Eastman Kodak Company v. Bell & Howell Document Management Products CompanyEastman Kodak Company v. Bell & Howell Document Management Products Company
Eаstman Kodak Company (Kodak) appeals from the decision of the Trademark Trial and Appeal Board (Board) of the Patent and Trademark Office (PTO) in an intent-to-use application proceeding under the Lanham Act, as amended by the Trademark Law Revision Act of 1988,
BACKGROUND
On October 12,1990, B & H filed intent-to-use applications, under
Kodak, a competitor of B & H in the manufacture and marketing of business equipment products, including microfilm reader/printers, timely filed a notice of opposition to registration of each of the three marks. Kodak alleged that the marks would be used solely as model designators for the reader/printers and therefore would be merely descriptive. Kodak argued that B & H had not shown that the marks had acquired secondary meaning and thаt, therefore, registration of the marks would be improper. The three opposition proceedings were consolidated before the Board.
B
&
H moved for summary judgment on the grounds that there were no genuine is
On the issue of mere descriptiveness, the Board stated that it “believe[s] that it is possible for a numerical designation, which functions only in part to designate a model or grade, to be inherently distinctive and registrable without a showing of secondary meaning.” Eastman Kodak, slip op. at 5 (citing Neapco Inc. v. Dana Corp., 12 USPQ2d 1746, 1748 (TTAB 1989)). Due to the nature of intent-to-use applications, the number marks at issue had not been used at the time of the opposition proceeding. Accordingly, the Board held that it could not determine whether the numerical designations “are merely descriptive or if they are registrable without a showing of secondary meaning.” Id. The Board concluded that in such situations, where the descriptiveness issue could not .be resolved until use had begun, the opposition should be dismissed without prejudice to the initiation of a cancellation proceeding against the mark if the mark is registered after the statement of use is filed. Consequently, the Board denied Kodak’s motion for summary judgment, granted B & H summary judgment on the descriptiveness issue, and dismissed the oppositions without prejudice. As а result, B & H received a notice of allowance.
DISCUSSION
The principal issue in this case is whether the Board’s implied creation of a presumption in favor of the applicant for a numerical mark intended for use as more than a model designator is a reasonable interpretation of the Board’s authority under the Lanhám Act. We hold that it is.
Under the
Chevron
doctrine, established in
Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc.,
.1.
In the instant case, the Board’s decision to grant B & H summary judgment and dismiss Kodak’s opposition without prejudice, necessarily- involved the Board’s concluding that numerical designators are presumptively not merely descriptive under Lanham Act section 2(e),
Nor does the legislative history of the Trademark Law Revision Act of 1988 speak directly to this issue. The legislative history does demonstrate that Congress intended most marks applied for in an intent-to-use application (intent-to-use mark) to be reviewed for descriptiveness in the initial examination/pre-use stage of the intent-to-use application process. For example, Senate Report 515 states that “the absence of specimens at the time the application is filed will not affect examination on numerous fundamental issues of registrability (that is, descriptiveness, geographic or surname significance, or confusing similarity).” S.Rep. No. 515, 100th Cong., 2d Sess. 32 (1988), reprinted in 1988 U.S.C.C.A.N. 5577, 5595. With respect to the examination of the statement of use, which is filed after a notice of allowance has been issued, the Report states:
The Patent and Tradеmark Office’s examination of the statement of use will be only for the purpose of determining issues that could not have been fully considered during the initial examination of the application, that is, whether the person filing the statement of use is the applicant, whether the mark as used corresponds to the drawing submitted with the application, whether the goods or services were identified in the application and not subsequently deleted, and ivhether the mark, as displayed in the specimens or facsimiles, functions as a mark.
Id.
at 34, 1988 U.S.C.C.A.N. at 5596 (emphasis added). As the highlighted phrase shows, Congress did intend the PTO to confirm, after the filing of the statement of use, that the intent-to-use mark, as displayed and used, actually “functions as a mark.” Indeed, the statute provides: “Subject to
examination and acceptance
of the statement of use, the mark shall be registered.... Such examination may include an examination of the factors set forth in subsections (a) through (e) of
Furthermore, it is clear from the legislative history that Congress, for policy reasons, chose to sequence the opposition process before the use of an intent-to-use mark had commenced. See S.Rep. No. 515 at 32, 1988 U.S.C.C.A.N. at 5595 (“Subjecting an intent-tо-use application to the opposition process before the applicant makes use of its mark is essential if the system is to achieve its goal of reducing uncertainty before the applicant invests in commercial use of the mark.”). Accordingly, Congress knew that some issues of registrability could not be decided in opposition proceedings and would therefore have to be addressed in the post-use PTO examination or challenged in a cancellation proceeding after the mark was registered.
Thus, under step one of our inquiry under the Chevron doctrine, the Board’s interpretation does not contravene any clear and unambiguous statutory meaning.
II.
We further conclude, under step two of the Chevron doctrine, that the Board’s construction is a reasonable interpretation of the Lanham Act.
Kodak argues, however, that the Board’s interpretation is unreasonable because it would preclude asserting mere descriptiveness as a basis for denying registration of both word and number marks in intent-to-use applications. This argument is unavailing for several reasons. First, there are words and phrases that, as applied to certain goods, the examining attorney in the initial examination could certainly find to be prima facie merely descriptive. For example, an
Second, Kodak’s argument must assume that under circumstances such as these, after a notice of allоwance is issued, intent-to-use marks will automatically be passed to registration. However, the statute provides for another examination of the mark after the statement of use is filed.
Furthermore, the Trademark Examination Guide 3-89 (TEG) sets forth a standard for this examination of the statement of use: “The [PTO] will not issue any requirements or refusals concerning matters which could have or should have been raised during initial examination, unless the failure to do so in initial examination constitutes a clear error.” TEG § A.9.b. The TEG defines “clear error” as “an error which, if not corrected, would result in issuance of a registration in violation of the Act.” Id. Thus, thе examining attorney’s examination standard is for legal error and is not the deferential clearly erroneous standard due, for example, fact-findings of a district court. Accordingly, the examining attorney essentially must make a de novo determination on any issue that would affect the legal correctness of registration. 4
The descriptiveness of the manner of use of numerical designators, such as the marks challenged in these oppositions, is such an issue. This is so even though the TEG singles out descriptiveness in its discussion of the extent of reexаmination of the mark: “[T]he examining attorney may not issue a refusal under Trademark Act Section 2(e)(1),
There is a serious question of whether the presumption created by the Board in favor of numеrical designators would be lawful if the examining attorney, after the statement of use and specimens are filed, were to approve the mark for registration without serious inquiry as to whether, as used, the mark functions as a trademark under the provisions of section 2. Such a de novo determination under section 2 appeal’s to be the only way the practical presumption created by the Board could be sustainable under Chevron. Therefore, any other interpretation of the applicable procedure would be of questionable' validity as long as the Board maintains this presumption.
Furthermore, Kodak’s contention that the Board’s interpretation of the statute “in effect eliminates Lanham Act § 2(e) as a basis for rejecting án intent-to-use application,” is unavailing because Kodak’s analysis would eliminate the use of intent-to-use applications for any numerical mark that could possibly be used'as a model designator, in whole or in part. However, the'statute does not exclude from intent-to-use applications any type of mark. Because Kodak is incorrect that the Board’s decision precludes the use of descriptiveness as a basis for rejecting intent-to-use applications and because Kodak’s interpretation would preclude use of intent-to-use applications for such numerical marks in direct contravention of the statute, certainly the Board’s failure to adopt such an interpretation is not unreasonable.
Kodak further asserts that the Board’s interpretation is unreasonable because it allegedly crеates a different standard for regis-trability for intent-to-use applications from use-based applications with regard to descriptiveness, contrary to statutory design. Kodak is correct that the statute provides for the same substantive requirements to be met for intent-to-use and use-based applications.
Compare
Furthermore, as shown above, the legislative history clearly shows that Congress considered the problem of placing the opposition proceeding of intent-to-use marks before actual use had occurred, but still
chose
to position the proceedings at that point in time for policy reasons.
See
discussion
supra
part I. And Congress codified this arrangement by (1) providing for the Commissioner, after initial examination, to publish the intent-to-use mark for opposition if it
“would be
entitled to registration
upon
the acceptance of the statement of use required by
III.
Kodak argues that the Board erred
in
denying it summary judgment because Kodak believes that B
&
H’s intent-to-use marks will be used as model designators, rendering them merely descriptive and therefore not registrable without a showing оf secondary meaning. Kodak further asserts that it submitted evidence to the Board supporting this contention. Even if we assume that Kodak’s evidence proves that B
&
H’s numerical marks will be used as model designators, this conclusion is not dispositive of the descriptiveness issue as Kodak claims. In order for B
&
H’s marks to be found merely descriptive, they must be used
solely
as model designators and not in any source-indieating function. As part of its intent-to-use application, B & H necessarily must have asserted a bona fide intent to use each number as a trademark,
see
CONCLUSION
Based on the foregoing, the Board’s decision is
AFFIRMED.
Notes
. Like J. Thomas McCarthy, see, e.g., 2 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition § 19.07 (3d cd. 1992), we refer to the current trademark statutory provisions as the "Lanham Act," even though the 1946 statute has been extensively amended, including in 1988.
. The statute also provides for extensions of time for good cause.
See
. Elsewhere, the court uses the word "reasonable,” interchangеably with "permissible."
See Chevron,
. Indeed, another provision of the TEG provides that “Examination of the statement of use follows the same procedural course as the initial examination of the application under Trademark Rule 2.61 et seq., 37 C.F.R. Section 2.61 et seg." TEG § A.9.a.
. Kodak asserts that
Neapco, Inc. v. Dana Corp.,
12 USPQ2d Í746 (TTAB 1989), "must be limited to situations in which, as in
Neapco,
the Board is able to consider evidence that the model designator in actual use serves a trademark (source-indicating) function.” Kodak argues that because B & H cannot prove use as a trademark in the initial examination, B & H should be denied registration at that point. However, the Board cannot consider "evidence that the model designator
in actual use
serves a trademark ... function” (emphasis added) until the mark is used. Under the TEG, the examining attorney examines the specimens of use “to confirm that the specimens show use of the subject matter as a trademark or service mark on or in connection with
. The statute also provides for extensions of time for good cause.
See
. A notice of allowance, rather than a certificate of registration, is issued, after the initial examination and prior to the applicant's filing of a statement of use, unless the mark was successfully opposed.
. Kodak argues that the timing is also prejudicial because not enabling Kodak to challenge thе marks until a post-registration cancellation proceeding allows an applicant to apply for several marks and tie them up for a period of months or years through the extension periods for filing a statement of use,
see
For example, the applicant must specify, in the original applicatiоn,
applicant's bona fide intention to use the mark in commerce, the goods on or in connection with which the applicant has a bona fide intention to use the mark and the mode or manner in which the mark is intended to be used on or in connection with such goods, including a statement to the effect that the person making the verification believes himself or herself, or the firm, corporation, or association in whose behalf he or she makes the verification, to be entitled to use the mark in commerce, and thаt no other person, firm, corporation, or association, to the best of his or her' knowledge and belief, has the right to use such mark in commerce ....
Furthermore, extensions are only granted (after the first) "upon a showing of good cause by the applicant.” Id. To show good cause, the applicant must provide:
(1) An allegatiоn that the applicant has not yet made use of the mark in commerce on all the goods or services specified in the notice of allowance ..., and
(2) A statement of applicant's ongoing efforts to make use of the mark in commerce on or inconne'ction with each of the goods or services specified in the verified statement of continued bona fide intention to use required under paragraph (b) of this section. Those efforts may include, without limitation, product or sendee research or development, market research, manufacturing activities, promotional activities, steps to acquire distributors, steps to obtain required governmental approval, or other similar activities. In the alternative, a satisfactory explanation for the failure to make such efforts must be submitted.
Thus, in order for an applicant to tie up several merely descriptive marks for a period of months or years, the applicant would have to mislead the PTO through several stages of the process — an unlikely event and one with potentially severe Consequences for the applicant. Furthermore, as mentioned above, such timing of Kodak's challenge to the mark was intended by Congress. Consequently, the Board's interpretation does not contravene the statute’s meaning and purpose of the timing of the proceedings to challenge an intent-to-use mark.