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A registered trademark is considered abandoned if its use has been discontinued with intent not to resume such use. 15 U.S.C.S. § 1127. Nonuse for 3 consecutive years shall be prima facie evidence of abandonment. A showing of a prima facie case creates a rebuttable presumption that the trademark owner has abandoned the mark without intent to resume use. The burden then shifts to the trademark owner to produce evidence that he either used the mark during the statutory period or intended to resume use. The burden of persuasion, however, always remains with the challenger to prove abandonment by a preponderance of the evidence.
Appellee Mattel Inc.'s predecessor-in-interest, Tyco Industries Inc., first produced a line of toys under the CRASH DUMMIES marks in 1991. In 1993, the predecessor-in-interest obtained federal trademark registrations for the Crash Dummies Marks: Crash Dummies and The Incredible Crash Dummies. In 1995, appellant Crash Dummy Movie LLC entered into an option agreement with the appellee’s predecessor-in-interest to allow use of the trademarks but the option expired in 1996. When the latter experienced financial difficulties, it began negotiating an acquisition with the appellee, which officially purchased the holder in 1998. The United States Patent Trademark Office (USPTO) cancelled the registrations for the trademark because appellee did not file a section 8 declaration of use and/or excusable nonuse for the marks. In March 2003, appellant then filed its intent to use application for the mark. Appellee opposed the application claiming priority over its predecessor-in-interest’s prior registration and use of the marks. The issue before the Trademark and Trial Board was whether appellee was entitled to claim common law trademark rights to the subject marks predating appellant’s March 2003 filing date. The Board concluded that appellee rebutted the presumption of abandonment of its common law trademark rights by showing reasonable grounds for the suspension and plans to resume use in the reasonably foreseeable future when the conditions requiring suspension abate. Appellant now appealed the Board's decision sustaining appellee’s opposition.
Did appellee’s trademarks, which was cancelled for failure to renew, had been properly determined to be valid based on its intent to resume use of the marks?
The court affirmed the Board’s decision as the court found that substantial evidence supported the Board's finding that the appellee intended to resume use of the marks during the contested time period. The court found that it had recorded a trademark assignment with the USPTO at the time of the acquisition. On the other, the court ruled that appellant presented no contradictory evidence, and had stipulated that documents submitted by the appellee that supported its position were admissible as business records.