Midwest Plastic Fabricators, Inc. v. Underwriters Laboratories Inc.

• Decision Date: 27 June 1990
• Docket Number: No. 90-1043,90-1043
• Citation: 906 F.2d 1568,15 USPQ2d 1359
• Parties: , 15 U.S.P.Q.2d 1359 MIDWEST PLASTIC FABRICATORS, INC., Appellant, v. UNDERWRITERS LABORATORIES INC., Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

Page 1568

906 F.2d 1568

59 USLW 2072, 15 U.S.P.Q.2d 1359

MIDWEST PLASTIC FABRICATORS, INC., Appellant, v. UNDERWRITERS LABORATORIES INC., Appellee.

No. 90-1043.

United States Court of Appeals Federal Circuit.

June 27, 1990.

Suggestion for Rehearing In Banc Declined Dec. 12, 1990.

William C. McCoy, Jr. of Pearne, Gordon, McCoy & Granger, Cleveland, Ohio, argued for appellant. With him on the brief was Stephen A. Hill.

Francis J. Higgins of Bell, Boyd & Lloyd, Chicago, Ill., argued for appellee. With him on the brief was J. William Hayton.

Before ARCHER and MICHEL, Circuit Judges, and SENTER, District Judge. ^*

MICHEL, Circuit Judge.

Midwest Plastic Fabricators, Inc. (Midwest) appeals the decision of the United States Patent and Trademark Office, Trademark Trial and Appeal Board (Board), denying Midwest's petition to cancel two certification mark registrations issued to Underwriters Laboratories Inc. (UL). Midwest Plastic Fabricators, Inc. v. Underwriters Laboratories Inc., 12 USPQ2d 1267 (TTAB 1989). Because the Board's findings that UL did not misuse and did control use of its certification marks are not clearly erroneous, we affirm.

BACKGROUND

UL, a corporation that promulgates and certifies compliance with safety standards for thousands of consumer and other products, is the owner and federal registrant of the two certification marks ¹ at issue in this appeal. See Joint Appendix at 13-15, Midwest Plastic Fabricators, Inc. v. Underwriters Laboratories Inc., No. 90-1043 (Fed.Cir. filed Mar. 9, 1990) [hereinafter Joint App.] (Registration No. 782,589, issued Dec. 29, 1964, and Registration No. 1,102,931, issued Sept. 19, 1978). Each registration states, in part, that the certification is used by persons authorized by UL to certify that representative samplings of the goods conform to the safety standards or requirements established by UL. Id. A manufacturer that wishes to use the UL marks on its products to indicate compliance with UL safety standards must first submit samples to UL for testing and evaluation. Once those samples are determined to comply with UL standards, the products become eligible for listing with UL. Usually the manufacturer will enter into a listing and follow-up service agreement with UL.

This agreement provides, inter alia, that the manufacturer order UL marks through [UL] from an authorized printer; that no UL mark shall be used on products not in compliance with [UL's] requirements; that the manufacturer agrees that it will ensure that the products bearing the UL mark are in compliance with [UL's] requirements; that a testing and inspection program will be maintained by the manufacturer to assure continued compliance ...; that access to [UL's] inspectors shall be allowed together with providing adequate facilities for the conducting of product testing and that any tests which indicate noncompliance with [UL's] requirements shall result in the manufacturer's being required to either correct the problem or remove the UL mark from the noncomplying products.

[The] follow-up service agreement provides for a periodic inspection program whereby [UL's] inspectors will visit factories and plants in which listed products are produced. If an inspector finds a variation from [UL's] requirements, a variation notice is issued ... [and] a manufacturer cannot ship products which are encompassed by the variation notice until the problem is resolved. The record shows that inspectors have discretion to allow products to be shipped with minor variations that do not affect the safety of the product. Inspectors are also authorized to remove the UL mark in appropriate situations.

[UL] exercises authority over use of the UL certification marks as described above by employing some 500 inspectors who work out of over 200 inspection centers throughout the United States. In 1987, [UL's] inspectors conducted approximately 438,000 inspections in approximately 38,900 factories and over 9 billion UL labels were issued covering approximately 12,500 different products.

Midwest, 12 USPQ2d at 1271.

Midwest is a manufacturer and seller of polyvinyl chloride (PVC) fittings and elbows for use with PVC conduit which encases electrical wiring. The company entered into a listing and follow-up service agreement with UL which provides, in part, that Midwest "agrees that his use of the Listing Mark constitutes his declaration that the products are Listed by [UL] and have been made in compliance with the requirements of [UL]." Joint App. at 1378 (emphasis added).

Midwest now seeks reversal of the Board's denial of its petition to cancel UL's registrations on the same two bases it presented to the Board. First, Midwest alleged that UL permits use of the certification marks for purposes other than certification, in violation of 15 U.S.C. Sec. 1064(e)(3) (1982). According to Midwest, UL's president testified that application of UL's mark represents not UL's, but merely the manufacturer's declaration that the products meet UL standards. Midwest argued that the failure of UL itself to certify that the products carrying the UL mark meet UL standards demonstrates that UL permits use of the marks for purposes other than certification.

As the second basis for cancellation, Midwest charged UL fails to control the use of its marks. Specifically, Midwest alleged: (1) certain PVC elbows carrying the UL marks failed impact tests performed by its expert, Professor Charles E. Rogers, of Case Western Reserve University; and (2) certain conduit pipe manufactured by a competitor of Midwest, National Pipe Company (National), carried counterfeit UL marks. If UL fails to control its marks, the registrations are subject to cancellation under 15 U.S.C. Sec. 1064(e)(1) (1982). Alternatively, Midwest argued to the Board that as UL fails to control use of the marks on PVC conduit, the registrations should be cancelled at least as to such conduit. UL controverted these allegations and asserted that Midwest's cancellation petition was barred by the doctrine of licensee estoppel.

ISSUE

Whether either the Board's fact finding that UL does not use the marks other than for certification or that UL does control use of its marks is clearly erroneous.

OPINION

I. Use of the Marks for Purposes Other Than to Certify

We have jurisdiction over this appeal under 28 U.S.C. Sec. 1295(a)(4)(B) (1988).

Although our court has not previously addressed either the burden or the standard of proof in cancellation proceedings for certification mark registrations, we discern no reason to make them different than for trademark registration cancellations. See Cerveceria Centroamericana, S.A. v Cerveceria India, Inc., 892 F.2d 1021, 1023, 13 USPQ2d 1307, 1309 (Fed.Cir.1989) ("[I]n a [trademark registration] 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.") (emphasis added).

A certification mark registration may be cancelled if the mark is not used exclusively as a certification mark. 15 U.S.C. Sec. 1064(e)(3). For example, if a certification mark's owner also allowed the mark to be used as a trademark, there would be a basis for cancellation of the registration. See In re Florida Citrus Comm'n, 160 USPQ 495, 499 (TTAB 1968) ("[T]he owner of a certification mark cannot use the identical mark as a service mark or a trademark.... A certification mark should be used only to certify."); Consolidated Dairy Prods. Co. v. Gildener & Schimmel Inc., 101 USPQ 465, 467 (Comm'r Pat.1954) (stating that it is incompatible to use a mark as both a trademark and as a certification mark); see generally J. McCarthy, Trademark and Unfair Competition Secs. 19:32(D), at 947-49, and 20:15(G), at 1060-61 (2d ed. 1984) [hereinafter J. McCarthy ]; E. Vandenburgh III, Trademark Law & Procedure Sec. 1.40, at 40-42 (1968).

Midwest argues that UL's registrations must be cancelled because the UL certification marks are not UL's own declarations to consumers that the marked products comply with UL standards, but instead are the manufacturer's declarations. ² Midwest asserts the failure of UL itself to make that declaration is evidence that UL "permits the use of the certification mark for purposes other than to certify" and therefore the registrations must be cancelled. See 15 U.S.C. Sec. 1064(e)(3).

There is an important difference, however, between the mark's use and the user. That others test products and apply UL's certification marks simply is not probative that the marks are used for other than certification. Certainly, on this record, there is no evidence that these certification marks are used, by anyone, as trademarks or service marks. Instead, Midwest merely complains about who applies the mark to the product. Midwest in effect argues that third party application of a certification mark constitutes per se misuse--use for a purpose other than certification. But Midwest offers no authority to support such a proposition.

The statute, however, plainly does not require that, as the registrant, UL itself must test the products and declare to the public that items carrying UL marks meet UL standards. It merely authorizes cancellation of a registration if the registrant allows use of the mark for purposes other than certification. Id. In addition, the general practice, in accord with the statute, allows for a third party to apply the certification mark. See U.S. Patent & Trademark Office, Trademark Manual of Examining Procedures Sec. 1306.01, at 1300-14 (1986) (The certification mark is "applied by other persons, to their goods or services, with authorization from the owner of the mark.") (emphasis added in part).

Thus, both registrations at issue here include a provision that the certification marks may be used by "persons authorized by [UL]" to indicate that "representative samplings" of the products conform to safety...