Caseflicks

Court of Appeals for the Federal Circuit • 1990

Midwest Plastic Fabricators, Inc. v. Underwriters Laboratories Inc.

906 F.2d 1568 | 1990 WL 88528

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Takeaway

In short, authorized manufacturers may apply certification marks, and the owner must exercise reasonable—not flawless—control over their use.

Background

Underwriters Laboratories (UL) owned two registered certification marks indicating that representative samples of authorized manufacturers’ products conformed to UL safety standards. Manufacturers applied the marks under agreements requiring continued compliance and permitting UL to inspect their facilities. Midwest Plastic Fabricators, a manufacturer authorized to use the marks, petitioned to cancel the registrations.

Midwest argued that the marks were misused because manufacturers, rather than UL, declared that marked products complied with UL standards. It also argued that UL failed to control the marks, citing failed impact tests and counterfeit marks on a competitor’s products. The Trademark Trial and Appeal Board rejected both grounds for cancellation, and Midwest appealed.

Issues

Issue #1

Whether allowing manufacturers to apply UL’s marks as their declarations of compliance was use of the marks for a purpose other than certification.

Holding

No. The marks still served to certify compliance with UL standards, so this practice did not warrant cancellation.

Reasoning

A certification mark registration can be cancelled if the owner permits the mark to be used for a purpose other than certification. Midwest bore the burden of proving a ground for cancellation by a preponderance of the evidence; the court reviewed the Board’s factual findings for clear error.

The court distinguished who applies a mark from what the mark communicates. The statute does not require UL itself to test every marked product or place every mark on a product. UL’s registrations expressly allowed authorized manufacturers to use the marks to indicate that representative samples met UL standards.

Midwest showed no use of the marks as trademarks, service marks, or anything other than certification marks. Calling a marked product the manufacturer’s declaration of compliance therefore did not make the mark’s purpose something other than certification.

Issue #2

Whether UL’s inspection program and response to misuse provided the control required to maintain its certification mark registrations.

Holding

Yes. UL took reasonable steps to control use of the marks; the law did not require perfect prevention of noncompliance or counterfeiting.

Reasoning

A certification mark owner has an affirmative duty to monitor authorized users so the public is not misled. The required control is reasonable control under the circumstances, not absolute control. Whether the measures taken were sufficient in this case was a factual question reviewed for clear error.

UL required manufacturers to maintain compliance and submit to follow-up inspections. Its extensive inspection network and procedures for addressing deviations supported the Board’s finding that UL diligently controlled use of the marks.

The Board reasonably gave Midwest’s impact tests little weight. The testing did not account for age or sunlight exposure, which could make the PVC brittle, and UL’s standards did not require impact testing for the elbows tested.

Counterfeit marks on one competitor’s conduit did not establish a general failure of control. UL responded with stricter oversight, including inspections performed solely by UL personnel and examination of all the affected conduit rather than only representative samples.