Trademark Trial and Appeal Board
Patent and Trademark Office (P.T.O.)
*1 ZIRCO CORPORATION
v.
AMERICAN TELEPHONE AND TELEGRAPH COMPANY
Opposition No. 84,979
November 5, 1991
Before Sams, Rice and Simms
Members
By the Board:
J.D. Sams, J.E. Rice and R.L. Simms
Members, Trademark Trial and Appeal Board
Opposer, on April 23, 1991, filed a notice of opposition to the registration of applicant's mark DATACEL for a portable cellular data transmission and reception system comprising a cellular transceiver integrated with a cellular protocol modem, which is the subject of an intent-to-use application filed on January 11, 1990. [FN1] In its notice of opposition, opposer alleges, inter alia, that opposer has been the user of the mark DATACELL for a cellular adapter allowing linkage of substantially any and all telephone equipment to any cellular telephone since about April 15, 1990; that opposer has perfected its common law rights in its mark throughout the United States; that applicant's use of its mark in commerce, if any, is well after the first use date of opposer's mark; that opposer had no actual knowledge of applicant's intent-to-use application prior to its adoption and use of its mark; and that because of the similarities between opposer's and applicant's marks and because of the related nature of the goods provided by opposer under its mark and the goods proposed to by sold by applicant under its mark, there is a likelihood of confusion on the part of the trade and purchasing public.
Applicant, on July 1, 1991, has filed a motion to dismiss the opposition pursuant to Fed.R.Civ.P. 12(b)(6) for failure to state a claim upon which relief may be granted. Applicant asserts that under Section 7(c) of the Trademark Act (15 UCS 1057(c)), as amended [FN2], the filing of its intent-to-use application constitutes constructive use of its mark since the filing date of January 11, 1990 and thus opposer's allegations of first use of its mark on or about April 15, 1990, even if true, do not afford it a basis for relief, in that opposer, as a subsequent user, cannot be damaged.
Opposer has filed its opposition to the motion, arguing that it is clear from Section 7(c) that constructive use does not come into play until the mark has been registered and issued; that, accordingly, applicant does not have conferred upon it a nationwide right of priority of January 11, 1990 until it uses the mark and registration is completed; that since applicant has not perfected constructive use of its mark, it cannot prevent opposer from acquiring common law rights in its mark; that opposer can exert these common law rights against parties which are junior to it, until the issuance of a dominating registration; and that since under Section 18 (15 USC 1068), as amended, no judgment shall be entered in favor of an intent-to-use applicant before the mark is registered, if that applicant cannot prevail without establishing constructive use pursuant to Section 7(c), [FN3] no judgment can be made final herein in favor of applicant and thus the motion to dismiss must be denied. Opposer further contends that Section 7(c) is in violation of the commerce clause of the Constitution and as such can confer no rights on applicant.
*2 Applicant has filed a reply [FN4], contending that opposer's position would require that an intent-to-use applicant make use of its mark before it could assert constructive use priority to prevail in an opposition and accordingly would defeat the purpose of the intent-to-use provisions of the Trademark Revision Act. Applicant argues that opposer cannot rely upon the acquisition of common law rights after the filing date of applicant's application; that the conditional language of Section 7(c) and Section 18 does not affect applicant's right to assert constructive use priority in this opposition, only the entry of final judgment in applicant's favor would be suspended pending issuance of a registration; and that the legislative history of the Trademark Law Revision Act reveals that the constitutionality of the intent-to-use provisions was thoroughly scrutinized and determined to be satisfactory.
Section 7(c) was added to the Lanham Act by the Trademark Law Revision Act of 1988 in order to provide constructive use, dating from the filing date of an application for registration on the principal register, for a mark registered on that register. As a review of the legislative history shows, the provision is intended to fix a registrant's nationwide priority rights in its mark from the filing date of its application whether the application is based on use or intent-to-use. This right of priority is to have legal effect comparable to the earliest use of a mark at common law. Senate Judiciary Committee Report on S.1883, Senate Report No. 100-515 (September 15, 1988).
While constructive use is applicable to applications based on use as well as intent-to-use, the provision is considered to be essential to the intent-to-use system. Without this provision, an intent-to-use applicant would be vulnerable to theft of its mark or to innocent use of the mark by anyone after the filing of its application. See Frank Z. Hellwig, The Trademark Law Revision Act of 1988: The 100th Congress Leaves Its Mark, 79 TMR 287, 299 (1989). Moreover, by according conditional rights to those who publicly disclose their marks, constructive use encourages the early filing of applications and the searching of trademark records prior to the adoption and investment in new marks. Senate Judiciary Committee Report on S. 1883, supra.
Opposer's major contention is that under Section 7(c), constructive use is conditional upon registration of the mark and thus applicant, having neither used its mark nor having been issued a registration, is not entitled to assert any priority rights as of the filing date of its application in this opposition.
It is true that a reading of Section 7(c) alone, specifically of that portion which reads "[c]ontingent on the registration of a mark ..., the filing of the application to register such mark shall constitute constructive use of the mark ...", might be construed to limit an applicant's right to rely upon the constructive use date as the first use date of its mark to post-registration actions. But the Board does not believe that such a literal interpretation of Section 7(c) can be adopted. Instead this section must be read in conjunction with Sections 13 and 18 of the Trademark Act. Under Section 13, an opposition may be filed against any application for registration of a mark on the principal register, regardless of whether the application is based on use or intent-to-use. Under Section 18 the Board may render a decision on the opposition; it is only the entry of final judgment in favor of an intent-to-use applicant which must be deferred until the mark is registered, if that applicant cannot prevail without establishing constructive use pursuant to Section 7(c). If an intent-to-use applicant were not allowed to rely upon the constructive use date prior to actual use and registration of its mark, it would be rendered defenseless in any opposition against the registration of its mark based on likelihood of confusion. Constructive use would only function as a sword in affirmative actions by an intent-to-use applicant and only after the registration of its mark, never as a shield in actions against that applicant prior to the registration of its mark.
*3 Accordingly, the Board finds that on its face the Lanham Act, as amended by the Trademark Law Revision Act, cannot be interpreted to limit an intent-to-use applicant's entitlement to rely upon the constructive use provision of Section 7(c) to the time after which it has used its mark and has been issued a registration. If the legislative history and the commentaries [FN5] on the revised statute are taken into consideration, it is readily apparent that the constructive use provision was intended to foster the filing of intent-to-use applications, to give an intent-to-use applicant a superior right over anyone adopting a mark after applicant's filing date (providing the applicant's mark is ultimately used and registered) and to prevent a third party from acquiring common law rights in a mark after the filing date of the intent-to-use application. With these being the aims of the constructive use provision, there can be no doubt but that the right to rely upon the constructive use date comes into existence with the filing of the intent-to-use application and that an intent-to-use applicant can rely upon this date in an opposition brought by a third party asserting common law rights. Whether this provision violates the commerce clause of the Constitution is not a matter falling within the jurisdiction of the Board.
In view thereof, applicant's motion to dismiss the opposition under Fed.R.Civ.P. 12(b)(6) is well taken. Opposer's allegations of common law rights in its mark as of April 15, 1990, a date subsequent to applicant's constructive use date, are inadequate to support the ground of priority of use and likelihood of confusion and accordingly opposer has failed to set forth a claim upon which it can prevail.
Judgment in favor of applicant dismissing the opposition is hereby entered, subject to applicant's establishment of constructive use. The time for filing an appeal or for commencing a civil action will run from the date of the present decision. See Trademark Rules 2.129(d) and 2.145. When applicant's mark has been registered or the application becomes abandoned, applicant should inform the Board, so that appropriate action may be taken to terminate this proceeding.
J. D. Sams
J. E. Rice
R. L. Simms
Members, Trademark Trial and Appeal Board
FN1 Serial No. 74/018,298.
FN2 Section 7(c) reads:
Contingent upon the registration of a mark on the principal register provided by this Act, the filing of the application to register such mark shall constitute constructive use of the mark, conferring a right of priority, nationwide in effect, on or in connection with the goods or services specified in the registration against any other person except for a person whose mark has not been abandoned and who, prior to such filing--
(1) has used the mark;
(2) has filed an application to register the mark which is pending or has resulted in registration of the mark; or
(3) has filed a foreign application to register the mark on the basis of which he or she has acquired a right of priority, and timely files an application under Section 44(d) to register the mark which is pending or has resulted in registration of the mark.
FN3 Section 18, in pertinent part, reads:
... no final judgment shall be entered in favor of an applicant under section 1(b) before the mark is registered if such applicant cannot prevail without establishing constructive use pursuant to section 7(c).
FN4 Applicant has accompanied its reply with a motion for leave to file the same, asserting therein that it was necessary for applicant to clarify the issues and respond to new matter raised by opposer. Opposer has opposed the motion, arguing both that the reply is untimely and that it is unnecessary, in that opposer raised no new issues but merely relied upon the relevant statutes.
While there is no specific provision in the present rules for the submission of a reply to a motion, the Board will often take such a reply under consideration, if filed within the normal twenty day period for response to a motion and if either the opposing party has raised new issues in its response or the Board feels the reply will clarify the issues and aid the Board in arriving at a just decision on the motion. In the present case, the reply has been filed within the acceptable period and will assist the Board in its disposition of the motion. Accordingly the Board has taken the reply under consideration. The Board finds no need for any further response on the matter, however, and thus denies opposer's request that it be permitted to file a responsive memorandum to the reply.
FN5 See United States Trademark Association Trademark Review Commission Report and Recommendations to USTA President and Board of Directors, 77 TMR 375 (1987); Henry W. Leeds, Intent To Use--Its Time Has Come, 79 TMR 269 (1989); Frank Z. Hellwig, The Trademark Law Revision Act of 1988: The 100th Congress Leaves Its Mark, 79 TMR 287 (1989).