Trademark Trial and Appeal Board Electronic Filing System. http://estta.uspto.gov
`
`ESTTA Tracking number:
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`ESTTA842405
`
`Filing date:
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`08/28/2017
`
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
`
`Proceeding
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`92062543
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`Party
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`Correspondence
`Address
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`Submission
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`Filer's Name
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`Filer's email
`
`Signature
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`Date
`
`Attachments
`
`Plaintiff
`Mombacho Cigars S.A.
`
`PETER S SLOANE
`LEASON ELLIS LLP
`ONE BARKER AVENUE, FIFTH FLOOR
`WHITE PLAINS, NY 10601
`UNITED STATES
`Email: sloane@leasonellis.com, sabol@leasonellis.com, lelitdocket-
`ing@leasonellis.com
`
`Brief on Merits for Plaintiff
`
`Peter S. Sloane
`
`sloane@leasonellis.com, lelitdocketing@leasonellis.com,
`sabol@leasonellis.com
`
`/Peter S. Sloane/
`
`08/28/2017
`
`Plaintiffs Brief.PDF(455209 bytes )
`Exhibit A - Yamaha Corporation.pdf(109928 bytes )
`Exhibit B - Del-Rain Corp v Pelonis USA Ltd.pdf(80367 bytes )
`Exhibit C - ITC v. Punchgini.pdf(148044 bytes )
`Exhibit D - The Bear.pdf(120593 bytes )
`Exhibit E - Gado v. Jay-Y.pdf(255068 bytes )
`Exhibit F - Republic Tobacco v. Newman.pdf(86432 bytes )
`Exhibit G - Cabelascom Inc v Dakota Industries Inc.pdf(80135 bytes )
`
`

`

`
`
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
`
`Cancellation No. 92062543
`
`
`
`
`
`
`In the Matter of Registration No. 4,183,397
`--------------------------------------------------------------------X
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`:
`MOMBACHO CIGARS S.A.,
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`:
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`:
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`Petitioner,
`:
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`:
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`v.
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`:
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`:
`TROPICAL TOBACCO, INC.,
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`:
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`:
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`Respondent.
`:
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`:
`--------------------------------------------------------------------X
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`PETITIONER MOMBACHO CIGARS S.A.’S TRIAL BRIEF
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`
`
`Peter S. Sloane
`Lauren Sabol
`LEASON ELLIS LLP
`One Barker Avenue, Fifth Floor
`White Plains, New York 10601
`Tel.: (914) 288-0022
`Fax: (914) 288-0023
`E-mail: sloane@leasonellis.com
`
` sabol@leasonellis.com
`
`
`Attorneys for Petitioner
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`
`
`I.
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`TABLE OF CONTENTS
`
`INTRODUCTION AND STATEMENT OF THE ISSUES ........................................... 1
`
`II. DESCRIPTION OF THE RECORD ............................................................................... 2
`
`A.
`
`Petitioner’s Evidence of Record ........................................................................... 2
`Respondent’s Evidence of Record ........................................................................ 4
`III. STATEMENT OF FACTS ................................................................................................ 4
`
`B.
`
`A.
`
`B.
`
`C.
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`Respondent Tropical Tobacco and the MOMBACHO Registration ................ 4
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`Petitioner and its MOMBACHO CIGARS Name and Mark ............................ 4
`
`The Cancellation Action ........................................................................................ 6
`
`IV. LEGAL ARGUMENT ....................................................................................................... 8
`
`A.
`
`Petitioner Has Standing to Cancel Respondent’s MOMBACHO Registration
` ................................................................................................................................. 8
`
`B.
`
`Respondent Abandoned the Mark MOMBACHO for Cigars........................... 9
`
`1. A Presumption of Abandonment Applies Because Respondent
`Discontinued Use of the Mark MOMBACHO Between 2010 and 2015 ... 10
`2. Respondent’s Actions Between 2010 and 2015 Confirm it Lacked an
`Intent to Resume use of the Mark ................................................................ 12
`3. Respondent’s Evidence of Use is Inconsistent and Demonstrates that it is
`Improperly Attempting to Warehouse the Mark MOMBACHO ............. 14
`
`C.
`
`Any Use by Respondent of the Mark MOMBACHO After the Filing of this
`Cancellation Action Does Not Constitute Resumption of Use ......................... 19
`
`V.
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`CONCLUSION ................................................................................................................ 21
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`
`ii
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`

`

`
`
`
`
`Cases
`
`TABLE OF AUTHORITIES
`
`
`Anvil Brand, Inc. v. Consolidated Foods Corp.,
`204 U.S.P.Q. 209, 464 F.Supp. 474 (S.D.N.Y. 1978) .............................................................. 18
`
`Cabelas.com, Inc. v. Dakota Indus., Inc.,
`Cancellation No. 92047600, 2008 WL 4674618 (T.T.A.B. Sept. 26, 2008) ........................... 17
`
`Continental Grain Co. v. Strongheart Prods, Inc.,
`9 U.S.P.Q.2d 1238, 1988 WL 252323 (T.T.A.B. 1988) .......................................................... 12
`
`Del-Rain Corp. v. Pelonis USA, Ltd.,
`29 Fed.Appx. 35 (2d Cir. 2002) ............................................................................................... 11
`
`Exxon Corp. v. Humble Expl. Co.,
`695 F.2d 96 (5th Cir. 1983) ...................................................................................................... 14
`
`Gado S.R.L. v. Jay-y Enterprise Co., Inc.,
`Cancellation No. 9204743, 2013 WL 5498172 (Sept. 26, 2013) ............................................. 15
`
`ITC Ltd. v. Punchgini, Inc.,
`373 F. Supp. 2d 275 (S.D.N.Y. 2005) ...................................................................................... 14
`
`ITC Ltd. v. Punchgini, Inc.,
`482 F.3d 135 (2d Cir. 2007) ..................................................................................................... 19
`
`La Societe Anonyme des Parfums Legalion v. Jean Patou, Inc.,
`181 U.S.P.Q. 545, F.2d 1265 (2d Cir. 1974) ............................................................................ 11
`
`Lever Brothers Co. v. Shaklee Corp.,
`214 U.S.P.Q. 654, 1982 WL 50426 (T.T.A.B. 1982) .............................................................. 11
`
`Mastic Inc. v. Mastic Corp.,
`230 U.S.P.Q. 699, 1986 WL 83610 (T.T.A.B. 1986) ........................................................ 13, 19
`
`Nabisco Inc. v. Wm. Wrigley Jr. Co.,
`40 U.S.P.Q.2d 1251 (T.T.A.B. 1995) ....................................................................................... 18
`
`Oshman’s Sporting Goods, Inc. v. Highland Import Corp.,
`16 U.S.P.Q.2d 1395, 1990 WL 354531 (T.T.A.B. 1990) ........................................................ 11
`
`Parfums Nautee Ltd. v. Am. Int’l Indus.,
`22 U.S.P.Q.2d 1306, 1992 WL 88049 (T.T.A.B. 1992) .......................................................... 19
`
`
`
`iii
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`

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`
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`Republic Tobacco, L.P. v. Newman,
`Cancellation No. 92049348, 2013 WL 3168092 (T.T.A.B. Apr. 12, 2013) ............................ 16
`
`Rivard v. Linville,
`45 U.S.P.Q.2d 1374, 133 F.3d 1446 (Fed. Cir. 1998) ................................................................ 9
`
`The Bear P'ship & Wings Research & Dev., S.R.L., v. Bear U.S.A. Inc.,
`Opposition Nos. 91119974 and 91120597, 2004 WL 2901193 (Nov. 30, 2004) .................... 15
`
`Vision Center Northwest, Inc. v. Vision Value,
`673 F. Supp. 2d 679 (N.D. Ind. 2009) ...................................................................................... 20
`
`Yamaha Corp. of American v. Wrightwood Enterprises, Inc.,
`Opposition No. 108787, 2002 WL 31651943 (T.T.A.B. Nov. 22, 2002) ................................ 10
`
`Statutes
`
`15 U.S.C. § 1064 ............................................................................................................................ 8
`
`15 U.S.C. § 1127 ...................................................................................................................... 9, 11
`
`37 C.F.R. 2.128 .............................................................................................................................. 1
`
`Other Authorities
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`T.M.E.P. § 1604.11 ...................................................................................................................... 10
`
`
`
`
`
`
`
`
`
`iv
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`

`

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`
`
`I.
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`INTRODUCTION AND STATEMENT OF THE ISSUES
`
`Petitioner hereby submits its main brief on the case pursuant to 37 C.F.R. 2.128.
`
`Respondent, Tropical Tobacco, Inc. (“Tropical Tobacco”), is the record owner of
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`Registration No. 4,183,397 of the mark MOMBACHO for cigars, dated July 31, 2012, which
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`claims a date of first use in commerce at least as early as January 4, 2004. Tropical Tobacco,
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`which does business under the names Casa Fernandez and Tabacalera Tropical, sells cigars
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`under some forty-odd secondary brands including, among others, CASA FERNANDEZ MIAMI,
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`COPACABANA and JFR.
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`Petitioner, Mombacho Cigars, S.A., is a Canada based cigar company found in 2006.
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`The company manufactures its cigars in Nicaragua and sells them internationally under the
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`name and mark MOMBACHO. It currently has 35 employees and sells its products through
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`over 250 retailers. Those products are marketed by various avenues including through its
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`website at www.mombachocigars.com.
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`When Petitioner first entered the United States market in 2014, it sold its cigars under a
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`different mark due to a potential trademark conflict with Respondent’s federal registration of the
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`mark MOMBACHO for cigars. In the course of doing business in the U.S., through attendance
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`at trade shows, speaking with other professionals in the industry, reading industry business
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`publications, and through other means, Petitioner learned that Respondent was no longer
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`commercializing the mark MOMBACHO in commerce. In March of 2015, as part of its due
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`diligence, Petitioner enlisted the aid of a private investigator to determine whether Respondent
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`was still using the mark. The investigation report confirmed that Respondent had not used the
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`mark for a “very long time” and had no plans of restocking its inventory.
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`With independent evidence that Respondent had discontinued use of the mark and had
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`no plans to resume its use, Petitioner filed the present non-use cancellation action and began to
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`
`
`1
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`

`

`
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`commercialize the mark MOMBACHO for cigars in the U.S. Only after receiving notice of the
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`Petition for Cancellation and filing its Answer did Respondent show any interest in the mark
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`MOMBACHO. Respondent proceeded to attempt to revive its old mark, launching a cigar
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`under the new name “MOMBACHO MIAMI” with new packaging and selling to a single
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`“exclusive” retailer.
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`Discovery depositions of Respondent revealed that MOMBACHO is one of many
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`dormant marks which Respondent has been warehousing. The only logical reason why
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`Respondent has now sought to revive the mark is to hold it like a Damocles Sword above the
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`head of Petitioner should this cancellation action be denied and the registration be declared valid.
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`Respondent should not be rewarded for engaging in a policy of warehousing its marks only to
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`gain the prospect of using them anti-competitively if and when the opportunity arises.
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`
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`Accordingly, the issue squarely before the Board is whether Respondent discontinued
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`use of the mark MOMBACHO for cigars with intent not to resume use prior to the filing of this
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`cancellation action in October of 2015. It is respectfully submitted that the evidentiary record
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`and the arguments presented herein amply demonstrate that Respondent abandoned its rights.
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`
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`Therefore, a final judgment should be entered in favor of Petitioner, and Registration No.
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`4,183,397 of the mark MOMBACHO should be cancelled.
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`II. DESCRIPTION OF THE RECORD
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`A.
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`Petitioner’s Evidence of Record
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`Petitioner has filed trial testimony declarations of Paul Stone-Jansen (16 TTABVUE),
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`
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`Glynn Segars (17 TTABVUE), Hasan Khalil (18 TTAVVUE), Cameron Heaps (22 TTABVUE),
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`and Katherine Lee (29 TTABVUE).
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`
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`On March 13, 2017, Petitioner filed its Notice of Reliance (23 TTABVUE) consisting
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`of:
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`
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`2
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`

`

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`
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`1. Respondent’s Rule 26(a)(1) Initial Disclosures (23 TTABVUE 9-13)
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`2. Excerpts from the discovery deposition of Josefa Vega (23 TTABVUE 14-73,
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`118-123), taken July 7, 2016, along with the following Exhibits 3-8:
`
`a. Respondent’s 2nd Response to Petitioner’s First Set of Interrogatories
`(23 TTABVUE 74-87)
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`b. Product label (23 TTABVUE 88)
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`c. Product box photos (23 TTABVUE 89-92)
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`d. Product box photos (23 TTABVUE 93-96)
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`e. Respondent’s 2nd Response to Petitioner’s First Set of Requests for
`Production (23 TTABVUE 97-115)
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`f. Printout from Serious Cigar’s Mombacho Miami Cigars webpage (23
`TTABVUE 116-117)
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`3. Excerpts from the discovery deposition of Paul Palmer (23 TTABVUE 124-
`218, 251-264), taken July 8, 2016, along with Exhibit 15, which is a Casa
`Fernandez brochure (23 TTABVUE 219-250)
`
`4. Excerpts from the discovery deposition of Maritza Vega, taken October 5,
`2016 (23 TTABVUE 265-303)
`
`5. Excerpts from Respondent’s 2nd Response to Petitioner’s First Set of
`Interrogatories (23 TTABVUE 304-325)
`
`6. Excerpts from Respondent’s Response to Petitioner’s Second Set of
`Interrogatories (23 TTABVUE 326-334)
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`7. Excerpts from Respondent’s Response
`Interrogatories (23 TTABVUE 335-342)
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`to Petitioner’s Third Set of
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`8. Respondent’s Amended Response to Petitioner’s First Set of Requests for
`Admission (23 TTABVUE 343-351)
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`9. Respondent’s Response to Petitioner’s First [sic] Set of Requests for
`Admission (23 TTABVUE 352-357)
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`10. Excerpt from the Tobacconist magazine from 2004 (23 TTABVUE 358-360)
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`11. Documents Respondent claims are brochures
`TTABVUE 361-378)
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`from 2004-2010
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`(23
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`3
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`

`

`
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`12. Printouts from the Wayback Machine of Respondent’s website from 2010-
`2015 (23 TTABVUE 379-484)
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`13. Printouts of articles from Halfwheel regarding the IPCPR trade show from
`2012-2016 (23 TTABVUE 485-522)
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`14. Printouts of articles from Halfwheel regarding Tropical Tobacco from 2016
`(23 TTABVUE 523-543)
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`15. Excerpts from the file wrapper of Reg. No. 4183397 of the mark
`MOMBACHO (23 TTABVUE 544-555)
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`16. Excerpts from the file wrapper of Supplemental Reg. No. 2909321 of the
`mark MOMBACHO (23 TTABVUE 556-579)
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`B.
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`Respondent’s Evidence of Record
`
`
`
`On May 12, 2017, Respondent filed a Notice of Reliance (26 TTABVUE) consisting of:
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`1. Trial testimony declaration of Paul Palmer (26 TTABVUE 3-6)
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`2. Documents that purport to be invoices from 2005-2016 (26 TTABVUE 7-68)
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`3. Photographs of product box and labels (26 TTABVUE 69-72)
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`4. Printout from Halfwheel regarding Respondent from 2016 (26 TTABVUE
`73-76)
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`III.
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`
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`
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`STATEMENT OF FACTS
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`A.
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`Respondent Tropical Tobacco and the MOMBACHO Registration
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`On January 10, 2012, Respondent filed Application No. 85/513097 to register the mark
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`MOMBACHO for cigars. (23 TTABVUE 545). Respondent claimed a date of first use of
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`January 4, 2004. (Id.). The application issued as Registration No. 4,183,397 on July 31, 2012
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`(the “Registration”).
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`
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`B.
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`Petitioner and its MOMBACHO CIGARS Name and Mark
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`
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`Petitioner is a boutique cigar company based in Canada. (22 TTABVUE ¶ 3). It sells its
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`cigars internationally under its trade name and mark MOMBACHO. In the United States,
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`however, Petitioner initially sold its cigars under the mark TIERRA VOLCAN due to
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`4
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`

`

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`Respondent’s registration of the mark MOMBACHO. (See, e.g., 23 TTABVUE 524; 22
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`TTABVUE Exhibit C).
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`
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`Over the past several years, Petitioner’s cigars have been well-received in the United
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`States cigar market. (22 TTABVUE ¶¶ 6-7, 11). After being in the market and not seeing
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`Respondent use the mark MOMBACHO for cigars, Petitioner believed that Respondent lost
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`interest in and discontinued its MOMBACHO product. (22 TTABVUE ¶¶ 8-10, 12).
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`In March of 2015, Petitioner engaged a private investigator to determine the extent of
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`Respondent’s use of the mark MOMBACHO. (22 TTABVUE ¶ 9). The investigation report
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`showed that Respondent was not selling cigars under the mark MOMBACHO and that it did not
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`have any plans to do so in the future. (Id.; 16 TTABVUE). The investigator called Respondent
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`and was told that “Tropical Tobacco previously sold MOMBACHO brand cigars, but that these
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`cigars have not been available in a ‘very long time’” and that “Tropical Tobacco has not sold
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`any of the MOMBACHO cigars in ‘at least’ two to three years. (16 TTABVUE ¶¶ 8-9). The
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`investigator was further told that there were no plans to restock the current inventory when it
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`was depleted.” (Id. at ¶ 9). Further review of Respondent’s website found no mention of a
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`MOMBACHO product between 2009 and 2015. (Id. at ¶¶ 10-13).
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`Thereafter, Petitioner proceeded to expand its cigar offerings in the United States,
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`utilizing its MOMBACHO name and mark. (22 TTABVUE ¶ 12, Exhibit B, D-E). As
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`Cameron Heaps, a Co-Founder of Petitioner, testified:
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`It is my belief that Tropical Tobacco lost interest in using the brand “Mombacho”
`for cigars and had no intent to revive it by the time we filed this cancellation
`action. Had Tropical Tobacco not abandoned the mark, we would not have
`proceeded to invest so much time and resources to commercialize our company
`name as a trademark in the U.S. market.
`
`(22 TTABVUE ¶ 12).
`
`
`
`5
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`

`

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`
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`Third party testimony in the case confirmed that the mark MOMBACHO is associated in
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`the U.S. cigar market with Petitioner, not Respondent. (See, e.g., 17 TTABVUE ¶¶ 11-12; 18
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`TTABVUE ¶¶ 12, 15).
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`C.
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`The Cancellation Action
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`
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`On October 22, 2015, Petitioner filed a Petition for Cancellation against Respondent to
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`seek cancellation of its Registration. (1 TTABVUE). On November 2, 2015, Respondent filed
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`its Answer denying the salient allegations. (4 TTABVUE).
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`
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`During discovery, Respondent alleged in an interrogatory response that it sold the
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`following amount of MOMBACHO cigars:
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`Interrogatory Response
`Year Boxes Sold Sales $
`2004
`100
`6,500
`2005
`255
`12,811
`2006
`766
`41,311
`2007
`321
`11,490
`2008
`71
`4,196
`2009
`88
`5,787
`2010
`103
`6,593
`2011
`75
`5,789
`2012
`6
`450
`2013
`5
`310
`2014
`2
`231
`2015
`28
`1,416
`2016
`300
`10,500
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`(23 TTABVUE 309). Respondent further alleged that its wholesale price was between $60 and
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`$80 per box. (Id.). Respondent claimed that it had no documents relating to its adoption, total
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`annual sales, advertising, marketing, and inventory of its MOMBACHO cigars. (23 TTABVUE
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`98-102). However, a month later at the depositions of Josefa Vega and Paul Palmer,
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`Respondent produced a stack of documents which purported to be invoices showing sales of its
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`MOMBACHO products. (See, e.g., 23 TTABVUE 68). These same invoices were provided as
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`6
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`

`

`
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`part of Respondent’s Notice of Reliance. (26 TTABVUE 7-68). Petitioner has compiled the
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`below chart, which summarizes these invoices.
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`Invoices
`Year Boxes Sold
`2004
`0
`2005
`95
`2006
`167
`2007
`47
`2008
`17
`2009
`31
`2010
`12
`2011
`2
`2012
`4
`2013
`3
`2014
`2
`2015
`28
`3001
`2016
`
`Sales $
`0
`4,467
`10,160.75
`2,859.10
`1,060
`2,045
`881
`152
`298
`231
`152
`1,244
`5,7952
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`Of the invoices from 2015, only 4 boxes were sold in February 2015. The remaining 24 boxes
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`were sold in December 2015—two months after Petitioner filed its Petition for Cancellation.
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`Respondent has not presented any third party or other documentary evidence to corroborate the
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`information in these invoices.
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`
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`Paul Palmer, President of Respondent, testified that MOMBACHO (i) “used to be an
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`active brand,” (ii) Respondent did not advertise its MOMBACHO product between 2010 and
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`2015, (iii) Respondent’s most recent brochure from 2014 did not mention MOMBACHO, (iv)
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`the MOMBACO product “is out of favor” and had quality issues, and (v) Respondent generates
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`$5 million in annual revenue through the sales of all of its various brands of cigars. (23
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`TTABVUE 129, 136, 152, 199-200, 211-212, 254). He further could not provide any
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`information on the time periods during which Respondent manufactured its MOMBACHO
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`cigars. (23 TTABVUE 168-169). Finally, he conceded that it is Respondent’s policy to keep
`
`
`1 In 2016, boxes changed from 20 count to 10 count.
`2 No pricing is listed for Invoice 43796.
`
`7
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`

`

`
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`“dormant brands” that are not advertised, which he defined as “brands that are good will with
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`the company, brands that are live as far as trademark and ownership of our company, but not
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`brands we have in the market.” (23 TTABVUE 215-216, 256-262). For these brands, if a third
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`party tried to register it, Respondent would “oppose it” because Respondent wants to keep the
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`brand available for its future use. (23 TTABVUE 257-259).
`
`
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`Josefa Vega, Office Administrator and Manager of Respondent, testified that she was
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`unaware of any trade show promotion of the MOMBACHO cigars since 2006. (23 TTABVUE
`
`18-19, 36-37, 78).
`
`
`
`Maritza Vega, who works in Sales for Respondent and is knowledgeable about its brands,
`
`testified that she was unaware of any sales of the MOMBACHO product prior to 2016. (23
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`TTABVUE 270, 272-284, 286).
`
`
`
`Trial testimony declarations of (1) Cameron Heaps, Chairman and Co-Founder of
`
`Petitioner, (2) Glynn Segars, an independent cigar sales broker and former cigar retailer, and (3)
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`Hasan Khalil, President of Casa De Montecristo, the largest cigar shop in the country, indicate
`
`that these individuals were unaware of Respondent selling or promoting cigars under the mark
`
`MOMBACHO.
`
`IV. LEGAL ARGUMENT
`
`
`A.
`
`Petitioner Has Standing to Cancel Respondent’s MOMBACHO Registration
`
`
`
`
`Petitioner has standing to seek cancellation of the Registration because Petitioner
`
`believes that it is and will continue to be damaged by the continued existence of such
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`registration. 15 U.S.C. § 1064. Based on Respondent’s abandonment, Petitioner has invested
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`significant time and effort into commercializing its MOMBACHO company name and mark in
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`the United States. To the extent the Registration is not cancelled, there will be a conflict
`
`
`
`8
`
`

`

`
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`between Petitioner’s common law rights and Respondent’s registered rights. Respondent has
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`not contested Petitioner’s standing in this proceeding.
`
`B.
`
`Respondent Abandoned the Mark MOMBACHO for Cigars
`
`
`
`
`Under Section 45 of the Lanham Act, abandonment of a trademark occurs when its “use
`
`has been discontinued with intent not to resume such use.” 15 U.S.C. § 1127. Nonuse for three
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`consecutive years is prima facie evidence of abandonment. (Id.) Any use of a mark is not
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`sufficient to rebut this presumption, rather the use must be “bona fide use of such mark made in
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`the ordinary course of trade, and not made merely to reserve a right in a mark.” 15 U.S.C. §
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`1127. Petitioner must “prove abandonment by a preponderance of the evidence.” Rivard v.
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`Linville, 45 U.S.P.Q.2d 1374, 133 F.3d 1446, 1449 (Fed. Cir. 1998).
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`
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`Here, Respondent failed to make bona fide use of the MOMBACHO mark for not just
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`three years, but rather for five years. As a result, Petitioner is entitled to rely upon a
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`presumption of abandonment. Respondent’s nominal use between 2010 and 2015 was made
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`merely to reserve its rights in the mark MOMBACHO (i.e. be kept as one of its “dormant”
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`brands), which is expressly prohibited by the Lanham Act. Respondent has not presented any
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`evidence of an intent to resume use during this period of abandonment and only began to
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`attempt to use the mark MOMBACHO on a revamped product after the filing of this action.
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`(See, e.g., 23 TTABVUE 525 (April 2016 article stating that Respondent, “when it was
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`previously known as Tabacalera Tropical 3 produced the cigar under the name Mombacho
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`Thermonuclear Series 2006. Now that blend is back with a new name, new factory and new
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`home.”)). On these facts, the Registration must be cancelled because the Respondent abandoned
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`the mark MOMBACHO for cigars.
`
`
`3 Respondent Tropical Tobacco also does business under the names Tabacalera Tropical and
`Casa Fernandez. (23 TTABVUE 26, 77, 129).
`
`
`
`9
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`
`
`1.
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`A Presumption of Abandonment Applies Because Respondent
`Discontinued Use of the Mark MOMBACHO Between 2010 and 2015
`
`Between 2010 and 2015 (pre-Petition), Respondent lost interest in the mark
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`MOMBACHO. The product fell out of favor and had quality issues. (23 TTABVUE 136, 211-
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`212). The company thus made a business decision to stop promoting the product, not feature it
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`on its website, not train its employees regarding the product, and warehouse the mark. (23
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`TTABVUE 34-35, 150, 197-198, 213-214, 254-260, 272-282, 284). “Nonuse related to a
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`business decision is not beyond the owner’s control and does not excuse nonuse.” T.M.E.P. §
`
`1604.11; see also Yamaha Corp. of American v. Wrightwood Enterprises, Inc., Opposition No.
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`108787, 2002 WL 31651943 (T.T.A.B. Nov. 22, 2002) (finding abandonment where opposer
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`made business decision not to use the mark at issue) (attached hereto as Exhibit A).
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`At least two individuals with extensive industry knowledge have submitted declarations
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`that attest to the fact that they were unaware of any use of the MOMBACHO mark by
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`Respondent prior to this cancellation action in 2015. (18 TTABVUE (Declaration of Hasan
`
`Khalil stating “[p]rior to learning about this trademark case, I had not heard of Tropical Tobacco
`
`offering or selling any cigars with the Mombacho name or mark.”); 17 TTABVUE (Declaration
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`of Glynn Segars stating “[p]rior to initiation of this cancellation proceeding, I was not aware of
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`Tropical Tobacco offering or selling any cigars under the name Mombacho in the United
`
`States.”)).
`
`This is not surprising since during the five-year period prior to the filing of this
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`cancellation action, Respondent had engaged in only token sales. According to the invoices
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`produced by Respondent, it sold only 27 boxes of MOMBACHO cigars between 2010 and 2015.
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`(26 TTABVUE 45-64). Between 2011 and 2014, the number of boxes allegedly sold ranged
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`from just 2 to 4 boxes per year. (26 TTABVUE 50-62). These nominal sales stand in contrast to
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`
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`10
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`the prior five years (i.e., 2005-2009), during which time Respondent claims it sold over 350
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`boxes of its MOMBACHO cigars. (26 TTABVUE 8-44). The sales are also exceedingly low
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`for Respondent considering that it has an annual revenue of $5 million. (23 TTABVUE 252).
`
`
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`The Board and courts have consistently held that such de minimis sales are insufficient to
`
`establish continued use. See, e.g., Lever Brothers Co. v. Shaklee Corp., 214 U.S.P.Q. 654, 1982
`
`WL 50426, at *7-8 (T.T.A.B. 1982) (“As the courts have made clear, rights under the common
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`law are not created by sporadic, non-commercial, “token” sales of a product under the proposed
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`trademark effected solely for the purpose of reserving the mark for possible future use.”);
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`Oshman’s Sporting Goods, Inc. v. Highland Import Corp., 16 U.S.P.Q.2d 1395, 1990 WL
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`354531, *3 (T.T.A.B. 1990) (finding no intent to resume use because there were no specific
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`plans to reintroduce the product after advertising and sales had been phased out); La Societe
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`Anonyme des Parfums Legalion v. Jean Patou, Inc., 181 U.S.P.Q. 545, 495 F.2d 1265, 1272 (2d
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`Cir. 1974) (“While the district court termed the 89 sales in 20 years ‘bona-fide,’ we cannot agree
`
`that such a meager trickle of business constituted the kind of bona fide use intended to afford a
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`basis for trademark protection. … where no present intent has been found to market the
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`trademarked product, minimal sales have been held insufficient to establish trademark rights.”);
`
`Del-Rain Corp. v. Pelonis USA, Ltd., 29 Fed.Appx. 35, 38 (2d Cir. 2002) (“Del-Rain
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`misconceives the meaning of ‘use’ under the Lanham Act. The Act does not protect any use;
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`nor is the quantity of ostensible use-here, the number of heaters sold-necessarily relevant. The
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`Lanham Act provides that ‘[u]se of a mark means bona fide use of such mark made in the
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`ordinary course of trade.’ … An effort to dispose of the remaining stock of an abandoned line of
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`merchandise does not constitute a ‘bona fide use … in the ordinary course of trade,’ 15 U.S.C. §
`
`1127, that suffices to defeat a finding of abandonment.”) (attached hereto as Exhibit B).
`
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`
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`The facts of this case are very similar to those of Continental Grain Co. v. Strongheart
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`Prods, Inc., 9 U.S.P.Q.2d 1238, 1988 WL 252323 (T.T.A.B. 1988). In Continental, the
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`petitioner contacted the respondent prior to adopting the mark KIT KAT for animal feed and
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`was told that respondent had not sold KIT KAT cat food for 15 years. (Id. at *15). While
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`respondent had sales of its KIT KAT products in the late 1960s and early 1970s, it only shipped
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`the product “on a very limited basis in an attempt to maintain rights in the mark” after 1974. (Id.
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`at *2). The Board granted the petition to cancel the mark KIT KAT, stating that “[w]e believe
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`that petitioner has demonstrated that respondent has abandoned its trademark rights and that
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`respondent’s nominal use of its trademark on annual shipments of cat food for the past 14 years
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`is insufficient to rebut the prima facie case of abandonment due to nonuse. ” (Id. at *3). Just as
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`in Continental, Petitioner’s pre-filing investigation in this case demonstrated that Respondent
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`was no longer using the mark MOMBACHO (16 TTABVUE) and Respondent only claims to
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`have made limited sales between 2010 and 2015 (26 TTABVUE 45-64). The Board should thus
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`follow the reasoning articulated in Continental and cancel the Registration.
`
`2.
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`Respondent’s Actions Between 2010 and 2015 Confirm it Lacked an
`Intent to Resume use of the Mark
`
`
`Beyond Respondent’s token sales, other facts demonstrate Respondent’s lack of interest
`
`
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`in the using the mark MOMBACHO between 2010 and 2015. Most notably, Respondent did
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`not advertise its MOMBACHO product whatsoever during this time, despite allegedly doing so
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`previously. As Paul Palmer, the President of Respondent, testified:
`
`But you mentioned Cigar Aficionado, SMOKE, and the Tobacconist. Are
`Q:
`there any other trade publications through which Tropical Tobacco has marketed
`Mombacho?
`
`A:
`
`No.
`
`Is it accurate then that any advertisement of Mombacho within those trade
`Q:
`publications took place before 2010?
`
`
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`12
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`
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`A:
`
`As I recollect, yes.
`
`there been any advertisement of Mombacho by any other
`Has
`Q:
`publications in 2010 or later?
`
`There was an editorial on the Mombacho Miami for Serious Cigars in
`A:
`Halfwheel. I don’t know exactly when that was, but I want to say it was
`probably March, maybe April 2016.
`
`So besides that editorial in 2016, as for the period between 2010 and 2015,
`Q:
`did Tropical Tobacco put any money into advertising Mombacho in any print
`media?
`
`A:
`
`Not that I’m aware of.
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`(23 TTABVUE 129, 152; see also 23 TTABVUE 199-200, 219-250 (2014 brochure did not
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`reference Mombacho)). During this same time period, MOMBACHO was not listed as a
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`product on Respondent’s website. (16 TTABVUE 3-4, 8; 23 TTABVUE 180-183, 380-484).
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`Further, Respondent did not promote its MOMBACHO product or display the MOMBACHO
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`brand at the annual cigar industry trade show. (23 TTABVUE 36-37, 486-510; 22 TTABVUE
`
`¶¶ 6-8; 18 TTABVUE ¶¶ 10-12). This lack of advertising and promotion is important because it
`
`demonstrates that the minimal sales allegedly made by Respondent during this time cannot
`
`constitute bona fide use in commerce because Respondent did not make the purchasing public
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`aware of the availability of the product. See Mastic Inc. v. Mastic Corp., 230 U.S.P.Q. 699,
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`1986 WL 83610, at *3 (T.T.A.B. 1986) (To constitute a bona fide use of a mark in commerce,
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`“it is necessary that any use made of the mark must be open, public and notorious use such that
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`the purchasing public is made aware of the availability of the goods under said mark and of the
`
`use of the mark as an indication of the origin of those goods.”).
`
`
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`Discovery also revealed that while Respondent was aware of others using the mark
`
`MOMBACHO for cigars, it could not confirm whether it took any action to stop this third party
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`use. (23 TTABVUE 188-189). To the extent that MOMBACHO was a mark that Respondent
`
`
`
`13
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`
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`was using and intended to keep using, it is reasonable to assume that it would have attempted to
`
`stop others from using it. Respondent provides no explanation for its lack of policing. See ITC
`
`Ltd. v. Punchgini, Inc., 373 F. Supp. 2d 275, n. 8 (S.D.N.Y. 2005), aff'd in part, 482 F.3d 135
`
`(2d Cir. 2007), certified question accepted, 8 N.Y.3d 994, 870 N.E.2d 151 (2007), and certified
`
`question answered, 9 N.Y.3d 467, 880 N.E.2d 852 (2007), and aff'd in part, 518 F.3d 159 (2d
`
`Cir. 200