“The Peace of Incontestability”
By: PAUL E. THOMAS
May 2009
Trademark ownership rights in the United States are based on use in commerce and not on registration, but if you obtain federal registration for your mark, you will enhance your existing common law trademark rights. One of the best examples of the benefits of registration is that if a registered mark is kept in continuous use for more than five years, the registrant can request that the mark be deemed “incontestable.” The request is not mandatory, but to make it properly achieve the status of incontestability, the registrant must file the request during the sixth year of the 10 year registration period (most registrants file the request at the same time that they submit the required sixth year affidavit of continuous use), must pay the $200 official filing fee, and must be able to declare that there is no adjudicated or pending claim challenging the registrant’s ownership rights in the mark. Once granted, incontestability removes several grounds on which trademark ownership rights may traditionally be challenged: (1) a plaintiff cannot allege that the registrant is not the true owner, (2) that the mark was registered improperly, or (3) that the mark is descriptive of the goods or services it identifies and therefore has not acquired distinctiveness.
This third ground, a challenge that a mark is “merely descriptive” of the goods it identifies and is therefore nondistinctive, was one of the claims raised in a case recently decided by a U.S. District Court in Kentucky. In late 2007, Holley Performance Products Inc. sued Quick Fuel Technology Inc. for infringement of its registered DOUBLE PUMPER mark, which Holley uses in connection with carburetors. Quick Fuel filed a timely answer in the suit. Then, as part of its defensive litigation strategy, Quick Fuel decided it wanted to challenge the validity of the DOUBLE PUMPER mark by asserting that because the term “double pumper” says something directly about the nature of Holley’s carburetors, it is therefore “merely descriptive” of the carburetors and does not have the distinctiveness required to be a valid trademark.
Under U.S. trademark law, marks that are considered “merely descriptive” do not have distinctiveness inherently, but they can acquire such distinctiveness through extensive use because, over time, consumers will come to think of them as distinctive marks that identify the source of specific goods or services. It is for this reason, this need for time to develop consumer awareness of the mark, that Congress has established the rule that at least five years of continuous use is required before a descriptive mark can be presumed to have acquired distinctiveness.
Acting promptly on its new strategy, Quick Fuel filed a motion to amend its answer to include a counterclaim asserting that the DOUBLE PUMPER mark is merely descriptive. So that Holley would not be able to take advantage of the statutory presumption that its mark had acquired distinctiveness through five years of continuous use, Quick Fuel filed its claim just one day before the five year bell would ring for Holley’s mark. Despite this motion, Holley went ahead after the five year period and requested that the United States Patent and Trademark Office (USPTO) deem its mark incontestable. Quick Fuel challenged the request by arguing that the USPTO could not grant incontestability because one of the preconditions for incontestable status had not been met: Holley could not declare that there was no unresolved or pending claim to its ownership of the DOUBLE PUMPER mark during the five year period. Quick Fuel asserted that four years and 364 days of continuous and unchallenged use is not enough to support a request for incontestability; Holley was one day short. The Court did not agree with Quick Fuel. Normally, when a party does not have a right to amend its pleadings, the amended pleadings do not become part of the record until the motion to amend is granted. In this case, Quick Fuel’s motion was not granted until two weeks after the five year bell had rung for Holley’s mark. Thus the case had a happy ending for Holley: the USPTO granted its request for incontestability, and the U.S. District Court for the Western District of Kentucky, respecting the USPTO’s authority to deem a registered mark incontestable, ruled that Quick Fuel could not bring its counterclaim because, by law, the incontestability of Holley’s DOUBLE PUMPER mark removed the ground for a challenge based on descriptiveness. Holley was the plaintiff in the case, so while the valid federal registration of its DOUBLE PUMPER mark was the sword it brandished against Quick Fuel, the incontestability of its mark was the shield it carried on its other arm to protect it from counterattack. (See: Holley Performance Products Inc. v. Quick Fuel Technology Inc., 89 USPQ2d 1788 (W.D. Ky. 2008))
Although incontestability is a clear benefit to trademark registration, trademark owners should not be misled by the seemingly absolute nature of the word “incontestable.” An incontestable registration can still be attacked successfully. For example, if the registration was achieved through fraud on the USPTO, if the mark that is the subject of the registration has become generic and lost its distinctive ability to act as a trademark, or if the mark that is the subject of the registration has been abandoned through non-use, a federal registration can be cancelled even if the USPTO deemed it incontestable. Nevertheless, in most cases, the status of incontestability is properly achieved and maintained. It is a very desirable state because of the peace of mind it can give to the owner of a valuable mark who wants to be as free as possible from challenges to his trademark ownership. Therefore, it creates a strong incentive to register a common law mark and to enhance the mark’s value as a business asset.