Federal Circuit Overturns Precedent in Dan Tana Restaurant Trademark Case

The Federal Circuit has overturned 50 years of precedent in a trademark case involving a famous West Hollywood restaurant.

The case is Great Concepts, LLC v. Chutter, Inc.

Great Concepts, LLC appealed the decision of the Trademark Trial and Appeal Board (Board or TTAB) cancelling registration of its trademark, "DANTANNA'S," due to the filing of a fraudulent declaration by a former attorney for Great Concepts.

Great Concepts applied to register "DANTANNA'S" as a mark for a "steak and seafood restaurant" in 2003 and obtained the trademark in 2005.

In 2006, Chutter’s predecessor-in-interest, Dan Tana, petitioned the Board to cancel the Registration, based on an alleged likelihood of confusion with Mr. Tana's common law "DAN TANA" mark for restaurant services.

Dan Tana is a Serbian-American soccer player and restaurateur with a colorful past. He defected from Serbia while playing soccer in Belgium in 1952 and later played in Germany and in Canada. He won $5000 in a poker match, after betting his last $100, and decided to go to Hollywood though he didn’t have a valid passport.

Tana took acting lessons to improve his English accent while trying to break in as an actor. He got his first role as a Nazi torpedo engineer in the 1957 movie The Enemy Below, earning $20,000 for eight weeks of work.

In 1964, Tana opened a New York-style Italian restaurant named for himself that became a favorite Hollywood hangout.

The main character in the 1978 U.S. television drama Vega$ was named Dan Tanna after the restaurateur. The producers of the show were regulars at the restaurant.

When Tana sought to register the DAN TANA’S mark with the US Patent and Trademark Office (USPTO), his application was blocked by the prior Great Concepts registration.

Tana sought to cancel the previous mark based on the likelihood of confusion. He eventually lost.

As the court noted,

Once obtained, continued registration of a mark requires compliance with Section 8 of the Lanham Act. Section 8 requires the mark owner, "at the end of the sixth year after the date of registration and at the end of each successive ten-year period after the date of registration," to "file a Section 8 Declaration of Continued Use, `an affidavit setting forth those goods or services recited in the registration on or in connection with which the mark is in use in commerce.'"

A trademark can be challenged on the grounds that it’s confusing, descriptive, generic, functional, or abandoned. However, noted the court, under 15 U.S.C. § 1065,

To make it more difficult for a mark to be invalidated, the owner of a registered mark may seek to obtain "incontestable" status for it. Incontestability is governed by Section 15 of the Lanham Act. Section 15 provides that a registered trademark may acquire incontestable status (subject to certain conditions not at issue here) after "such registered mark has been in continuous use for five consecutive years subsequent to the date of such registration and is still in use in commerce."

Such an “incontestable” mark is considered conclusive evidence of validity, whereas a registered mark that isn’t incontestable is only prima facie evidence of validity.

In 2010, the attorney for Great Concepts filed a declaration of use and incontestability in support of its trademark registration, stating that the mark was still in use and “there is no proceeding involving said rights pending and not disposed of either in the [USPTO] or in the courts.”

The latter statement was false because Tana’s legal challenge to the prior mark was still pending at the time.

However, the USPTO accepted the filing, making the mark incontestable.

Chutter acquired the rights to the Dan Tana mark and filed another petition to cancel the Great Concepts registration in 2015. The new petition was based on the false 2010 filling and was successful this time.

Great Concepts appealed the cancellation to the Federal Circuit.

Under 15 U.S. Code § 1064,

A petition to cancel a registration of a mark, … may … be filed as follows by any person who believes that he is or will be damaged … by the registration of a mark on the principal register …

(3) At any time if … its registration was obtained fraudulently

The court noted that the TTAB had long believed that Section 14 of the Lanham Act, 15 U.S.C. § 1064, permitted it to cancel a trademark's registration due to the owner's filing of a fraudulent declaration for the purpose of acquiring incontestability status for its already-registered mark.

The Federal Circuit determined that although the mark’s incontestability status had been obtained via fraud, the original trademark registration wasn’t fraudulent.

The court concluded

that Section 14, which allows a third party to seek cancellation of registration when the "registration was obtained fraudulently," does not authorize cancellation of a registration when the incontestability status of that mark is "obtained fraudulently."

As the court explained,

Section 14 permits a third party to file "[a] petition to cancel a registration of a mark" "[a]t any time if" the registered mark's "registration was obtained fraudulently." 15 U.S.C. § 1064 (emphasis added). "Obtaining" has a plain and ordinary meaning, "`[t]o get hold of by effort; to gain possession of; to procure; to acquire, in any ways.'"

What Great Concepts “obtained,” said the court, was not the trademark but the incontestability status.

Thus, there was no valid basis to cancel the Great Concepts registration.

One judge dissented, stating,

Today, the majority instructs the Patent and Trademark Office that it is without authority to cancel a trademark registration in situations where a registrant defrauds the agency with false declarations intended to deceive the agency into granting incontestable rights for its continued use of a mark. It instructs the agency, and the general public, that there exists a milepost in the trademark administrative continuum, a green-light, beyond which inequitable conduct is encouraged by the promise of great gain with little to no meaningful risk to the registrant. But there is harm. First, this court should be wary not to excuse fraud that is undertaken at any stage within an administrative process. Second, this court must recognize that the grant and protection of intellectual property rights involves a pact with the general public. This case represents a violation of that pact.

The dissent also suggested that just because litigants had limited grounds to cancel a mark, the USPTO wasn’t equally limited.