Petition to Director Denied

UNITED STATES PATENT AND TRADEMARK OFFICE

 

U. S.  APPLICATION SERIAL NUMBER:  76/289013     U. S.  REGISTRATION NUMBER:  2,743,792	*2743792*
CORRESPONDENCE ADDRESS:         Jennifer Lee Taylor      Morrison & Foerster LLP      425 Market Street      San Francisco CA 94105-2482	RETURN ADDRESS:   Commissioner for Trademarks P.O. Box 1451 Alexandria, VA 22313-1451
MARK:      BOMBAY KIDS   APPLICANT/REGISTRANT:      OTTO INTERNATIONAL (USA), LLC	ISSUE/MAILING DATE: January 28, 2015
CORRESPONDENT’S REFERENCE/DOCKET NO:       662026006000   CORRESPONDENT’S EMAIL ADDRESS:

 

PETITION TO DIRECTOR DENIED

 

Otto International (USA), LLC (petitioner) has petitioned the Director of the United States Patent and Trademark Office (Director) to reverse the decision of the Post Registration examiner refusing to accept petitioner’s claim of excusable nonuse, filed under 15 U.S.C. §1058, for the above identified registration.  The petition is denied, pursuant to 37 C.F.R. §§ 2.161 and 2.146. 

 

FACTS

 

The registration issued on July 29, 2003 for furniture and home accessories in Class 20; bedding in Class 24, and mail order, electronic catalog, and online retail stores featuring furniture, home accessories, and gifts in Class 35.  On January 29, 2010, petitioner’s predecessor-in-interest Bombay Brands, LLC (Bombay Brands) filed a Section 8 declaration of excusable nonuse (Section 8 declaration) under Trademark Act §1058.  In its Section 8 declaration, Bombay Brands stated that it had acquired the trademark from BBA Holdings, Inc., a subsidiary of The Bombay Company, Inc., which filed a voluntary petition for reorganization under Chapter 11 in bankruptcy court on September 20, 2007. 

 

Bombay Brands also stated in the Section 8 declaration that it had selected Otto International USA, LLC, the petitioner and current owner of the registration, “as its anchor licensee for the BOMBAY brand of products.”  Bombay Brands further stated that it had “been in negotiations with Otto International to launch an e-commerce website featuring the BOMBAY KIDS trademark.  Bombay Brands anticipates that Otto International will begin website design and programming shortly, with the initial launch of the website to occur with the 2010 calendar year.  Bombay Brands is also actively identifying and soliciting other ancillary vendors for the website. Through the e-commerce website identified above, Bombay Brands intends to resume use of the BOMBAY KIDS trademark within the next twelve months in connection with electronic retailing services via computer. Bombay Brands also anticipates resuming use of the BOMBAY KIDS mark in connection with mail-order catalog services within the next one to two years.”  (Section 8 declaration).  The Section 8 declaration was accepted by the Office on February 11, 2010. 

 

On July 22, 2013, petitioner filed a combined Section 8 declaration of excusable nonuse and a Section 9 application for renewal under Trademark Act §§ 1058 and 1059 (combined filing) covering all classes in the registration.  In the combined filing, petitioner stated that in December 2008 Bombay Brands granted it a license to use the BOMBAY trademark “in connection with the sale of certain household furnishings via the Internet and mail order.  Shortly thereafter, Otto commenced use of the BOMBAY trademark for such goods.[1]  However, due to the extremely challenging retail environment over the succeeding two years, Bombay Brands was not successful in licensing the BOMBAY trademarks for use in connection with retail store services and was not able to launch its own line of retail establishments.”  (Combined Filing).  Petitioner states that it acquired the BOMBAY trademarks on December 27, 2010 and, since then, “has been extremely busy trying to bring BOMBAY-branded products back to the market.” (Combined Filing). 

 

The special circumstance supporting nonuse of the mark with the goods and services in the registration is identified as “the need of the Bombay Company to file a voluntary petition for reorganization under Chapter 11 in September 2007.” (Combined Filing).

 

DISCUSSION

 

Where a mark in a registration has not been used, an inference arises that the owner of the registration intends to abandon the mark.  Therefore, to prevent the cancellation of the mark, the owner of the registration must negate that inference.  In addition to overcoming the inference of abandonment, the owner must demonstrate that special circumstances exist that excuse the failure to use the mark.  Ex parte Kelley-How-Thomson Co, 118 USPQ 40 (Comm’r Pats. 1958).  Sufficient facts must be set forth to demonstrate that nonuse is due to some special circumstance beyond a registrant’s control or “forced by outside causes.”  Ordinary changes in social or economic conditions do not excuse nonuse.  In fact, the Section 8 declaration was designed to clear the Register of marks which cease to be used as a result of such changes.  In re New England Mutual Life Ins. Co., 33 USPQ2d 1532 (Comm’r Pats. 1991); In re Parmalat S.p.A., 32 USPQ2d 1860 (Comm’r Pats. 1991); In re Moorman Manufacturing Co., 203 USPQ 712 (Comm’r Pats. 1979). 

 

In this case, the Director finds that petitioner has provided sufficient information to negate the inference that it intends to abandon the mark.  The absence of such an intention is apparent from petitioner securing a new licensee to manufacture furniture under the BOMBAY KIDS trademark, as well as the stated efforts of that licensee in promoting the BOMBAY furniture line.  In re Parmalat, supra; In re Moorman, supra.

 

However, petitioner has not established that nonuse of the mark is due to special circumstances beyond its control.  Indeed, the facts of record are in the nature of activities and conditions tied to the normal ebb and flow of business cycles, including reorganizations due to bankruptcy.  Here petitioner recites the 2007 bankruptcy of its predecessor-in-interest as the special circumstance beyond its control that should now excuse its nonuse.  

Petitioner is correct that temporary forced withdrawal from the market due to external causes, such as bankruptcy, can excuse nonuse of a mark.  However, as soon as the external cause has passed, use must resume within a reasonable time.  See J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition §17:16 (4^th ed. 2014). 

 

In this case, Bombay Brand’s Section 8 declaration was accepted because the Office concluded that the recited facts detailing the circumstances surrounding the company’s bankruptcy excused nonuse.  The Section 8 declaration also detailed the approximate date when use of the mark was expected to resume with services covered by the registration.  The declaration also identified petitioner as its “anchor licensee” for the trademark, and described a plan for resuming use of the mark with goods.  (Section 8 declaration).  However, petitioner apparently did not begin using the BOMBAY KIDS mark as stated in Bombay Brand’s Section 8 declaration.  Petitioner instead seeks to rely on Bombay Company’s 2007 bankruptcy to excuse its own ongoing nonuse of the mark--more than six years later.

 

The facts of record support that petitioner’s nonuse is due to the normal ebb and flow of the economy and the home furnishing industry specifically.  Petitioner referred to it as “the extremely challenging retail environment.” (Combined filing).  The loll in demand for the goods, business issues related to the negotiation of licensees, and the reorganization and dissolution of business entities are neither unusual nor unique.  The purpose of the requirement for an affidavit or declaration is to eliminate registrations of marks that are in nonuse due to ordinary changes in social or economic conditions.   See In re Conusa Corp., 32 USPQ2d 1857 (Comm'r Pats. 1993); In re Parmalat S.p.A., 32 USPQ2d 1860 (Comm’r Pats. 1991); Ex parte Astra Pharm. Prod., Inc., 118 USPQ 368 (Comm’r Pats. 1958); Ex parte Denver Chem. Mfg. Co., 118 USPQ 106 (Comm’r Pats. 1958). 

 

In light of facts demonstrating that petitioner’s nonuse of the mark is due to normal business conditions, that petitioner did not intend to abandon the mark does not excuse its ongoing nonuse.  Petitioner’s declaration of nonuse is not accepted.

 

DECISION

 

The petition is denied.  The registration will be cancelled.

 

/Sharon R. Marsh/

 

Sharon R. Marsh

Deputy Commissioner

  for Trademark Examination Policy

 

 

SRM:MGP

 

For general and other useful information about trademarks, you are encouraged to visit the USPTO web site at http://www.gov.uspto.report/main/trademarks.htm.