Ttabvue 92062543 Decision
Ttabvue 92062543 Decision
_____
_____
1 Registration No. 4183397 was filed on January 10, 2012, under Section 1(a) of the
Trademark Act, 15 U.S.C. § 1051(a), claiming January 4, 2004 as the date of first use and
first use in commerce. The registration issued on the Principal Register on July 31, 2012 with
Cancellation No. 92062543
abandonment. In its answer, Respondent denied the allegations set forth in the
petition, and asserts affirmatively that it has not abandoned its mark. We dismiss
the petition.
I. Initial Issue
discontinued with intent not to resume use. Thus, the registrant, Tropical
To set forth a cause of action to cancel a registration which assertedly has been
abandonment that, if proved, would establish a prima facie case. Otto Int’l, Inc. v.
Otto Kern GMBH, 83 USPQ2d 1861, 1863 (TTAB 2007). To provide fair notice to a
defendant, such a pleading must allege at least three consecutive years of non-use, or
alternatively, a period of nonuse less than three years coupled with proof of intent
not to resume use. Imperial Tobacco Ltd. v. Philip Morris Inc., 899 F.2d 1575, 14
USPQ2d 1390, 1393-96 (Fed. Cir. 1990). See Trademark Act § 45, 15 U.S.C. § 1127.
Petitioner’s pleading does neither. Nonetheless, the parties presented evidence and
a claim of acquired distinctiveness under Section 2(f) of the Trademark Act, 15 U.S.C.
§ 1052(f).
2 1 TTABVUE 2.
-2-
Cancellation No. 92062543
testimony regarding Respondent’s use (or nonuse) of the mark for at least three
consecutive years and argued the claim in their briefs. Accordingly, we consider the
issue of abandonment to have been tried by the implied consent of the parties, and
consider the pleadings amended to conform to the evidence. See Fed. R. Civ. P.
15(b)(2).
II. Record3
The record consists of the pleadings and, without any action by the parties, the
A. Filed by Petitioner
attached;6
2. Glynn Segars, an independent cigar sales broker and President of Big Country
Cigars LLC;7
3 Effective June 24, 2016, the Board instituted a revised standard protective order for
currently pending inter partes cases.
4 Petitioner’s submission under notice of reliance of excerpts from the file wrapper of the
involved registration was therefore superfluous.
5 Effective January 14, 2017, Trademark Rule 2.123(a)(1), 37 C.F.R. § 2.123(a)(1) was
amended to allow parties to submit the testimony of witnesses in inter partes cases in the
form of an affidavit or a declaration “pursuant to § 2.20 and in conformance with the Federal
Rules of Evidence, filed during the proffering party’s testimony period ... .”
6 16 TTABVUE.
7 17 TTABVUE.
-3-
Cancellation No. 92062543
3. Hasan Khalil, President of Cabana Cigars Inc. d/b/a Casa De Montecristo and
exhibits;9 and
blog, regarding the IPCPR cigar trade show from 2012-2016, and about
8 18 TTABVUE.
9 22 TTABVUE.
10 29 TTABVUE.
1123 TTABVUE (redesignated nonconfidential per the June 13, 2017 Board order (28
TTABVUE)).
-4-
Cancellation No. 92062543
B. Filed by Respondent
III. Standing
every inter partes proceeding. Any person who believes it is or will be damaged by
registration of a mark has standing to file a petition to cancel. Trademark Act § 14,
15 U.S.C. § 1064. To establish its standing, Petitioner must prove that it has a “real
interest,” i.e., a “reasonable” basis for its belief of damage. See Empresa Cubana Del
Tabaco v. Gen. Cigar Co., 753 F.3d 1270, 111 USPQ2d 1058, 1062 (Fed. Cir. 2014);
Ritchie v. Simpson, 170 F.3d 1092, 50 USPQ2d 1023, 1025 (Fed. Cir. 1999).
Because Petitioner has not pleaded and introduced a United States trademark
registration, Petitioner must prove its standing through other evidence. In this case,
Petitioner’s Chairman and Co-Founder Cameron Heaps testified that “Prior to filing
this cancellation action and since filing it, Mombacho has had its own staff on the
12Respondent should have simply filed Mr. Palmer’s Testimony Declaration under separate
cover, rather than under Notice of Reliance, as the Notice of Reliance procedure is reserved
for “official documents” and certain “printed publications.” Compare Trademark Rule
2.125(a), 37 C.F.R. § 2.125(a) and Trademark Rule 2.122(e), 37 C.F.R. § 2.122(e). See
WeaponX Performance Prods. Ltd. v. Weapon X Motorsports, Inc., 126 USPQ2d 1034, 1037-
38 & n.12 (TTAB 2018).
-5-
Cancellation No. 92062543
road in the U.S. introducing and selling the brand MOMBACHO to hundreds of
retailers across the country.”13 One such retailer, independent cigar sales broker
Glynn Segars, testified that “I have been offering products from Mombacho Cigars to
proceeding and a reasonable belief of damage. Petitioner therefore has standing. Int’l
Order of Job’s Daughters v. Lindeburg & Co., 727 F.2d 1087, 220 USPQ 1017, 1020
(Fed. Cir. 1984) (finding sufficient the petitioner’s production and sale of merchandise
IV. Abandonment
Section 45 of the Trademark Act, 15 U.S.C. § 1127, provides in pertinent part that
When its use has been discontinued with intent not to resume such use.
Intent not to resume may be inferred from circumstances. Nonuse for 3
consecutive years shall be prima facie evidence of abandonment. “Use”
of a mark means the bona fide use of such mark made in the ordinary
course of trade, and not made merely to reserve a right in a mark.
There are two elements to a nonuse abandonment claim: nonuse of a mark and intent
not to resume use. Exec. Coach Builders, Inc. v. SPV Coach Co., 123 USPQ2d 1175,
1180 (TTAB 2017); see also Jack Wolfskin Ausrustung Fur Draussen GmbH & Co.
13 22 TTABVUE 4, ¶ 11.
14 17 TTABVUE 4, ¶ 10.
-6-
Cancellation No. 92062543
KGAA v. New Millennium Sports, S.L.U., 797 F.3d 1363, 116 USPQ2d 1129, 1131
(Fed. Cir. 2015). Because registrations are presumed valid under Section 7 of the
See On-Line Careline Inc. v. Am. Online Inc., 229 F.3d 1080, 56 USPQ2d 1471, 1476
(Fed. Cir. 2000); Imperial Tobacco Ltd. v. Philip Morris Inc., 899 F.2d 1575, 14
USPQ2d 1390, 1393 (Fed. Cir. 1990); Cerveceria Centroamericana, S.A. v. Cerveceria
India, Inc., 892 F.2d 1021, 13 USPQ2d 1307, 1310 (Fed. Cir. 1989).
presumption that the registrant has abandoned the mark without intent to resume
use. Rivard v. Linville, 133 F.3d 1446, 45 USPQ2d 1374, 1376 (Fed. Cir. 1998). The
burden of production, i.e., going forward, then shifts to the respondent to produce
evidence sufficient to show use of the mark during the relevant period, or an intent
to resume use. Id. The burden of persuasion, however, always remains with the party
B. Petitioner’s Arguments
Petitioner contends that “Respondent failed to make bona fide use of the
MOMBACHO mark for not just three years, but rather for five years. As a result,
-7-
Cancellation No. 92062543
position that Respondent made only “nominal use” of the MOMBACHO mark
“between 2010 and 2015,” and that such “nominal use … was made merely to reserve
its rights in the mark MOMBACHO (i.e., to be kept as one its ‘dormant’ brands),
which is expressly prohibited by the Lanham Act.”16 Petitioner further contends that
“Respondent has not presented any evidence of an intent to resume use during this
period of abandonment and only began to attempt to use the mark MOMBACHO on
and Hasan Khalil (President of Casa De Montecristo, “the largest cigar shop in the
country”18), all of whom aver that they were unaware of Respondent selling or
promoting cigars under the mark MOMBACHO.19 Petitioner also points to the
15 30 TTABVUE 14.
16 Id.
17 Id.
18 Khalil Testimony Decl. ¶ 3, 18 TTABVUE 2.
19For example, Mr. Khalil testified that “Prior to learning about this trademark case, I had
not heard of Tropical Tobacco offering or selling any cigars with the Mombacho name or mark.
The only company I knew of that offered a cigar called Mombacho was Mombacho Cigars
S.A.” “The first time I heard of Tropical Tobacco offering any cigars under the Mombacho
name was in approximately June 2016 through an article on www.halfwheel.com, which is a
website about the cigar industry. I have not, however, seen any Tropical Tobacco cigars called
Mombacho in the marketplace.” Id. at 4, ¶¶ 13-14.
-8-
Cancellation No. 92062543
the foregoing “calls into question the bona fides of [Respondent’s] de minimus sales
from 2010 through late 2015.”21 In addition, Petitioner questions the reliability of
figures in the invoices do not align with the sales figures Respondent provided in
maintained that Respondent’s sales of MOMBACHO cigars were continuous since the
brand was introduced in 2004, although he acknowledged that sales declined after
2010. According to Mr. Palmer, MOMBACHO cigars have “been on the market since
2004. It’s sold every year and the name Mombacho is a familiar name … in the
industry.”23 “Mombacho was always live. We sold Mombacho, but it’s not that we had
high sales volume on Mombacho.”24 Mr. Palmer explained that MOMBACHO “used
to be an active brand. We used to sell a lot of it. Sales have dwindled. We’ve always
sold Mombacho,”25 and that MOMBACHO has been a “slower selling brand” but it
20 32 TTABVUE 6-7.
21 Id. at 7.
22 30 TTABVUE 19-21; 32 TTABVUE 6-7.
23 23 TTABVUE 185.
24 Id. at 157.
25 Id. at 136.
-9-
Cancellation No. 92062543
has been “sold every year.”26 Likewise, in her discovery deposition, Josefa Vega
testified that MOMBACHO cigars “have always been sold continuously.”27 “Every
year, we’ve had Mombacho sales, yes. We’ve always had Mombacho,”28 but “[s]ome
years, it moves more. Other years, it moves less.”29 Mr. Palmer also testified that
since around December 2015, Respondent has sold MOMBACHO cigars exclusively
to Serious Cigars,30 and “now that we’ve done an exclusive with Serious, we hope that
As for Respondent’s marketing efforts, Mr. Palmer testified that Respondent did
not actively promote the brand since 2010,32 and that the brand did not appear on
Respondent’s website from 2010-2015 per Petitioner’s evidence from the Wayback
Machine33 “[b]ecause it was one of those brands that was selling, but it was not one
of those brands that, you know, was a featured brand to the industry ….”34 He also
acknowledged that “Not all of our brands are on the website. Not all of our brands are
in the catalogue when we make a catalogue,”35 and that MOMBACHO was not a
26 Id. at 209.
27 Id. at 58.
28 Id. at 63.
29 Id. at 64
30 Id. at 195-96.
31 Id. at 209
32 Id. at 146-56.
33 Id. at 379-484 (Exhibits PTX 15-19).
34 Id. at 182.
35 Id. at 205.
- 10 -
Cancellation No. 92062543
know that Respondent was selling MOMBACHO cigars between 2010 and 2015
“Because we’re known for Mombacho. It’s our brand. We’ve been selling it for 12, 14
years.”37
In his Testimony Declaration, Mr. Palmer averred that “MOMBACHO cigars were
first sold to consumers directly through retailers and the MOMBACHO cigars have
been sold every year since 2004 (see Exhibit I). Exhibit I is a printout of actual
invoices showing sales of MOMBACHO cigars to retailers in the United States every
single year from 2004 to date.”38 Said invoices, which comprise the entirety of
that Petitioner sold MOMBACHO cigars every year from 2005 to 2016.39 For the
2012, the invoices demonstrate sales of between two and four boxes of twenty cigars
Serious Cigars) on December 10, 2015, seven weeks after Petitioner filed the petition
his deposition testimony, Mr. Palmer explained, “MOMBACHO cigars are presently
36 Id. at 202.
37 Id. at 204.
38 26 TTABVUE 4, ¶ 6.
39The invoices include sales from Tabacalera Tropical and Casa Fernandez, which are other
business names of Respondent. 23 TTABVUE 26 (Josefa Vega Discovery Deposition), 77
(Respondent’s Answer to Interrogatory No. 1), 129 (Paul Palmer Discovery Deposition).
- 11 -
Cancellation No. 92062543
being sold by Serious Cigars, LLC … under an exclusive agreement to retail the
product for Tropical.”40 He also testified that “MOMBACHO cigars are sold in boxes
which are clearly labeled with the trademark (see Exhibit II).”41
With regard to Respondent’s marketing efforts, Mr. Palmer confirmed his prior
discovery deposition testimony as follows: “Tropical does not regularly advertise all
of its brands (more than thirty different brands exist on its website or in magazines
each and every year, but Tropical does continue to sell all of its brands. Some brands
are more popular than others and sales vary each year for many reasons.”42
D. Analysis
Since the registration at issue originated from a use-based application, the three-
year period of nonuse, proof of which would constitute a prima facie case of
abandonment, is deemed to have commenced on January 10, 2012, with the filing of
the application. See ShutEmDown Sports, Inc. v. Lacy, 102 USPQ2d 1036, 1042
to begin to run in 2010 (as both parties did), it would not affect our determination on
Based on the testimony and evidence of record, we find that there is no period of
Respondent’s sales from 2010 to 2015 were admittedly slow and made virtually
4026 TTABVUE 4, ¶ 7. As noted above, Mr. Palmer testified in his discovery deposition that
this exclusive arrangement began around December 2015.
41 Id. at 4, ¶ 8
42 Id. at 4, ¶ 12.
- 12 -
Cancellation No. 92062543
exclusively to one client (Serious Cigars),43 nothing in the record supports a finding
that such sales were not “bona fide use[s] of [the] mark[s] in the ordinary course of
trade,” rather than “made merely to reserve a right in [the] mark[s].” 15 U.S.C.
§ 1127. In other words, contrary to Petitioner’s assertions, the record does not support
trademark warehousing program. On the other hand, such near exclusivity would
explain why Petitioner’s witnesses were not aware that Respondent was selling
MOMBACHO cigars.
concerning annual sales of MOMBACHO cigars from 2004 to 201644 and the sales
figures on the above-discussed invoices. While Mr. Palmer did not address this
Respondent’s use is merely unacceptable token use is not well-taken. Person’s Co.
43As Josefa Vega explained, Serous Cigars is “like the number one fan of Mombacho.” 23
TTABVUE 49.
44 Id. at 309.
45We also note Mr. Palmer explained in his discovery deposition that Respondent used to run
promotional specials for its brands, including MOMBACHO, such as buy three cigars and get
one free, or buy five boxes and get one free. Id. at 159-61, 164. Such promotional specials
could account for some of the differences in figures in the years prior to 2012.
- 13 -
Cancellation No. 92062543
Ltd. v. Christman, 900 F.2d 1565, 14 USPQ2d 1477, 1481-82 (Fed. Cir. 1990)
(“Although sales … were intermittent and the inventory of the corporation remained
rule of law that the owner of a trademark must reach a particular level of success,
measured either by the size of the market or by its own level of sales, to avoid
abandoning a mark.”).
on cigars for any given year, let alone three consecutive years. Nor are we persuaded
by Petitioner’s various arguments that Respondent’s use of its mark is not bona fide
- 14 -