Ttab Decisions and Developments

• Jurisdiction: United States,Federal
• Citation: Vol. 47 No. 4
• Publication year: 2022
• Author: Jane Shay Wald
• topic: Contracts,Trademark,Intellectual Property

TTAB DECISIONS AND DEVELOPMENTS

Jane Shay Wald
Irell & Manella LLP

If You Must Cede Control To Get Government Perks You Might Lose Trademark Rights, And That's Just How It Works "Creating" A Mark Gives No Trademark Rights: Zero No Pride In Creation Converts You To Hero

The Board granted a petition for cancellation of the mark CHENOA FUND and design on the basis that the registrant never owned the registered trademark at issue. The Board struck down the mark as void ab initio.

The facts are strange, as is so often the case in Board matters. Here, Respondent is an entity that came up with a mortgage financing program to be run by a Native American tribe. Respondent's managers claim to be "'thought and market leaders in providing down payment assistance to home buyers.'" It developed "a program to collaborate with a federal, state, or local government agency, namely, a federally recognized Indian tribe, to offer down payment assistance of single family homes that are financed through FHA-insured loans where the down payment would be provided by an agency or corporation of a federally-recognized Indian tribe." Respondent needed a Native American tribe participant in order to get government funding or backing for the loans it would extend.

Respondent shopped its scheme to three Indian tribes, but, as the Board put it, found no takers there. It then entered into an agreement with the Paiute Indian Tribe of Utah (Cedar Band of Paiutes), and, more specifically, CBC, the Tribe's wholly owned tribal corporation, Petitioner here. During negotiations, Respondent explained the nature of the proposal: "[We] need a government entity to operate our program. We propose that your tribe or band form a temporary agency ('Agency') followed by a...corporation under the Indian Reorganization Act of 1934 (the 'Corporation'). Your tribe will retain exclusive ownership of the Agency and Corporation. We will run the Agency and Corporation on a day-to-day basis, similar to what many tribes do when they create tribal casinos. Of course, your tribe or band will be involved in oversight of the Agency and Corporation."

Also during negotiations, CBC "feared that a 'Governmental regulator [would] come in once we reach some regulatory agency's radar screen and see that the operations are being

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run by [Respondent] and not by both Respondent' and CBC." The parties attempted to allocate their respective responsibilities to provide CBC with sufficient control to meet "legal requirements imposed on Indian tribes engaging in these types of activities." CBC's attorneys advised Respondent that "Respondent's Managers will 'have to accept more CBC control if they want to make a straight faced argument that it is a tribal government instrumentality. If they don't want to protect that status it seems to promise a short life span.'" Respondent agreed. CBC therefore took on more responsibility.

Subsequently, Petitioner, CBC, challenged ownership of the registration that had issued to Respondent. The parties had an Intellectual Property clause in their Agreement providing that Petitioner "'shall own all right, title and interest in and to any and all intellectual property created or obtained by [Petitioner] in operating the activities of [Petitioner].'" Respondent argued that it owned the mark because it created the mark prior to the parties' entering the Agreement, and therefore prior to Petitioner's activities under the Agreement. It argued that it came into the Agreement already owning the mark, and that the IP clause was only intended to cover subsequent activities by Petitioner—after the parties' entry into the Agreement. Of course, it is settled law that "creation" of a mark gives no trademark rights. Mere invention, creation, or discussion of a trademark does not create priority rights. Hole In 1 Drinks, 2020 USPQ 2d 10020 at *9. Respondent had made no use, itself, of the CHENOA FUND mark prior to entering into the Agreement with Petitioner, even if it could assert some use of the mark inuring to itself after entering the Agreement. Respondent therefore had no pre-Agreement rights in the mark because it didn't use the mark then. Post-Agreement, the IP clause put the rights with Petitioner. In addition, the Board found substantial evidence that all of the outward-facing materials offered under CHENOA FUND were associated with Petitioner, and not Respondent. Ultimately, despite considerable discussion, the issue of who actually controlled the activities provided as CHENOA FUND was not determinative. Instead, because Petitioner established that on the filing date of the application underlying Respondent's registration for CHENOA FUND Respondent did not own the mark, Respondent's application was void ab initio. The registration was therefore cancelled for non-ownership. Trademark Rule 2.71(d), 37 CFR 2.71(d). CBC Mortgage Agency v. TMRR, LLC, Cancellation No. 9207623 (august 5, 2022) Precedential.

I'd Rather Be Spending A Day At The Getty Than Reading The Latest Complaints From Brunetti

The Board upheld the Examining Attorney's refusal to register four marks applied for by Erik Brunetti claiming the F-word for cell phone cases, sunglasses and other Class 9 goods, various items of jewelry and watches in Class 14, various specific bags in Class 18, and a wide variety of retail services in Class 35. The Board referred to Mr. Brunetti's marks as the FUCK Marks, and agreed the term sought to be registered failed to function as a mark for the goods and services claimed, and were thus unregistrable under Sections 1, 2, 3, and 45 of the Trademark Act, 15 USC Secs. 1051-53 and 1127. Where a proposed mark fails to identify or distinguish the source of goods or services, it does not meet the statutory definition of a mark and cannot be registered.

While Applicant's FUCT case, Iancu v. Brunetti, was pending before the U.S. Supreme Court, Mr. Brunetti filed new applications. His new applications skipped the misspellings. Presumably his theory was that if SCOTUS eventually ruled for him, striking down the "scandalous and immoral" section of 2(a) as unconstitutional viewpoint discrimination, there was no need to try to "hide" the real word via an amusing misspelling. Brunetti, as we know, won that case. SCOTUS indeed struck down the part of Sec. 2(a) prohibiting registration of "scandalous and immoral" marks like the one before it, FUCT. Nonetheless, the Examining Attorney declined to allow the FUCK Mark applications that led to this Board case. This time, the marks obviously could not

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be refused as "scandalous and immoral" since the basis for that refusal no longer exists. The Examining Attorney therefore turned to the failure to function doctrine as the basis to refuse the registrations. The Board upheld the Examining Attorney.

The failure to function doctrine imposed here is nothing new though it seemingly has been increasingly invoked in recent years and is now more on the radar, see, e.g., Jane Shay Wald, "Failure to Function" When That Catchy Slogan You♥Is Not a Mark At All, Intellectual Property Law Section of California Lawyers Association New Matter Summer 2021, Vol. 46, Number 2, and Jane Shay Wald, "F-Word TM Ruling Highlights Key Defect of Salacious Terms," Law 360 (August 30, 2022). The Board explained that many designations fail to function because of their ubiquity alone, citing In D.C. One Wholesaler, Inc. v. Chien, 120 USPQ 2d 1710, 1713 (TTAB 2016) the Board denied registration to "I ♥ DC" on the Supplemental Register because "the marketplace is awash in products that display the term." Other terms fail to function because they are "inherently incapable of functioning as trademarks to identify and distinguish the source of the products in connection with which they are used,'" citing In re Eagle Crest, 96 USPQ 2d 1227 (TTAB 2010) affirming refusal to register ONCE A MARINE, ALWAYS A MARINE for clothing because it would be perceived as an informational slogan "'to express support, admiration or affiliation with the Marines.'" Other examples of this included WATCH THAT CHILD on bumper stickers of trucks, In re Tilcon Warren, Inc., 221 USPQ 86, 88 (1984), and GUARANTEED STARTING for automobile service stations, Standard Oil v 125 USPQ 227, 229 (CCPA 1960), and INVESTING IN AMERICAN JOBS, In re Wal-Mart Stores, Inc., 129 USPQ 2d...