TTAB Orders Cancellation of UBANK Registration for Banking Services, Rejects Laches Defense and Suggested Geographical Carve-Out

In this mostly straightforward cancellation proceeding, Respondent UBANK (Texas) conceded that Petitioner UBANK TN was the first user of the mark UBANK for banking services. Respondent claimed, however, that petitioner's prior use resulted in "minimal market penetration," asserted that the challenged registration should survive with a carve-out granting rights to Petitioner that are geographically limited to Jellico, Tennessee, and argued laches as an affirmative defense. The Board was unimpressed and it granted the petition for cancellation. UBANK (TN) v. UBANK, Cancellation No. 92078890 (May 1, 2024) [not precedential] (Opinion by Judge Martha B. Allard).

Since the marks, services, and channels of trade were identical, topped off with several incidents of actual confusion, respondent faced a formidable task in seeking to avoid cancellation. 

Minimal Market Penetration: Respondent’s minimal market penetration argument (i.e., that petitioner's prior use was limited to a single city) was a loser because, for purposes of priority, the Trademark Act "does not require any degree of market penetration; rather, it only requires 'prior use.' Case law makes it clear that Petitioner’s mark may be used in either interstate commerce or intrastate commerce, so long as the use is 'prior use.'"

Geographical Carve-Out: Respondent urged that petitioner, as a senior user in a remote trading area, is entitled only to be a concurrent user with rights limited to its geographical trading area. The Board pointed out, however, that such a carve-out cannot be obtained in this proceeding. "[P]ossible concurrent rights are determined by the Board only in a concurrent use proceeding, not a cancellation proceeding."

We agree with Petitioner that the present proceeding is not a concurrent use proceeding, nor could it be . . . , as the present proceeding cannot be converted to a concurrent use proceeding. Rather, a concurrent use proceeding may be generated only by filing an application with the USPTO for registration as a lawful concurrent user.

Laches: In order to establish its laches defense, respondent was required to show that "there was undue or unreasonable delay [by Petitioner] in asserting its rights, and prejudice to [Respondent] resulting from the delay." Respondent proved neither.

"'In the absence of actual knowledge [of trademark use] prior to the close of the opposition period, the date of registration is the operative date for laches,’ as it provides constructive notice to [a] petitioner of the registrant’s claim of ownership." The testimony was unclear as to when petitioner first had knowledge of respondent's use of the UBANK mark, and so the the operative date for assessing laches was the date the registration issued: July 23, 2019.

The petition for cancellation was filed on January 20, 2022, and so the period of delay was two-and-one-half years. "Our case law has held that comparable time periods with no communication between the parties was not a sufficient amount of time to find laches."

Turing to the issue of prejudice, assuming arguendo that there was an unreasonable delay, the Board looked to respondent's claim of economic prejudice "due to its continued investment in and promotion of its banking services under the UBANK Mark." However, respondent's CEO testified that "she did not consider Petitioner’s usage of the same mark to be a problem."

Respondent does not appear to have been affected by Petitioner’s usage, much less prejudiced by it. There is no evidence, nor does Respondent allege, that it curtailed its advertising or its expansion, or even considered doing so, in light of Petitioner’s usage. Thus, Respondent’s argument that it is prejudiced by Petitioner’s delay is not supported by the record.

And so, the Board granted the petition and ordered that the registration be cancelled.

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TTABlogger comment: So, will the Texas bank now oppose the Tennessee bank's application? Will it file a concurrent use application? Will there be a settlement carving up the country? 

Text Copyright John L. Welch 2024.