Aktieselskabet Af 21. November 2001 v. Fame Jeans Inc.

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued March 13, 2008 Decided April 29, 2008

No. 07-7105

AKTIESELSKABET AF 21. NOVEMBER 2001,

APPELLANT

v.

FAME JEANS INC.,

APPELLEE

Appeal from the United States District Court

for the District of Columbia

(No. 06cv00585)

Monica P. McCabe argued the cause for appellant. With

her on the briefs were Oliver N. Blaise, III and Mary E.

Gately.

Robert L. Byer argued the cause for appellee. With him

on the brief were Lewis F. Gould, Jr., Barry Golob, Maxim A.

Voltchenko, and Matthew C. Mousley.

2

Before: HENDERSON, ROGERS and BROWN, Circuit

Judges.

Opinion for the court filed by Circuit Judge BROWN.

BROWN, Circuit Judge: For some reason, a pair of jeans

labeled Jack & Jones will sell for the equivalent of $96.

Clearly there is magic in the name, and Fame Jeans tried to

capture that magic by registering Jack & Jones as a trademark

in the United States. Aktieselskabet (Bestseller),1 which

generated the magic by selling Jack & Jones jeans elsewhere

in the world, opposed Fame’s trademark application. After

the Trademark Trial and Appeal Board (TTAB) granted

summary judgment to Fame, Bestseller filed this action in

district court, alleging several new grounds for its opposition.

The district court dismissed Bestseller’s complaint, holding

the new grounds waived because Bestseller failed to present

them to the TTAB and because Bestseller’s complaint failed

to meet a new pleading standard the court thought Bell

Atlantic Corp. v. Twombly, 127 S. Ct. 1955 (2007), required.

Bestseller appeals the dismissal. We hold the district court

should hear new claims in a trademark opposition, and we

disagree with the district court’s interpretation of Twombly.

Even so, some of Bestseller’s claims are legally flawed.

Accordingly, we affirm in part and reverse in part.

I

Bestseller, a Danish corporation, has been selling Jack &

Jones jeans since 1990. By 2005, its business with the brand

had expanded to include jeans, T-shirts and jackets,

distributed in Europe, the Middle East, South America, and

Asia. In the European Union alone, Bestseller sold nineteen

1

Throughout its filings, Appellant refers to itself as Bestseller, the

name of its corporate parent. We follow the same convention.

3

million articles of branded clothing in 2005. It has registered

Jack & Jones and related marks in forty-six countries, and it

owns twenty-one domain names incorporating variations of

the name.

In 2003, Bestseller decided to expand into North

America; its competitor Fame Jeans appears, so far, to have

stalled that expansion into the United States by assiduous

effort at the U.S Patent and Trademark Office (PTO).

Bestseller planned to begin operations in Canada, from which

it would develop the brand into the United States.

Accordingly, it applied to register the Jack & Jones mark in

Canada in August 2004 and in the United States on December

6, 2004. Unfortunately for Bestseller, Fame had already

applied to register Jack & Jones in the United States on

January 9, 2004. As of their respective filing dates, neither

party had tested the susceptibility of American consumers to

the allure of Jack & Jones by actually trying to sell any jeans

under the brand. Fame, therefore, filed its application under

Lanham Act § 1(b), 15 U.S.C. § 1051(b), avowing its intent to

use the trademark in commerce. Bestseller, on its part, filed

under Lanham Act § 44(e), 15 U.S.C. § 1126(e), swearing it

intended to use the mark and citing its 1990 Danish

registrations.

Nine days after filing its U.S. application to register Jack

& Jones, Bestseller filed an opposition to Fame’s application

to register the mark, alleging that Fame’s registration was

likely to cause confusion with Bestseller’s Jack & Jones mark

and interfere with Bestseller’s application to register the

mark. On January 30, 2006, the TTAB granted summary

judgment on Bestseller’s opposition. First, the TTAB pointed

out Bestseller had admitted it never used the mark in

commerce in the United States, and it explained foreign use

alone gave Bestseller no right of priority here. Second, the

4

TTAB held Bestseller’s December 6, 2004, application junior

to Fame’s January 9, 2004, application.

Bestseller sought district court review of the TTAB

decision, under Lanham Act § 21(b), 15 U.S.C. § 1071(b). In

its complaint, Bestseller renewed its allegation that it had

prior rights to the Jack & Jones mark due to its § 44(e)

application, and it also claimed to have used the mark in the

United States. In addition, Bestseller argued the court should

apply equitable principles to give it rights in the mark, since it

has used the mark around the world for seventeen years and

Fame has never used it anywhere. Bestseller also added new

claims that Fame’s § 1(b) application was void ab initio for

lack of bona fide intent to use the mark and that Fame

misrepresented its intent to the PTO. The district court

dismissed all the claims. The new claims it held waived; it

agreed with the TTAB that Bestseller’s § 44(e) application

was too late; and it thought the misrepresentation claim fell

short of its putative Twombly standard.

II

This Court reviews the dismissal of a complaint de novo.

Stewart v. Nat’l Educ. Ass’n, 471 F.3d 169, 173 (D.C. Cir.

2006). We first discuss two threshold issues on which the

district court based most of its analysis.

A

Although a district court owes a certain degree of

deference to the TTAB’s findings of fact, both parties may

introduce new evidence in a § 21(b) action. Material Supply

Int’l, Inc. v. Sunmatch Indus. Co., 146 F.3d 983, 989 (D.C.

Cir. 1998) (citing 3 J. THOMAS MCCARTHY, MCCARTHY ON

TRADEMARKS AND UNFAIR COMPETITION § 21:20 (1997)).

5

The question before us is whether a party may also introduce

new issues not brought before the TTAB. We join several of

our fellow circuits in allowing new issues in § 21(b) actions.

See, e.g., PHC, Inc. v. Pioneer Healthcare, Inc., 75 F.3d 75,

80 (1st Cir. 1996); CAE, Inc. v. Clean Air Eng’g, Inc., 267

F.3d 660, 674 (7th Cir. 2001).

District courts have broad authority to review trademark

decisions by the U.S. Patent and Trademark Office (PTO),

both before and after the registration of a mark. They may

order the PTO to cancel a registration “in whole or in part” or

to restore a canceled registration, Lanham Act § 19, 15 U.S.C.

§ 1119, and during a civil action for infringement, a

registration is only prima facie evidence that the registrant

owns a valid mark, Lanham Act § 15, 15 U.S.C. § 1115(a);

Am. Online, Inc. v. AT&T Corp., 243 F.3d 812, 817–18 (4th

Cir. 2001). In addition, district courts may authorize the PTO

to register or to deny registration to a pending mark. 15

U.S.C. § 1071(b)(1). Courts use this power to remedy

erroneous decisions of the TTAB in any of the various kinds

of proceeding committed to it, including oppositions,

cancellation petitions, and interferences. For a person

challenging a TTAB decision, a civil action in district court is

an alternative to review by the Court of Appeals for the

Federal Circuit. Id.

The proceedings differ in important ways, with Federal

Circuit review taking the form of an appeal and the district

court alternative being an ordinary civil action. In a Federal

Circuit appeal, the PTO transmits its record to the court,

which “shall review the decision from which the appeal is

taken on the record.” 15 U.S.C. § 1071(a)(4). In an ex parte

case, the PTO must also explain the grounds for its decision,

“addressing all the issues involved in the appeal.” 15 U.S.C.

§ 1071(a)(3). By contrast, in a § 21(b) action, the PTO does

6

not automatically transmit its record to the court; rather, any

party may, on its own motion, enter the record into evidence.

Once entered, “[t]he testimony and exhibits” of the PTO

record “have the same effect as if originally taken and

produced in the suit.” 15 U.S.C. § 1071(b)(3). The district

court then decides de novo whether the application at issue

should proceed to registration, or the registration involved

should be canceled, or “such other matter as the issues in the

proceeding require, as the facts in the case may appear.” 15

U.S.C. § 1071(b)(1); see Material Supply, 146 F.3d at 990.

Fame presses the general rule that judicial review of

agency action is limited to the issues presented before the

agency. But this rule usually arises from statutes providing

for judicial review, Sims v. Apfel, 530 U.S. 103, 107–08

(2000), and it is certainly subject to statutory modification,

Time Warner Entm’t, Co. v. FCC, 144 F.3d 75, 79 n.5 (D.C.

Cir. 1998); cf. Darby v. Cisneros, 509 U.S. 137, 153–54

(1993) (APA governs exhaustion). Just so here: the Lanham

Act directs a district court to conduct a new trial to decide

whether an applicant is entitled to a registration. In that

proceeding, the court may consider both new issues and new

evidence that were not before the TTAB. This statutory

mandate becomes clear from a comparison of § 21(b),

containing the “issues in the proceeding” language, with the

analogous provision in the Patent Act, 35 U.S.C. § 145, which

lacks that phrase. Both statutes direct a district court to

decide “as the facts in the case may appear.” The “case” in

question refers to the district court action, not the prior events

at the PTO, with the consequence that the court should decide

on the facts before it, even though they were not before the

PTO. Accordingly, in both patent and trademark cases, a

party may introduce new evidence. Am. Steel & Wire Co. of

N.J. v. Coe, 105 F.2d 17, 19 (D.C. Cir. 1939) (patent);

Material Supply, 146 F.3d at 989 (trademark). While new

7

issues, on the other hand, are barred in a patent case,

DeSeversky v. Brenner, 424 F.2d 857, 858 (D.C. Cir. 1970),

under § 21(b), the district court is also to decide “as the issues

in the proceeding may require.” 15 U.S.C. § 1071(b)(1)

(emphasis added). Like “case,” the word “proceeding” refers

to the district court action. Thus, in a § 21(b) action, a district

court should decide on the issues before it, including new

issues.

Indeed, this conclusion seems unavoidable, since a

district court does not necessarily receive the TTAB record.

Rather, the record “shall be admitted on motion of any party.”

15 U.S.C. § 1071(b)(3). By comparison, in judicial review

under the Administrative Procedure Act, a court shall “review

the whole record,” which of course the court receives as a

matter of course. 5 U.S.C. § 706; see also CHARLES A.

WRIGHT & CHARLES H. KOCH, JR., FEDERAL PRACTICE AND

PROCEDURE: JUDICIAL REVIEW OF ADMINISTRATIVE ACTION

§ 8306, at 73 (2006) (“It is black letter law that . . . review in

federal court must be based on the record before the agency

. . . .”). If, in an inter partes matter like an opposition, in

which the PTO may choose not to participate, 15 U.S.C.

§ 1071(b)(2), no party introduced the TTAB record, a district

court would not even be able to identify the issues raised

before the TTAB, much less hold other issues waived.

Moreover, the Lanham Act establishes a fluid

relationship between the TTAB and the courts, in which the

TTAB does not have the authority of an ordinary agency.

Unlike an ordinary agency, whose decisions we would review

under the deferential standards of APA § 706, the PTO’s

decision to register a trademark is subject to later collateral

attack during which registration is only prima facie evidence

of the mark’s validity, rebuttable by a preponderance of the

evidence. See Colt Def. LLC v. Bushmaster Firearms, Inc.,

8

486 F.3d 701, 708 (1st Cir. 2007); Tie Tech., Inc. v. Kinedyne

Corp., 296 F.3d 778, 783 (9th Cir. 2002); Am. Online, 243

F.3d at 817.2 Further, whereas ordinarily parties must exhaust

their administrative remedies before seeking judicial review

of agency decisions, the Lanham Act provides an independent

civil action to cancel a completed trademark registration

without first petitioning the PTO. 15 U.S.C. § 1119; Ditri v.

Coldwell Banker Residential Affiliates, Inc., 954 F.2d 869,

873 (3rd Cir. 1992); Windsurfing Int’l Inc. v. AMF Inc., 828

F.2d 755, 758 (Fed. Cir. 1987). In addition, two of our sister

circuits have even interpreted § 21(b) as allowing a court, in

appropriate circumstances, to adjudicate a registration while

the application is still pending at the PTO. Pioneer

Healthcare, 75 F.3d at 80–81; Goya Foods, Inc. v. Tropicana

Prods., Inc., 846 F.2d 848, 854 (2d Cir. 1988). When the

statute does not require exhaustion of the administrative

procedure itself, it would be odd to require exhaustion on

particular issues during that procedure.

Nor does Wilson Jones Co. v. Gilbert & Bennett Mfg.

Co., 332 F.2d 216, 218 (2d Cir. 1964) (as amended), persuade

us to the contrary. That case relied on Gold Seal Co. v.

Weeks, 129 F. Supp. 928, 937 (D.D.C. 1955), which itself

mistook this circuit’s existing rule against considering new

2

We do not mean to suggest that we would not defer to the

TTAB’s findings of fact during § 21(b) review. After Dickinson v.

Zurko, which prescribed “substantial evidence” review of the

PTO’s fact-finding in patent examinations, 527 U.S. 150 (1999),

some courts have applied that standard in trademark cases as well,

e.g. On-Line Careline, Inc. v. Am. Online, Inc., 229 F.3d 1080,

1085 (Fed. Cir. 2000), in place of the older “thorough conviction”

standard. We need not address this issue, because the TTAB

granted summary judgment, making no findings of fact, and

therefore the district court owed it no deference at all. Material

Supply, 146 F.3d at 990.

9

patent claims, Cherry-Burrell Corp. v. Coe, 143 F.2d 372,

373 (D.C. Cir. 1944), for a rule against new issues. In any

case, Gold Seal arose under a previous version of § 21. At

the time, the Lanham Act cross-referenced 35 U.S.C. § 145 to

provide the procedure for trademark review, but the modern

statute prescribes its own procedures, including the “issues in

the proceeding” language. Compare 15 U.S.C. § 1071

(1952), amended by Pub. L. No. 87-772, § 12, 76 Stat. 769,

771 (1962), with § 1071(b)(1) (2000). Wilson Jones

postdated the amendment, but it relied on Gold Seal without

discussing the change. Section 21(b) in its current form limits

a district court to evaluation of “the application involved” in

the TTAB’s decision but directs the district court to consider

all the relevant issues brought by either party, regardless of

whether those issues were before the TTAB.

B

In addition, this case questions how much detail

Bestseller must allege to avoid dismissal under Rule 12(b)(6)

of the Federal Rules of Civil Procedure. The district court

performed such an analysis only for Bestseller’s third claim,

for fraudulent misrepresentation, because it dismissed

Bestseller’s claim to have made prior use of the mark in the

United States and its claim that Fame’s application was void

ab initio as waived. Since we have concluded § 21(b) does

not provide for issue waiver, our de novo review must

proceed to the adequacy of Bestseller’s allegations.

Ordinarily a sufficient complaint “contain[s] a short and

plain statement of the claim showing that the pleader is

entitled to relief,” enough to give a defendant “fair notice of

the claims against him.” Ciralsky v. CIA, 355 F.3d 661, 668–

70 (D.C. Cir. 2004) (quoting FED. R. CIV. P. 8(a)). In

deciding a 12(b)(6) motion, a court “constru[es] the complaint

10

liberally in the plaintiff’s favor,” “accept[ing] as true all of

the factual allegations contained in the complaint,” Kassem v.

Wash. Hosp. Ctr., No. 06-7161, 2008 U.S. App. LEXIS 1174,

at *2 (D.C. Cir. Jan. 22, 2008), “with the benefit of all

reasonable inferences derived from the facts alleged,”

Stewart, 471 F.3d at 173. However, the district court

interpreted Twombly as establishing a new threshold for

complaints: enough facts to “clarify the grounds” on which

each claim rests and “nudge[] their claims across the line

from conceivable to plausible.” Aktieselskabet AF 21.

November 2001 v. Fame Jeans, Inc., 511 F. Supp. 2d 1, 18–

19 (D.D.C. 2007). Many courts have disagreed about the

import of Twombly.3 We conclude that Twombly leaves the

long-standing fundamentals of notice pleading intact.

3

See, e.g., ACA Fin. Guar. Corp. v. Advest, Inc., 512 F.3d 46, 58

(1st Cir. 2008) (Twombly gave 12(b)(6) “more heft”); Iqbal v.

Hasty, 490 F.3d 143, 157–59 (2d Cir. 2007) (“requiring not a

universal standard of heightened fact pleading” but a “flexible

‘plausibility standard’” under which “a conclusory allegation might

. . . need to be fleshed out . . . [in] response to a defendant’s motion

for a more definite statement”); Phillips v. County of Allegheny,

515 F.3d 224, 234 (3d Cir. 2008) (no probability requirement at the

pleading stage); Barclay White Skanska, Inc. v. Battelle Mem’l

Inst., No. 07-1084, 2008 U.S. App. LEXIS 1916, at *9 (4th Cir.

Jan. 29, 2008) (unpublished) (pleading only needs to give “fair

notice”); Lindsay v. Yates, 498 F.3d 434, 440 n.6 (6th Cir. 2007)

(concluding only that Twombly did not overrule Swierkewicz);

Airborne Beepers & Video, Inc. v. AT&T Mobility L.L.C., 499 F.3d

663, 667 (7th Cir. 2007) (“Twombly did not signal a switch to fact-

pleading”); Stalley v. Catholic Health Initiatives, 509 F.3d 517, 521

(8th Cir. 2007) (plaintiff must allege facts “that affirmatively and

plausibly suggest” he has the claimed right, not just “facts that are

merely consistent with such a right”); Skaff v. Meridien N. Amer.

Beverly Hills, L.L.C., 506 F.3d 832, 842 (9th Cir. 2007) (citing

Twombly as instructing courts “not to impose such heightened

[pleading] standards”); Dudnikov v. Chalk & Vermilion Fine Arts,

11

“Rule 8 is the keystone of the system of pleading” in

federal procedure, and “the functioning of all the procedures

in the federal rules . . . are intertwined inextricably with the

pleading philosophy embodied in Rule 8.” 5 CHARLES A.

WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE AND

PROCEDURE § 1202, at 87–88 (3d ed. 2004). The pleadings

serve specific functions of giving notice of “the general

nature of the case and the circumstances or events upon which

it is based,” so the parties can prepare and the court can

dispose of the case properly. Charles E. Clark, Simplified

Pleading, 2 F.R.D. 456, 457, 460 (1943). Accordingly, Rule

8 requires, not a specific quantity of facts, but simply “a short

and plain statement of the claim showing that the pleader is

entitled to relief.” FED. R. CIV. P. 8(a)(2); see also Richard L.

Marcus, The Revival of Fact Pleading Under the Federal

Rules of Civil Procedure, 86 COLUM. L. REV. 433, 439

(1986).

Over the years, courts have tended to drift away from this

standard by imposing various requirements of particularity.

See generally Christopher M. Fairman, Heightened Pleading,

81 TEX. L. REV. 551 (2002). The Supreme Court has

continually pruned back such requirements, with the

admonition that we are not to impose heightened pleading

requirements. See, e.g., Swierkewicz v. Sorema N.A., 534

Inc., 514 F.3d 1063, 1070 (10th Cir. 2008) (courts must “tak[e] as

true all well-pled (that is, plausible, non-conclusory, and non-

speculative) facts alleged in plaintiff’s complaint”); Watts v. Fla.

Int’l Univ., 495 F.3d 1289, 1295–96 (11th Cir. 2007) (courts may

not assess the probability of facts, but a plaintiff must “allege[]

enough facts to suggest, raise a reasonable expectation of, and

render plausible” his claim); McZeal v. Sprint Nextel Corp., 501

F.3d 1354, 1357 (Fed. Cir. 2007) (plaintiff need only “place [a

defendant] on notice as to what he must defend”).

12

U.S. 506, 511–12 (2002); Leatherman v. Tarrant County

Narcotics Intelligence & Coordination Unit, 507 U.S. 163,

164 (1993); Scheuer v. Rhodes, 416 U.S. 232, 249–50 (1974).

After decades of such consistency, we will not lightly assume

the Supreme Court intended to tighten pleading standards.

Indeed, the Court has indicated quite clearly that it meant

no such thing. Twombly itself reiterated that a complaint

“does not need detailed factual allegations.” 127 S. Ct. at

1964. Further, the Court denied “apply[ing] any ‘heightened’

pleading standard,” because any heightened standard would

have to arise from an amendment of the Federal Rules of

Civil Procedure. Id. at 1973 n.14 (citing Swierkewicz and

Leatherman). Rule 8(a), as the Court reminded, contains only

“the threshold requirement” that the statement of a claim

“show that the pleader is entitled to relief.” Id. at 1966. As

the Court said, Twombly’s complaint failed that basic

requirement, not any higher requirement for allegations that

were “[]sufficiently particularized.” Id. at 1973 n.14. If,

despite this clear language, Twombly itself left any doubt, the

Court subsequently emphasized the continuation of the prior

Rule 8(a) standard: “[S]pecific facts are not necessary,” and a

complaint need only give the defendant fair notice of the

claims. Erickson v. Pardus, 127 S. Ct. 2197, 2200 (2007)

(per curiam).

The forms accompanying the Federal Rules of Civil

Procedure illustrate the concept of fair notice with numerous

exemplary complaints that “suffice under these rules.” FED.

R. CIV. P. 84; see also Clark, 2 F.R.D. at 464 (“[Q]uite

essential . . . are the illustrative forms.”). In general, a

complaint should simply identify the “circumstances,

occurrences, and events” giving rise to the claim, Twombly,

127 S. Ct. at 1965 n.3 (quoting WRIGHT & MILLER, supra,

§ 1202, at 94, 95), or “inform the opponent of the affair or

13

transaction to be litigated,” Clark, 2 F.R.D. at 460–61.4 For

example, Form 11, the example complaint for negligence,

says that defendant drove a car against the plaintiff at a

certain time in a certain place. Form 10, for suing on a note,

cites the date of the note, the sum promised, and the interest

rate imposed. Form 18, for patent infringement, recites the

number of the patent allegedly infringed and explains what

product of the defendant’s infringes. Twombly observed that

a direct allegation of conspiracy analogous to the forms

would say who conspired, at what time, to do what. 127 S.

Ct. at 1970 n.10.

Of course, these forms illustrate details that are

sufficient, not necessary. Thus, in Twombly, although the

complaint provided only a conclusory allegation of

conspiracy, the plaintiff could have made out the claim in

other ways. 127 S. Ct. at 1970 (“[T]he complaint leaves no

doubt that plaintiffs rest their § 1 claim on descriptions of

parallel conduct and not on any independent allegation of

actual agreement.”). To the extent direct allegations are

missing, “a complaint must contain . . . inferential

allegations.” Id. at 1969. Twombly determined that a certain

set of factual allegations did not support an inference that the

defendants conspired in violation of the Sherman Act:

“Without more, parallel conduct does not suggest

conspiracy,” and “nothing contained in the complaint invests

4

Since a complaint has always had to meet this standard, it has

never been literally true, as Twombly noted, that a complaint is

adequate unless “no set of facts” consistent with the complaint

could support a claim. 127 S. Ct. at 1968–70 (citing Conley v.

Gibson, 355 U.S. 41, 45–46 (1957)). We have never accepted

“legal conclusions cast in the form of factual allegations,” Kowal v.

MCI Commc’ns Corp., 16 F.3d 1271, 1276 (D.C. Cir. 1994),

because a complaint needs some information about the

circumstances giving rise to the claims.

14

either the action or inaction alleged with a plausible

suggestion of conspiracy.” Twombly, 127 S. Ct. at 1966,

1971.

In sum, Twombly was concerned with the plausibility of

an inference of conspiracy, not with the plausibility of a

claim. A court deciding a motion to dismiss must not make

any judgment about the probability of the plaintiff’s success,

for a complaint “may proceed even if it appears ‘that a

recovery is very remote and unlikely,’” Id. at 1965 (quoting

Scheuer); a complaint “may not be dismissed based on a

district court’s assessment that the plaintiff will fail to find

evidentiary support for his allegations,” id. at 1969 n.8.

Further, the court must assume “all the allegations in the

complaint are true (even if doubtful in fact),” Twombly, 127

S. Ct. at 1965 (citing Swierkewicz), and the court must give

the plaintiff “the benefit of all reasonable inferences derived

from the facts alleged,” Stewart, 471 F.3d at 173.

III

Bearing in mind these general considerations, we turn to

the claims at issue in this appeal. Bestseller contests Fame’s

pending trademark application on three grounds, and the

district court rejected most of Bestseller’s arguments on the

improper ground that Bestseller failed to raise them before the

TTAB. Nevertheless, we may affirm the dismissals for any

reason properly raised by the parties. Barr v. Clinton, 370

F.3d 1196, 1202 (D.C. Cir. 2004).

A

First, Bestseller opposes Fame’s application based on

Lanham Act § 2(d), under which a mark may not be

registered if it is “likely . . . to cause confusion” with respect

15

to “a mark . . . previously used in the United States.” 15

U.S.C. § 1052(d). An opposer under § 2(d) must show “it

ha[s] priority and that registration of the mark creates a

likelihood of confusion.” Herbko Int’l, Inc. v. Kappa Books,

Inc., 308 F.3d 1156, 1162 (Fed. Cir. 2002) (cancellation

proceeding under § 2(d)). The parties do not dispute that

Bestseller has sufficiently alleged likelihood of confusion,

since Bestseller and Fame want to use the same trademark on

the same product. See Am. Comp. ¶ 18.5 As to priority,

Bestseller asserts prior rights to the Jack & Jones mark on the

basis of its December 6, 2004, § 44(e) application and on the

basis of its alleged use in the United States. Because Fame

filed its intent-to-use application on January 9, 2004,

Bestseller must be able to claim priority earlier than that date.

Bestseller disputes even this point, pointing to Lanham

Act § 7(c), which establishes a trademark application as

constructive use “[c]ontingent on registration of a mark.” 15

U.S.C. § 1057(c). An intent-to-use application cannot mature

into a registration before the applicant actually uses the mark

in commerce. 15 U.S.C. § 1051(d). Therefore, according to

Bestseller, an intent-to-use application, by itself, earns no

trademark rights, and no priority attaches before the intent-to-

use applicant engages in actual use of the mark. Until that

point, the intent-to-use applicant would continue to be

vulnerable to rival users, even those who begin use after the

intent-to-use filing date or, like Bestseller, file a later

application.

5

Although Fame does not dispute the sufficiency of Bestseller’s

allegations of confusion, it does argue Bestseller fails to bring a

§ 2(d) claim at all because Bestseller failed to cite § 2(d). But so

long as the basis for a claim is clear, a complaint need not “plead

law” in specific detail. Krieger v. Fadely, 211 F.3d 134, 136 (D.C.

Cir. 2000).

16

While an intent-to-use application does not, by itself,

confer any rights enforceable against others, it does give an

applicant the right to engage in the statutorily prescribed

application procedure. See WarnerVision Entm’t Inc. v.

Empire of Carolina, Inc., 101 F.3d 259, 262 (2d Cir. 1996)

(because an intent-to-use applicant has the right to engage in

use so as to complete registration, a court may not enjoin that

use to protect the rights of a rival who began use after the

intent-to-use filing date). Bestseller may only contest Fame’s

application within the confines of that scheme. A trademark

opposition must be based on “a statutory ground”—such as a

legal defect or deficiency in the application—“which negates

the appellant’s right to the subject registration.” Young v.

AGB Corp., 152 F.3d 1377, 1380 (Fed. Cir. 1998); 3

MCCARTHY, supra, § 20:13, at 20–28. Section 7(c) is a

potential source of rights for a trademark registrant, not a

requirement for or a source of defects in an application.

Bestseller mistakes § 7(c) for the true ground for its

opposition, which is § 2(d). See TTAB Op., Am. Compl.

Exh. 1, at 3; Am. Comp. ¶ 18 (alleging likelihood of

confusion).

We conclude that under § 2(d), an intent-to-use applicant

prevails over any opposer who began using a similar mark

after the intent-to-use filing date. Covering applications of all

types, including § 1(b) applications, § 2(d) simply says a

mark is invalid if there is a likelihood of confusion with a

mark “previously used.” 15 U.S.C. § 1052(d). “Previously

used” must mean used before some date, and for a pending

§ 1(b) application, there is only one date that could apply: the

filing date. Perhaps one could argue that a § 1(b) applicant

will eventually use the mark in commerce; § 2(d) might refer

to the date of that use. However, the Lanham Act does not

require an intent-to-use applicant to begin using his mark

until he receives a notice of allowance, which can happen

17

only after the end of all opposition proceedings on the

application. 15 U.S.C. §§ 1051(d), 1063(b). Given the

sequence of events established by statute, we must assess

Bestseller’s claim to priority in opposition without asking

whether Fame has used the mark, relying only on Fame’s

filing date as an intent-to-use applicant.

Holding to the contrary, as Bestseller urges, would not

only make nonsense of § 2(d) but would also vitiate the

intent-to-use application system itself. Congress created the

intent-to-use application in the 1988 amendments to the

Lanham Act with the goal of eliminating the need to use a

mark before applying to register it. See S. Rep. No. 100-515,

at 6 (1978), as reprinted in 1988 U.S.C.C.A.N. 5577, 5582.

Congress regretted the “unnecessary legal uncertainty” caused

by the use requirement, since a business might adopt a mark

and invest in product development and marketing without

being sure its use had earned it rights to the mark. Id. at 5.

Constructive use, as codified in § 7(c), was a central element

of the system: “Without constructive use, the certainty

envisioned by the intent-to-use application system would not

be achieved; an intent-to-use applicant would be vulnerable to

pirates and to anyone initiating use after it files its

application.” Id. at 29 (emphasis added). Bestseller, as an

applicant claiming priority from December 5, 2004, stands in

exactly the position of a rival starting use after an intent-to-

use filing.6 Allowing priority to Bestseller would devalue

Fame’s application on the assumption Fame had not made

actual use by that date, precisely the result Congress wanted

6

If anything, Bestseller’s argument is even weaker, since a second

main motivation for the 1988 amendments was to eliminate the

perceived unfairness of the § 44(d) and § 44(e) applications. Since

foreign applicants were able to claim priority from their filing dates

without actual use, Congress wanted domestic applicants to be able

to do the same. S. Rep. No. 100-515, at 4–5.

18

to avoid. Thus, the legislative history supports our

conclusion, based on the text of § 2(d), that an intent-to-use

applicant may rely on his filing date to establish priority

during an opposition proceeding. The TTAB has consistently

maintained the same position, and other courts have

ordinarily assumed this interpretation as well. Zirco Corp. v.

AT&T Co., 21 U.S.P.Q.2d 1542, 1544 (T.T.A.B. 1992); see

also, e.g., Lucent Info. Mgmt., Inc. v. Lucent Techs., Inc., 186

F.3d 311, 315 (3rd Cir. 1999).

B

Since Fame Jeans filed its application on January 9,

2004, Bestseller must establish use, either actual or

constructive, before that date.7 Constructive use can arise

under § 7(c), which grants priority, based on filing date, to a

U.S. application or to a foreign application that was followed

by a timely U.S. application under § 44(d). Bestseller filed a

U.S. application on December 6, 2004, based on its 1991

Danish registration. It neither complied with the six-month

timeliness requirement of § 44(d) nor even filed its

application under § 44(d). Therefore, Bestseller cannot

demonstrate any constructive use prior to Fame’s filing date.

However, Bestseller has adequately alleged actual use.

Although the complaint does not set forth trademark use to

earn Bestseller rights in the Jack & Jones mark, an opposer

who has made enough “analogous” use can still defeat a

registration. See Malcolm Nicol & Co. v. Witco Corp., 881

7

Bestseller also demands priority as a matter of equity. Courts

have no power to deny a pending trademark registration on this

basis, because the registration procedure is a statutory construct. In

the cases on which Bestseller relies, equity was a defense to

infringement liability. E.g. Manhattan Indus., Inc. v. Sweater Bee

by Banff, Ltd., 627 F.2d 628, 630 (2d Cir. 1980).

19

F.2d 1063, 1065 (Fed. Cir. 1989) (quoting 3 MCCARTHY,

supra, § 20:4 (1984)).

First, Bestseller fails to allege actual use in the most

straightforward way, by showing its own protectible right to

the Jack & Jones trademark in the United States. At common

law, “prior ownership of a mark is only established as of the

first actual use of a mark in a genuine commercial

transaction.” Allard Enters., Inc. v. Adv. Programming Res.,

Inc., 146 F.3d 350, 358 (6th Cir. 1998). The 1988

amendments to the Lanham Act codified a standard of “use in

commerce,” necessary for a valid trademark registration,

which means “the bona fide use of a mark in the ordinary

course of trade,” including, for a trademark, attaching the

trademark to goods. 15 U.S.C. § 1127. In any case,

“sporadic or minimal” sales are not sufficient. Allard Enters.,

146 F.3d at 359; see also Zazu Designs v. L’Oreal, S.A., 979

F.2d 499, 503 (7th Cir. 1992) (“A few bottles sold over the

counter . . . and a few more mailed to friends” are not

sufficient use.). While a single sale may indicate the first use

of a mark, it must be the beginning of “continuous

commercial utilization.” Allard, 146 F.3d at 358. Obviously,

as § 1052(d) requires, such use must also be “in the United

States.” See Person’s Co. v. Christman, 900 F.2d 1565,

1568–69 (Fed. Cir. 1990) (T-shirt sales in Japan are not “use

in United States commerce”).

However, Bestseller need not “meet the technical

statutory requirements to register . . . [a mark] to have a basis

for objection to another’s registration.” Nat’l Cable

Television Ass’n v. Am. Cinema Editors, Inc., 937 F.2d 1572,

1578 (Fed. Cir. 1991). Section 2(d) requires only “use[] in

the United States,” and adoption of the mark by use

analogous to strict trademark use will therefore suffice.

T.A.B. Sys., Inc. v. Pactel Teletrac, 77 F.3d 1372, 1375 (Fed.

20

Cir. 1996). An opposer may rely on myriad forms of activity

besides sales themselves, including, among others, regular

business contacts, after-sales services, advertising of various

forms, and marketing. First Niagara Ins. Brokers, Inc. v.

First Niagara Fin. Group, 476 F.3d 867, 868–69 (Fed. Cir.

2007); Johnny Blastoff, Inc. v. L.A. Rams Football Co., 188

F.3d 427, 434 (7th Cir. 1999); Malcolm Nicol, 881 F.2d at

1064. Even marketing of a trademarked product before the

product is ready for sale has the potential to defeat a rival’s

registration. See Old Swiss House, Inc. v. Anheuser-Busch,

Inc., 569 F.2d 1130, 1133 (C.C.P.A. 1978). Still, desultory

marketing such as sending out occasional press releases is not

enough. Id. Analogous use must be “of such a nature and

extent as to create public identification of the target term with

the opposer’s product.” T.A.B. Sys., 77 F.3d at 1375.

Bestseller’s allegations fall short of showing a sale,

whether in the United States or to an American abroad, as the

beginning of a continuous commercial exploitation of the

Jack & Jones mark in the United States; but they do give fair

notice of a claim to analogous use. While Bestseller clearly

sells millions of dollars worth of Jack & Jones branded

clothing elsewhere in the world, it fails to allege any sales in

the United States or to Americans. The closest Bestseller

comes is saying this clothing “has been available to U.S.

consumers through Bestseller’s foreign customers and stores

as well as through re-sales on eBay.com.” Am. Compl. ¶ 14.

This allegation does not imply any American sales at all,

much less continuous commercial sales.

By contrast, Bestseller actually does say it conducted

“research and marketing for use of the mark within the United

States.” Am. Compl. ¶ 29.8 The complaint does not say this

8

We continue to construe complaints liberally by interpreting

ambiguous text in the complaint in the light most favorable to the

21

marketing was sufficiently extensive to create an awareness

of the Jack & Jones brand among American consumers, but it

is reasonable to infer such an awareness from Bestseller’s

other allegations. Presumably, Bestseller will need to

produce more substantial evidence if Fame contests this

conclusion. In light of our conclusion that Twombly did not

tighten the requirements for pleading, we need not consider

whether it is convincing or plausible that Bestseller adopted

the Jack & Jones mark in the United States. Simply put, the

allegation of marketing in the United States, together with the

inference of public association, is enough to give Fame fair

notice of what it must contest. No more is required of a

complaint.

C

Second, Bestseller claims Fame’s application was void

ab initio for lack of a bona fide intent to use the Jack & Jones

mark in commerce. A bona fide intent is a statutory

requirement of a valid trademark application under § 1(b),

and the lack of such intent is therefore a ground on which

Bestseller may oppose Fame’s application. MCCARTHY,

supra, § 20:21, at 20-60; see also Lipton Indus., Inc. v.

Ralston Purina Co., 670 F.2d 1024, 1031 (C.C.P.A. 1982)

(“Standing having been established, petitioner is entitled to

rely on any statutory ground which negates [applicant’s] right

to the subject registration.”).

The TTAB has held § 1(b) to require both actual intent to

use a mark in commerce and evidence, contemporary with the

plaintiff. E.g. ACLU Found’n of S. Cal. v. Barr, 952 F.2d 457, 472

(D.C. Cir. 1991) (“The allegations . . . although not framed in

precisely these terms, could be interpreted to support such a cause

of action.”). Here, we take Bestseller to mean marketing in the

United States.

22

application, that objectively demonstrate such an intent. Wet

Seal, Inc. v. FD Mgmt., Inc., 82 U.S.P.Q.2d 1629, 1633

(T.T.A.B. 2007) (actual intent); Commodore Elecs. Ltd. v.

CBM Kabushiki Kaisha, 26 U.S.P.Q.2d 1503, 1507 (T.T.A.B.

1993) (objective standard). We agree with this interpretation.

The provision says “[a] person who has a bona fide intention,

under circumstances showing the good faith of such person,

to use a trademark in commerce” may apply to register the

mark. 15 U.S.C. § 1051(b)(1). The phrases “bona fide” and

“good faith” ordinarily refer to a person’s actual, subjective

state of mind. BLACK’S LAW DICTIONARY 177 (6th ed. 1990);

see Howard v. SEC, 376 F.3d 1136, 1145 (D.C. Cir. 2004).

Certainly a person will fail to have a “bona fide” intent to use

a trademark if his actual intent is otherwise. In addition,

“bona fide” means not fraudulent or feigned, BLACK’S LAW

DICTIONARY, supra, at 177, and in some circumstances,

showing a “bona fide” intent will actually require proving

certain objective facts, e.g. W. Air Lines, Inc. v. Criswell, 472

U.S. 400, 412–14 (1985) (under ADEA, a “bona fide

occupational qualification” must be reasonably necessary).

Here, Congress made clear that a “bona fide intent to use”

also involves an objective standard by specifying there must

be “circumstances showing . . . good faith.”

Thus, an opposer may defeat a trademark application for

lack of bona fide intent by proving the applicant did not

actually intend to use the mark in commerce or by proving the

circumstances at the time of filing did not demonstrate that

intent. To state a claim on the latter ground, an opposer only

has to notify the applicant of the general “circumstances,

occurrences, and events” causing the flaw in the application.

Twombly, 127 S. Ct. at 1965 n.3. Although the complaint

need not go into detail, it must at least notify the applicant of

how the general circumstances fail to show intent. Cf.

Commodore Elecs., 26 U.S.P.Q.2d at 1507 (because under the

23

objective standard, “the absence of any documentary evidence

on the part of an applicant regarding such intent is sufficient

to prove that the applicant lacks” a bona fide intent, an

opposer need only allege that absence).

Bestseller’s allegations certainly depict circumstances

that belie Fame’s good faith intent to sell Jack & Jones jeans.

Bestseller alleges it has used the Jack & Jones mark around

the world, and it says the mark has become famous. It alleges

Fame is a rival in the clothing industry around the world and

particularly in Canada, where Bestseller began its North

American market entry. Bestseller further alleges Fame knew

Bestseller was planning to expand in the United States and

planned to “thwart” that expansion. Finally, Bestseller claims

Fame “has never used the Jack & Jones mark anywhere in the

world” and “investigation reveals that it does not intend” to

use it in the United States. Notably, despite how long

Bestseller has been selling clothes under the brand, Fame

filed its U.S. application for the mark immediately after

Bestseller began preparing to sell its products in Canada.

Bestseller’s allegations meet two necessary conditions.

First, they indicate generally the circumstances that suggest

Fame lacked a bona fide intent to use Jack & Jones. These

circumstances do not necessarily indicate a lack of good faith,

but we need not infer that lack because Bestseller directly

alleged Fame simply wanted “to interfere with Bestseller’s

stated intention to use the mark,” Am. Compl. ¶ 39. See, e.g.,

Rochon v. Gonzales, 438 F.3d 1211, 1220 (D.C. Cir. 2006)

(Title VII plaintiff need not “negate the FBI’s alternative

explanations for its actions,” because the complaint alleged

“‘the Government retaliated against me because I engaged in

protected activity’”); Sparrow v. United Air Lines, Inc., 216

F.3d 1111, 1117 (D.C. Cir. 2000) (court must take as true

employee’s allegation that employer used his convictions as

24

“a pretext for termination”). We assume that allegation to be

true, and thus Bestseller has given Fame adequate notice of

the claim it must defend.

D

Finally, Bestseller’s third claim rests on Fame’s alleged

misrepresentation to the PTO that Fame intended to use the

Jack & Jones mark in commerce. The district court assumed

this claim rested on District of Columbia law and, having

dismissed all Bestseller’s Lanham Act claims, dismissed its

misrepresentation claim as well for lack of supplemental

jurisdiction and for failure to state a claim. Bestseller

disputes the dismissal but has consistently agreed the claim

sounds in common law. Appellant’s Reply Br. at 18–19; Oral

Argument at 7:50–8:00. As an independent, non-statutory

claim, it is not a basis for reversing the TTAB’s decision or

directing the PTO to grant or deny a trademark registration.

See Young, 152 F.3d at 1378, 1380.

A fraudulent misrepresentation claim should meet the

requirements of particularity of Rule 9(b) of the Federal Rules

of Civil Procedure, but we need not discuss the adequacy of

Bestseller’s allegations of fraud because Bestseller utterly

fails to allege, indeed contradicts, the element of reliance. A

plaintiff may recover for a defendant’s fraudulent statement

only if the plaintiff took some action in reliance on that

statement. See Va. Acad. of Clinical Psychologists v. Group

Hospitalization & Med. Servs., Inc., 878 A.2d 1226, 1237–38

(D.C. 2005). Rather than suggesting its own reliance,

Bestseller says the PTO relied on Fame’s alleged

misrepresentation. Bestseller’s only action in response to

Fame’s statement of an intent to use the mark appears to have

been opposing Fame’s application—an action that hardly

suggests Bestseller detrimentally relied on that statement.

25

IV

In conclusion, the district court erred insofar as it

dismissed any of the claims because Bestseller failed to raise

them before the TTAB. Considering the pleadings on the

merits, Bestseller stated two grounds for opposing Fame’s

application: likelihood of confusion with respect to the mark

already used by Bestseller and lack of a bona fide intent to

use the mark. With respect to the former, Bestseller

adequately alleged priority only in the sense of its marketing

of Jack & Jones clothing in the United States. The district

court was correct to dismiss the third claim for common-law

fraudulent misrepresentation, because Bestseller did not claim

to have relied on Fame’s supposedly false statement.

For these reasons, the judgment of the district court is

affirmed in part and reversed in part.

So ordered.