IP Law Daily, TRADEMARK—TTAB: Distributor’s opposition to manufacturer’s registration of mark dismissed, (Oct 3, 2022)

By Kevin M. Finson, J.D.

A manufacturer’s attempt to register a mark survived its distributor’s opposition because the distributor’s use was originally carried out on behalf of the manufacturer and the use inured to the manufacturer’s benefit.

A distributor of nutritional supplements did not establish common law rights in a mark owned by the manufacturer of its goods, the Trademark Trial and Appeal Board has held. The mark had not been abandoned because a period of non-use while the manufacturer was barred from doing business in the United States was justifiable (Arsa Distributing, Inc. v. Salud Natural Mexicana S.A. de C.V., September 28, 2022, English, C).

Salud Natural Mexicana S.A. de C.V. (Salud) sought registration on the Principal Register of the standard character mark EUCALIN and a related composite mark for use with various types of nutritional supplement in International Class 5. ARSA Distributing, Inc. (Arsa) filed notices of opposition alleging prior common law use of the mark EUCALIN for “dietary and nutritional supplements” and that its own application for registration of the EUCALIN mark had been suspended by the USPTO based on a likelihood of confusion with Salud’s applications.

The parties had a prior relationship; between 1999 and 2008 Arsa distributed goods under the EUCALIN mark on behalf of Salud. In 2008, Salud was declared a “Specially Designated Narcotics Trafficker” (SDNT) under the Kingpin Act and banned from doing any business in the United States. The designation was eventually removed, and the ban lifted in 2015. During the period when Salud was barred from doing business in the United States, Arsa contracted with another manufacturer who produced a new product because Arsa was not privy to the formulations used by Salud. Arsa then distributed that new manufacturer’s goods under the EUCALIN mark.

Priority. Arsa argued that it had priority based on its use from 2008 through the 2017 constructive use filing dates of Salud’s applications. Salud argued that, because Arsa acted as its distributor, Arsa’s use from 1999 to 2008 inured to the benefit of Salud. Arsa argued that even if this were true, Salud had abandoned the mark by not using it since 2008. The Board held that because the product packaging used from 1999 to 2008 clearly identified Arsa as distributor and Salud as manufacturer, and because there was no clear agreement to the contrary, Salud was the owner for the 1999 to 2008 period. As for abandonment, the Board held that Salud’s period of non-use when it was barred from doing business was justifiable, drawing comparisons to marks for alcoholic beverages that were not used during the period of Prohibition. In addition, Salud had engaged in litigation in Mexico to establish its rights there against Arsa’s new manufacturer and had promptly attempted to resume use in the United States upon the legal bar being lifted.

The Board held that Salud had priority rights in the mark and dismissed the opposition.

The Case is Serial No. 91243700.

Attorneys: Christine Lebrón-Dykeman (McKee Voorhees & Sease P.L.C.) for ARSA Distributing, Inc. Jeffrey M. Furr (Furr Law Firm) for Salud Natural Mexicana S.A. de C.V.

Companies: ARSA Distributing, Inc.; Salud Natural Mexicana S.A. de C.V.

Cases: Trademark USPTO