The Ostrich and the Telecom Company

Finally, another trademark case. I was beginning to wonder whether there is a conspiracy among trademark owners and opponents to stop appealing trademark decisions made by the Trademark Trial and Appeals Board (TTAB).

Estrada v. Telefonos De Mexico, S.A.B. DE C.V., No. 2010-1558 (Fed. Cir. Nov. 10, 2011) (nonprecedential) (Judges Lourie, Linn, and Prost)

Trademark Squatting

It seems that Mr. Estrada attempted to register a trademark that has been used in association with a stadium near his home in Mexico. Perhaps he thought he would obtain registration in the U.S. and sell the mark to the telecom company that was really entitled to registration for a healthy profit?

It feels like domain cybersquatting, but trademark registrations don’t go to the squatters. Rather, they are granted to individuals or companies who actually use a mark in association with goods or services they provide.

Estrada attempted to register the mark AUDITORIO TELMEX in the U.S., which he intended to use in connection with arenas and services, including sports, concert, and convention facilities and events. Telefonos opposed registration because of its TELMEX mark, which is not registered with the PTO but has been used in the U.S. and Mexico in connection with telecommunications and other related services.

In fact, Telefonos has been using TELMEX in Mexico for six decades. It sponsors a large concert arena in Guadalajara, Mexico, which interestingly, is called AUDITORIO TELMEX (sound familiar?). This arena held the 2008 Latin American MTV Music Awards, an event that was telecast worldwide over the Internet. Telefonos also sells telephone-calling cards in the U.S. that display the TELMEX mark with artwork and promotions for Telefonos-sponsored sports and entertainment events.

Too Crazy to Be True

Before the TTAB, Estrada essentially denied any knowledge of the TELMEX and AUDITORIO TELMEX marks, even though he had lived in Mexico for thirty years. He even lived within 10 miles of the arena bearing the AUDITORIO TELMEX mark since 1980. The TTAB wasn’t buying it—it found his responses during prosecution of the registrations and the opposition proceedings disingenuous. It also found that he acted in bad faith.

Ultimately, the TTAB sustained the oppositions to Estrada’s applications and concluded that Telefonos had both shown priority for TELMEX in the U.S. and demonstrated that consumers would likely be confused between the TELMEX and AUDITORIO TELMEX marks. So Estrada was unable to register AUDITORIO TELMEX in the U.S.

The Federal Circuit agreed that Estrada’s trademark applications for AUDITORIO TELMEX should be denied because of a likelihood that consumers would be confused between the two marks. At the TTAB, Telefonos provided a witness who testified that it has been selling telephone calling cards bearing the mark in the U.S. since 2000. This was sufficient to establish its priority to the TELMEX mark here. Also, though the TELMEX mark is not famous, it is a coined term, and inherently distinctive and strong. The court also concluded that other confusion factors, such as the real-world overlap between the telecommunication and arena and entertainment services, support the TTAB’s decision.

The Federal Circuit also dismissed Estrada’s new argument that the Telefonos entity opposing his applications lacked standing. But the interesting part of this decision is the fact that the TTAB and the court considered evidence of Estrada’s bad faith when applying the thirteenth DuPont confusion factor. This factor allows the TTAB to weigh any other established fact probative of the effect of Estrada’s use of AUDITORIO TELMEX. Though it did not consider this a close case, and the other factors provided enough evidence that a likelihood of confusion existed between the two marks, this bad faith further supported the TTAB’s decision.

Here’s the Federal Circuit’s opinion in Estrada.

 

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