Ninth Circuit Says District Courts Can Cancel Trademark Applications for Lack of Bona Fide Intent to Use

On April 1, the U.S. Courtroom of Appeals for the Ninth Circuit issued a ruling in BBK Tobacco & Foods LLP v. Central Coast Agriculture, Inc. affirming a decrease courtroom’s ruling that canceled trademark purposes pending on the U.S. Patent and Trademark Workplace (USPTO). The Ninth Circuit panel majority decided that the district courtroom had statutory authority to invalidate a trademark software for no bona fide intent to make use of over a dissent authored by U.S. Circuit Decide Patrick Bumatay, who argued that district courts lacked the authority to cancel emblems earlier than registration by the USPTO.

BBK Tobacco sued Central Coast Agriculture (CCA) within the District of Arizona alleging that CCA’s “Uncooked Backyard” hashish product label infringed upon BBK Tobacco’s “RAW”-branded smoking merchandise. BBK Tobacco’s criticism additionally included a petition to cancel a number of CCA trademark purposes for a scarcity of bona fide intent to make use of the marks in commerce. Whereas the district courtroom entered abstract judgment in favor of CCA on the trademark infringement claims, the courtroom invalidated 4 of CCA’s trademark purposes.

Underlying Trademark Registration Permits Courts to Think about Proper to Register Software

The Ninth Circuit’s choice famous that it had not but addressed whether or not district courts have jurisdiction to cancel or alter trademark purposes pending on the company, or if a scarcity of bona fide intent to make use of the mark was a sound foundation for such an order. Decoding 15 U.S.C. § 1119, which governs the facility of courts over trademark registration, the Ninth Circuit majority answered each of those questions within the affirmative, main it to affirm the Arizona district courtroom’s invalidation of CCA’s pending trademark purposes challenged by BBK Tobacco.

The Ninth Circuit majority discovered that district courts derived such authority from the primary sentence of Part 1119, which gives that, “[i]n any motion involving a registered mark the courtroom could decide the precise to registration, order the cancellation of registrations… and in any other case rectify the register with respect to the registrations of any social gathering to the motion.” Underneath the bulk’s interpretation, the underlying registered marks asserted by BBK Tobacco permitted the district courtroom to think about challenges to CCA’s trademark purposes as a part of the courtroom’s authority to “decide the precise to registration” and “rectify the register.” The panel majority discovered that this in the end superior the curiosity of resolving all registration disputes in a single motion.

In assessing whether or not a scarcity of bona fide intent was a sound foundation to cancel a pending trademark software, the Ninth Circuit majority famous that three different circuit courts and the Trademark Trial and Attraction Board (TTAB) had every answered that query within the affirmative. Citing to language from a 1982 choice by the U.S. Courtroom of Customs and Patent Appeals (CCPA), the predecessor courtroom to the Federal Circuit, the Ninth Circuit agreed that an opposing social gathering is entitled to problem an applicant’s proper to trademark registration based mostly on any statutory floor for doing so.

Decide Bumatay: Congress Has Not Approved Courtroom Evaluate of Trademark Functions

Decide Bumatay’s dissent argued that the textual content, construction and context of the Lanham Act confirmed that federal courts haven’t any authority to intrude with the USPTO’s examination procedures on trademark purposes. Decide Bumatay famous that the Lanham Act, codified at Title 15 of U.S. Code, established unique authority on the USPTO to bear thorough examination procedures, with appeals to U.S. district courtroom solely out there as soon as a trademark applicant has exhausted its appeals on the TTAB.

Additional, Decide Bumatay contended that not one of the authorities granted to federal courts below Part 1119 conferred any proper to cancel trademark purposes. Every of those express authorities have been restricted to trademark registrations, not purposes, Decide Bumatay argued. Tracing a century’s value of case legislation on federal courts figuring out the “proper of registration,” the dissent famous that courts have decided this proper impartial of the adjudication of underlying trademark purposes earlier than different tribunals. Decide Bumatay additionally famous that the statutory provision that courts could “in any other case rectify the register” was vital because the time period “in any other case” indicated that the authority to rectify the register have to be learn in mild of the opposite authorities conferred by Part 1119. Thus, this language doesn’t grant broad authority to courts to police the register.

The Ninth Circuit panel majority addressed a number of the arguments raised on dissent by Decide Bumatay. The bulk discovered that Decide Bumatay cited a number of circumstances that referred to the “proper of registration” within the context of adjudicating an opposition to a trademark software. “[T]he try and separate the validity of an software from the validity of a registration ignores the definition of an software,” the panel majority held. Whereas the bulk opinion affirmed the district courtroom’s cancellation of CCA’s trademark purposes, in a separate memorandum the circuit courtroom reversed the grant of abstract judgment in favor of CCA on BBK Tobacco’s infringement claims, and affirmed the district courtroom’s dismissal of CCA’s problem to BBK Tobacco’s trademark registrations for alleged illegal use.

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