Introduction

On October 10, 2019, the United States Court of Appeals for the Federal Circuit (“Federal Circuit”) made a decision in Cervejaria Petropolis Sa v. Ambev S.A. Appellee Ambev S.A. (“Ambev”) filed a petition to cancel Appellant Cervejaria Petropolis SA’s (“CP”) registered mark FUSION, used for “non-alcoholic beverage ingredients, namely, effervescent powder to be dissolved in liquid to produce an energy drink and hypertonic drink” (“Registered Product”). Ambev asserted that CP had abandoned the mark, due to nonuse in three years or more. Ambev submitted supporting evidence to the United States Trademark Trial and Appeal Board, (“TTAB”) and CP attempted to defend their entitlement to registration in turn. TTAB found CP’s defense unpersuasive and canceled CP’s FUSION mark in Ambev’s favor. CP appealed TTAB’s decision and the Federal Circuit has jurisdiction.

Decision

The Federal Circuit reviewed the TTAB’s findings de novo. “Under the Lanham Act, a registered trademark may be ‘deemed to be ‘abandoned’’ when ‘its use has been discontinued with intent not to resume such use.’” Furthermore, if one seeks the cancellation of a registered mark, the burden of proof of nonuse lies on the petitioner. Once the petitioner has provided proof, the mark owner may rebut and defend entitlement to the mark’s registration and provide evidence that the mark is still used or will be used. However, such evidence must have originated from a time during the statutory period of three consecutive years from initial nonuse.

TTAB found that Ambev’s evidence established CP’s nonuse of the FUSION mark for even more than three and a half years. It should be noted that CP purchased the FUSION mark, and in response to Ambev, “CP stated that at the time it acquired the FUSION mark, on October 27, 2011, it did not intend to use the mark for the Registered Product,” but developed intentions later to do so later on. Regardless, CP still could not provide documentation (e.g., a CP-owned webpage or blog) to exhibit its intent to use the mark for the Registered Product. CP’s efforts were clouded by additional withstanding supporting evidence submitted by Ambev: excerpts from CP’s website which lack of any reference to the FUSION product/mark, “testimony from Ambev’s private investigator that she found no evidence of CP using the FUSION mark for the Registered Product in the United States through June 11, 2014,” and a 2011 “public corporate filing from CP’s predecessor in interest indicating that it had discontinued sales of its FUSION mark registered products.”

In regard to CP’s intent to resume use of the mark, CP could only provide evidence suggesting intent to resume the mark’s use dated from July 15, 2015, “after more than three and a half consecutive years of nonuse.” The evidence comprised of an advertisement of the FUSION mark on a race car and driver jumpsuit, neither of which made any connection to the Registered Product.

For the above reasons, the Federal Circuit affirmed TTAB’s decision to cancel CP’s ownership of the FUSION mark due to abandonment.

Conclusion

Trademarks are presumed valid, and as such, cancellation of the mark may be possible if three consecutive years of nonuse of the mark is evident. Due to this statutory period, it is important for the mark owner to carefully consider whether or not to continue use of a registered mark. Moreover, the mark owner should be conscious of such use to preserve in order to preserve the chance at keeping registration alive.

Full Cervejaria Petropolis SA v. Ambev S.A. decision can be read here: http://www.cafc.uscourts.gov/sites/default/files/opinions-orders/19-1132.Opinion.10-10-2019.pdf

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