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US: TTAB rules sales to single customer sufficient to avoid abandonment




In the latest international briefing for the US, Katten Muchin Rosenman analyses a recent TTAB decision on sales to a single customer

In Mombacho Cigars SA v Tropical Tobacco, Inc., the Trademark Trial and Appeal Board (TTAB) addressed the issue of whether a small amount of sales of products bearing a particular mark made to a single customer was sufficient to rebut a claim that such a mark was abandoned.

Mombacho Cigars had filed a petition for cancellation with the TTAB, seeking to cancel Tropical Tobacco's registration for the mark MOMBACHO on the ground of abandonment. The Trademark Act provides that a mark shall be deemed abandoned when its use has been discontinued with an intent not to resume such use. The Act states that an intention not to resume use can be inferred from circumstances and that non-use of a mark for three consecutive years serves as prima facie evidence of abandonment. Important to the case at hand, the Act specifically indicates that use of a mark means the bona fide use of the mark in the ordinary course of trade. It does not include uses of a mark made merely to reserve a right in such mark.

Since trade mark registrations are presumed to be valid, procedurally, the party seeking cancellation bears the burden of proving non-use of the mark. The submission of evidence of non-use of a mark for three consecutive years constitutes a prima facie showing of abandonment. It also creates a rebuttable presumption that the registrant has abandoned the mark without intent to resume use. The burden then shifts to the registrant to proffer evidence to show use of the mark during the relevant period or to demonstrate an intent to resume use of the mark.

In the case at hand, Mombacho Cigars claimed that Tropical Tobacco had only made nominal use of the mark and that such nominal use "was made merely to reserve rights in the mark MOMBACHO (i.e. to be kept as one of its 'dormant' brands), which is expressly prohibited by the Lanham Act." The evidence submitted by Tropical Tobacco indicated that sales of the MOMBACHO branded cigars were slow and made almost exclusively to one customer. The TTAB found that there was no period of three consecutive years where Tropical Tobacco sold no MOMBACHO cigars, and held that nothing in the record supports a finding that such sales were not bona fide uses of the mark.

Citing established case law, the TTAB held that there is no rule of law that "the owner of a trademark must reach a particular level of success, measured either by the size of the market or by its own level of sales, to avoid abandoning a mark." As such, the petition to cancel the MOMBACHO trade mark registration was dismissed.

Although the TTAB's decision in Mombacho Cigars is not a precedent, the case is instructive on the amount of use of a mark that would be deemed sufficient to avoid abandonment and provide a strong basis for defending against a third party challenger asserting abandonment.



Karen Artz AshBret J Danow

Katten Muchin Rosenman LLP 
575 Madison Avenue
New York, NY 10022-2585
United States
Tel: +1 212 940 8554
Fax: +1 212 940 8671
karen.ash@kattenlaw.com
www.kattenlaw.com


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