when an applicant knowingly makes false, material, representations of fact in connection with his application.” Id. at 658 (quoting In re Bose Corp., 580 F.3d 1240, 1243 (Fed. Cir. 2009)). Tarntino argued that the district court had not properly applied this standard under the Federal Circuit’s 2009 decision in Bose. In Bose, the Federal Circuit held that the scienter standard for fraud on the USPTO is met only when an applicant actually knew that material statements in the application were false, and that it is not enough that the applicant should have known about such falsity. Bose Corp, 580 F.3d at 1244-45. According to Tarntino, the district court held him liable for misstatements that he should have known were false, not that he actually knew were false. MPC Franchise, LLC, 826 F.3d at 658.
The Second Circuit agreed with Tarntino that negligence was not enough, and that the scienter standard for a fraud claim requires that the person making the representation to the USPTO knows that the representation is false. Id. at 659. That mere negligence was not sufficient was consistent with Second Circuit precedent, as well as decisions by other Courts of Appeal. Id. at 659-60.
However, Tarntino’s arguments about the requisite degree of scienter did not aid him. Id. at 660. Not only did the district court not use the incorrect standard, but it was “beyond question” that Tarntino knew that his representations to the USPTO were false. Id. at 660-61. He admitted that he had never individually used the PUDGIE’S mark, despite applying for the mark in his individual capacity. Id. at 661. Moreover, there was abundant evidence that he knew others had the right to use the mark. He was aware of the other Pudgie’s locations, and he knew that his mother operated her restaurant as a franchisee. Id. Further, he conceded in his deposition that the trademark proprietary notice on the pizza box that he submitted as his specimen meant that someone else claimed the rights to the mark along with him. Id. The Second Circuit therefore affirmed the district court’s decision.
It is generally difficult for a plaintiff to prevail on a claim of fraud in the trademark application because, as made clear by the Second Circuit in this decision, a plaintiff must prove that the trademark applicant had actual knowledge that his representations were false. But in this case, there was direct evidence that Tarntino knew that his representations were false, and therefore summary judgment for Appellees was appropriate.
Cartier International AG V. Coachman, Opp. No. 91209815 (T.T.A.B. Oct. 5, 2016)
In Cartier International AG v. Coachman, Opp. No. 91209815 (T.T.A.B. Oct. 5, 2016), the Trademark Trial and Appeal Board (the “Board”) recently sustained opposer Cartier International A.G.’s (“Cartier”) opposition to an application to register TRINITY for leather handbags filed by Lance Coachman. Cartier’s opposition was based on the ground that Coachman’s TRINITY mark would likely cause confusion with Cartier’s own TRINITY mark. Cartier had long used the TRINITY mark in connection with various goods, and owned a federal registration for the TRINITY mark in connection with jewelry. Moreover, in the past, Cartier itself had used the TRINITY mark in connection with handbags, and intended to do so in the future.
The Board first addressed Cartier’s standing and priority. The parties did not dispute that Cartier had standing, but Coachman argued that Cartier had failed to establish priority because it did not have priority for the mark TRINITY for leather handbags. The Board recognized, however, that Cartier was not relying on its past use of TRINITY for leather handbags to establish priority; rather, it was relying on its registration for the TRINITY mark for jewelry. Slip op. at 6. Thus, Cartier had established priority and the issue was whether Coachman’s mark TRINITY for handbags so resembled Cartier’s previously-registered TRINITY mark for jewelry as to be likely to cause confusion.
The Board then reviewed the likelihood of confusion factors. First, the parties’ marks were identical. Id. at 7. Second, the Board found that Cartier’s TRINITY mark was strong for jewelry and therefore entitled to a wide scope of protection. In particular, Cartier’s line of TRINITY jewelry had received extensive unsolicited media coverage that referred to the “iconic” or “famous” TRINITY jewelry design. Id. at 9-11. Coachman had made of record three third-party uses of the TRINITY mark for handbags and one registration owned by one of the third parties. The Board held that evidence of only three third parties using the term TRINITY was not sufficient to demonstrate that Cartier’s TRINITY mark was weak. Moreover, Coachman had proffered no evidence regarding the extent of such third-party use. Id. at 11-12.
Third, the Board held that jewelry and handbags were related. The Board relied on evidence showing that Cartier markets its products as part of collections, with the products offered under each collection changing from year to year and season to season. Through the years, the TRINITY collection had encompassed a wide variety of goods, which included not only jewelry, but also leather belts, cufflinks, key rings, diaries, organizers, travel clocks, and pens. Moreover, in 2004 and 2005, Cartier had used the TRINITY mark in connection with handbags. Id. at 15-16. Further, Cartier had introduced evidence showing fourteen third parties that offered jewelry and handbags under the same mark. Id. at 16-18. On the basis of this evidence, the court found the goods related. Id. at 19.
Fourth, the Board considered the parties’ trade channels, and because neither party had limited the trade channels or purchasers in their respective application and registration, found that the goods were likely to move in the same channels of trade. Id. at 19-21. Fifth was the sophistication of purchasers factor. The Board rejected Coachman’s argument that the purchasers were sophisticated because the parties were selling expensive goods under their marks. The Board noted that neither Coachman’s application nor Cartier’s registration limited the goods to any particular price point, and therefore this factor was neutral. Id. at 21-22. Finally, the Board addressed the actual confusion factor. Coachman had argued that the lack of actual confusion established that there was unlikely to be confusion between the marks. The Board, however, found that there was no reasonable opportunity for confusion to have occurred because Coachman’s use of its mark had been minimal. Therefore, the actual confusion factor was neutral. Id. at 23-25.
Balancing the factors, the Board held that because the marks were identical, the goods were related, and the goods would move in the same channels of trade, Coachman’s registration of the TRINITY mark was likely to cause confusion with Cartier’s TRINITY mark.