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Halting a Mother's progress.

Summary: Two weeks ago, I described in this space what promises to be an important precedential ruling by the TTAB relating to the affirmative defense ...

Two weeks ago, I described in this space what promises to be an important precedential ruling by the TTAB relating to the affirmative defense of laches as applied in trademark disputes, in Ava Ruha Corp. d/b/a Mother's Market & Kitchen v. Mother's Nutritional Center, Inc.

Readers will recall that Mother's Nutritional Center provides retail grocery services that feature foods for pregnant women, new mothers and young children participating in the federal Supplemental Food Program for Women, Infants and Children. It owns a federal registration for Mother's in a stylized form and for Mother's Nutritional Centers.

Petitioner Ava Ruha does business as Mother's Market & Kitchen and owns that mark, along with design restaurant and grocery services directed toward natural and health products and food preparation.

In its opposition filing with the TTAB, Ava Ruha petitioned to cancel Mother's Nutritional Centers' registrations on the grounds of likelihood of confusion, fraud and dilution. Mother's argued for laches, arguing that Ava Ruha had waited too long to assert its claim. The parties cross-moved for summary judgment on Mother's laches defense.

As I noted, there were two important lines of argument in Ava Ruha: one incumbent on the respondent, Mother's Nutritional Center, to prove its affirmative defense of laches, and the other incumbent on the petitioner, Ava Ruha, to prove its claim of progressive infringement. Respondent Mother's bore the burden of proof for asserting laches as a defense; petitioner Ava Ruha needed to plausibly defend its own delay to a court that had agreed that laches did apply.

Facing its loss on summary judgment on laches, Ava Ruha argued that its delay in asserting its trademark rights was due to Mother's having progressively encroached on its market over time. This is the second thread of the ruling that I suggested should be teased out a little.

Not progressing there? Try over here.

As I explained in my first piece on this case, it would be neither fair nor accurate to characterize Ava Ruha's claims of progressive encroachment by Mother's Nutritional Center Inc. as opportunistic--facing as they were the court's judgment on cross motions for summary judgment on the laches defense. In light of the nearness of the respondent's market to a federal program that seeks to provide nutritional meals to participants, it follows that it could have taken Ava Ruha some years to recognize that Mother's was encroaching on Ava Ruha's markets.

Progressive encroachment occurs when one party comes more closely into competition with another, such that confusion from similar marks is more likely. The Board explained that the doctrine of progressive encroachment suggested that it focus on whether Mother's, after commencing its use of the mark, redirected its business so that it more squarely competed with Ava Ruha Corp., and thereby increased the likelihood of public confusion of the marks.

For example, if a defendant in an infringement case begins using a trademark, and then directs its marketing or manufacturing efforts such that it is placed more squarely in competition with a plaintiff, then a plaintiff's delay in asserting its trademark rights can be excused.

The Board looked at the respondent's identification of its services in its registration as "Retail grocery stores that exclusively feature foods authorized for purchase by pregnant women, new mothers and young children participating in the federal Supplemental Food Program for Women, Infants and Children (WIC)." The Board held that this recitation of services clearly indicated that the respondent's services cover a specific type of grocery services directed to specific consumers, namely those participating in the WIC.

The Board further noted that Mother's had not submitted any evidence in its response and cross motion to suggest that it had ever been put on notice by Ava Ruha as to any possible encroachment upon the latter's business. Ava Ruha's evidence of Mother's Nutritional Centers' encroachment consisted primarily of paper copies of certain pages from the Mother's website that suggest that the Centers provide locally grown fresh produce that is in season, offer a wide selection of the best quality fresh produce, carry organic baby food and provide "great tasting and refreshing recipes for a healthy family."

This evidence, the Board held, was not sufficiently probative of a change in the nature of Mother's services such that the Centers had expanded into retail grocery store services not connected exclusively with the WIC program or that the Mother's was marketing retail grocery store services to non-WIC program participants.

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The Board held that trademark registration provides constructive nationwide notice of a respondent's claim of ownership of specific marks in connection with the services specified in the registration certificates. It opined that the types of foods Ava Ruha pointed to as evidence of progressive encroachment are subsumed within the description of retail store services in Mother's registrations. The Board held that for purposes of an attack on a registration, progressive encroachment cannot be argued where the alleged encroachment is contained within the scope of the registration at issue.

In an interesting footnote, it added that such encroachment would not seem applicable to excusing a tardy claim of dilution, because competition between parties is irrelevant to such a claim. But because the TTAB felt that it did not need to definitively so hold in the instant case, the Board may have left the door open for a future litigant to cite this footnote. We shall see.

In this case, Mother's argued that it suffered prejudice as a result of Ava Ruha's delay in filing its opposition, asserting that it had expended tens of millions of dollars growing its business, investing in stores and steadily building goodwill in its marks. Mother's maintained that it had since 1995 continuously used its marks for its chain of grocery stores focused on the federal supplemental Food Program for Women, Infants and Children.

A respondent's reliance on a petitioner's failure to file a petition for cancellation sooner is not a requirement for laches. That is, a petitioner does not have to overtly or covertly lull a respondent into believing it would not act. The Board explained that economic prejudice arises from investment in and development of a trademark, and the continued commercial use and economic promotion of a mark over a prolonged period adds weight to the evidence of prejudice. The Board was not persuaded by Ava Ruha's counter-argument, and it held that Mother's had clearly changed its economic position by continuing to use, promote and develop its marks in the period before the petitioner filed its opposition.

As a result, the Board held that as a matter of law Mother's would be subject to economic prejudice if its registrations were to be cancelled. It held that Ava Ruha's delay was unreasonable and prejudiced the respondent, and that laches had been shown. Because laches may also apply to claims of dilution in opposition and cancellation proceedings, Mother's had also established a valid laches defense to Ava Ruha's dilution claim as well.

Interestingly, the Board held that even when a laches defense has been proven, it will not serve as a bar against a petition for cancellation on a likelihood of confusion ground when confusion is inevitable. In this case, Ava Ruha failed to raise inevitable confusion as a basis for avoiding any indisputable showing of laches. Although the Board could have held that the petitioner waived this issue, the public interest in avoiding consumer confusion would not be served by finding waiver as to the question of whether confusion is inevitable. Accordingly, the Board used its own discretion to analyze the issue.

The TTAB admitted that given the procedural posture of the motions for summary judgment--specifically, that the respondent presented its laches defense prior to trial and without the petitioner first having moved for summary judgment on its likelihood of confusion claim--there was no evidence of likelihood of confusion on record when the Board was requested to consider the question of laches. One might ponder whether this was a great strategic move by Mother's.

Indeed, the Board admitted that it would not have expected petitioner Ava Ruha to show all its evidence on likelihood of confusion to defend against Mother's motion, though the Board went on to explain that it would have been preferable for the former to at least acknowledge in its response or cross-motion the possibility that the evidence of confusion that it planned to produce at trial might show not a mere likelihood of confusion but that confusion was inevitable, and that determination of such issue should wait until all the evidence on confusion was put in.

But the Board said it was still going to rely on the public interest and the possibility that evidence of confusion, when presented, might show that confusion is inevitable, as well as the particular procedural posture in which the question of laches was raised for consideration, to exercise its discretion not to find waiver. However, because Mother's had shown that there was no genuine dispute on the issue of laches, at trial the Board held that Ava Ruha could not prevail on a showing of mere likelihood of confusion. Instead, Ava Ruha would have had to enter evidence of confusion that shows confusion to be inevitable, a higher burden than that required for a finding of likelihood of confusion.

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Publication:Inside Counsel
Date:Apr 6, 2015
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