Galperti-Italy obtained a trademark to the surname Galperti for metal hardware based on an alleged substantially exclusive use of the mark. Galperti-USA challenged the mark based on fraud, contending others had significantly used the mark during the period when Galperti-Italy and an intent to deceive. The Trademark Trial and Appeal Board (TTAB) dismissed Galperti-Italy’s evidence of use as inconsequential because Galperti-USA’s use did not rise to the level of distinctiveness and because Galperti-USA was not in privity with those entities who also used the mark.

The Federal Circuit vacated the dismissal, holding the TTAB erred in requiring a challenger to establish its own proprietary rights to the mark in question and in disregarding use of the mark by others.

On the issue of proprietary rights, the Federal Circuit explained, “Our precedents hold that even marketplace uses of a term lacking secondary meaning for the users are among the uses that legitimately play that role. After all, a significant amount of marketplace use of a term not as a source identifier for those users does tend to undermine an applicant’s assertion that its own use has been substantially exclusive so as to create a prima facie case that the term has come to acquire distinctiveness as a source identifier for the applicant. An applicant’s assertion that it has attained the status of recognition as the source of goods carrying a given mark is not undermined only by uses made by another person that has attained that status for itself.”

On the issue of privity, the Federal Circuit stated, “Use by anyone, regardless of relation to the challenger, may undercut a claim of substantially exclusive use,” pointing out “[t]his straightforward point” was reflected an earlier opinion concerning the same mark.