Thursday, February 23, 2012

Precedential No. 6: TTAB Summarily Cancels Registration Due to Flawed Section 44(e) Basis

Respondent Asad A. Khan, a Pakistani domiciliary and national, obtained a US registration for the mark shown below, for soft drinks, under Section 44(e) of the Lanham Act, based on a Community Trademark Registration (CTM). Khan claimed that the CTM registration emanated from his "country of origin," but the Board concluded that Khan did not have a "bona fide and effective industrial or commercial establishment in the EU." It therefore ruled that the CTM registration could not serve as a basis for registration under Section 44(e), and it cancelled Khan's registration on Petitioner's motion for summary judgment. Fouad Kallamni v. Asad A. Khan, 101 USPQ2d 1864 (TTAB 2012) [precedential].

Section 44(e) provides that a mark duly registered in a foreign applicant's "country of origin" may be registered in the USPTO. An applicant's "country of origin" is defined in Section 44(c) as "the country in which he has a bona fide and effective industrial or commercial establishment, or if he has not such an establishment the country in which he is domiciled, or if he has not a domicile in any of the countries described in subsection (b) of this section, the country of which he is a national." Under subsection (b), the applicant’s country of origin must be a party to a treaty or agreement with the United States that provides for registration based on ownership of a foreign registration, or must extend reciprocal registration rights to nationals of the United States. [See TMEP Section 1002].

Although Pakistan is a treaty nation of the Paris Convention, Khan did not base his US application on a Pakistani registration (and it does not appear that any such registration has issued). Instead he relied on his CTM registration. Consequently, "the question is whether any country in the European Union qualifies as a 'country of origin' of respondent." I.e., did Khan have a "bona fide and effective industrial or commercial establishment" in an EU country on the date of the US registration?

The Board concluded that Khan's evidence fell short. He did not have a permanent place of business with employees, nor production facilities, in the EU. Instead he conducted business through a independent entity in the EU "with which [he] had a contractual relationship for product sourcing, business development, and marketing." Khan admitted that this entity was "neither a Licensee, nor a Subsidiary, nor a Parent company, nor a holding company, nor a special instrument company created for royalty or tax advantages." In sum, it was an independent entity, separate from Respondent.

We find as a matter of law that a bona fide and effective industrial or commercial establishment cannot be created by respondent’s reliance on the commercial facilities of an independent legal entity which respondent retained to source his European Union business.

The Board also found that Khan's shipment of product from Pakistan to distributors in Romania and Bulgaria did not create the requisite bona fide and effective commercial establishment in the EU. Nor did Khan's activities in Pakistan, targeting EU countries, support that claim.

Finally, there was no genuine dispute that Khan is neither domiciled in nor a national of an EU country.

And so Khan had no issued foreign registration on which he could rely under Section 44(e) at the time his US registration issued. The Board therefore granted Petitioner's motion for summary judgment, cancelling the registration.

Text Copyright John L. Welch 2012.


At 10:40 AM, Anonymous Prof Montgomery said...

Cleaning up the register in the post-Bose world: the petitioner claimed fraud and later, at the TTAB's invitation, amended the petition to add the 44 claim -- leading to the TTAB's final footnote: "In view of our granting petitioner’s motion for summary
judgment on the Section 44 ground, resulting in cancellation of
the registration, we need not consider respondent’s motion for
summary judgment on the fraud ground...."


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