The Law Journal of the International Trademark Association

Transcription

1 The Law Journal of the International Trademark Association Embracing Marketplace Realities: Rediscovering Section 18 of the Lanham Act on the Twentieth Anniversary of Its Revival Timothy A. Lemper and Linda K. McLeod Twenty Years of Rogers v. Grimaldi: Balancing the Lanham Act with the First Amendment Rights of Creators of Artistic Works David M. Kelly and Lynn M. Jordan Family Feud: The Tension Between Family Names and Trademarks Christopher P. Bussert The Effect of Consumer Surveys and Actual Confusion Evidence in Trademark Litigation: An Empirical Assessment Dan Sarel and Howard Marmorstein Standing and Joinder Considerations in Trademark Litigation and Licenses Kim J. Landsman, Daniel C. Glazer, and Irene C. Treloar Amicus Brief of the International Trademark Association in Chloé v. Queen Bee of Beverly Hills, LLC Amicus Brief of the International Trademark Association in Levi Strauss & Co. v. Abercrombie & Fitch Trading Co. Vol. 99 November-December, 2009 No. 6

2 EMBRACING MARKETPLACE REALITIES: REDISCOVERING SECTION 18 OF THE LANHAM ACT ON THE TWENTIETH ANNIVERSARY OF ITS REVIVAL By Timothy A. Lemper and Linda K. McLeod I. INTRODUCTION There is a significant and enduring divide between current trademark law and current practice. A provision in the law Section 18 of the Lanham Act 1 allows the U.S. Patent and Trademark Office ( PTO ) to modify, limit, restrict, or rectify U.S. trademark applications and registrations for marks on the principal register of the PTO, in whole or in part, to reflect how the marks are actually being used in the marketplace. When created, the provision marked the first time the U.S. Congress had given the PTO such broad power over U.S. trademark applications and registrations on the principal register. When amended in 1988, the provision was hailed in Congress as a significant step toward bringing the principal register in line with real-world trademark use. 2 Its proponents praised the amendment for increasing the PTO s ability to resolve registration disputes, restrict overbroad applications and registrations on the principal register, combat the overprotection of marks, promote registration of a greater number The authors wish to thank Rany Simms, a former Administrative Trademark Judge of the Trademark Trial and Appeal Board, for his constructive comments on earlier drafts of this article. Clinical Associate Professor of Business Law, Indiana Univ.; former intellectual property litigator at Finnegan, Henderson, Farabow, Garrett & Dunner LLP. Partner, Finnegan, Henderson, Farabow, Garrett & Dunner LLP; former Administrative Trademark Judge and Interlocutory Attorney of the Trademark Trial and Appeal Board. 1. Section 1068 of the U.S. Trademark (Lanham) Act of 1946, 15 U.S.C. 1068, as amended by the Trademark Law Revision Act of 1988, Pub. L. No , Title I, 118, 102 Stat (Nov. 16, 1988). 2. See Cong. Rec., S (Nov. 19, 1987); accord 1 Thomas McCarthy, McCarthy on Trademarks and Unfair Competition, 5:9 (4th ed. 2008) [hereinafter McCarthy] ( The legislative history of the 1988 Act indicates that the overall purpose of the TLRA was to update the 1946 Lanham Act to bring the law into accord with modern realities of the worldwide marketplace. ). Section 18 does not apply to the supplemental register. 15 U.S.C Vol. 99 TMR 1299

3 1300 Vol. 99 TMR of marks on the principal register, and produce a principal register that reflects the realities of the modern marketplace. In practice, however, Section 18 has been largely ignored or forgotten since its much-lauded amendment in Only a handful of decisions have discussed it, and a scarce few have actually applied it. It is seldom used by litigants, is even less frequently applied by the PTO, and is essentially overlooked by scholars. There is scant mention of it in academic or professional publications. Its impact on the principal register has been minimal, and its expected benefits have so far failed to materialize. By all accounts, it is one of the most underutilized provisions in U.S. trademark law. This article marks the 20th anniversary 3 of the amendment to Section 18 by exploring the evolution, impact, and current status of the statute in an attempt to increase the awareness and understanding of Section 18. In Parts II and III, we discuss the evolution of the PTO s authority to manage the principal register, including the creation of Section 18 in the Lanham Act, its amendment in the Trademark Law Revision Act of 1988, and the PTO s implementation of that amendment. Next, we analyze the jurisprudence on amended Section 18, including the substantive development of the statute (Part IV), the requirements for pleading and proving claims for relief under the statute (Part V), and the impact of the statute over the last two decades (Part VI). We conclude in Part VII by exploring the possible explanations for the underutilization of Section 18, with an eye toward understanding and overcoming the barriers to full realization of Section 18 s potential. II. THE EVOLUTION OF THE PTO S POWER TO REGULATE THE FEDERAL TRADEMARK REGISTER To understand the significance of the 1988 amendment to Section 18, it is helpful to understand the evolution of the PTO s power to manage the principal register by canceling, restricting, or modifying trademark applications and registrations for marks on the principal register. 3. The amendment to Section 18 was enacted on November 16, 1988, but did not go into effect until November 16, See Trademark Law Revision Act of 1988, 102 Stat (1988), codified at 15 U.S.C (1988).

4 Vol. 99 TMR 1301 A. The Creation of Section 18: The Trademark Act of 1946 In 1946, Congress s efforts to reform federal trademark law culminated in the passage of the U.S. Trademark Act of 1946, 4 commonly known as the Lanham Act. 5 One of the primary goals of the Lanham Act was to create a principal trademark register that reflected the realities of the marketplace and made registration on the principal register as consistent with actual use of a mark as possible. 6 It contained several provisions that expanded the PTO s authority to accomplish this goal, including authorizing the PTO to refuse, cancel, or restrict registrations on the principal register in inter partes proceedings under Section 18. Section 18 stated: In [inter partes] proceedings the Commissioner may refuse to register the opposed mark, may cancel or restrict the registration of a registered mark, or may refuse to register any or all of several interfering marks, or may register the mark or marks for the person or persons entitled thereto, as the rights of the parties hereunder may be established in the proceedings On its face, Section 18 s language authorizing the PTO to cancel or restrict registrations on the principal register appeared to give the PTO the same authority to cancel registrations in whole or in part that courts had been given in the 1905 Act. 8 Both 4. Pub. L. No , 60 Stat. 427 (1946), codified at 15 U.S.C et seq. The Act was signed into law on July 5, 1946, and took effect on July 5, See Lanham Act 46(a) note, 15 U.S.C The Act is named for Congressman Frederick Garland Fritz Lanham, who introduced the legislation in the U.S. Congress and spearheaded the effort to pass it. See S. Rep. No. 1333, 79th Cong., 2d Sess. 6 (1946). 6. See Bongrain Int l Corp. v. Delice de France, Inc., 811 F.2d 1479, 1485 (Fed. Cir. 1987) ( One of the policies sought to be implemented by the Act was to encourage the presence on the register of trademarks of as many as possible of the marks in actual use.... ); Wells Cargo Inc. v. Wells Cargo, Inc., 606 F.2d 961, 203 U.S.P.Q. 564 (C.C.P.A. 1979) (recognizing the policy favoring a Principal Register reflecting the realities of the marketplace ); In re E.I. DuPont de Nemours & Co., 476 F.2d 1357, 1364, 177 U.S.P.Q. 563 (C.C.P.A. 1973) ( Although a naked right to use cannot always result in registration, the Act does intend... that registration and use be coincident so far as possible. ); see also 3 McCarthy, supra note 2, 19:2 ( The goal of the Lanham Act is that the right to obtain registration of a mark follows as nearly as possible the right to use that mark. ) (citation omitted). 7. Section 18 of the Lanham Act, 60 Stat. 434, 15 U.S.C (1946) (emphasis added). 8. Section 22 of the 1905 Act gave courts authority to cancel registrations in whole or in part (e.g., by deleting some but not all goods or services). Section 22 of Act of Feb. 20, 1905, 33 Stat. 729, 15 U.S.C. 102 (emphasis added). Like its predecessors, the Lanham Act continued to give courts the authority to order the cancellation of registrations in whole or

5 1302 Vol. 99 TMR statutes appeared to authorize the PTO and the courts, respectively, to limit the goods and services, channels of trade, classes of consumers, or other aspects of existing registrations. However, the legislative intent behind the phrase cancel or restrict in Section 18 was never clear. The original version of the bill authorized the PTO only to cancel registrations. 9 The phrase or restrict was inserted into a substitute version of the bill in 1941, but the legislative history is conspicuously silent on why it was added or what purpose it was intended to serve. 10 B. The Life and Death of Section 18: For more than 30 years, the PTO used Section 18 to modify registrations on the principal register to reflect more accurately how registered marks were actually being used in the marketplace. It interpreted Section 18 as authorizing it to cancel registrations in whole or in part (e.g., by deleting goods or services) in cancellation actions 11 and to restrict registrations on the principal register (e.g., by limiting the territory, manner of use, or goods or services) in interference proceedings. 12 However, the lack of guidance on Congress s intent in adopting the phrase cancel or restrict ultimately posed a serious hindrance to Section 18 s application. In 1978, the U.S. Court of Customs and Patent Appeals rejected the PTO s long-standing use of Section In Selfway v. in part... and to otherwise rectify the register with respect to the registrations of any party to the action. Section 37 of the Lanham Act, 15 U.S.C As originally drafted, Section 18 read: The Commissioner may refuse to register the opposed mark, may cancel the registration of a registered mark, or may refuse to register both of two interfering marks, or may register the trade-mark for the person entitled thereto. Hearings on H.R before the Subcommittee on Trademarks of the House Committee on Patents, 76th Cong., 1st Sess., 112 (1939). 10. See Selfway Inc. v. Travelers Petroleum, Inc., 579 F.2d 75, 83 & n.4 (C.C.P.A. 1978) (Miller, J., dissenting) (citing H.R. 5461, 77th Cong., 1st Sess. (1941); Hearings on H.R. 102, H.R. 5461, and S. 895 before the Subcommittee on Trade-Marks of the House Committee on Patents, 77th Cong., 1st Sess (1941)). 11. See, e.g., U.S. Steel Corp. v. Nat l Copper & Smelting Co., 131 U.S.P.Q. 397, 398 (T.T.A.B. 1961) (granting partial cancellation of a registration for certain abandoned goods and restricting the goods in the registration). 12. See Stanspec Co. v. Am. Chain & Cable Co., 531 F.2d 563, 566 n.9 (C.C.P.A. 1976). 13. The U.S. Court of Customs and Patent Appeals ( CCPA ) was the reviewing court for decisions by the Trademark Trial and Appeal Board ( TTAB or the Board ), an administrative tribunal in the U.S. Patent Office created in See Pub. L. No , Aug. 8, 1958, 72 Stat. 540, codified at 15 U.S.C (1958). In 1982, the CCPA merged with the appellate division of the U.S. Court of Claims to become the U.S. Court of Appeals for the Federal Circuit. See Pub. L. No , 96 Stat. 25 (1982), codified at 28 U.S.C.

6 Vol. 99 TMR 1303 Travelers Petroleum, 14 the Court held that Section 18 authorized the PTO to cancel registrations on the principal register only in whole (not in part) and to restrict such registrations only in concurrent-use proceedings. 15 In effect, the decision permitted geographic restrictions only in concurrent-use proceedings, 16 and it precluded all other forms of partial cancellation or restriction in inter partes proceedings. 17 The Court thus severely limited the PTO s ability to modify applications and registrations for marks on the principal register to reflect real-world trademark use. C. Revival of Marketplace Realities: The Trademark Law Revision Act of 1988 As the 40th anniversary of the Lanham Act approached, calls arose for a comprehensive revision of U.S. trademark law and an overhaul of the U.S. trademark registration system, driven in part by dissatisfaction with the Selfway decision. On September 28, 1984, the U.S. Trademark Association (USTA, the predecessor to the International Trademark Association (INTA)) launched an effort to review and recommend changes to U.S. trademark law. 18 It created a Trademark Review Commission with six different 1491; U.S. Court of Appeals for the Federal Circuit website, (last accessed Aug. 29, 2009) F.2d 75 (C.C.P.A. 1978). 15. Id. at The scope of the Board s authority in concurrent-use proceedings under Section 2(d) has similarly been limited in application. On its face, Section 2(d) gives the PTO authority to issue registrations with such conditions and limitations on the mode or place of use of the marks or the goods in connection with which such marks are used as will avoid a likelihood of confusion. 15 U.S.C. 1052(d). But Section 2(d) has been interpreted to apply only to concurrent-use proceedings, and to authorize primarily geographic restrictions. Current PTO procedures permit parties to seek geographic and mode of use restrictions in concurrent-use proceedings, but limit mode of use restrictions to very rare instances where the restriction cannot be incorporated into the drawing of the mark or the description of goods and services. TBMP (d). Mode of use restrictions that can be incorporated into the drawing of the mark or the identification of goods and services must be sought under Section 18 in an opposition or cancellation proceeding. Id (d)(3). As a result, mode of use restrictions have been virtually eliminated under Section 2(d), and geographic restrictions have become almost the exclusive remedy in concurrent-use proceedings. See Tamarkin Co. v. Seaway Food Town Inc., 34 U.S.P.Q.2d 1587 (T.T.A.B. Mar. 21, 1995). 17. See 3 McCarthy, supra note 2, 20:44, at Section 37 of the Lanham Act, which allows courts to cancel registrations in whole or in part, was held not to apply to PTO cancellation proceedings. Id. 18. U.S. Trademark Ass n Trademark Review Commission Report and Recommendations to USTA President and Board of Directors, 77 TMR 375, 379 (1987) (hereafter USTA Report ).

7 1304 Vol. 99 TMR committees, each responsible for reviewing different aspects of U.S. trademark law. 19 The Housekeeping Committee was tasked with reviewing and considering changes to Section 18 of the Lanham Act, among other topics. 20 After more than two years of review, the Commission submitted its report to the USTA s leadership on August 21, It concluded that Section 18, as drafted and applied, deprived the TTAB of the flexibility it needed to determine trademark rights based on actual marketplace realities rather than on vague and overbroad descriptions of goods and services. It explained: Current law puts the Board in a straightjacket, bound by the goods and services descriptions in the relevant applications and registrations. For example, it must assume that men s shirts covers all types of shirts sold through all conceivable trade channels, even though they may be made of heavy duty wool and sold only in certain regions in mining company outlets as protective clothing for coal miners. Not surprisingly, the Board often decides the likelihood of confusion issue on hypothetical, not real world, grounds. The Commission believes that perpetuating this artificial environment is undesirable. Actual product and trade channel differences are highly relevant and often determinative in court proceedings. The Board should be able to consider them as well, and to modify a description if it would avoid likelihood of confusion. The Board could thus delete men s shirts and substitute protective woolen shirts for coal miners, while deciding that confusion is unlikely with respect to a similar mark used on tee shirts sold at rock concerts. 22 The Commission recommended amending Section 18 to give the TTAB broader authority in inter partes proceedings to restrict or modify applications and registrations for marks on the principal register to reflect actual marketplace realities. 23 The proposed amendment effectively overruled Selfway by adding language to Section 18 specifically authorizing the PTO to 19. USTA Report Id. at Id. at Id. at 452. The Commission drew the shirts for coal miners example from Daniel L. Skoler, Trademark Identification Much Ado About Something?, 76 TMR 224, (1986). 23. USTA Report 453.

8 Vol. 99 TMR 1305 partially cancel registrations on the principal register, to limit the description of goods and services in applications and registrations for marks on the principal register, and to otherwise restrict such registrations to reflect the manner in which a mark was actually being used in the marketplace. USTA s leaders adopted the Commission s recommendations in their entirety on September 13, The USTA Report became the basis for the draft legislation ultimately enacted as the Trademark Law Revision Act of Both the House and Senate bills proposed amending Section 18 to incorporate language virtually identical to the USTA proposal. The House bill stated: In such proceedings the Commissioner may refuse to register the opposed mark, may cancel the registration, in whole or in part, may modify the application or registration by limiting the goods or services specified therein, may otherwise restrict or rectify with respect to the register the registration of a registered mark, or may refuse to register any or all of several interfering marks, or may register the mark or marks for the person or persons entitled thereto, as the rights of the parties hereunder may be established in the proceedings The Senate Judiciary Committee Report explained the amendment was intended to allow the TTAB to make likelihood-ofconfusion determinations, and thus the decision to register marks on the principal register, based on marketplace realities rather than on hypothetical facts. 27 It explained that certain product identifications, although accurate and acceptable for purposes of registration, may appear on paper to give rise to likelihood of confusion, but would not give rise to confusion in the marketplace due to distinctions between the actual products and their channels of trade Id. at H. Rep. No , 100th Cong., 2d Sess. at 2 (Oct. 3, 1988) ( Both bills were based on recommendations of the United States Trademark Association, which, through its Trademark Review Commission, reviewed the status of the current law, and concluded that Congress should revise and update that law. ). 26. Id. at S. Rep. No (Sept. 15, 1988); see also Cong. Rec., S (Nov. 19, 1987). 28. S. Rep. No (Sept. 15, 1988).

9 1306 Vol. 99 TMR The Trademark Law Revision Act of 1988 ( TLRA ) 29 was signed into law on November 16, 1988, and went into effect one year later on November 16, Years later, the TTAB emphasized the significance of the TLRA s amendment to Section 18: Before the amendments to Section 18, the Board was constrained to decide cases presenting the issue of likelihood of confusion based upon the recitation of goods or services that appeared in a defendant s application or registration and a plaintiff s pleaded registration..., rather than on the evidence adduced at trial as to the actual goods or services or the channels of trade of those goods or services. The amendments to Section 18 were intended to give the Board greater ability to decide cases on the basis of the evidence of actual use. 30 The TLRA amendment to Section 18 was intended to give the PTO flexibility to determine trademark rights based on marketplace realities, rather than on vague and overbroad descriptions of goods and services in applications and registrations for marks on the principal register. 31 By enacting the revised Section 18, Congress hoped to create a principal register that more closely reflects real-world trademark use and that allows registration of a greater and more diverse number of marks. III. THE PTO S IMPLEMENTATION OF THE TLRA S AMENDMENTS TO SECTION 18 As a result of the TLRA, the PTO implemented changes to two rules governing practice in trademark cases before the PTO. 32 The first change was to Trademark Rule 2.111(b), which pertains to the filing of petitions for cancellation, to indicate the availability of petitions for partial cancellation of a registration on the principal register by restricting the identification of goods or services. 33 The second change was to Trademark Rule 2.133, which governs the 29. Pub. L. No , 102 Stat (Nov. 16, 1988). The amendment to Section 18 of the Lanham Act was contained in Section 118 of the TLRA, and later codified at 15 U.S.C (1988). 30. Eurostar Inc. v. Euro-Star Reitmoden GmbH & Co., Cancellation No. 21,589, 34 U.S.P.Q.2d 1266, 1268, 1994 TTAB LEXIS 29 (T.T.A.B. Dec. 22, 1994). 31. See Space Base Inc. v. Stadis Corp., 17 U.S.P.Q.2d 1216, 1220, 1990 TTAB LEXIS 50 (T.T.A.B. Sept. 11, 1990). 32. See 37 C.F.R. Part 2 ( Rules of Practice in Trademark Cases ) C.F.R (b) (Nov. 16, 1989).

10 Vol. 99 TMR 1307 amendment of applications and registrations for marks on the principal register in inter partes proceedings, to reflect the Board s expanded authority in inter partes cases under amended Section As amended, Trademark Rule has four parts. Section (a) requires a party seeking to amend an application or registration in an inter partes proceeding to obtain the opposing party s consent or to file a motion with the Board. 35 Section (b) allows a party time to request that its application or registration be amended to conform to the Board s findings where the Board finds that the party is not entitled to a registration without a restriction. 36 Section (c) makes geographic restrictions available only in concurrent-use proceedings. 37 Finally, Section (d) requires a party seeking to restrict a registration on the principal register to file a counterclaim to cancel the registration in whole or in part (except where the registration is the subject of another proceeding between the parties). 38 The rules adopted by the PTO thus preclude the Board from granting relief under Section 18 sua sponte. IV. THE EARLY EVOLUTION OF AMENDED SECTION 18 IN TTAB DECISIONS: The evolution of amended Section 18 in the Board s jurisprudence has been shaped by four pivotal cases. Three cases decided within five years after the TLRA was enacted Microsoft C.F.R (Nov. 16, 1989). 35. Trademark Rule 2.133(a) states: An application involved in a proceeding may not be amended in substance nor may a registration be amended or disclaimed in part, except with the consent of the other party or parties and the approval of the [Board], or except upon motion. 36. Trademark Rule 2.133(b) states: If, in an inter partes proceeding, the [Board] finds that a party... is not entitled to registration in the absence of a specified restriction to the involved application or registration, the [Board] will allow the party time in which to file a request that the application or registration be amended to conform to the findings of the [Board], failing which judgment will be entered against the party. 37. Trademark Rule 2.133(c) states: Geographic limitations will be considered and determined by the [Board] only in the context of a concurrent use registration proceeding. 38. Trademark Rule 2.133(d) states: A plaintiff s pleaded registration will not be restricted in the absence of a counterclaim to cancel the registration in whole or in part, except that a counterclaim need not be filed if the registration is the subject of another proceeding between the same parties or anyone in privity therewith.

11 1308 Vol. 99 TMR v. Qantel; Alberto-Culver v. FDC Wholesale; and Procter & Gamble v. Sentry Chemical interpreted and applied the statute in problematic ways. A fourth case Eurostar v. Euro-Star Reitmoden overruled the central holdings of those earlier cases and established the Board s current approach to Section The Board s first decision interpreting amended Section 18 came on July 5, 1990, in Microsoft v. Qantel Business Systems. 40 Microsoft applied to register the mark MICROSOFT QUICKBASIC for computer programs for computer program development for microcomputers and instructional manuals, sold as a unit. 41 The PTO refused Microsoft s application on the ground that its mark, as applied to the goods listed in its application, was likely to cause confusion with Qantel s mark QICBASIC, which had previously been registered on the principal register for computer programs. 42 Microsoft filed a petition to cancel Qantel s registration, and then moved to amend its petition to allege that the parties marks were used for different goods distributed through different channels of trade. The Board construed Microsoft s allegations as a claim that there would be no likelihood of confusion between the parties marks if the Board, acting under Section 18, modified the description of goods and trade channels in Qantel s registration to reflect Qantel s actual use of its mark in the marketplace. 43 The Board denied Microsoft s motion. It held that Section 18 was merely a remedy provision, and that a request for relief under Section 18 must therefore be tied to a statutory ground for cancellation or opposition (such as nonuse or abandonment). 44 The Board concluded that Microsoft s request to restrict Qantel s registration failed to state a claim under Section 18, because it was not tied to a separate statutory ground for partially canceling Qantel s registration. Just four days after its decision in Qantel, the Board issued its second decision interpreting amended Section 18 in Alberto-Culver 39. Microsoft Corp. v. Qantel Bus. Sys. Inc., 16 U.S.P.Q.2d 1732, 1990 TTAB LEXIS 33 (T.T.A.B. July 5, 1990); Alberto-Culver Co. v. F.D.C. Wholesale Corp., 16 U.S.P.Q.2d 1597, 1990 TTAB LEXIS 30 (T.T.A.B. July 9, 1990); Procter & Gamble Co. v. Sentry Chem. Co., 22 U.S.P.Q.2d 1589, 1992 TTAB LEXIS 3 (T.T.A.B. Feb. 28, 1992); Eurostar Inc. v. Euro-Star Reitmoden GmbH, 34 U.S.P.Q.2d 1266, 1994 TTAB LEXIS 29 (T.T.A.B. Dec. 22, 1994) U.S.P.Q.2d 1732, 1990 TTAB LEXIS 33 (T.T.A.B. July 5, 1990). 41. Application Serial No. 74/029,346 (filed Feb. 13, 1990). 42. Registration No (issued May 13, 1986). 43. Microsoft, 16 U.S.P.Q.2d at Id. See also 15 U.S.C (listing grounds for cancellation of a registration).

12 Vol. 99 TMR 1309 v. FDC Wholesale. 45 FDC had applied to register the mark FDC for baby shampoo, baby powder, skin cleanser, skin cream, liquid hand soap, bubble bath, suntan lotion, baby oil, skin lotion, and petroleum jelly, among other goods. 46 Alberto-Culver opposed FDC s application on the ground that FDC s mark, as applied to those goods, was likely to cause confusion with Alberto-Culver s mark FDS, which had twice previously been registered on the principal register for deodorants and personal deodorant, personal deodorant towelette, and bath oil preparations. 47 In response, FDC filed a counterclaim under Section 18 to partially cancel Alberto-Culver s registrations by restricting the term personal deodorant to the more narrow term feminine deodorant spray, and by deleting the remaining goods from the registrations. 48 FDC alleged that Alberto-Culver had abandoned the use of its mark for all goods except feminine deodorant spray, and that there was no likelihood of confusion between the parties marks as they were actually used in the marketplace. The Board sustained Alberto-Culver s opposition. It found that even if Alberto-Culver s registrations were restricted to feminine deodorant spray, there would still be a likelihood of confusion between the parties marks. 49 The Board concluded, however, that it could still restrict Alberto-Culver s registration under Section 18, even though it would not prevent a likelihood of confusion, if it was necessary to represent fairly the nature of registrant s goods vis-à-vis the goods of others in the marketplace. 50 The Board acknowledged that the TLRA s legislative history referred to situations in which a restriction or modification of a registration would avoid a finding of a likelihood of confusion with another s mark, but concluded that Section 18 s language was broad enough to allow it to restrict or modify a registration even where doing so would not avoid a finding of a likelihood of confusion. 51 More importantly, the Board concluded that such an exercise of authority would amount to recognition of real world trademark use of the sort alluded to in the Trademark Review Commission s U.S.P.Q.2d 1597, 1990 TTAB LEXIS 30 (T.T.A.B. July 9, 1990). 46. U.S. Application Serial No. 73/309,303 (filed May 8, 1981). 47. Alberto-Culver, 16 U.S.P.Q.2d at 1598 & nn.1-4 (citing U.S. Registration Nos. 831,204 and 863,268). 48. Id. 49. Id. at 1602, Id. at Id. at 1604.

13 1310 Vol. 99 TMR report and recommendations, which were the basis for the 1988 amendment to Section As a result of its holding, the Board granted FDC s request to delete the goods for which use of the mark had been abandoned from Alberto-Culver s registrations, but denied FDC s request to restrict personal deodorant to feminine deodorant spray, because it concluded that personal deodorant fairly described, and was thus not an overbroad description of, the goods on which Alberto-Culver used its mark. 53 In 1992, less than two years after its decisions in Qantel and Alberto-Culver, the Board expanded on its holdings in those cases in Procter & Gamble v. Sentry Chemical. 54 Sentry applied to register the mark CAPTAIN CLEAN on the principal register for all purpose detergent. 55 Procter & Gamble ( P&G ) opposed Sentry s application on the ground that its mark, as applied to those goods, was likely to cause confusion with P&G s mark MR. CLEAN, which had previously been registered on the principal register for sudsing cleaner, cleanser, and detergent. 56 In the alternative, P&G requested that Sentry s application be restricted under Section 18 by limiting the description of goods to all purpose detergent sold in industrial and institutional trade channels, in order to reflect the trade channels in which Sentry actually used its mark. 57 In response, Sentry filed a counterclaim to partially cancel P&G s registration under Section 18 by restricting the description of P&G s goods to sudsing cleaner, cleanser, and detergent sold in grocery stores, discount stores, and club stores, 58 to reflect the trade channels in which P&G was actually using its mark at the time P&G filed its application to register the mark. 59 Both parties moved for summary judgment. The Board began its analysis by expanding on its holding in Qantel that a claim for relief under Section 18 must be tied to a separate statutory ground for cancellation or opposition. It noted that where a party seeks to restrict an opponent s application or 52. Id. 53. Id. at U.S.P.Q.2d 1589, 1992 TTAB LEXIS 3 (T.T.A.B. Feb. 28, 1992). 55. U.S. Application Serial No. 73/779,915 (filed Feb. 10, 1989). 56. U.S. Registration No. 658,915 (issued Feb. 25, 1958). 57. Procter & Gamble, 22 U.S.P.Q.2d at 1590 & nn.1-2 (emphasis added). 58. Id. at 1591 (emphasis added). 59. Id. By the time Sentry filed its counterclaim, however, P&G had expanded the use of its mark beyond grocery stores, discount stores, and club stores to include industrial and institutional trade channels. Id. at 1593.

14 Vol. 99 TMR 1311 registration under Section 18, the statutory ground for such relief will ordinarily be nonuse, i.e., that its opponent has not used its mark on the entire range of goods listed in its application or registration. 60 However, the Board explained that while nonuse may be a ground for canceling a registration on the principal register that is less than five years old, it is not included among the limited grounds for canceling a registration that is more than five years old. 61 This posed a serious obstacle to applicants who are seeking to assert claims of nonuse against registrations on the principal register that are more than five years old. To address this problem, the Board held that where a mark has been registered on the principal register for more than five years, a claim for nonuse could be premised on the ground of abandonment, 62 which is a ground for canceling a registration that is more than five years old. 63 The Board acknowledged that the Lanham Act defined a mark as being abandoned [w]hen its use has been discontinued with intent to resume such use 64 and that such a definition would seem to exclude claims of nonuse based on allegations that a mark has never been used. However, the Board noted that the U.S. Court of Appeals for the Federal Circuit had been unfazed by this anomaly of language when it found abandonment based on proof that a registrant had not commenced use of its mark and had no intent to commence use. 65 Relying on this decision, the Board reformulated the law on abandonment as follows: We specifically reiterate here that the ground of abandonment is properly established by a party who pleads and proves that the owner of a registration (including a registration in existence for more than five years) is not using (or has never used) its mark on certain goods that are within the scope of the goods recited in the certificate of registration; that the registrant has no intention to resume (or commence) use on 60. Id. at Id. at The Lanham Act limits the grounds for cancelling registrations that are more than five years old, but not registrations that are less than five years old. See 15 U.S.C. 1064(1) & (3). 62. Procter & Gamble, 22 U.S.P.Q.2d at 1592 (emphasis added) (citing Alberto-Culver and Imperial Tobacco Ltd. v. Philip Morris Inc., 14 U.S.P.Q.2d 1390 (Fed. Cir. 1990)). 63. See 15 U.S.C. 1064(3). 64. Procter & Gamble, 22 U.S.P.Q.2d at 1592 (emphases added) (quoting 15 U.S.C. 1127). 65. Id. (quoting Imperial Tobacco, 14 U.S.P.Q.2d 1390).

15 1312 Vol. 99 TMR such goods; and that the restriction sought is a commercially significant one. 66 The Board thus created the legal fiction of abandonment through nonuse by allowing a party to claim abandonment where a registrant had failed to use its mark and had no intent to begin using its mark on or in connection with the goods or services in its registration. 67 Although this fiction effectively obliterated the distinction between abandonment and nonuse for older registrations, 68 the Board justified its decision on the ground that this approach would fulfill the purpose of the amendment to Section 18: to make registrations conform, as nearly as possible, to marketplace realities and to allow registrations on the [principal] register where the only bar to registration is the existence of a registration that overstates the extent of the registrant s use of its mark in commerce. 69 The requirement of pleading a separate statutory ground for relief under Section 18, and the legal fiction of abandonment through nonuse that it spawned, would continue to unnecessarily complicate the application of Section 18 for two years, until as discussed below the Board overturned this aspect of the holdings in Qantel and in Procter & Gamble in its 1994 decision in Eurostar. The Board in Procter & Gamble also elaborated on its holding in Alberto-Culver that a registration (or application) for a mark on the principal register could be restricted or modified under Section 18 if necessary to fairly represent the party s goods and services, even if it would not avoid finding a likelihood of confusion in an inter partes proceeding. The Board refined and expanded on this requirement by holding in Procter & Gamble that a proposed restriction or modification under Section 18 must be commercially significant. 70 A restriction or modification, the Board explained, is commercially significant if (1) the restriction or modification would avoid a finding of a likelihood of confusion in the inter partes proceeding, or (2) the application or registration so overstates the 66. Id. (emphases added). 67. Id. 68. See, e.g., Aries Sys. Corp. v. World Book Inc., 26 U.S.P.Q.2d 1926, n.11, 1993 TTAB LEXIS 7 (T.T.A.B. Mar. 1, 1993) (acknowledging that such a claim of abandonment is akin to a claim of non use ); Space Base Inc. v. Stadis Corp., 17 U.S.P.Q.2d 1216, 1220, 1990 TTAB LEXIS 50 (T.T.A.B. Sept. 11, 1990) (recognizing a claim of abandonment by reason of non-use of a mark). 69. Procter & Gamble, 22 U.S.P.Q.2d at Id.

16 Vol. 99 TMR 1313 party s goods or services or trade channels that fairness demands that it be restricted or modified. 71 The Board thus made clear that it would restrict or modify an application or registration under Section 18 if it was necessary to avoid a likelihood of confusion or to fairly represent the realities of the marketplace. As a result of its holdings in Procter & Gamble, the Board denied P&G s motion for summary judgment to restrict the trade channels in Sentry s application, finding a genuine issue of fact as to the commercial significance of the proposed restriction. 72 However, the Board granted P&G s motion for summary judgment on Sentry s counterclaim to restrict the trade channels in P&G s registration, finding no genuine issue of material fact that P&G s use of its mark was not limited to grocery, discount and club stores at the time Sentry filed its counterclaim (and thus that P&G had not abandoned use of its mark in other trade channels through nonuse). 73 Two years later in 1994, the Board reversed its prior holdings in Qantel and Procter & Gamble and adopted its current interpretation of Section 18 in Eurostar v. Euro-Star Reitmoden. 74 Eurostar had filed four applications to register the mark EUROSTAR on the principal register for casual and athletic footwear. 75 The PTO refused Eurostar s applications on the ground that the EUROSTAR mark, as applied to the goods listed in its four applications, were likely to cause confusion with the mark EURO-STAR that had been registered on the principal register by Euro-Star Reitmoden ( ESR ) for riding jackets, riding pants (breeches) and riding coats. 76 To overcome the refusals, Eurostar petitioned to partially cancel ESR s registration by restricting its trade channels to catalog mail-order sales and sales through retail establishments specializing in apparel, equipment and products for horses and for owners and/or riders of horses. 77 Eurostar argued that ESR had abandoned use of its mark in all other trade 71. Id. 72. Id. at Id. at In determining whether to restrict an application or registration for a mark on the principal register under Section 18, the Board concluded that it must look at the party s use of its mark at the time the restriction is requested and not at the time the party filed its application. Id U.S.P.Q.2d 1266, 1994 TTAB LEXIS 29 (T.T.A.B. Dec. 22, 1994). 75. U.S. Application No. 74/202,704; No. 74/202,705; No. 74/202,707; and No. 74/202,725 (all filed Sep. 12, 1991). 76. U.S. Registration No. 1,250,471 (issued Sept. 6, 1983). 77. Eurostar Inc. v. Euro-Star Reitmoden GmbH, 34 U.S.P.Q.2d 1266, 1267 (T.T.A.B. Dec. 22, 1994).

17 1314 Vol. 99 TMR channels through nonuse. ESR moved to dismiss Eurostar s claim. It argued that Section 18 does not authorize restrictions on trade channels, and that the amendment to Section 18 in the TLRA was never intended to make registrations for marks on the principal register vulnerable to attack because the registrants had not used their marks in every conceivable way and through every conceivable trade channel. 78 The Board began its analysis by overruling its prior holdings in Alberto-Culver and Procter & Gamble that it would entertain requests to restrict or modify applications or registrations under Section 18 even if granting such requests would not avoid a finding of a likelihood of confusion. 79 It found that these previous holdings had allowed litigants to request restrictions or modifications of dubious commercial significance for tactical reasons rather than substantive ones and had opened the door to wasteful and vexatious litigation. [E]very time an applicant is rejected by an examiner based on an existing registration, it can petition the Board to narrow a registration to the absolutely specific items and methods of sale that a registrant has made to date. Not only would this overwhelm the Board with petitions for partial cancellation, but it would make most registrations subject to challenge because there always will be some way to specifically describe exactly how a registrant is using its mark. Allowing this kind of issue to be tried forces registrants needlessly to spend time and money to defend their registrations and requires [the Board] to decide the breadth or scope of a description of goods or services in the abstract, unrelated to any determination of likelihood of confusion. 80 The Board concluded that by entertaining requests for restrictions even where they would not avoid a finding of a likelihood of confusion, it had been encouraging parties to assert such claims merely to harass opponents and to create pressure on applicants to adopt unworkably narrow identifications of goods and services. 81 To address these concerns in Eurostar, the Board held that a party seeking to restrict an application or registration under Section 18 must plead and prove that the proposed restriction will 78. Id. (citation omitted). 79. Id. at Id. (quoting ESR s reply brief). 81. Id. at The Board noted that the PTO s Trademark Manual of Examination Procedure ( TMEP ) cautioned examining attorneys against requiring unduly restrictive descriptions of goods and services in applications. Id. (citing TMEP (a) (1989)).

18 Vol. 99 TMR 1315 avoid a finding of a likelihood of confusion. 82 It reasoned that this requirement would eliminate frivolous or harassing claims and would allow the Board to devote its resources to cases where such relief would avoid a likelihood of confusion. 83 It argued Section 18 could also be used to restrict intent-to-use applications where the evidence of the applicant s intended use indicated that the identification of goods and services was overbroad and where the proposed restriction would avoid a finding of a likelihood of confusion with the opposing party s mark. 84 The Board then overruled its holding in Qantel and Procter & Gamble that requests for relief under Section 18 must be tied to a ground for cancellation or opposition, such as nonuse or abandonment. 85 It found that this holding had distracted from Section 18 s focus on avoiding a likelihood of confusion and had threatened the statute s usefulness in restricting registrations on the principal register that were more than five years old. 86 In a concurring opinion, Judge Rany Simms explained that the Board s creation of the legal fiction of abandonment through nonuse in Procter & Gamble had reduced this pleading requirement to an unnecessary formal legalism, because a party seeking to restrict an overbroad identification of goods and services would always be able to tie its request to a claim for either nonuse or abandonment though nonuse (for registrations more than five years old). 87 Judge Simms also noted that recognizing a claim for abandonment through nonuse was at odds with the TLRA, under which a mark could not be considered abandoned until it had actually been used for goods or services with a later discontinuance of use without intent to resume use. 88 He argued that requests for restrictions or modifications under Section 18 should instead be treated like requests for geographic restrictions in concurrent-use proceedings, which need not be tied to a statutory ground for opposition or cancellation Id. at The Board continued to follow its holding in prior decisions that the party must also plead and prove that the applicant or registrant is not using its mark on the goods and services, or in the channels of trade, sought to be excluded by the proposed restriction. Id. 83. Id.; see also id. at (Simms, J., concurring). 84. Id. at n Id. at Id. at 1271 & n Id. at & n Id. at Id. at 1275 & n.4 (citing Trademark Rule 2.99(d)(3)).

19 1316 Vol. 99 TMR To address these concerns, the Board held that a claim for a restriction or modification under Section 18 was an equitable remedy that need not be tied to a separate statutory ground for opposition or cancellation, after finding nothing in the law that required requests for relief under Section 18 to be tied to a separate statutory claim or that limited the Board s power under Section 18 to registrations less than five years old; and that eliminating such a pleading requirement would keep the focus on the likelihood of confusion. 90 The Board therefore granted ESR s motion to dismiss Eurostar s claim, but allowed Eurostar to amend its petition to claim that the restriction it sought would avoid a likelihood of confusion. After Eurostar filed the amended petition, ESR filed a motion to dismiss the petition, and later filed a motion for summary judgment on the issue of likelihood of confusion. The Board denied both motions. Thereafter, the parties moved to suspend the Board s proceedings pending settlement negotiations. Eurostar later withdrew its petition for cancellation and the Board dismissed the case without prejudice, presumably pursuant to a settlement agreement between the parties. Ultimately, Eurostar amended the description of goods and services in its application to specifically exclude shoes and footwear designed for horseback riding and to limit its trade channels to swap meets and stores specializing in shoes and footwear. It then received a registration for those goods and services on the principal register. 91 The Board s decision in Eurostar in some ways limited and in other ways expanded the availability of relief under Section 18. On the one hand, the Board s decision limited the availability of relief under Section 18 to cases where a restriction or modification of an application or registration for a mark on the principal register would avoid a finding of a likelihood of confusion. On the other hand, the Board s decision expanded the utility of Section 18 by dispensing with the need to plead a separate statutory ground for opposition or cancellation and by reaffirming that Section 18 may be asserted at any time even against a registration on the principal register that is more than five years old. To date, the Board s decision in Eurostar remains the governing law in the TTAB on the meaning and application of amended Section Id. at 1271 & n See PTO records for Cancellation Action No (filed Feb. 12, 1993) and PTO records for U.S. Application No. 74/202,704; No. 74/202,705; No. 74/202,707; and No. 74/202,725 (all filed Sept. 12, 1991).

20 Vol. 99 TMR 1317 V. THE BOARD S POST-EUROSTAR PROCEDURES FOR PLEADING AND PROVING SECTION 18 CLAIMS The Board has devoted many of its decisions discussing Section 18 to outlining the proper procedure for requesting relief under Section 18. Those decisions form the basis for the Board s current procedures for pleading and proving Section 18 claims, as discussed below. A. Proceedings in Which Section 18 Claims May Be Asserted Section 18 claims may be asserted only in inter partes proceedings, and not during the PTO s ex parte examination of an application. 92 Moreover, the Board s decisions and current procedures prohibit Section 18 claims in concurrent-use proceedings, effectively limiting Section 18 claims to opposition and cancellation proceedings. 93 B. Types of Relief Available Under Section 18 A party may request a restriction or modification of virtually any aspect of an application or registration for a mark on the principal register under Section 18, such as the ownership information, the description or drawing of the mark, and the identification of the goods and services (including the type of goods or services, channels of trade or advertising, customers, etc.). 94 There are three notable limitations on the types of relief available under Section 18. First, geographic restrictions on a mark s usage may be imposed only in a concurrent-use proceeding. 95 Second, a party may not request a restriction on an aspect of a mark s usage that is not encompassed by the original 92. See In re Lisa Frank, Inc., Serial No. 75/028,659, 2003 TTAB LEXIS 312, at *8 (T.T.A.B. June 25, 2003) ( Section 18 refers to restrictions which are imposed as the result of an inter partes proceeding, and has no relevance to an ex parte appeal such as this. ); In re Phillips Beverage Co., Serial Nos. 75/313,751 and 753, TTAB LEXIS 656, at *9-10 (T.T.A.B. Sept. 13, 2000) (stating that the Board s authority under Section 18 is exercisable only in inter partes cases ). 93. See supra note 16; 37 C.F.R. 2.99(h); 37 C.F.R (c). 94. See Trademark Board Manual of Procedure (d) ( TBMP ); DAK Indus., Inc. v. Daiichi Kosho Co., 35 U.S.P.Q.2d 1434, 1437, 1994 TTAB LEXIS 31 (T.T.A.B. Apr. 18, 1995). 95. See TBMP (d); 37 C.F.R (c); Snuffer & Watkins Mgmt., Inc. v. Snuffy s, Inc., 17 U.S.P.Q.2d 1815, 1816, 1990 TTAB LEXIS 62 (T.T.A.B. Dec. 19, 1990).