15 November 2021TrademarksAlex Baldwin

Fed Circ rules that non-TM holders can tackle exclusivity claims

The US Court of Appeals for the Federal Circuit has vacated a Trademark Trial and Appeal Board (TTAB) decision in a dispute between two companies over exclusive use of the “Galperti” trademark.

In a precedential ruling handed down on Friday, November 12, a three-judge panel for the circuit rejected two prior TTAB decisions on what constitutes “use” in claiming substantially exclusive use of the mark.

Italian steel manufacturing company Galperti SRL sought the trademark registration for “Galperti” for “ironmongery in the form of metal hardware”.

As Galperti is a surname, the word needs to be “distinctive of the applicant’s goods in commerce”, in order to demonstrate prima facie evidence of distinctiveness and be trademarked, according to the court.

The Italian company also needed to prove “substantially exclusive and continuous use… for the five years before the date of which the claims of distinctiveness is made”.

US firm Galperti Inc argued that its use of “Galperti” predated Galperti SRL’s use and that issuing the trademark was likely to cause confusion between the two. It also alleged that the Italian company had obtained the registration fraudulently by making a “false assertion” of substantially exclusive use from 2002 to 2007.

In the TTAB’s ruling, the board required Galperti Inc to show “secondary meaning” of the term “Galperti” in order to show proprietary rights over the term to undermine the Italian company’s substantially exclusive use claim.

According to the Federal Circuit, this requirement is “counter to our precedent”, which held that “even marketplace uses of a term lacking secondary meaning for the users are among the uses that legitimately play that role”.

The Federal Circuit ruled that the board committed a “legal error” in requiring to show the secondary meaning of use of the mark. It also held that the board erred in its related requirement that the US company had to demonstrate “privity” with other users of the mark during the 2002-2007 period.

“Use by anyone, regardless of relation to the challenger, may undercut a claim of substantially exclusive use. This straightforward point is reflected in our prior opinion in the present matter, where we said that ‘any use by a third party’ could be significant,” said the court.

Case history

Galperti SRL sought to trademark its company name in 2007, submitting its evidence for “substantially exclusive” use for the five proceeding years. While the application was initially denied, the Italian company submitted further proof of the marks usage over the time period and registration was issued.

In 2013, Galperti Inc petitioned the USPTO to cancel the registration, arguing that, among other things, that the registration was obtained fraudulently as Galperti SRL’s 2007 statement of substantially exclusive use was falsified.

The USPTO dismissed the cancellation petition, leading Galperti Inc to appeal to the Federal Circuit.

In its first appeal, the Federal Circuit affirmed the USPTO’s ruling on the non-fraud issues, but vacated the board’s rejection of the fraud charge and remanded it for further consideration.

On remand, the board again dismissed the fraud claim, finding no proven falsity on the part of Galperti SRL’s assertion of “substantially exclusive use” of the mark from 2002 to 2005, leading the decision to be appealed again to the Federal Circuit.

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