• Does the Parent Own the Mark?

    by  • December 18, 2009 • trademark

    The TTABlog reports on a decision invoking In re Wella to try to escape a likelihood of confusion refusal. In re Wella is a 1986 Federal Circuit decision which held that corporate family members (in that case, parent and subsidiary) may own substantially similar marks without a likelihood of confusion so long as there is

    a unity of control over the use of the trademarks. ‘Control’ and ‘source’ are inextricably linked. If, notwithstanding the legal relationship between entities, each entity exclusively controls the nature and quality of the goods to which it applies one or more of the various ‘WELLA’ trademarks, the two entities are in fact separate sources.

    In In re Federal Express Corporation, one of Federal Express Corp.’s marks was refused registration under §2(d) because of a likelihood of confusion with a mark owned by a sister company, FedEx Custom Critical, Inc. It is a “substantial burden” to show a unity of control when it is a sibling relationship, rather than a parent-subsidiary relationship, TMEP §1201.07(b)(iii), and one that Federal Express Corp. wasn’t able to meet. Likelihood of confusion is then a foregone conclusion.

    There was one glaring part of the Federal Express Corp. argument that I would have avoided, though. The TTAB quotes Federal Express Corp. as arguing:

    … because Fedex Corporation directly owns Applicant (Federal Express Corporation), FedEx Custom Critical, Inc. and Fedex Office and Print Services, Inc., control over the mark at issue in this case and the cited marks resides in a single source. There is no likelihood of confusion as to source between services offered by Federal Express Corporation, FedEx Custom Critical, Inc. and Fedex Office and Print Services, Inc. because they all are wholly owned and controlled by Fedex Corporation. Purchasers will know that services emanating from subsidiaries of Fedex Corporation emanate from a single source. Because Applicant (Federal Express Corporation), FedEx Custom Critical, Inc., and Fedex Office and Print Services, Inc. are wholly owned and controlled by the same parent company, Fedex Corporation, all use of marks owned by these subsidiaries inures to the ultimate benefit of Fedex Corporation.

    But In re Wella has some “additional comments” offered by Judge Nies that one should be mindful of when arguing for unity of control:

    There is, however, a different question, not addressed in the initial prosecution of the application, with respect to ownership of U.S. rights in the WELLA marks. Is Wella A.G. the owner of such rights or is its subsidiary, Wella U.S., the owner? Under section 1 of the Lanham Act, only the owner of a mark is entitled to apply for registration.

    Federal Express Corp. says directly “all use of marks owned by these subsidiaries inures to the ultimate benefit of Fedex Corporation.” This sounds to me like a statement that parent FedEx Corporation, not Federal Express Corporation, controls, and thus owns, the applied-for marks.

    In re Federal Express Corporation, Serial Nos. 78726298, 78726303, 78726306, and 78726310, (TTAB December 7, 2009).

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