By Robert B. Barnett Jr., J.D.
Moving tire-making facilities from China to Thailand to avoid heavy U.S. tariffs did not constitute abandonment of the company’s trademark during period of nonuse.
The Chinese tiremaker Double Coin Holdings succeeded in cancelling Tru Development’s ROAD WARRIOR registration for tires because it was likely to cause confusion with Double Coin’s WARRIOR mark for tires, the Trademark Trial and Appeal Board has ruled, in a precedential opinion. The Board also ruled that Double Coin’s decision to stop selling its tires from 2015-2018 because of the imposition of high tariffs in the U.S. did not constitute abandonment given that the evidence showed that Double Coin always intended to resume sales, which it did in 2018 after moving production facilities to Thailand (Double Coin Holdings Ltd. v. TRU Development, October 1, 2019, Hudis, J.).
Double Coin has been selling tires in the U.S. under the name WARRIOR since 2007. In 2015, Tru began selling tires under the mark ROAD WARRIOR. Double Coin filed a petition seeking cancellation of the ROAD WARRIOR mark for tires on the basis of priority and likelihood of confusion. In its response, Tru filed a counterclaim asserting cancellation of the WARRIOR mark for abandonment.
Priority. The Board noted that Double Coin had established priority by showing that (1) Double Coin had used the mark as early as October 8, 2006, (2) Double Coin had used the mark in the U.S. since 2007, and (3) based on sales documentation, Double Coin had sold tires using the mark in the U.S. since at least May 2014. Tru began using ROAD WARRIOR no earlier than January 1, 2015. Thus, Double Coin had established priority.
Likelihood of confusion. In any likelihood of confusion analysis, the two most important factors are (1) similarity between the marks and (2) similarity between the goods.
The Board concluded that the marks were similar in appearance, sound, connotation, and commercial impression. In the Board’s opinion, the average purchaser would be confused. For one, both marks contain the word "WARRIOR," which, though not determinative, at least gives rise to a strong likelihood of confusion. The Board also concluded that the term ROAD was weak as a source identifier and failed to distinguish the marks. If one party takes the other party’s entire name, confusion cannot be avoided merely by adding a generic or descriptive term. The term ROAD WARRIOR sounds and look like an extension of WARRIOR.
The Board also determined that the marks were similar and the goods (tires) were, at least in part, identical. For both products, the channels of trade and the classes of consumers who buy the products overlapped. Turning to customer sophistication, the Board concluded that this factor was at best neutral because the customer base was the same. No evidence was presented of any actual confusion, in large part because only eight months lapsed between when Tru started selling the tires and Double Coin acted to stop it. As a result, the lack of actual confusion did not benefit Tru because no real opportunity existed for building a record of lack of confusion. As a result, the Board concluded, after balancing the various factors, that Double Coin had adequately demonstrated a likelihood of confusion.
Abandonment. Tru’s counterclaim asserted that Double Coin had abandoned the mark by its decision to stop selling WARRIOR tires in the U.S. for about two and a half years. The evidence revealed that the U.S. in January 2015 imposed an 88% tariff on light duty truck and car tires imported to the U.S. from China. In January 2016, it imposed a 61% tariff on heavy duty truck and bus tires imported from China, which was later reduced to 10%. In any event, Double Coin decided to stop selling tires in the U.S from China. It stated its intention at that time to move production to another country to avoid the tariffs. Ultimately, it moved its factory to Thailand, at which point it began selling WARRIOR tires again in the U.S. Abandonment requires a statement of intent to permanently discontinue sales. Double Coin’s statement that it was halting production because of the tariffs "falls far short of a statement of an intention permanently to discontinue the sale of WARRIOR tires," the Board said. In fact, Double Coin did begin sales after its production facilities were moved to avoid the tariff. As a result, the Board concluded that no intentional abandonment occurred.
Non-use by alteration. Tru also argued that Double Coin abandoned its mark by materially altering the commercial impression of the mark when it resumed U.S. sales. Whereas the previous mark was the word "Warrior" in outlined black, the new mark was the word "Warrior" filled in with red. Whatever the merits of the argument, the Board concluded that it was waived because Tru raised it for the first time in a brief, without ever raising it in its counterclaim or in any other pleading.
The Board, therefore, granted Double Coin’s petition to cancel Tru’s ROAD WARRIOR registration on the basis of priority and likelihood of confusion. It also denied Tru’s counterclaim.
This case is Cancellation No. 92063808.
Attorneys: Joseph E. Mueth (Joseph E. Mueth Law Corp.) for Double Coin Holdings Ltd. Rishi Nair and Kevin J. Keener (Keener & Associates, PC) for TRU Development.
Companies: Double Coin Holdings Ltd.; TRU Development
MainStory: TopStory Trademark USPTO
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