Cerveceria Centroamericana, S.A. v. Cerveceria India, Inc.

• Decision Date: 26 December 1989
• Docket Number: No. 89-1369,89-1369
• Parties: CERVECERIA CENTROAMERICANA, S.A., Appellant, v. CERVECERIA INDIA, INC., Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

Page 1021

892 F.2d 1021

13 U.S.P.Q.2d 1307

CERVECERIA CENTROAMERICANA, S.A., Appellant, v. CERVECERIA INDIA, INC., Appellee.

No. 89-1369.

United States Court of Appeals Federal Circuit.

Dec. 26, 1989.

Adrienne L. White, Burns, Doane, Swecker & Mathis, Alexandria, Va., argued, for appellant. With her on the brief was Robert S. Swecker.

Willard M. Hanger, Hilton Head Island, S.C., argued, for appellee. Richard G. Kline, Kline, Rommel & Colbert, Washington, D.C., of counsel.

Before MARKEY, Chief Judge, and ARCHER and MICHEL, Circuit Judges.

MICHEL, Circuit Judge.

Cerveceria Centroamericana, S.A. (Centroamericana) appeals the decision, dated January 12, 1989, of the United States Patent and Trademark Office, Trademark Trial and Appeal Board (TTAB), granting Cerveceria India, Inc.'s (India's) petition to cancel Centroamericana's Registration No. 972,984 for the word mark MEDALLA DE ORO, for beer, on the grounds of abandonment. See Cerveceria India Inc. v. Cerveceria Centroamericana, S.A., 10 USPQ2d 1064 (TTAB 1989) (Cancellation No. 14,654). We affirm.

Background

Centroamericana, a foreign beer producer, obtained a United States registration for MEDALLA DE ORO, for beer, in 1973. India sought to register the mark MEDALLA, for beer, in 1979, but its application was denied by the Patent and Trademark Office based on likelihood of confusion with Centroamericana's mark. Since 1978, India used the word mark MEDALLA on its beer in Puerto Rico. In 1985, India petitioned to cancel Centroamericana's registration asserting, inter alia, that Centroamericana had abandoned its mark by nonuse. Id. at 1065, 1067.

TTAB decided the cancellation based essentially on deposition testimony and certain answers to interrogatories. TTAB found that Centroamericana had imported shipments of MEDALLA DE ORO beer into the United States in 1971, 1972, 1975, 1977, and 1986, and that the 1970's shipments were "of very small quantities." Id. at 1067. In 1975, for example, only one shipment was made and consisted of only some four gallons. Based on the record evidence, TTAB concluded that India had made out a prima facie case of abandonment because nonuse for two or more years between 1977 and 1984 was established by India. Centroamericana argued, however, that India failed to establish prima facie abandonment. Centroamericana noted that although India provided evidence that Centroamericana had not imported MEDALLA DE ORO beer into the United States between 1977 and 1986, India offered no direct proof showing that the mark was not used in the United States for two consecutive years during that period. See id. at 1068.

To rebut the prima facie case found by TTAB, Centroamericana presented testimony by Carlos Castillo, Centroamericana's export manager and vice president of its U.S. subsidiary. Castillo stated that he had seen MEDALLA DE ORO beer for sale in Los Angeles " 'probably in 1978' " and in Washington, D.C. in either 1979 or 1980. Id. India countered with testimony by Howard Rosenberg, the General Manager of a Washington, D.C. beer importer and wholesaler and an expert in imported beers, that he checked various reference books and from them and his personal knowledge was not aware of any MEDALLA DE ORO beer ever on sale in Washington, D.C. Id. at 1068-69. TTAB found Castillo's testimony "vague," and noted that Castillo could not remember the circumstances or location, indicating that TTAB was affording the testimony little or no weight. Id. at 1068.

Centroamericana also presented evidence that in 1982, it established a U.S. subsidiary to market beers. This evidence was presented to show Centroamericana's intent to resume use of the MEDALLA DE ORO mark. TTAB found, however, that at that time, Centroamericana intended to market only "MONTE CARLO" brand beer with the hope of selling other brands sometime in the future. Two years later, in 1984, Centroamericana sought approval of a new MEDALLA DE ORO label from the U.S. Bureau of Alcohol, Tobacco and Firearms, and it received such approval in 1985. Centroamericana then contacted a number of distributors about handling MEDALLA DE ORO and eventually made shipments to the United States in 1986. Id. at 1067-68.

                Based on this evidence, TTAB found that although Centroamericana had shown an intent to resume use as early as 1984, it had failed to rebut the prima facie case of abandonment between 1977 and 1984.   Consequently, TTAB cancelled Centroamericana's MEDALLA DE ORO registration.  Id. at 1069.   This appeal followed.   Centroamericana now argues that its rebuttal evidence was sufficient to overcome the prima facie case, even if we uphold TTAB's determination that prima facie abandonment was indeed established, and that an improper burden of proof was imposed on it by TTAB
                

OPINION

I. Establishing Prima Facie Abandonment

A federal registration of a trademark may be cancelled if the mark is abandoned. Under the Lanham Act a federally registered trademark is considered abandoned if its "use has been discontinued with intent not to resume." 15 U.S.C. § 1127 (1988). Moreover, nonuse for two consecutive years constitutes "prima facie abandonment." Id.

Because a trademark owner's certificate of registration is "prima facie evidence of the validity of the registration" and continued use of the registered mark, the burden of proof is placed upon those who seek cancellation. 15 U.S.C. § 1057(b) (1988); J.C. Hall Co. v. Hallmark Cards, Inc., 340 F.2d 960, 962-63, 144 USPQ 435, 437 (CCPA 1965); see Trade-marks: Hearings on H.R. 4744 Before the Subcomm. on Trade-marks of the House Comm. on Patents, 76th Cong., 1st Sess. 65 (1939) (testimony of Sylvester Liddy, Esq.; Edward Rogers, Esq.; and Rep. Lanham), reprinted in 3 J. Gilson, Trademark Protection and Practice § 7-11 (1988) [hereinafter J. Gilson ]; Trade-marks: Hearings Before the House Comm. on Patents, 72d Cong., 1st Sess. 40 (1932) (testimony of Edward Rogers, Esq.), reprinted in 4 J. Gilson, supra, at § 45-28. ¹ Accordingly, in a cancellation for abandonment, as for any other ground, the petitioner bears the burden of proof. Moreover, the petitioner's burden is to establish the case for cancellation by a preponderance of the evidence. See Dan Robbins & Assocs., Inc. v. Questor Corp., 599 F.2d 1009, 1014, 202 USPQ 100, 105 (CCPA 1979) (involving cancellation for likelihood of confusion); Department of Justice, Fed. Bureau of Investigation v. Calspan Corp., 578 F.2d 295, 301, 198 USPQ 147, 151 (CCPA 1978) (same); Massey Junior College, Inc. v. Fashion Inst. of Technology, 492 F.2d 1399, 1403, 181 USPQ 272, 275 (CCPA 1974) (same). Although not binding on this court like Court of Customs and Patent Appeals (CCPA) precedent, another circuit court's decision, which provides persuasive authority, has applied the preponderance standard to an abandonment case. See Roulo v. Russ Berrie & Co., 886 F.2d 931, 938, 12 USPQ2d 1423, 1429 (7th Cir.1989).

The CCPA, however, has stated that the petitioner has a "heavy burden" to establish abandonment. See, e.g., Lipton Indus., Inc. v. Ralston Purina Co., 670 F.2d 1024, 1031, 213 USPQ 185, 191 (CCPA 1982); W.D. Byron & Sons v. Stein Bros. Mfg. Co., 377 F.2d 1001, 1003-04, 153 USPQ 749, 750 (CCPA 1967). Nonetheless, we cannot conclude that these statements relate to the standard of proof. Instead, we interpret these statements merely as noting the greater evidentiary difficulties a petitioner likely faces in a cancellation as opposed to an opposition proceeding. See Massey Junior College, 492 F.2d at 1402-03, 181 USPQ at 274-75. ² Additionally, in a cancellation as opposed to an opposition proceeding, the registrant benefits from a presumption of validity. 15 U.S.C. § 1057(b) (1988).

Moreover, we are unable to discern from the legislative history of the Lanham Act any intention by Congress to raise the burden of proof for cancellation for abandonment above the normal civil burden of a preponderance of the evidence. Nor do we see any basis for a higher burden of proof in cancellation proceedings for abandonment than for likelihood of confusion. In many contexts, including trademark registration cancellation proceedings, a preponderance is the standard of proof to be presumed. "Without some statutory direction, a preponderance of the evidence will usually be 'sufficient.' " Massey Junior College, 492 F.2d at 1403, 181 USPQ at 275; see McCormick, Evidence § 339, at 793 (Cleary ed. 1972). Accordingly, we conclude that, as any cancellation petitioner, India bears a burden of proof by a preponderance of the evidence.

In the instant case, TTAB concluded that India established prima facie abandonment based on its findings that Centroamericana only shipped MEDALLA DE ORO beer to the United States in 1971, 1972, 1975, 1977, and 1986, and the 1970's shipments were "of very small quantities." Cerveceria India, Inc. v. Centroamericana, S.A., 10 USPQ2d 1064, 1067 (TTAB 1989). Although Centroamericana does not contest the showing of eight years of no importations, it argues that India's proof was insufficient to establish prima facie abandonment because India did not provide "direct" evidence that the mark was not used within the United States. Centroamericana stresses that TTAB must have "inferred" that MEDALLA DE ORO was not used in order to have reached the conclusion that prima facie abandonment had been established.

In cases involving products made abroad, proof of nonuse of the trademark may require both proof of no importations into the United States and no domestic sales. See, e.g., 7-11 Sales, Inc. v. Perma, S.A., 225 USPQ 170, 171-72 (TTAB 1984). We cannot conclude, however, that TTAB's implied finding that India proved no domestic sales between 1977 and 1986 was clearly erroneous. ³ Although Centroamericana suggests that "inference" and "implication" are inappropriate in establishing prima facie abandonment, we cannot agree. Especially when a party must prove a negative, as in proving abandonment...