Section 2(d) Refusal Stands Despite “Procedural Mishaps”

The TTAB recently issued a precedential decision emphasizing two important points. First, that applicants should monitor the status of cited applications and registrations during the prosecution process and promptly notify the PTO of any procedural abnormalities during prosecution. Second, that an ex parte proceeding is not the proper venue for challenging an existing registration on priority grounds.

In In re House Beer, LLC, Serial No. 85684754 (TTAB Mar. 27, 2015), House Beer LLC unsuccessfully argued for a reversal of a Section 2(d) refusal issued contrary to the USPTO’s examining procedures. House Beer LLC filed a trademark application for HOUSE BEER on July 23, 2012 and subsequently amended its application to allege use as of November 1, 2012. Its application was refused registration based upon an prior filed ITU application for the identical mark that, as a result of an amendment during prosecution, ultimately had a later effective filing date. The cited application matured to registration on December 11, 2013 during prosecution of House Beer’s own application.

The PTO generally processes similar or “conflicting” pending applications according to the earliest filing or effective filing dates. TMEP §1208.01. The trademark rules direct that later filed application be suspended until the earlier-filed application either matures to registration or is abandoned. An applicant of a later-filed application with an earlier first use date can oppose a cited earlier-filed application on priority grounds when that application is published for opposition.

In this case, the application underlying the cited registration (“the underlying application”) was filed on an ITU basis prior to House Beer LLC’s application. Prosecution of the underlying application continued following the suspension of House Beer LLC’s application on likelihood of confusion grounds. During the examination process, following a refusal for mere descriptiveness, the underlying application was amended to seek registration on the Supplemental Register and to allege a first use date after the original filing date. Following same, the mark matured to registration on the Supplemental Register.

Following issuance of the registrant, the anticipatory refusal issued against House Beer LLC’s mark matured into an actual 2(d) refusal. House Beer LLC argued this refusal was improper because, as a result of an amendment during the prosecution of the underlying application, its effective filing date was actually after that of House Beer LLC.

In evaluating House Beer LLC’s ex parte appeal from the refusal, the Board acknowledge that, had the Examining Attorney followed proper procedure, she should have withdrawn the suspension and continued prosecution of House Beer LLC’s application. It also noted House Beer LLC’s failure to object to the application on prior grounds following its publication, or in a cancellation action after it issued.

Ultimately, the Board concluded that these “procedural mishaps” did not invalidate the Section 2(d) refusal.  Section 2(d) allows for a refusal based on “a mark registered in the Patent and Trademark Office” and makes no reference to the filing date of an underlying application. Concluding that it could not give internal PTO examining procedures primacy over statutory law, the Board found that “strict compliance” with these examining procedures was not a prerequisite to a Section 2(d) refusal, and that the Examining Attorney’s refusal was “procedurally sound” based on the language of Section 2(d). The Board also emphasized that the proper venue to challenge the registration on priority grounds was during an inter partes (i.e. opposition or cancellation) action, rather than an ex parte proceeding.

Not surprisingly, the Board upheld the refusal given the identity of the marks and close relationship of House Beer LLC’s retail store services featuring beer and Registrant’s beer products.