The Federal Circuit Rules on Trademark Tacking

Most trademark owners understand that changing a trademark should not be taken lightly. From a legal perspective, changing a trademark can have significant ramifications under trademark laws. But it is all a question of nuances, especially when considering “tacking” (and no, I am not talking about the sailing maneuver).

The doctrine of “tacking” allows a trademark owner to make slight alterations in a trademark, without abandoning ownership of the earlier trademark, thereby gaining the benefit of the earlier priority filing date. Tacking was addressed by the Supreme Court in Hana Financial Inc. v. Hana Bank, 135 S.Ct. 907 (Jan. 21, 2015), where the Court applied the doctrine in the context of trademark priority. The issue, however, had not been addressed in the context of cancellation proceedings, and the Court of Appeals for the Federal Circuit (CAFC) recently closed that gap in Jack Wolfskin v. New Millenium Sports, 2015 U.S. App. LEXIS 14514.

On August 19, 2015 the U.S. Court of Appeals for the Federal Circuit (CAFC) upheld a decision of the Trademark Trial and Appeals Board (TTAB) refusing to cancel a senior trademark owner's registration because the senior mark had not been continuously used in the same way it had been registered. In Jack Wolfskin v. New Millenium Sports, appellee New Millenium owned the registered trademark KELME for use in association with goods in International Class 25, which encompasses a variety of clothing products. The KELME mark was registered in 1994. In 2009, however, appellant Jack Wolfskin filed a trademark application for “a nonhuman paw print” also in International Class 25.  New Millenium filed an opposition, claiming that Jack Wolfskin's mark would likely cause confusion with New Millenium's KELME mark In response, Jack Wolfskin counterclaimed to cancel New Millenium's KELME mark on the basis of abandonment. The Board rejected Jack Wolfskin's abandonment counterclaim, and the CAFC agreed with its conclusion (the likelihood of confusion claim by New Millenium is a discussion for another day, or blog entry).

This is the Jack Wolfskin mark next to the original KELME registration:

This is the altered, modernized, version of the KELME mark:

Jack Wolfskin's abandonment claim was based on the fact that New Millenium had ceased using the registered version of its mark and had began using in 2004 a modified, or modernized, version of that mark. The KELME mark as originally registered consisted of the word “KELME” and a paw print to the right of the literal element of the mark.  Since 2004, however, New Millenium altered the font of the word KELME, and the style of the paw print element.  The changes are slight, and perhaps more noticeable in the design of the paw print in that claws were added to the paw print.  The font seems thinner, perhaps more modern. The location and size of one element (literal and design) to another appear to be the same.

At issue in the case is the concept of “tacking.”  Trademark owners sometimes cease using their literal registered marks in favor of modified or modernized versions.  The ability to rely on an earlier form of a mark, when now using a modified version, is referred to as “tacking.” Where the changes are slight, a trademark owner can rely on the original trademark, however, when the changes are not considered slight, a trademark owner risks losing its earlier priority date due to abandonment.  As Prof. McCarthy more eloquently explains it:

[s]uch changes in the form of marks have been legally attacked on two grounds: (1) that the change resulted in abandonment of rights in the old form; (2) that the change prevents the user from tracing priority of use back to a date of first use of the old form of the mark.

J. Thomas McCarthy, 3 McCarthy on Trademarks and Unfair Competition §17:25 (4th ed. 2015). Courts have dealt with the issue of tacking in the context of both abandonment and priority. See Hana Fin., Inc. v. Hana Bank, 135 S. Ct. 907, 909 (2015) (recognizing that “tacking” encompasses situations where an entity makes modifications to its marks over time, but is till able to “clothe [that] new mark with the priority position of an older mark”); see also Sunstar, Inc v. Alberto-Culver Co., 586 F.3d 487, 496 (7th Cir. 2009) (explaining that the rule of “tacking on” “makes the use by a trademark owner of a variant of his original trademark a defense to a claim that replacing the original with the variant constituted the abandonment. . . of the trademark”).

While the CAFC had not previously spoken directly on what standard to use in the abandonment contact, the CAFC has held that in the context of a priority dispute, an abandonment attack will fail if the old form and the new form of the mark are “legal equivalents.” Van Dyne-Crotty, Inc. v. Wear-Guard Corp., 926 F.2d 1156, 1159 (Fed. Cir. 1991), abrogated on other grounds by Hana Fin., 135 S.Ct. At 910. Two marks are “legal equivalents” if they “create the same, continuing commercial impression” and where the modified version of the mark does not “materially differ from or alter the character” of the original mark. Id.

The CAFC therefore concluded that the standard to be applied is the following: has the original mark been so substantially altered such that third parties would not expect that the presently used mark be used under and protected by the registration.  In other words, does the modified version of the mark “create the same, continuous commercial impression”?

The CAFC, as in the priority context, treated this question as a question of fact, which does not warrant a de novo review.  In doing so, the CAFC asked whether a reasonable fact-finder might find that the evidentiary record supports the Board's conclusion that New Millenium had not abandoned its mark.

The Court examined both the literal and design element of the design and concluded they did create the same commercial impression.  In doing so, it noted that the literal element of the mark was more distinctive than the lettering in which it was presented, and that the changes in the paw design were not that substantially different because the paw still looks like a paw – except with now claws on it (as counsel for KELME argued, one usually goes with the other anyway).

While the decision provides some insight to those seeking to modernize their trademark, it should also serve as a word of caution. The changes to the KELME mark were frankly quite slight.  If KELME had decided to change the location of the paw, or perhaps change the relative size of the literal to the design element, the decision might have come out differently.

My advice still remains the same: don't change your trademark or you may risk losing it. And even if your trademark does change only slightly, do you really want to spend years litigating just to find out you were in the right? Your time is better spent elsewhere.