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TTAB Dismisses Cancellation Petition Brought against SWISS and SWISS MADE Certification Marks

Tuesday, February 14, 2012
Jennifer Gaeta | Bloomberg LawSwiss Watch International, Inc. v. Federation of the Swiss Watch Industry, Cancellation No. 92046786 (T.T.A.B. Jan. 30, 2012) The Trademark Trial and Appeal Board ("TTAB") addressed a challenge to two certification marks for SWISS and SWISS MADE used in conjunction with clocks and watches. The TTAB addressed each of the claims brought by the petitioner in turn, and found that it had not proven its case. Thus, the TTAB dismissed the petition as to all claims.

Swiss Watch International Petitioned to Cancel Two Certification Marks

Swiss Watch International, Inc. ("petitioner") filed a petition to cancel two registrations for certification marks owned by the Federation of the Swiss Watch Industry ("respondent"). The certification marks SWISS and SWISS MADE are in standard character and certify the geographic origin of clocks, watches, and their components. As to standing, petitioner alleged that it owned a trademark registration for SWISS WATCH INTERNATIONAL and that it also applied to register SWISS LEGEND for watches. The SWISS LEGEND application was refused based on a likelihood of confusion with the certification marks. Petitioner further contended that the certification marks were obtained fraudulently and that respondent does not control the use of SWISS or SWISS MADE. Moreover, petitioner argued that SWISS and SWISS MADE are generic and cannot function as certification marks.

Certification Marks

A certification mark, as defined in 15 U.S.C. §1127 is a mark "(1) used by a person other than its owner" or "(2) which its owner has a bona fide intention to permit a person other than the owner" to use and register the mark the purpose of which is to "certify regional or other origin, material, mode of manufacture, quality, accuracy, or other characteristics" of the goods or services or that the goods were produced by a union or other organization. Swiss at 13. Pursuant to15 U.S.C. §1054, the trademark provisions apply to certification marks in the same manner when those marks are applied for by "persons, and nations, States, municipalities, and the like, exercising legitimate control over the marks sought to be registered." Id. A cancellation proceeding of a certification registration may be brought at any time on the grounds that the certification mark registrant does not control the use of the mark, actually uses the mark itself, "permits the use of the certification mark other than to certify," or discriminates in the certification process, and refuses to certify persons who maintain the requisite standards. Id. at 13-14. Certification mark registration can also be cancelled at any time on the grounds that the mark is generic or that the registration was obtained fraudulently.

Certification Marks Were Not Used as Trademarks

Petitioner claimed that the registrations should be cancelled because they were used other than to certify, alleging that respondent allowed members of its organization to use trademarks that also included the word "Swiss," for example, LEONARD SWISS, WENGER SWISS MILITARY, SWISS ARMY, and DAVOSA SWISS. The TTAB explained, however, that these marks are not the same mark as the SWISS certification mark because they also included additional wording. A certification mark cannot be used as a trademark, but for that rule to apply, the mark must be "identical or substantially or virtually identical" to the certification mark. In re 88OPEN Consortium Ltd., 28 U.S.P.Q.2d 1314, 1315 (T.T.A.B. 1993). In the above examples, the additional material rendered the marks dissimilar. Petitioner also argued that respondent "allowed" unauthorized third-party use of the mark. The TTAB stated that even if that were true, that argument would be a failure to control, discussed below.

Respondent Did Not Fail to Control the Use of the Certification Marks

A registration mark may be cancelled if the owner of the certification mark does not control its use. According to the TTAB, however, the statute does not define what it means to "control." A failure to control has been interpreted either as to allow others to use the mark without ensuring that requisite standards are met, or as the mark being generic. Petitioner argued that respondent allowed widespread use of the term "Swiss" by third parties. Thus, the TTAB reasoned that petitioner's argument was that respondent allowed the mark to become generic, not that it did not monitor the standards of those it certified. The TTAB addressed whether the respondent policed the various third-party uses of its mark, including the testimony evidence that respondent engaged in activities in an effort to insure that only companies that adhered to its standards were permitted to use its certification marks. The TTAB found that respondent monitored trademarks filed worldwide and filed oppositions, monitored magazine advertisements, and inspected watch samples. As to the 22 alleged "uncontrolled" uses, respondent had opposed six or them, while the others were not registered marks or were abandoned. The TTAB explained that "absolute control is not only not required, but the Board has recognized that absolute control would be impossible." Swiss at 23. Instead, the TTAB stated that the question was whether the control was adequate:
Respondent has an extensive worldwide monitoring and enforcement system in place, including working with U.S. Customs officials. It has, as noted, brought numerous oppositions in the United States, and negotiated the abandonment or withdrawal of numerous applications. It has also filed letters of protest with the USPTO.
Id. at 24. Accordingly the TTAB found that the steps taken by respondent constituted adequate control over the marks. As to other uses of the term "Swiss," they referred to a watch having Swiss movement. The TTAB did not regard such uses as evidence of a lack of control over the certification marks. The TTAB also did not fault respondent for uses of which it was unaware.

Respondent Did Not Discriminate

Petitioner argued that respondent discriminated when licensing the certification marks because its standards were incorrect. Specifically, petitioner alleged that respondent required the watch movement to be cased in Switzerland and that the watch have a final inspection in Switzerland. However, the TTAB noted: "The statutory provision is not dependent upon whether the Board or a third party likes the standards, or sees the need for them; the statute requires only that the owner of the certification mark allow any entity that meets the standards, whatever the owner determines those standards to be, to use the mark." Swiss at 26. Petitioner further argued that respondent discriminated because it did not allow certain parties to be members of its organization. However, the TTAB noted that the issue is discrimination with respect to the use of the mark, not membership in its organization, and the respondent had provided a list of non-members who were nevertheless permitted to use the certification marks by license. Petitioner also argued that respondent discriminated against U.S. companies complying with custom regulations because the Tariff Act of 1930 provides that "the country of origin of the movement determines the country of origin of the watch" and that U.S. customs would, therefore, recognize "Swiss Made" as the appropriate mark on a watch. The TTAB, however, disagreed stating: "In short, petitioner has not submitted any evidence that respondent has refused to permit the use of its certification marks for watches meeting its standards, namely the watch movement made in Switzerland." Id. at 28.

The Marks Were Not Generic

A certification mark may be cancelled at any time on the grounds of genericism, just like any other mark. Petitioner argued that the SWISS and SWISS MADE marks were generic as signifying a type of watch regardless of geographic origin. The TTAB did not agree, finding that the terms "Swiss" and "Swiss Made" were not generic for precision watches regardless of origin, and thus, the TTAB determined that the SWISS and SWISS MADE marks had not lost their significance. Petitioner further argued that marks of geographic origin are generally tied to the land and the consumers will not regard "Swiss" for watches as meaning that the watch actually came from Switzerland, as opposed to being a Swiss-type of watch. The TTAB stated that it was unaware of any case law suggesting that geographic certification marks must be tied to the land, and thus found the marks not to be generic.

Respondent Had Not Committed Fraud

Petitioner contended that respondent had committed fraud with respect to the SWISS MADE certification mark. The TTAB explained that fraud occurs when an applicant or registrant makes a false statement when procuring or maintaining a trademark registration, and that a petitioner asserting fraud faces a heavy burden. When the application for SWISS MADE was being prosecuted, the examining attorney required a copy of the standards that would be used to determine whether others could use the mark. In response, respondent submitted a copy of its standards and a copy of the Swiss ordinance that provided the basis for those standards. The standards do not use the phrase "Swiss Made," but the TTAB found that that alone did not provide a basis for fraud, nor had petitioner shown an intent to deceive. Based on the above, the TTAB found that petitioner had failed to prove that the SWISS and SWISS MADE certification marks should be cancelled and dismissed the petition. DisclaimerThis document and any discussions set forth herein are for informational purposes only, and should not be construed as legal advice, which has to be addressed to particular facts and circumstances involved in any given situation. Review or use of the document and any discussions does not create an attorney-client relationship with the author or publisher. To the extent that this document may contain suggested provisions, they will require modification to suit a particular transaction, jurisdiction or situation. Please consult with an attorney with the appropriate level of experience if you have any questions. Any tax information contained in the document or discussions is not intended to be used, and cannot be used, for purposes of avoiding penalties imposed under the United States Internal Revenue Code. Any opinions expressed are those of the author. The Bureau of National Affairs, Inc. and its affiliated entities do not take responsibility for the content in this document or discussions and do not make any representation or warranty as to their completeness or accuracy.©2014 The Bureau of National Affairs, Inc. All rights reserved. Bloomberg Law Reports ® is a registered trademark and service mark of The Bureau of National Affairs, Inc.

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