UNITED STATES: Abandonment Test Applies to Determine Priority

In Simply Wireless, Inc. v. T-Mobile U.S., Inc., a federal court in Virginia held that the “deliberate and continuous” test applies in determining whether a party initially obtains trademark rights based on use and that the abandonment test applies in determining whether a party has retained its trademark rights.

Simply Wireless used the SIMPLY PREPAID mark from 2002 until 2008, when it discontinued use. The company started to use the mark again from July 2012 to April 2013 on a different platform and with only limited sales. T-Mobile began using the SIMPLY PREPAID mark in June 2014 and filed an application for registration in August 2014. After learning of T-Mobile’s registration, Simply Wireless filed an application for registration in October 2014 and recommenced using the mark in 2015 but ceased use again in 2018. Simply Wireless subsequently sued T-Mobile for trademark infringement based on common law rights in the SIMPLY PREPAID mark.

The U.S. District Court for the Eastern District of Virginia first considered which standard is appropriate for determining priority of ownership:

1. Whether Simply Wireless’s use in commerce was “deliberate and continuous, not sporadic, casual or transitory” through T-Mobile’s first use in June 2014; or
2. Whether Simply Wireless had abandoned rights in the mark as of T-Mobile’s first use in June 2014 after having established rights based on its use from 2002 to 2008.

It concluded the following:

• The “deliberate and continuous” test applies in determining whether the user of a common law trademark has acquired rights; and
• The abandonment test applies in determining whether the user has retained its trademark rights.

Applying the abandonment test, the court held that Simply Wireless abandoned its rights in the SIMPLY PREPAID mark after not using it from 2009 to July 2012. The court noted that Simply Wireless failed to rebut the mandatory presumption of abandonment based on more than three years of non-use. The court further held that Simply Wireless did not acquire a new, protectible interest in the SIMPLY PREPAID mark based on its “intermittent, limited use” during a nine-month period from July 2012 to April 2013 or through its subsequent use. Accordingly, the court held that T-Mobile had priority in the SIMPLY PREPAID mark.

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