March 15, 2015
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UNITED STATES: Game Over for Abusive Cancellation Petition
Respondent Microsoft Corp. moved to dismiss the petition to cancel its Registration No. 3300210 for the mark XBOX 360 and subsequently moved for entry of sanctions against petitioner, NSM Resources, and its president, Zane Murdock, for “filing a string of baseless and harassing petitions for cancellation.” The Board granted both motions based upon petitioners’ failure to state a claim upon which relief can be granted and their vexatious conduct in this and other proceedings in which petitioners asserted similarly doubtful claims. NSM Resources Corp. v. Microsoft Corp., 113 USPQ2d 1029 (TTAB 2014) [precedential].
The petition for cancellation alleged that respondent obtained its XBOX 360 registration fraudulently and that respondent’s use of its mark constituted a misrepresentation of source under Section 14 of the Trademark Act. Petitioners’ complaint centered on respondent’s publishing of a user manual for a video game program entitled “Stoked,” which displays the term “Huck” in its pages. Petitioners claimed ownership of 12 registrations or pending applications for marks comprising or containing the word “Huck.”
The fact that respondent used “Huck,” a term that is not remotely similar to respondent’s registered XBOX 360 mark, in its written materials did not establish a basis for petitioner to allege standing to cancel the registration. If standing could be based on a defendant’s mere use of a term in materials, trademark owners would be discouraged from registering their marks. Moreover, unscrupulous plaintiffs could file baseless proceedings not contemplated by the Trademark Act.
Because the petition showed that the continued registration of respondent’s XBOX 360 mark does not harm petitioners, the Board found that petitioners had no personal stake in this proceeding to cancel the registration, and no reasonable belief of damage.
The Board also acknowledged its inherent power to enter sanctions and found that in other instances it granted motions dismissing petitioners’ pleadings. The Board concluded that petitioners could not reasonably or in good faith believe that asserting the same claims in the instant proceeding was warranted or that petitioners had standing to bring the claims. The Board thus dismissed the case with prejudice as a sanction for petitioners’ conduct which was found to be vexatious and a disruption to the fair allocation of the Board’s resources.
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© 2015 International Trademark Association