No Intent to Use for Some Goods Not Fatal to Entire ITU Trademark Application: Sixth Circuit

Practical Law Legal Update w-005-5350 (Approx. 4 pages)

No Intent to Use for Some Goods Not Fatal to Entire ITU Trademark Application: Sixth Circuit

by Practical Law Intellectual Property & Technology

Law stated as of 24 Jan 2017 • USA (National/Federal)

In Kelly Servs., v. Creative Harbor, the US Court of Appeals for the Sixth Circuit held that where an applicant for an intent-to-use trademark application does not have a bona fide intent to use the mark on all goods and services listed in the application, the application should not be totally voided if the applicant did not commit fraud or other egregious conduct.

On January 23, 2017, in Kelly Servs., v. Creative Harbor, the US Court of Appeals for the Sixth Circuit affirmed-in-part, vacated-in-part, and remanded the US District Court for the Eastern District of Michigan's decision, holding that where an applicant for an intent-to-use trademark (ITU) application does not rebut a showing of a lack of a bona fide intent to use the mark on all goods and services listed in the application, the application is not totally voided if the applicant did not commit fraud or other egregious conduct ( (6th Cir. 2017)).

This dispute concerns the mark WORKWIRE for use in connection with certain goods and services by:

Creative Harbor, a technology start-up company engaged in content development for all media, which filed two trademark applications on February 19, 2014 at 6:28 pm and 7:56 pm seeking rights to the WORKWIRE mark in connection with 36 different goods and services.
Kelly Services, which developed an employment based iPad application that:
- became available at 8:11 pm on February 19, 2014 under the WORKWIRE name; and
- was first downloaded by a customer on February 20, 2017.

After Creative Harbor sent Kelly Services a cease and desist letter demanding that Kelly Services stop using the WORKWIRE name in connection with the iPad application, Kelly Services sought a declaratory judgment from the Eastern District of Michigan that:

It had superior rights in the WORKWIRE mark.
It had not infringed Creative Harbor's rights in that mark.
Creative Harbor's rights in the mark were invalid.

Subsequently, the US Patent and Trademark Office (USPTO) published Creative Harbor's applications, which Kelly Services opposed. The USPTO consolidated the two oppositions and stayed the proceedings in light of the district court case.

Creative Harbor moved for partial summary judgment seeking a declaration that it had priority to the WORKWIRE mark based on its applications. Kelly opposed the motion asserting that the applications were invalid because Creative Harbor lacked a bona fide intent to use the mark on some of the goods and services listed in the applications. The district court:

Ultimately found that Creative Harbor did not have a bona fide intent to use the mark on some of the goods and services.
Voided Creative Harbor's applications in their entirety.

Creative Harbor appealed to the Sixth Circuit, which began its analysis by joining the US Courts of Appeals for the Federal Circuit and the DC Circuit in holding that a lack of a bona fide intent is a proper ground to oppose an ITU application. It also noted that there must be objective evidence of intent to use the mark, not merely an intent to reserve a right in the mark.

The Sixth Circuit pointed to Creative Harbor's district court deposition testimony indicating that some of the goods and services were included in the application for the following reasons:

In case the brand got bigger or diversified.
For future exploration.
To protect future activity.
To keep options open.

Based on this and evidence that Creative Harbor submitted concerning its intent to use the mark with some other goods and services, the Sixth Circuit concluded that Creative Harbor lacked a bona fide intent to use the mark for at least some of the goods and services listed in the applications.

Moving to the appropriate remedy, the Sixth Circuit held that the district court should delete the offending goods and services from the applications and allow the remainder to proceed towards registration. In reaching this conclusion, the Sixth Circuit reviewed Trademark Trial and Appeal Board (TTAB) precedent and:

Highlighted the rule the TTAB set out in Grand Canyon West Ranch LLC v. Hualapai Tribe concerning use based trademarks ( (TTAB 2006)). Specifically, the TTAB held that applicants that have used the mark in connection with some of the goods or services identified in the application but not others may cure the problem by amending their applications to delete the offending goods and services where the applicants did not commit fraud.
Noted that the TTAB took this same approach for ITU applications in The Wet Seal, Inc. v. FD Management, Inc., (TTAB 2007), and Syndicat Des Proprietaires Viticulteurs de Chateneuf-du-Pape v. Pasquier DesVignes, (TTAB 2013).

The Sixth Circuit distinguished Spirits International, BV v. S.S. Taris Zeytin Ve Zeytinyagi Tarim Satis Kooperatifleri Birligi, (TTAB 2011), cited by Kelly Services, because in that case:

The opposing party:
- put the entire application at issue in the opposition; and
- made a prima facie showing that the applicant lacked a bona fide intent.
The applicant failed to produce any evidence at all that it had a bona fide intent as to any of the goods and services listed in the application.

The Sixth Circuit remanded the case for the district court to determine which goods and services should be deleted from the applications.

No Intent to Use for Some Goods Not Fatal to Entire ITU Trademark Application: Sixth Circuit | Practical Law