Montecash LLC v. Anzar Enterprises, Inc.

This Decision is a UNITED STATES PATENT AND TRADEMARK OFFICE

Trademark Trial and Appeal Board

Precedent of the TTAB P.O. Box 1451

Alexandria, VA 22313-1451

BUTLER

Mailed: May 7, 2010

Cancellation No. 92051768

MONTECASH LLC

v.

ANZAR ENTERPRISES, INC.

Before Hairston, Holtzman, and Kuhlke, Administrative Trademark

Judges.

By the Board:

Petitioner seeks to cancel respondent's registration for the

following mark

for a "pawn shop service."1 In the preamble and paragraphs 3 and 8

of the complaint, petitioner alleges its belief that it is and will

continue to be damaged by the existence of respondent's

1

Registration No. 2861123, issued on July 6, 2004, more than five

years prior to commencement of this case. Trademark Act §8 affidavit

accepted, §15 affidavit acknowledged. 15 U.S.C. §§1058 and 1065.

Cancellation No. 92051768

registration, which is “inconsistent with Petitioner's right to

freely describe its services.” As grounds for cancellation,

petitioner alleges that the term MONTEPIO means “pawnshop” in

Spanish2 and, therefore: that the registration should be cancelled

because the term MONTEPIO is generic; or that the registration

should be cancelled in part because a portion of the mark, the term

MONTEPIO, is generic; or that the registration should be restricted

by entry of a disclaimer of the term MONTEPIO. Paragraph Nos. 4-7

and 9 of the petition to cancel.

This case now comes up on respondent's fully briefed motion,

filed January 4, 2010, to dismiss the petition to cancel for failure

to state a claim upon which relief may be granted.

Petitioner argues in response to the motion that it alleged its

belief that it is damaged by respondent's registration; that it is

engaged in the same or a related business as respondent; and that it

has an interest in using the Spanish term "montepio" in connection

with its business. Thus, petitioner contends it has alleged its

standing. Petitioner argues that it has a valid claim because it

has requested partial cancellation or a restriction of the

registered mark (by way of entry of a disclaimer of the purportedly

generic term) as an alternative to full cancellation. Further,

2

The term at issue is "MONTEPIO." The registration does not include a

translation statement. Petitioner, using the "words only" coding in

the USPTO's TARR database, refers sometimes in its pleading to the

mark as "MONTEPIO$." As can be seen from viewing the mark itself, the

dollar sign is not the last character in the term MONTEPIO but,

instead, forms part of the money bag held by one of the people in the

design element of the mark.

2

Cancellation No. 92051768

referencing particular prior cases, petitioner asserts that the

authority granted the Board with respect to partial cancellation or

restriction has been used with respect to registrations that are

more than five years old.

In order to withstand a motion to dismiss for failure to

state a claim upon which relief can be granted, a pleading need

only allege such facts as would, if proved, establish that the

plaintiff is entitled to the relief sought. That is, that (1)

the plaintiff has standing to maintain the proceeding, and (2) a

valid ground exists for cancellation of the registration. See

Lipton Industries, Inc. v. Ralston Purina Co., 670 F.2d 1024, 213

USPQ 185 (CCPA 1982). For purposes of determining such a motion,

all of the plaintiff's well-pleaded allegations must be accepted

as true, and the complaint must be construed in the light most

favorable to the plaintiff. See Advanced Cardiovascular Systems

Inc. v. SciMed Life Systems Inc., 988 F.2d 1157, 26 USPQ2d 1038

(Fed. Cir. 1993); Fed. R. Civ. P. 12(b)(6); and TBMP §503.02 (2d.

ed. rev. 2004).

Petitioner's standing

To allege standing within the meaning of Section 14 of the

Trademark Act, 15 U.C.S. §1064, a petitioner must plead facts

sufficient to show that it has a direct and personal stake in the

outcome of the cancellation and a reasonable basis for its belief

that it will be damaged. See Ritchie v. Simpson, 170 F.3d 1092,

1098, 50 USPQ2d 1023, 1025-26 (Fed. Cir. 1999). The focus must

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Cancellation No. 92051768

be on whether petitioner has shown a reasonable basis for its

belief in damage, and there is no requirement that any actual

“damage” be pled or proved to establish standing or even to

prevail in a cancellation proceeding. In a case involving

assertion of an equal right to use a term, the question is

whether the presumptions flowing from the respondent’s

registration are damaging to petitioner’s right to legal and

continuous use of that term. Competitors in the same field or

industry as the respondent have a personal stake in the

resolution of the question. See Duramax Marine LLC v. R.W.

Fernstrum & Co, 80 USPQ2d 1780 (TTAB 2006); M-5 Steel

Manufacturing v. O’Hagin’s Inc., 61 USPQ2d 1086, 1094 (TTAB

2001); and Plyboo America, Inc. v. Smith & Fong Co., 51 USPQ2d

1633, 1634 (TTAB 1999). See also J. Thomas McCarthy, 3 McCarthy

on Trademarks and Unfair Competition, § 20:50 (4th ed. 2009).

In this case, petitioner's standing arises from its position

as a competitor; that is, as another entity offering pawn shop

services, and its expressed need to use the term “montepio,”

which forms part of respondent's mark, to describe its services.

Thus, petitioner has alleged facts which, if proven, would

establish its standing in this cancellation proceeding.

Petitioner's claims

Trademark Act §14, 15 U.S.C. §1064, provides that after five

years from the date of registration of a mark on the Principal

Register, a petition (or counterclaim) to cancel said

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Cancellation No. 92051768

registration may be filed only on grounds specified in

subsections 14(3) and 14(5).3 Subsection 14(3) provides, in

part, that a petition (or counterclaim) to cancel may be brought:

[a]t any time if the registered mark becomes the generic name

for the goods or services, or a portion thereof, for which it

is registered …. If the registered mark becomes the generic

name for less than all of the goods or services for which it

is registered, a petition to cancel the registration for only

those goods or services may be filed.

Under Trademark Act §18, 15 U.S.C. §1068, the Board:

… 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 ….

1. Cancellation of the registration in its entirety

A claim that the mark is or has become "… the generic name

for the goods or services, or a portion thereof …," is a ground

unavailable to petitioner in this case. It is clear that

respondent's mark, composed of a design element combined with the

term MONTEPIO, is not generic as a whole. Indeed, petitioner

only asserts that a portion of the mark, MONTEPIO, is a generic

term.

Similarly, petitioner cannot seek to cancel a mark

registered for more than five years on the ground that a portion

of the mark is a generic name, and the purportedly generic term

has not been disclaimed. The Board has held that Section 14(3)

provides for a claim of cancellation on the ground of genericness

3

Subsection 14(5) involves certification marks and thus is not

relevant herein.

5

Cancellation No. 92051768

with respect to a registration more than five years old only if

it is alleged that the mark as a whole is generic. See Finanz

St. Honore, B.V. v. Johnson & Johnson, 85 USPQ2d 1478 (TTAB

2007). See also J. Thomas McCarthy, 3 McCarthy on Trademarks and

Unfair Competition §20:56 (4th ed. 2009). Thus, respondent's

motion to dismiss is granted as to petitioner’s request that the

registration be cancelled in its entirety.

2. Cancellation of the registration in part

Although petitioner is not entirely clear in its pleading,

it appears that petitioner’s second, alternative ground seeks

deletion of the term MONTEPIO from respondent's mark as

registered. Such a ground is not enumerated, and therefore not

available, under Trademark Act §14(3). Indeed, any deletions of

matter from a registered mark which may materially alter the mark

and/or may result in a mutilation of the mark as used by the

registrant would be prohibited. See Trademark Rule 2.72, 37

C.F.R. §2.72; and TMEP §§807.14 and 807.14(a) (6th ed. Rev. 1,

Oct. 2009). This is so even where the matter involved may be

generic, when such matter is an integral part of the mark. Thus,

the remedy petitioner appears to seek is not available.

Accordingly, respondent's motion to dismiss is granted as to

petitioner’s second, alternative claim for relief.

3. Relief sought to restrict or rectify the registration by

entering a disclaimer

As respondent has observed, petitioner did not specifically

refer to Trademark Act §18, 15 U.S.C. §1068, in its pleading.

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Cancellation No. 92051768

However, it is under this provision that the Board has the

authority to cancel a registration in whole or in part, to

restrict the goods or services identified therein, or to

"otherwise restrict or rectify … the registration of a registered

mark." See Wellcome Foundation Ltd. v. Merck & Co., 46 USPQ2d

1478, 1479 (TTAB 1998). At paragraph No. 9 of the petition to

cancel, petitioner specifically asks, in the alternative, for

relief in the nature of a restriction to the registration by way

of entry of a disclaimer of the assertedly generic term. Such

relief would only be available pursuant to Section 18. Further,

in briefing the motion to dismiss, the parties have discussed

decisions interpreting Section 18. Consequently, we construe

petitioner’s third, alternative ground as seeking relief under

this provision of the statute.

Relief under Section 18 may be sought separate and apart

from any other ground. See Eurostar, Inc. v. "Euro-Star"

Reitmoden GmbH & Co. KG, 34 USPQ2d 1266, 1271 (TTAB 1995) (" … we

hereby overrule Alberto-Culver and Procter & Gamble (and any of

our subsequent decisions that relied on one or both of those

precedents), to the extent that those cases hold … (ii) Section

18 may be invoked by the Board only when tied to a properly

pleaded ground for opposition or cancellation (e.g.,

abandonment)."). See also Dak Industries, Inc. v. Daiichi Kosho

Co., 35 USPQ2d 1434, 1437 (TTAB 1995), relying on Eurostar

("Opposer is relying on case law which has recently been

7

Cancellation No. 92051768

overruled by this Board," and "The Board now takes the position

that … a claim for cancellation by restriction or modification …

is an equitable remedy under Section 18 of the Trademark Act, not

tied to a ground to cancel.").4 Thus, it is clear that

petitioner here may assert a prayer for relief by relying solely

on Section 18.

In Kellogg Co. v. Pack'Em Enterprises, Inc., 14 USPQ2d 1545

(TTAB 1990), the applicant counterclaimed to cancel one of

opposer's pleaded registrations for the mark FROOT LOOPS on the

grounds that the term "Froot" is descriptive and the registration

did not contain a disclaimer. Id. at 1547. Such registration

was less than five years old. Id. In the alternative, the

applicant asked that the Board require the opposer to amend the

registration to include a disclaimer of the word "Froot." Id.

There was no dispute in that case that registrations less than

five years old may be cancelled on any ground which could have

barred registration in the first place. Id. at 1548-1549. The

Board went on to explain that a registration less than five years

old may be cancelled on the ground that an undisclaimed portion

of the mark is merely descriptive of the identified goods or

services and that the mark should not be registered without a

4

In Dak Industries, the Board also clarified that a party seeking to

delete specific items from its opponent's application or registration

(without regard to type, use, customers, or channels of trade) on the

ground that the opponent is no longer using the mark on such goods and

has no intent to resume such use asserts simply a straight-forward

claim of abandonment, not a prayer for relief under Trademark Act §18.

8

Cancellation No. 92051768

disclaimer of that portion. Id. at 1549 and cases cited therein.

In an order denying a motion to dismiss the counterclaim, the

Board found that applicant had stated a ground upon which relief

may be granted. Id. Though the Board ultimately did not reach

the merits of the applicant's counterclaim, it is clear that, for

a registration less than five years old, a disclaimer of a

descriptive or generic term may be required. As already noted

herein, such relief is not available under §14(3) of the

Trademark Act when the registration is more than five years old.

See Finanz, supra.

The issue here, then, is whether Trademark Act §18 provides

a basis for seeking entry of a disclaimer of a term which

comprises only a part of the mark, and which has been asserted to

be generic, when the registration is more than five years old,

notwithstanding that §14(3) does not provide such a basis. If

so, then there is a ground available upon which relief may be

granted; if not, then petitioner's prayer for relief is futile.

We do not find pursuit of such relief before the Board to be

expressly contemplated by Section 18 itself or by its legislative

history. Moreover, to allow petitioner the relief it seeks under

Section 18 would be inconsistent with the plain wording of both

Sections 14(3) and 18.5 See Park 'N Fly v. Dollar Park and Fly,

5

Wellcome Foundation, supra, relied on by petitioner, is

distinguishable from the facts of the present case because the

registration involved, although more than five years old, was

registered on the Supplemental Register. Thus, as in Kellogg, supra,

9

Cancellation No. 92051768

Inc., 469 U.S. 189, 224 USPQ 327, 329 (1985) ("Statutory

construction must begin with the language employed by Congress

and the assumption that the ordinary meaning of that language

accurately expresses the legislative purpose."); and In re

Nantucket, Inc., 677 F.2d 95, 213 USPQ 889, 892 (CCPA 1982)

("Each part or section of a statute should be construed in

connection with every other part or section so as to produce a

harmonious whole.").

The Board, in Eurostar, 34 USPQ2d 1266, relied upon by both

parties, discussed the evolution, purpose, and legislative

history of Section 18, including the amendments thereto. The

Board observed that the provisions of Section 18 were intended to

give the Board greater ability to decide cases on the basis of

the evidence presented, with respect to the goods and services,

of each party's actual use. Id. at 1268. The Board concluded

that the legislative history clearly contemplated that the Board

would have authority "… to limit, or otherwise modify, the goods

and services identified in a registration or application" (Senate

Report No. 100-515, September 15, 1988); and "… the authority to

cancel a registration in whole or in part, to limit or otherwise

modify the goods and services in a registration or application in

order to avoid a likelihood of confusion" (House Report No. 100-

1028, October 3, 1988). Id. at 1269.

the grounds available to the petitioner in that case were not limited

by Trademark Act §14(3).

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Cancellation No. 92051768

The Board made clear in Eurostar that "[t]he restriction

provisions of Section 18 are in the nature of an equitable remedy

…" and are available for registrations more than five years old

because the usefulness of Section 18 would be severely undermined

if the Board's power to limit the goods and services of a

registration could be exercised only with respect to

registrations less than five years old. Id. at 1271, fn. 3. The

Board's clarification on this issue presented by cases involving

the question of likelihood of confusion is in harmony with

Trademark Act §§ 14(3) and 18 as confirmed by the legislative

history. Section 18 expressly provides for a limited remedy

notwithstanding the provisions of Section 14(3); that is, Section

18 speaks directly to the goods and services without a time bar.

However, Section 18 contains no express provisions with

respect to a disclaimer of a generic term in a mark registered

for more than five years.6 To read such provisions into Section

18 would conflict with the provisions of Section 14(3) and our

reading of it in Finanz. In contrast to the salutary effect of

allowing restriction of goods or services, notwithstanding that a

6

Indeed, the Trademark Act §7, 15 U.S.C. §1057, presumptions flowing

from the registration are for the mark as a whole and not to its

individual parts. See Sweats Fashions Inc. v. Pannill Knitting Co.

Inc., 833 F.2d 1560, 4 USPQ2d 1793, 1797 (Fed. Cir. 1987) (“The

registration affords prima facie rights in the mark[s] as a whole, not

in any component. Thus, a showing of descriptiveness or genericness

of part of a mark does not constitute an attack on the

registration.”). (Emphasis in the original). See also Tea Board of

India v. Republic of Tea, Inc., 80 USPQ2d 1881, 1884 at fn. 5 (TTAB

2006), citing Sweats Fashions, "… we do not consider the counterclaim

against DARJEELING to constitute a collateral attack on the

registration which consists only in part of DARJEELING."

11

Cancellation No. 92051768

registration may be more than five years old, because of the

equitable purpose served of allowing marks to coexist on the

register, allowing the Board to impose disclaimers after

registrations are more than five years old is neither expressly

provided for by the statute nor, in our view, an equitable remedy

contemplated by the legislative history of Section 18.

In Eurostar, 34 USPQ2d 1266, the Board discussed its

experience of having seen a number of pleadings in which parties

sought to restrict their opponents' long-held registrations where

such requests for restriction were not supported by claims that

the requested restrictions would avoid findings of likelihood of

confusion. Id. at 1270. As a consequence, such requested

restrictions were "of dubious 'commercial significance,'" leading

the Board to conclude they were brought for tactical rather than

substantive reasons. Id. In order to resolve such problems, the

Board determined that in cases involving a question of likelihood

of confusion the party requesting restrictions under Section 18

must plead and prove that the proposed restriction would avoid a

likelihood of confusion and the opponent is not using its mark on

those goods and services to be deleted, so as to allow the

claiming party a place for its mark on the register. Id. In

contrast, petitioner’s request for restriction of respondent’s

registration by entry of a disclaimer, unlike cases involving

restriction of identifications of goods, would not, in and of

12

Cancellation No. 92051768

itself, allow marks to coexist on the register.7 The Board’s

jurisdiction is limited to issues relating to the registrability

of marks, and we clarify by this decision that a claim for

restriction under Section 18 must not only be commercially

significant but be related to the registrability of marks on the

register.

In view thereof, petitioner, by seeking entry of a

disclaimer for a purportedly generic term that forms part of a

mark that is not generic in its entirety, and that has resided on

the Principal Register for more than five years, has failed to

state a claim upon which the Board will grant relief.

Accordingly, respondent's motion to dismiss, based on its

claim to rectify the register for respondent's registration by

entry of a disclaimer of the term MONTEPIO, is granted, and the

petition to cancel is dismissed with prejudice.

***

7

A generic name for a product or service cannot function as a

trademark to indicate source. J. Thomas McCarthy, 3 McCarthy on

Trademarks and Unfair Competition §12:1 (4th ed. 2009). Thus, if

petitioner were seeking to register a mark including the term

MONTEPIO, and was facing a refusal to register based on the existence

of a registration over five years old where the mark includes a term

believed to be generic, petitioner would not be prohibited from

arguing and presenting evidence that such term is generic and

therefore entitled to little or no weight in the likelihood of

confusion analysis.

13