Grocery store successfully petitions for cancellation of similar vending machine trademark. CORCAMORE v. SFM

A trademark is something that a product seller uses to identify the products it sells. A word, phrase or symbol is what most people commonly think of as a trademark, but anything that a product seller uses to distinguish its products from competitor’s products can be granted trademark protection. Obtaining a right to a trademark law in the United States is based on using the trademark in commerce. The first person to use a trademark to brand products is considered the senior user and has priority over junior users of a trademark. A trademark can be registered with the United States Patent and Trademark Office to strengthen the rights associated with a trademark, however registration is not required to begin using a trademark to brand products.

Even after a trademark is registered with the United States Patent and Trademark Office, that registration can be canceled. A senior user may petition the United States Patent and Trademark Office to cancel a registration on the basis of prior use pursuant to 15 U.S.C. § 1064. In a cancellation proceeding, to establish priority on a likelihood of confusion claim brought under Section 2(d) of the Trademark Act, a senior user must prove that it owns a trademark previously used in the United States and not abandoned. A senior user may establish its own prior proprietary rights in a trademark through actual use, use analogous to trademark use, or an earlier constructive use date.

CORCAMORE, LLC, v. SFM, LLC, 2019-1526 (C.A.F.C. 2020) is an example of a case where a senior user of a trademark successfully canceled the registration of a junior user under 15 U.S.C. § 1064.

SFM owns the federal registration for SPROUTS and other SPROUTS nominative trademarks for use in connection with retail grocery store services. SFM first used the SPROURTS trademark in commerce at least as early as April 15, 2002. An example of SFM’s trademark is reproduced above on the left.

Corcamore owns a federal trademark registration for SPROUT for use in connection with vending machine services. The registration claims a first use date of May 1, 2008. An example of Corcamore’s trademark is reproduced above on the right.

SFM filed a petition with the Trademark Trial and Appeal Board (“TTAB”) to cancel Corcamore’s registration. SFM claimed that its rights to the SPROUTS mark were superior because it had been using the trademark at least as early as 2002, and Corcamore claimed first use in 2008. SFM alleged that it would be damaged by Corcamore’s continued registration of the SPROUT mark because it was likely to cause confusion or mistake, or to deceive the purchasing public. Corcamore claimed the SFM lacked standing to petition for cancellation and motioned to dismiss.

The TTAB held that SFM had standing because it sufficiently alleged a real interest in the cancellation proceeding and a reasonable belief of damage, as required under 15 U.S.C. § 1064. During discovery Corcamore was uncooperative to the point that the TTAB imposed sanctions, twice. At the close of discovery SFM motioned for default judgment as a sanction for Corcamore’s litigation misconduct and the TTAB granted the motion. Corcamore appealed this decision to the Court of Appeals for the Federal Circuit on two theories. First that SFM lacked standing and second that the TTAB abused its discretion when it granted default judgment.

The Federal Circuit noted that there are two requirements for determining whether a party has standing to bring or maintain a statutory cause of action: a party must demonstrate (i) an interest falling within the zone of interests protected by the statute and (ii) proximate causation. The Federal Circuit agree with the TTAB that SFM satisfied these requirements by claiming that Corcamore’s use of SPROUT is likely to cause consumer confusion and damage SFM. With respect to the grant of default judgement as a sanction for discovery misconduct, the Federal Circuit found no abuse of discretion by the TTAB and affirmed the decision.

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