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Without Intent: The Consequences of Invalidly Assigning an Intent-to-Use Application

Central Garden & Pet Company (Central Garden), the owner of two trademark registrations for its ZILLA trademark, opposed the registration of Doskocil Manufacturing Company, Inc.’s (Doskocil) trademark application for its PETZILLA mark believing there to be a likelihood of confusion between them. To turn the tables, Doskocil sought to cancel Central Garden’s ZILLA registrations claiming, in relevant part, that the trademark application underlying one of the ZILLA registrations was invalidly assigned to Central Garden more than five years ago.

Under U.S. trademark law, a party who, in good faith, has a bona fide intention to use a trademark in commerce may file an “intent-to-use” (ITU) trademark application with the PTO to protect that mark before it has been put into use. (For more information about ITU applications, click here).  However, before the PTO will issue a registration for that application, the trademark owner must provide the PTO with evidence that the mark has been put into use.  In this instance, the relevant ZILLA registration was initially filed by All-Glass Aquarium Co. (All-Glass) as an ITU application. All-Glass happened to be a wholly-owned subsidiary of Pennington Seed, which was itself a wholly-owned subsidiary of Central Garden. Before All-Glass submitted the necessary evidence of use for the ITU application, it assigned the ITU application to Central Garden. After the transfer, Central Garden filed the required evidence of use that the PTO issued it a trademark registration for the ZILLA mark. 

While this transfer was presumably a simple transaction between two closely related companies, Doskocil used the intimate nature of that relationship against Central Garden. Section 10 of the Trademark Act provides that, prior to filing the required evidence of use, an ITU application may not be transferred by its owner to a party other than the “successor to the business of the applicant, or portion thereof, to which the mark pertains…”  “In other words,” as the Trademark Trial and Appeal Board (TTAB) explained, “prior to the filing of an allegation of use, an intent-to-use applicant may not transfer its application to another, unless the assignee also acquires at least part of applicant’s business to which the mark pertains.” Doskocil argued that All-Glass merely transferred ownership of the ITU application, and not the associated business. Therefore, the assignment was not in compliance with this specific requirement of the Trademark Act. 

The TTAB agreed explaining that after the ITU application was assigned, All-Glass continued to produce ZILLA-branded products and Central Spring otherwise assumed no control over those business operations, which was necessary for the assignment to have been effective. From Central Spring’s perspective, it did control All-Glass because it was All-Glass’s parent company.  While this may have been true in practice, it was not technically correct. Central Spring’s corporate structure was such that Central Spring, Pennington Seed and All-Glass were three separate companies operating under one common umbrella, each of which must honor the respective corporate formalities. Had All-Glass assigned the ITU application to an unrelated third party, it would have also transferred the business operations that accompanied the mark.  Because it did not do so here, the assignment was invalid and the resulting trademark registration was cancelled.

Central Spring’s folly can serve as a lesson to all businesses. When transferring an ITU application prior to submitting evidence of the mark’s use, the applicant must also sell the business associated with the mark. For example, if the trademark is being reserved for a new product, the ITU application must be transferred alongside at least part of the product line (e.g., the manufacturing capabilities, the inventory, its marketing and sale, etc.).

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