Federal Circuit Untangles Trademark Dispute

by Dennis Crouch

Araujo v. Framboise Holdings Inc., No. 23-1142 (Fed. Cir. Apr. 30, 2024).

In this appeal, the Federal Circuit affirmed a Trademark Trial and Appeal Board (TTAB) decision sustaining an opposition proceeding and refusing registration of the standard character mark #TODECACHO for hair combs. Procedural and Substantive: the Federal Circuit held that the TTAB properly allowed Framboise to extend its trial period; and that substantial evidence supported the TTAB’s finding that Framboise established prior use.  Opinion by Judge Lourie, joined by Judges Linn and Stoll.

In Brazilian Portuguese the colloquial phrase – “to de cacho” –  is often used to mean “I am angry.”  In the context of this case, however, it references difficult to control curly hair. In December 2019, Jalmar Araujo filed a trademark application to register #TODECACHO as a standard character mark for hair combs. Framboise opposed the registration, asserting likelihood of confusion with its previously used #TODECACHO design mark for various hair products such as shampoo and conditioner.

In trademark opposition proceedings before the TTAB, each party is given a 30-day window for submitting their evidence and arguments to support their respective positions.  This is known as the “trial period” of the opposition proceeding.  For each case, the TTAB sets a schedule with these specific deadlines, including pre-trial disclosures, the trial period and rebuttal filings, and post-trial briefs, followed by oral arguments.  The trial period is typically 30-days long and strictly enforced, although  timely extensions are granted for good cause.  TBMP § 701.01.

Framboise, as the opposer, had the first 30-day trial period.  However, on the final day of its period, Framboise moved to extend the deadline by seven days to submit  a declaration of its director, Adrian Extrakt. Although Araujo objected to the motion, the TTAB granted the extension, finding good cause for the delay.

In its decision, the TTAB relied on the Extrakt declaration to find that Framboise met its burden to establish prior use of the design mark by a preponderance of the evidence. It held that Framboise was entitled to the earlier March 24, 2017 priority date and sustained the opposition, refusing registration of Araujo’s mark based on likelihood of confusion.

On appeal, the Federal Circuit first focused on the extension of the 30-day trial period, holding that the TTAB had discretion to extend the period and did not abuse its discretion in this case:

The Board identified and applied the correct good cause standard. It then examined the record and reasonably found good cause to grant the extension based on its findings that ‘there [was] no evidence of record that [Framboise was] guilty of negligence or bad faith,’ that it was Framboise’s first extension request, that Framboise submitted ‘the bulk of its evidence by the close of its testimony period,’ and that the four day delay in submitting the Extrakt declaration ‘was minimal.’ Those factual findings are not clearly erroneous.

The Federal Circuit noted that the TTAB Manual of Procedure provides the TTAB “is liberal in granting extensions of time before the period to act has elapsed, so long as the moving party has not been guilty of negligence or bad faith and the privilege of extensions is not abused.” quoting Am. Vitamin Prods. Inc. v. Dowbrands Inc., 22 U.S.P.Q.2d 1313 (T.T.A.B. 1992). Because the TTAB applied the correct standard and made reasonable factual findings to support good cause, it did not abuse its discretion.

Second, the court held that substantial evidence supported the TTAB’s finding that Framboise established priority through prior use of its design mark:

The Board’s determination that Framboise established its prior use of the #TODECACHO design mark was supported by substantial evidence. The Board found the Extrakt declaration alone to be sufficiently ‘clear, convincing, and uncontradicted’ to establish Framboise’s priority date. Contrary to Araujo’s assertion, the declaration provides more than general assertions. It states that it is based on Extrakt’s ‘personal knowledge and assessment of the records maintained by Framboise.’ It provides a list of products and a specific date on which Framboise began using the #TODECACHO design mark in connection with those products. It also provides representative examples of the mark as displayed on products in stores in the United States.

At oral arguments, opposition’s counsel Steve Bean pointed to one particular paragraph in the Extract declaration:

So in that tight little paragraph, you’ve got dates of first use. You’ve got the requirement for continuous use, which is non-abandonment of a mark. You have channels of trade, which is the stores that are involved in presenting the goods to the public, and the different types of goods.

Oral args 19:10.

In its decision, the court emphasized that Araujo did not offer any contradictory evidence and declined to depose Extrakt during the opposition, despite having the opportunity.  “When presented with the evidence provided in the Extrakt declaration and nothing to contradict it, a reasonable mind could conclude that Framboise had established its priority date by a preponderance of the evidence.” The court cited Powermatics, Inc. v. Globe Roofing Prods. Co., Inc., in which its predecessor court held that “oral testimony, if sufficiently probative, is normally satisfactory to establish priority of use in a trademark proceeding.” 341 F.2d 127 (CCPA 1965).  This is quite different from the patent context where oral testimony alone is typically not sufficient to establish invention date priority.  At oral arguments, Araujo’s attorney Francis John Ciaramella made the case that ancient rules allowing for self serving oral testimony are no longer appropriate:

The only other thing I would wish to add is that in a modern age where the Appellee, as well as my client, deal in digital and online sales, getting copies of documents where you could get invoices and sales, these are all readily available, easy to be produced, and just a simple search of your own business records that are easily accessible on any of your online accounts. Such documents could have been produced to corroborate that testimony.

Oral args. 24:00. This decision underscores several important points.  I’m sure that trademark experts can provide further nuance.

1. The TTAB has broad discretion in managing trial schedules and granting extensions for good cause. As long as the request is made before the deadline has passed and the TTAB does not find negligence, bad faith, or abuse of the extension process, it will generally allow reasonable extensions.
2. A single witness’ clear, convincing, and uncontradicted declaration can be sufficient to establish priority.  But, the declaration should be detailed and specific, based on personal knowledge and business records. Merely conclusory assertions of prior use are not enough.
3. If the opposer provides credible evidence of prior use, the applicant cannot simply rely on a lack of corroborating evidence. It must either present contradictory evidence or challenge the veracity of the opposer’s evidence, such as by deposing the witness.
4. As is typically true, it is best to win at the lower tribunal rather than hang your hopes on an appeal.  For cases appealed from the TTAB, the substantial evidence “iota” standard of review is deferential. The Federal Circuit will not substitute its judgment for the TTAB’s as long as a reasonable mind could reach the same conclusion based on the evidence of record.

TTAB expert John Welch writes that this case does not seem to break new legal ground — noting that both the TTAB and Federal Circuit prefer deciding cases on the merits rather than procedural technicalities like improper extension of time.