TM decision reversed due to TTAB’s erroneous analysis of “substantially exclusive” use claim

Galperti, Inc. v. Galperti S.R.L.

Docket Nos. 2019-1150
November 13, 2019

Brief Summary: Galperti TX priority argument correctly denied, but decision remanded as TTAB found to have erroneously analyzed whether Galperti IT’s “substantially exclusive” use claim was false.

Summary: Galperti (a Texas corporation (“Galperti TX”)) appealed TTAB dismissal of its petition to cancel Galperti SRL’s (an Italian limited liability company (“Galperti IT”)) registration of the mark GALPERTI “in the standard characters for ironmongery in the form of metal hardware, namely, flanges, ring-shaped fittings of metal, and forgings” and claiming priority to a 2006 Italian registration. Galperti IT’s mark is “registered on the Principal Register under Section 2(f) of the Lanham Act” which “requires an applicant to demonstrate that a mark ‘has become distinctive of the applicant’s goods in commerce’” (e.g., “exclusive and continuous use…by the applicant in commerce for the five years before the date on which the claim of distinctiveness is made”). Galperti TX alleged Galperti IT’s distinctiveness claim was fraudulent since it “know that both parties used the GALPERTI mark for the manufacture and sale of flanges” (In re Bose, FC 2009). The TTAB found that Galperti TX “failed to demonstrate…by a preponderance of the evidence’ that it had any rights in the mark prior to” Galperti IT’s priority date (Sept. 26, 2006), “concluding that even if [Galperti IT] was aware of [Galperti TX’s] presence in the U.S. marketplace, that did not make its claim of substantially exclusive use ‘per se false’.” The FC panel reviewed the TTAB’s legal conclusions de novo and its fact findings for substantial evidence (In re I.AM.Symbolic, FC 2017; Consol. Edison, US 1938; Net MoneyIN, FC 2008 (“whether an issue was tried by implied consent [is reviewed] for abuse of discretion”)). Galperti TX argued that under Converse (FC 2018), “the proper question was whether” it “demonstrate prior use prior to” Galperti IT’s registration date (April 15, 2008), but the FC panel disagreed since, e.g., “Converse presented an infringement action, not a cancellation petition” and “did not reckon with priority claims” (“it only considered whether infringement occurred before or after registration…[a mark owner] must establish without the benefit of presumption that its mark had acquired secondary meaning before the first infringing use by each respondent”). In addition, the FC panel explained, under “Section 7(c) of the Lanham Act, the filing of the application to register such mark shall constitute constructive use of the mark” (also explaining that this principle applies to foreign marks registered under the Madrid Protocol). The TTAB’s conclusion that Galperti TX did not show the required priority was therefore affirmed. The FC panel also found no abuse of discretion in the TTAB’s refusal to consider Galperti TX’s argument “for cancellation based on its use of GALPERTI as a trade name” because it was “neither included in the petition nor tried by implied consent”. The FC panel did find the TTAB “committed legal error…by stopping its analysis” of whether Galperti IT’s statement of “substantially exclusive” use was false at whether it was “per se” false, while it should have analyzed whether Galperti TX’s “use of the mark was ‘significant’ enough to make [Galperti IT’s] claim false, or whether it was ‘inconsequential’ such that” the claim “was not false.” The FC panel therefore vacated and remanded the decision.

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