IP Law Daily Lack of intent to use mark for some services did not void entire application
Tuesday, January 24, 2017

Lack of intent to use mark for some services did not void entire application

By Thomas Long, J.D.

Technology company Creative Harbor, LLC, lacked a bona fide intent to use its WORKWIRE trademark with respect to some, but not all of the goods and services listed in two applications to register the marks, the U.S. Court of Appeals in Cincinnati has held. However, a district court erroneously voided Creative Harbor’s applications in their entirety. Based on this determination, the district court had decided that Creative Harbor could not establish the requisite priority in its mark to proceed with unfair competition and dilution counterclaims against personnel placement firm Kelly Services, Inc., which had filed a declaratory judgment action against Creative Harbor in connection with the parties’ use of "WorkWire" for mobile device apps. The district court’s grant of summary judgment in favor of KellyServices was vacated, and the case was remanded with instructions for the district court to determine which goods and services were improperly included in the applications and to excise the improper items (Kelly Services, Inc. v. Creative Harbor, LLC, January 23, 2017, Clay, E.).

Technology startup Creative Harbor described its business as "original content creation and concept development for all media, including but not limited to, internet, mobile, photography, film, and TV." Kelly Services was a leading provider of personnel placement and staffing services. The dispute between the parties centered on which should have priority in the WORKWIRE mark. Creative Harbor’s principal, Christian Jurgensen, asserted that he developed an idea in September 2013 for a mobile app designed to connect employers with prospective employees. Jurgensen formed Creative Harbor in 2014 to develop the app, which he decided to call "WorkWire." In early 2013, Kelly Services allegedly started developing its own iPad app, also called "WorkWire." Kelly Services asserted that its app was completed in February 2014.

On February 19, 2014, Creative Harbor filed two intent-to-use applications with the USPTO seeking to register WORKWIRE in connection with 36 individually identified goods and services. Meanwhile, Kelly Services’ iPad app became available on the Apple App Store, and a customer first downloaded the app on February 20, 2014.

A few weeks later, Creative Harbor sent Kelly Services a cease and desist letter asserting its rights in the WORKWIRE mark. Kelly Services responded by filing suit against Creative Harbor, seeking a declaratory judgment that it possessed superior rights in the mark, that it did not infringe Creative Harbor’s trademark rights, and that Creative Harbor’s asserted mark rights were not valid. Creative Harbor filed counterclaims against Kelly Services, asserting, among other things, that it had priority rights over Kelly Services because it had filed its applications before Kelly Services began using the mark in commerce. Creative Harbor moved for partial summary judgment on the question of priority; Kelly Services cross-moved for summary judgment, arguing that the applications were void due to a lack of bona fide intent to use the marks on some of the goods and services listed in the applications. The district court sided with Kelly Services, and Creative Harbor appealed.

Bona fide intent. The lack of a bona fide intention to use an applied-for mark with respect to listed goods or services is a proper basis for challenging an intent-to-use application under Section 1(b) of the Lanham Act. The Lanham Act does not define "bona fide intent," but the Federal Circuit has explained that "the applicant’s intent must be demonstrable and more than a mere subjective belief." The applicant must show more than a mere intention to reserve a right in the mark.

In the court’s view, Jurgensen’s deposition testimony was sufficient to demonstrate by a preponderance of the evidence that Creative Harbor lacked a bona fide intent to use the mark as to at least some of the listed good and services. For example, Jurgensen testified that he asked his attorney to broaden the scope of the applications "in case the brand got bigger." He also testified that when the applications were drafted, he had clear ideas for some of the uses, while some of them were "meant for future exploration." Jurgensen specifically testified that he did not intend to use the mark in connection with computer game software, although it was listed in the applications. Creative Harbor did show that it had the requisite bona fide intent to use the mark for some of the listed goods and services, such as an iPhone application that connected job seekers with employers, the court said. This evidence did not, however, contradict the evidence showing that Creative Concepts lacked a "firm" intention to use the mark in connection with computer games, professional credentialing verification services, business consulting services, and a number of other services listed in the applications.

Remedy. Kelly Services argued—and the district court agreed—that the appropriate remedy was to void the applications in their entirety. The Sixth Circuit, however, agreed with Creative Harbor that the entire applications should not be voided, but, rather, the court should delete the improper goods and services from the application and allow the remainder to proceed toward registration. After reviewing conflicting precedent from the Trademark Trial and Appeal Board, the court decided that the more lenient approach was preferable. According to the Sixth Circuit, the Board had voided entire applications in cases in which the opposing party had made a prima facie showing that the applicant lacked bona fide intent to use the mark, and the applicant failed to provide any evidence in rebuttal. This case was distinguishable from those cases, in that Creative Harbor had provided evidence of intent to use the mark with respect to some of the listed goods and services.

Accordingly, the court held that when an intent-to-use applicant lacked bona fide intent as to some, but not all, of the goods and services listed in her application, the application should not be voided in its entirety absent fraud or other egregious conduct. Rather, the court should determine as to which goods and services the applicant lacked bona fide intent, and excise the overbroad portions of the application.

Concurring and dissenting opinion. Circuit Judge Alice M. Batchelder concurred in part and dissented in part. Judge Batchelder agreed with the majority that Kelly Services met its burden of production and that Creative Harbor failed to demonstrate a bona fide intent to use the mark in connection with at least some of the goods and services listed in its applications, she disagreed with the holding as to the appropriate remedy. Judge Batchelder opined that Board precedent suggested that it was incumbent on the applicant to amend its application to eliminate portions for which it could not demonstrate a bona fide intent to use, or else risk having the entire application voided. Therefore, Judge Batchelder would have affirmed the district court’s judgment.

The case is No. 16-1200.

Attorneys: David P. Utykanski (Harness, Dickey & Pierce, P.L.C.) for Kelly Services, Inc. and Kelly Services, LLC. Peter D. Gordon (Peter D. Gordon and Associates) for Creative Harbor, LLC.

Companies: Kelly Services, Inc.; Kelly Services, LLC; Creative Harbor, LLC

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