Generally, third parties who believe they may be harmed by a trademark registration can challenge a USPTO trademark application through the Trademark Trial and Appeal Board. However, do third parties have another avenue in challenging such applications in federal court?
Recently, a Kentucky U.S. District Court answered this question in the affirmative, finding it had jurisdictional authority to review pending trademark applications. This decision, rooted in a 1976 Connecticut case, Continental Connector Corp. v. Continental Specialties Corp., establishes a means for trademark holders to challenge sufficiently similar trademark applications.
In denying defendant PetSmart LLC’s (PetSmart) motion to dismiss one of the claims in a trademark infringement lawsuit brought by Louisville, Kentucky-based dog food seller Rudy Green Inc. (Rudy Green), the Kentucky federal court disagreed with PetSmart’s assertion that the Court did not have authority to rule on (and possibly cancel) pending trademark applications that are related to ongoing litigation, finding that statutory interpretation and existing case law supported the court’s decision.
Background
In March 2024, the USPTO issued an initial refusal on a Trademark application to PetSmart, finding a likelihood of confusion with Rudy Green’s existing trademarks. Rudy Green subsequently brought a lawsuit against PetSmart on May 30, 2024, in the U.S. District Court for the Western District of Kentucky, alleging federal and state trademark infringement and unfair competition claims. Rudy Green sought further relief by requesting that the court affirmatively cancel PetSmart’s application for registration, of which PetSmart sought to dismiss for lack of jurisdiction.
Jurisdiction Over Pending Trademark Applications
PetSmart argued that federal courts lacked the jurisdiction to adjudicate issues related to pending trademark applications, as that power resides exclusively with the USPTO. PetSmart’s argument was based on a strict reading of the Lanham Act, which gives federal courts the power over registered trademarks but does not explicitly extend that power to pending trademark applications.
Two key provisions of the Lanham Act were under scrutiny. Section 37 grants courts the authority to determine the “right to registration” and “rectify the register,” but it only specifically mentions registered trademarks. Section 39 grants federal courts jurisdiction over all actions arising under the Lanham Act but does not explicitly address the issue of pending applications. The Kentucky court noted this ambiguity, stating that while the Lanham Act does not explicitly authorize courts to cancel pending applications, the broad language of Sections 37 and 39 allows courts to determine registration rights, which could imply a power to address issues related to pending applications when they are closely tied to the subject of the litigation.
The Continental Connector Exception
Judge Jennings relied heavily on the Continental Connector case, which established an exception allowing courts to cancel pending patent applications in the context of related litigation, if the application is sufficiently related to a registered mark involved in the litigation. This exception has been adopted by several courts, including within the Sixth Circuit.
PetSmart attempted to rely on a case from Northern District of Ohio, Universal Tube & Rollform Equip. Corp. v. YouTube, Inc., where that court refused to cancel a pending application. However, the Kentucky court found that case distinguishable and supportive of Rudy Green’s position, as there was no registered mark at issue in Universal Tube. As the Kentucky court noted, Rudy Green satisfied the condition that was missing in Universal Tube — the presence of a registered trademark. And so, the Kentucky court found the Continental Connector exception applicable to Rudy Green’s claim.
Similarity and Litigation Nexus
PetSmart next argued that the mark for which it applied, “Rudy’s,” was not sufficiently similar to Rudy Green’s marks, and the Continental Connector exception should not apply. The Kentucky court emphasized that the marks in question did not need to be “nearly identical,” as PetSmart argued, but only “sufficiently related.” The similarity between the marks was further evidenced by the USPTO’s own initial refusal of PetSmart’s trademark application due to its likelihood of confusion with Rudy Green’s marks.
Implications for Trademark Holders and Applicants:
As outlined above, under certain circumstances district courts can exercise jurisdiction over pending trademark applications, especially when the application is tied to ongoing litigation involving registered marks. Thus, a third party need not solely rely upon the USPTO to challenge a trademark application when these elements are met.
The PetSmart case highlights the importance of mark similarity in trademark litigation. Even if two marks are not identical, courts may still find them “sufficiently related” if they share a common base and are used in overlapping markets, as was the case with PetSmart’s “Rudy’s” and Rudy Green’s marks. Applicants must carefully consider the potential for confusion with existing marks when choosing and applying for trademarks.
Applicants should be wary of the potential interplay between litigation and the USPTO’s registration process as exemplified by the PetSmart decision. A pending application could be challenged in federal court if it becomes entangled in trademark litigation. Conversely, trademark holders may use litigation strategically to challenge a competitor’s pending application in court, potentially avoiding a drawn-out opposition process at the USPTO.
Trademark holders must diligently protect their trademark rights and should consult with legal counsel if they have questions about how similar conduct might impact them. For additional information regarding the content of this article or how to protect your brand, please contact Robert E. Zulandt, III (REZ@kjk.com; 216-736-7259), or Nathan F. Studeny (nfs@kjk.com; 216-736-7284), or one of KJK’s eCommerce attorneys.