Fact scenario: Company A has a U.S. trademark registration on the mark CRABAPPLE. Company B, which is related to Company A, files a U.S. trademark application on CRABAPPLE RED for similar goods. The USPTO refuses to register CRABAPPLE RED, asserting there is a likelihood of confusion with the already-registered CRABAPPLE mark. Is there a way around the refusal?
The answer is maybe. It depends on the relationship between Company A and Company B. The overriding rule is whether the public is likely to be confused about the source of the product, in this case the goods that bear the mark CRABAPPLE RED. The specific rule is that if there is “unity of control” over the marks at issue, then the marks are considered to be for goods or services from a single source, and use of the applied-for mark would not cause confusion as to source. If the marks, and the goods that are associated with them, emanate from a single source, the application should not be refused in light of the registered mark.
What establishes “unity of control” depends on the circumstances of every case. However, the following are generally considered to be situations where there is “unity of control”:
When either the applicant or the registrant owns all of the other entity (i.e., a wholly owned subsidiary situation)
When either the applicant or the registrant owns substantially all of the other entity and asserts control of the activities of the other, including its trademarks
When the applicant is a joint owner of the registration
When the applicant and the registrant are commonly and wholly owned by a third party (i.e., a sister company situation) and detailed evidence is provided to establish how one sister company controls the trademark activities of the other
When the applicant and the registrant have common stockholders, directors, and/or officers in common, and detailed evidence is provided to establish that a single person or group controls the trademarks of the applicant and the registrant
Just because two companies are “related” does not mean that there is unity of control. Ideally, the matter should be worked out at least prior to filing the second application. This is not always possible or practical, however. If a refusal is issued based on a related company’s registration, it may be worthwhile to investigate the situation as to who truly has control over the marks and how that control is manifested.
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