Overview
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An international Christian ministry, The Salvation Army has as its mission in part to meet human needs without discrimination. But some in its ranks faced a trademark registration battle in which a U.S. Patent and Trademark Office (USPTO) examiner sought expressly to discriminate between The Salvation Army's entities.
However, the applicant prevailed, thanks to the Trademark Trial and Appeal Board's faithful application of precedent concerning unity of control. In a non-precedential decision in In re The Salvation Army, Serial No. 86150336 (July 8, 2016), the TTAB reversed a likelihood of confusion refusal to register the mark Coats for Kids as shown below, for charitable fundraising services, to The Salvation Army, an Illinois corporation:
The examining attorney had based his refusal to register the applied-for mark on its resemblance to 13 existing registrations owned by three separate entities of The Salvation Army incorporated in California, New York, and New Jersey. He found that the structure of the organization did not "support unity of control which creates a single source for Trademark purposes."
The Board observed that because the ultimate question raised in the appeal was whether there was a likelihood of confusion as to source, it would consider whether there existed "such unity of control over the marks ... that the public will view the identified services as emanating from a single source."
Relying on In re Wella A.G., 5 USPQ2d 1359 (TTAB 1987) ("Wella II"), rev'd on other grounds, 858 F.2d 725, 8 USPQ2d 1365 (Fed. Cir. 1988), applicant The Salvation Army explained that it was one of four separate regional organizations under unitary control of the Salvation Army USA through that organization's National Commander USA and Commissioners Conference USA. The applicant pointed to The Salvation Army USA's "quasi-military command structure" to support its argument that the Army is indeed a single source, despite its legal structure in the several states.
The Salvation Army further pointed out in support of its position that the USPTO had already allowed 15 registrations incorporating The Salvation Army mark to co-exist—the 13 registrations cited by the examining attorney, and two of its own prior registrations.
In general, registration of confusingly similar marks to separate legal entities is barred by the Lanham Act. However, the U.S. Court of Appeals for the Federal Circuit has held that examining attorneys should consider whether use of an applicant's mark that would otherwise give rise to a likelihood of confusion would do so when the applicant is related in ownership to a company that holds a registered mark.
In the seminal case, applicant Wella AG had sought to register the mark Wellastrate for hair care products. The examining attorney refused registration in view of the marks Wella, Wellasol, Wella Streak and Wellatone registered to Wella U.S., a subsidiary of Wella AG. On appeal, the Board affirmed the refusal, finding that because Wella U.S. was a separate legal entity from Wella AG, Wella AG was not entitled to registration of the mark Wellastrate.
On further appeal, the Federal Circuit criticized the Board's decision for affirming the refusal without determining “whether under the circumstances there was in fact any likelihood of confusion, or to explain what that confusion would be.” The Court vacated the refusal and remanded Wella AG's application to the Board for further action in accordance with its opinion.
In reversing its refusal, the Board concluded that there was no likelihood of confusion, finding that unity of control was sufficiently evidenced by a declaration establishing that the applicant, Wella AG, owned substantially all the outstanding stock of the registrant, Wella U.S. In some limited circumstances, therefore, a close relationship between related companies can obviate any likelihood of confusion in the public mind because the related companies constitute a single source.
In In re The Salvation Army, the examining attorney argued that the arrangement described by the applicant failed to satisfy the requirements of Wella II because the entities were "sister entities" that were "not even owned by a single parent," and contended that the evidence of record did not establish unity of control.
Those battle lines drawn, the Board allied itself with the applicant. It held that the evidence showed that The Salvation Army is a worldwide organization with a U.S affiliate divided into four regions under the control of the National Command. Moreover, it held that the applicant already owned three registrations for marks with the wording "The Salvation Army," which had coexisted with other registrations owned by Salvation Army entities incorporated in California, New York, and New Jersey.
The Board found that the applicant and the owners of the 13 registrations cited by the examining attorney "are governed by a central authority, which exercises unity of control over the entities' trademarks," concluding that there would be no likelihood of confusion as to the source of the entities' services, and reversing the refusal to register.
When you consider how many corporate parents and subsidiaries own marks bearing the overall companies' house marks, unity of control cases are rare. Typically, the USPTO is open to applicants' arguments in such situations and tends to side with them.
This case proved an exception at the USPTO, but the Board's decision was in line with precedent. In fact, In re The Salvation Army arguably broadens the unity of control argument beyond parent/subsidiary; the Board did a good job of evaluating the reality of the situation and was right to reverse the examiner's refusal.
Applicants whose corporate relationships do not follow the traditional parent/subsidiary model might find the holding in this case useful. Indeed, it could be their salvation when their trademark applications face judgement.
Reprinted with permission from the February 21, 2017 edition of Corporate Counsel© 2017 ALM Media Properties, LLC. All rights reserved. Further duplication without permission is prohibited, contact 877-257-3382 or reprints@alm.com.