Key Trademark Abandonment Case: Adamson v. Peavey Analysis

In a recent precedential decision from a cancellation proceeding before the Trademark Trial & Appeal Board, the Board found that de minimis sales of amplifiers by the Respondent over the past six years in connection with the registered mark at issue constituted abandonment and canceled the registration.

Respondent Peavey Electronics Corporation owned U.S. Reg. No. 1486017 for the standard character mark CS for “amplifiers” in International Class 9. Petitioner Adamson Systems Engineering, Inc. sought to cancel Respondent’s registration on the grounds of abandonment, among others.

After reviewing evidence of “sporadic, casual, and nominal” use of the mark by Respondent from 2016 to 2021, the Board found that such use was insufficient to overcome Petitioner’s abandonment argument because it did not constitute “bona fide use made in the ordinary course of trade” under 15 U.S.C. § 1127.

In addition to record evidence of a handful of sales in 2016, 2017, and 2020 and sales at an auction in 2019, the Respondent supported its argument that it had not abandoned its mark by contending:

(a) it sold its amplifiers through its independent dealer network (and provided evidence that two of its dealers had CS amplifiers in stock),

(b) there was an active warranty and repair business for its branded amplifiers, and

(c) the CS amplifiers were promoted annually at an industry tradeshow before the 2020 pandemic, and Respondent planned to debut a new CS-branded amplifier at the 2022 iteration of that tradeshow but couldn’t because of supply chain issues.

The Board was not persuaded, finding that in addition to the sales of CS amplifiers being de minimis in some recent years and zero in others, “Respondent’s actions evince a purposeful drawing-down of domestic CS amplifier sales.” Further, “resales by third parties [did] not inure to Respondent’s benefit,” and neither did the repair and refurb business for the CS amplifiers because neither the third-party shops nor the repair parts displayed the CS mark.

Despite Respondent’s contention that it intended to debut a new CS-branded amplifier, the Board found the record “devoid of evidence showing any intention to resume use of the mark….”

Respondent also argued that it spent millions of dollars advertising the CS branded products, but the Board noted no record evidence existed documenting Respondent’s advertising or its expenditures from 2016-2012.

Finally, the Board rejected Respondent’s argument regarding residual goodwill, pointing out that “residual goodwill does not negate a finding of abandonment based on nonuse.”

Ultimately, the Board granted the petition for cancellation on the grounds of abandonment in light of the lack of evidence of use, intent to resume use, or any evidence or argument that would excuse Respondent’s nonuse.

This case underscores the importance of sustained and genuine use of a mark in the ordinary course of trade to maintain trademark rights.

For the entire decision, see Adamson Sys. Eng’g, Inc. v. Peavey Elecs. Corp., Cancellation No. 92076586, Final Decision (T.T.A.B. Nov. 1, 2023) [precedential]