Thursday, August 18, 2022

Precedential No. 22: TTAB Grants Petition to Cancel CHENOA FUND Registration for Mortgage Services Due to Non-Ownership

The Board granted a petition for cancellation of a registration for the mark shown below for mortgage financing services, finding that Petitioner CBC Mortgage was the first and only user of the mark for those services. Respondent TMRR created and promoted the mark but it did not use the mark in rendering mortgage services, nor was it permitted to do so by the agreement between the parties. CBC Mortgage Agency v. TMRR, LLC, 2022 USPQ2d 748 (TTAB 2022) [precedential] (Opinion by Judge Michael B. Adlin).

TMRR conceived of a mortgage financing program that would be run by a Native American Tribe, and it contracted with the Paiute Indian Tribe of Utah to implement and operate the program. TMRR created the mark CHENOA FUND and the logo. In 2013 the Tribe and TMRR signed a Management Services Agreement (MSA) to provide the program, and Petitioner CBC Mortgage was formed as a subsidiary of the Tribe, pursuant to the MSA. Under the MSA, TMRR is deemed CBC's "agent" and "contracted day-to-day operator."

The Board observed that only the owner of a mark may file an application to register. An application filed by one who is not the owner of the mark is a "void application." In deciding the issue of ownership, the Board was guided by Lyons v. Am. Coll. of Veterinary Sports Med. & Rehab. Rehab., 859 F.3d 1023, 123 USPQ2d 1024, 1028 (Fed. Cir. 2017), which (in a slightly different context) set forth "three main factors to be considered in ownership disputes surrounding service marks as between a departing member and the remnant group: (1) the parties’ objective intentions or expectations; (2) who the public associates with the mark; and (3) to whom the public looks to stand behind the quality of goods or services offered under the mark."

As to the first factor, the MSA unambiguously established the intent and expectation of the parties that the petitioner would solely own the CHENOA FUND mark. Those intentions and expectations are also reflected in promotional and advertising material for the program.

Petitioner CBC Mortgage, not the respondent, was first to offer mortgage services under the mark. The fact that TMRR created the mark two years earlier and "promoted the mark" in seeking an entity that would offer the services does not mean it owned the mark. "Rather, a service mark must be 'used' in commerce, meaning not only that it must be 'used or displayed in the sale or advertising of services,' but also that the services must be 'rendered in commerce.' 15 U.S.C. § 1127."

As to element (2) and (3) of the Lyons test, the Board pointed out that Respondent TMRR "operates behind the scenes, out of public view," while CBC Mortgage is "out front, engaging with the public via materials that identify Petitioner, and only Petitioner, as the source of the mortgage financing services rendered in connection with the CHENOA FUND mark." Thus, it is Petitioner CBC Mortgage that the public associates with the mark and to whom the public looks to stand behind the quality of the services.

And so, the Board found that Respondent TMRR was not the owner of the mark when the underlying application was filed, and the subject registration was therefore void ab initio.

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TTABlogger comment: Pretty straightforward, don't you think?

Text Copyright John L. Welch 2022.

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