SFM correctly found to have standing to bring trademark cancellation request (e.g., “reasonable belief of damage”)

Corcamore, LLC v. SFM LLC

Docket No. 2019-1526 (http://www.cafc.uscourts.gov/sites/default/files/opinions-orders/19-1526.OPINION.10-27-2020_1675813.pdf)

PROST, REYNA, TARANTO

October 27, 2020

Brief Summary:  SFM found to have standing to bring trademark cancellation request against Corcamore’s SPROUTS registration in connection with vending machines in view of SFM’s registration for retail grocery stores (e.g., “reasonable believe of damage”).

Summary:  Corcamore appealed USPTO Board decision granting SFM’s request to cancel Corcamore’s SPROUTS registration in connection with vending machines in view of SFM’s registration of SPROUTS regarding retail grocery stores.  Corcamore argued the Board erred in applying the FC’s “analysis in Empresa Cubana, instead of the analytical framework established by the Supreme Court in Lexmark” (Empresa, FC 2014; Lexmark, US 2014).  The FC panel reviewed the Board’s decision “de novo whether SFM pleaded sufficient facts to establish entitlement to challenge Corcamore’s registered trademark under [section] 1064” (which “does not involve the traditional legal notions of Article III standing”).  The FC panel found that “[t]he Board failed to apply the Lexmark analytical framework” (its “interpretation…is unduly narrow”; “zone-of-interests and proximate-causation requirements control the statutory cause of action analysis”; “if that person ‘believes that he is or will be damaged…by the registration of a mark on the principal register”; “distinguish [parties demonstrating a real interest] from mere intermeddlers”) “but it reached the correct result”, explaining that it “see[s] no meaningful, substantive difference in the analysis used in Lexmark and Empresa Cubana” (e.g., “a party that can demonstrate a reasonable believe of damage by the registration of a mark also demonstrates damage proximately caused by the registered mark”).  And it agreed with the Board’s conclusion that “SFM pleaded allegations sufficient to demonstrate a right to challenge Corcamore’s registered mark” (e.g., “goods sold are substantially similar…an interest falling within the zone of interests protected by [section] 1064”, “purchasers will be led to the mistaken belief that SFM’s goods and [Corcarmore’s] goods originate from the same source, or that [Corcamore’s] useof SPROUT has been sponsored, authorized, or warranted by SFM”).  The Board granted a default judgment “as a discovery sanction”, which Corcamore unsuccessfully argued was an abuse of discretion (e.g., “Corcamore failed to follow Rule 2.119 and provided no explanation for why it failed to effect email service”).  The Board decision was therefore affirmed.

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