Here’s another one to file under the maxim “use it or lose it,” from a recent decision in the Trademark Trial and Appeal Board (“TTAB”) that is also an example of how people with inflated importance often fail to pay attention to the finer details, to their detriment.
Surfing is a competitive sport and that spirit of rivalry extends to businesses teaching the sport of surfing. In this instance, a late comer to the surfing school business in Santa Cruz, California, decided to threaten an established competitor with trademark infringement.
In May 2014, The New Santa Cruz Surf School, LLC, filed a trademark application to register the mark SANTA CRUZ SURF SCHOOL. As appears obvious, the business’ services are providing surfing instruction and surfing information. While The New Santa Cruz Surf School filed its application for a mark in standard lettering form (known as “standard characters” in the trade), the business actually uses a logo form, shown here.
The application was initially refused registration because the mark lacked distinctiveness. “SANTA CRUZ” is literally geographically descriptive of where the services are offered and the terms “SURF SCHOOL” are generic. Therefore, the standard character form of the mark (remember, the logo form was not the subject of the application) had nothing that made it distinctive, i.e., the mark could not identified a particular business or brand.
The New Santa Cruz Surf School overcame the refusal by amending its application to claim “acquired distinctiveness,” under sec. 2(f) of the Trademark Law. Marks that lack distinctiveness, e.g., ones that are merely descriptive or merely geographical, are not entitled to registration. However,
sec. 2(f) allows for registration of such marks that have “acquired” distinctiveness. Acquired distinctiveness means that a mark’s long use in commerce, presumptively after five years of continuous use, is evidence that the public has come to recognize that the mark identifies a particular brand – that is, the mark is functioning as a trademark. After making the sec. 2(f) amendment, The New Santa Cruz Surf School finally got its application approved.
The New Santa Cruz Surf School then decided to threaten rival surf school with a cease and desist demand. That rival, owned by John Edward Guzman who did business as “Club Ed Surf School and Camp,” had been operating since 1990. Apparently, The New Santa Cruz Surf School decided to use its recently approved trademark application (but not yet registered) to bully the rival surf school. But its bullying backfired bigtime, because Mr. Guzman fought back. He filed a trademark opposition action in the TTAB to block the registration of the SANTA CRUZ SURF SCHOOL mark.
Underlying The New Santa Cruz Surf School’s threat to John Guzman is an apparent attempt to claim exclusive right to the terms “SURF SCHOOL.” These are the only elements in common between SANTA CRUZ SURF SCHOOL mark and Guzman’s trade name of “Club Ed Surf School and Camp.” In reality, Guzman’s actual trademark use is “CLUB ED,” as shown below, which has nothing in common with the SANTA CRUZ SURF SCHOOL mark.
It turns out The New Santa Cruz Surf School did not itself have five years use in commerce to support its sec. 2(f) claim in its application. The company had to show that there was continuous use of the mark from November 2009 to November 2014, when The New Santa Cruz Surf School filed its application amendment. The company had purchased the business from its previous owner only six months prior to filing its trademark application. Normally a successor who acquires a trademark gets to “tack on” the prior owner’s period of use, as long as there was continuous use of the mark.
In December 2013, The New Santa Cruz Surf School purchased the business and mark from Dylan Greiner. Mr. Greiner, in turn, had purchased the business in 2000 from Anne Bailey, who had owned and operated the surf school since 1997. So, in theory, The New Santa Cruz Surf School would be able to trace the mark’s use back through Mr. Greiner’s use to Anne Bailey’s first use in 1997. The problem, however, was that Mr. Greiner did not have continuous use of the mark when he sold the business to The New Santa Cruz Surf School.
The TTAB’s decision took note of evidence stated in the business purchase agreement between The New Santa Cruz Surf School and Dylan Greiner. Greiner had indeed operated the business, but only up until his arrest and incarceration in August 2013. The business sale agreement recited that after Greiner’s imprisonment:
“The business has not been operating for several months [… and …] currently does not have a physical business location due to cancellation of the commercial lease. The insurance policy which is required to operate the business was cancelled. The website is not operating and has an outstanding bill [….] The business operating permit [expired] at the end of December 2013 and the City of Santa Cruz’s Parks and Recreation Department’s Heads have expressed their intent to not renew the operating permit.”
The TTAB determined that there was no use of the SANTA CRUZ SURF SCHOOL mark from the time of Greiner’s arrest until The New Santa Cruz Surf School resumed use in November 2014 – a period of 14 months. That 14-month hiatus was enough to negate The New Santa Cruz Surf School’s claim of acquired distinctiveness under sec. 2(f) of the Trademark Law. On that basis, John Guzman’s opposition to the SANTA CRUZ SURF SCHOOL mark was sustained and The New Santa Cruz Surf School’s trademark application was denied registration.
Despite “SURF SCHOOL” being deemed generic, The New Santa Cruz Surf School tried to use its newly approved trademark application as a club waved at John Guzman’s business. By threatening the infringement claim (damn thin at best), The New Santa Cruz Surf School ended up losing its trademark. If The New Santa Cruz Surf School had instead refrained from being a trademark bully, and had amended its trademark application to the Supplemental Register instead of making the invalid sec. 2(f) claim of acquired distinctiveness, the company would have been rewarded with a solid trademark registration. But then bullies sometimes justly get what they deserve when finally confronted.