MVS Filewrapper® Blog: Likelihood of confusion at USPTO may be preclusive in litigation

Post by Dan Lorentzen

Although trademarks exist outside of the federal trademark system set out in title 15 of the U.S. Code (the Lanham Act), federal trademark law provides a number of benefits to mark owners who register their trademarks through the United Stated Patent and Trademark Office. In the context of federal trademark law, a trademark owner's rights in a mark, and the validity of that mark, can be tested in two separate types of proceedings: a lawsuit in federal court, or opposition at the USPTO.  The recent Supreme Court decision in B&B Hardware, Inc. v. Hargis Industries, Inc. provides important clarification on how determinations in the two types of proceedings interact.

B&B registered its mark SEALTIGHT in 1993 for "“threaded or unthreaded metal fasteners and other related hardwar[e];namely, self-sealing nuts, bolts, screws, rivets and washers, all having a captive o-ring, for use in the aerospace industry.”  Hargis began producing metal screws for use in building construction using the mark SEALTITE, and sought to register the mark in 1996.  B&B sued Hargis in federal court for trademark infringement and also filed a concurrent opposition to Hargis' registration at the USPTO.  A central question in both proceedings was whether there was a likelihood of confusion between Hargis' SEALTITE mark and B&B's already registered SEALTIGHT mark. 

Before the District Court had ruled on the likelihood of confusion, the Trademark Trial and Appeal Board (TTAB) of the USPTO ruled on the opposition proceeding, determining that Hargis' mark could not be registered because there was a likelihood of confusion with respect to B&B's mark.  Hargis did not appeal the TTAB decision to either a district court or the Federal Circuit.   B&B, in turn, argued to the District Court that as a result of the TTAB's decision, Hargis could not contest likelihood of confusion in the pending court proceeding.  Following Eighth Circuit precedent, the District Court disagreed, reasoning that the TTAB is not a judicial body created by Article III of the Constitution, and so the TTAB decision could not have preclusive effect on the District Court.  The jury ultimately found there to be no likelihood of confusion.  B&B appealed to the Eighth Circuit, which affirmed the District Court on the basis that the TTAB weighs different interests (e.g., the right to register versus the right to use) and applies different factors in determining likelihood of confusion than a district court would. 

On ultimate appeal, the Supreme Court resolved a Circuit-split on this issue and held that determinations of likelihood of confusion at the USPTO could be preclusive for subsequent determinations in litigation.  The Court concluded that an administrative determination, such as by the USPTO, can be preclusive for determinations of the same issue in federal court when the administrative agency is acting in a judicial capacity and resolves disputed issues of fact properly before it which the parties have had an adequate opportunity to litigate.  The Court further determined that although the specific factors used by the district courts and the USPTO for determining likelihood of confusion may be different, the underlying legal standard is the same for both litigation and registration.  However, the holding is limited to situations where the application/registration at issue in the TTAB proceedings covers goods and services that are "materially the same" as those at issue in the federal court proceeding. 

It is worth noting that the Court's opinion relates to TTAB decisions regarding likelihood of confusion for trademark registration—that is, determinations proceedings such as oppositions where the parties have a chance to "litigate" the pertinent issues.  The same type of preclusion would not apply simply as a result of registration of a mark with the USPTO. 

As a result of this decision, parties considering taking action against a federal trademark applicant or registrant should carefully compare the goods/services shown in the trademark application/registration to the their own goods and services to determine whether they should proceed in the TTAB or a federal court.  Additionally parties trademark applicants/registrants who lose at the TTAB should strongly consider an appeal of that decision because that decision may now have preclusive effect in later federal court cases. 

The full decision is available here. 

MVS Filewrapper® Blog: Cancelation of Trademarks due to First Actual Use After Application

Post by Dan Lorentzen


Federal registration of a trademark provides a number of benefits to the trademark owner, including protection throughout the entire country, advantageous litigation position—for example presumption of validity and enhanced monetary damages—and enlistment of the U.S. Customs Service to stop importation of counterfeit goods. The federal trademark system provides two separate avenues for protecting a mark: (1) registration of a mark that is already used in commerce, and (2) certification of a bona fide intent to use the mark in commerce (ITU application), followed by a later demonstration of actual use.  However, failure to use the correct registration scheme can result in invalidation of the registration, and loss of the benefits of federal protection.


In its recent decision in Couture v. Playdom, the Federal Circuit Court of Appeals held that a trademark that was registered under the standard (i.e. non-ITU) system, but was not actually used in commerce until after the registration, was void.  The mark owner filed a registration including, as a specimen showing use of the mark, a screen capture of the mark owner's website.  At the time of filing, the website was a single page that advertised the mark owner's readiness, willingness and ability to render services.  The mark owner did not, however, provide any services under the mark until after the mark had been registered.  The mark was the subject of a cancelation proceeding, and the Trademark Trial and Appeal Board (TTAB) canceled the registration as void from the time of filing because the owner had not used the mark in commerce as of the date of the application.


On appeal, the Federal Circuit affirmed the TTAB's cancelation.  The court held that "use in commerce" for registration requires actual use in conjunction with the services described in the application, and not merely offering services.  The court further noted that, although ITU applications are available, and procedures for substitution of an ITU application for a standard application are available, such substitution is specifically provided for prior to publication and registration.  As a result, once a standard trademark application is published, it can no longer be converted into an ITU application. 


This case highlights the need for mark owners to understand when and how they use their marks.  For the incautious, failure to fully consider and communicate these use issues may result in loss of trademark rights. 


The full opinion is available here.  

MVS Filewrapper® Blog: USPTO Cancels Washington, D.C. NFL Franchise's Trademark Registrations

The United States Patent and Trademark Office issued a decision yesterday cancelling six federal trademark registrations owned by the Washington, D.C. National Football League franchise.  The cancellation proceeding was brought by five Native American petitioners on the basis that the marks disparage persons or bring them into contempt or disrepute in violation of 15 U.S.C. § 1052(a).  The Trademark Trial and Appeal Board (TTAB) panel of three Administrative Trademark Judges sided with the petitioners, cancelling all six of the challenged registrations. 


The registrations in question were all obtained between 1967 and 1990 on behalf of the Washington NFL franchise, and are all word marks.  The registrations were previously challenged in 1992 in a similar proceeding that also challenged the team logos without the word marks.  In the prior proceeding the TTAB held that the marks were disparaging to Native Americans when registered and ordered the registrations canceled.  The Washington NFL franchise appealed the decision in the prior proceeding to the U.S. District Court for the District of Columbia, who reversed the decision as barred by the doctrine of laches. 


The TTAB panel found that the five petitioners had standing to bring the cancellation proceeding, and were not barred from doing so by the doctrine of laches. The TTAB panel further found that the alleged honorable intent and manner of use of the term did not contribute to the determination of whether the marks were disparaging, but rather the sole issue was whether a substantial composite of the referenced group found the term to be disparaging in the context of the Washington NFL franchise during the time period when the registrations were obtained (1967-1990). 


The TTAB consulted evidence that reflected the sentiments of Native Americans, including a resolution passed by the National Congress of American Indians, various reports and testimony, newspaper articles, official records, and letters, and concluded that the substantial evidence may have disparaged a substantial composite of Native Americans at the times of the registrations.


Administrative Trademark Judge Bergsman dissented in the opinion on the basis that the petitioners had not shown by a preponderance of the evidence that a substantial composite of Native Americans found the marks to be disparaging in connection with the Washington NFL franchise during the relevant time frame.


The full decision and additional information are available here.  

Second Circuit: If you want a court to order the USPTO, ask in your pleadings, not after you win

In a recent decision, the Second Circuit affirmed a district court's decision in a trademark case not to enter an order pursuant to 15 U.S.C. § 1119§ 1119 permits a court to enter an order regarding registrability and cancellation of marks at the USPTO.  The prevailing defendant asked the district court to order the USPTO to dismiss a related cancellation proceeding.  The party had not requested an order under § 1119 in its counterclaims, but instead sought it by way of a Rule 59(e) motion to amend the final judgment in the case.  The district court denied the motion, concluding the defendant could simply raise the issue as a matter of issue preclusion.

The Second Circuit affirmed.  The court held there was no abuse of discretion in denying the Rule 59(e) motion.  Further, the court noted § 1119 is permissive, such that the court was not required to grant such relief.

More detail of Empresa Cubana del Tabaco v. Culbro Corp. after the jump.


Party defaulting before district court and enjoined cannot attack registration via cancellation

In a decision this week, the Federal Circuit held that a party against whom a default judgment was entered in a trademark infringement case before a district court cannot thereafter petition to cancel the registration at issue before the TTAB.  The TTAB held the claim barred by res judicata.  The court held that res judicata did not apply, because an invalidity counterclaim in the district court was not compulsory under Rule 13, and therefore the party now seeking cancellation was not required to assert the invalidity counterclaim before the district court.  However, the court held that the cancellation would be an impermissible collateral attack on the previous judgment, and affirmed the TTAB's decision on that basis.

Judge Newman, concurring in the judgment, would have affirmed on the same grounds as the TTAB, namely that because the issue of the registration's validity was decided before the district court, res judicata applied to prevent relitigation of the issue.

More detail of Nasalok Coating Corp. v. Nylok Corp. after the jump.


Fourth Circuit: Subpoena to foreign corporation valid even though no U.S. business contacts

The Fourth Circuit last week addressed a district court's ability to issue subpoenas to foreign witnesses in USPTO administrative proceedings. The court held that a district court may issue a Rule 30(b)(6) subpoena to a foreign corporation who is party to an opposition, even if the party has no officers, directors or managing agents who reside within the jurisdiction.  The decision generated a lengthy dissent that argued that this holding greatly extended the reach of the district court in such interference proceedings and was not supported by the applicable statute and USPTO procedures.

More detail of Rosenruist-Gestao E Servicios LDA v. Virgin Enters., Ltd. after the jump.


Ninth Circuit: DJ dismissal reversed; concurrent TTAB proceedings, Rule 408 don't warrant dismissal

On Monday, the Ninth Circuit addressed the issue of a federal court's subject matter jurisdiction over a trademark declaratory relief action when an infringement action has not been brought and proceedings related to the trademark are pending at the Trademark Trial and Appeal Board (TTAB).  The district court dismissed the case as not presenting a sufficient case or controversy to support jurisdiction, and also noted that the case should be dismissed under the doctrine of "primary jurisdiction" given the concurrent proceedings at the TTAB.

The court held (1) that a defendant had shown a real controversy in order to establish subject matter jurisdiction, (2) that related proceedings at the TTAB could not be the basis for denying jurisdiction under the doctrine of primary jurisdiction, and (3) that the district court abused its discretion when it declined jurisdiction under 28 U.S.C. § 2201.  In doing so, the court rejected the declaratory judgment defendant's contention that any proof of a "case or controversy" was privileged under Rule 408 for purposes of establishing jurisdiction, as the settlement letters were not offered for one of the enumerated reasons in the Rule.  The court also remanded the case back to a different judge.  

More detail of Rhoades v. Avon Prods., Inc. after the jump.     


Revised TTAB rules published, some take effect August 31, others November 1

As noted last week, the revised TTAB rules were published in today's Federal Register.  The final rules are somewhat different than those proposed last January.  Some of the new rules include:

  • Opposers/Petitioners will serve copies of the notice of opposition or cancellation petition on the opposing party directly, rather than having the TTAB send out the papers [Revised 37 C.F.R. § 2.105]
  • Adoption of mandatory disclosure requirements, similar to those in Federal Rule 26(a)(1) [Revised 37 C.F.R. § 2.120(a)]
  • Requirement for a discovery conference, that may include participation by a TTAB attorney upon request of a party [Revised 37 C.F.R. § 2.120(b)]
  • Discovery requests may not be sent out by a party until that party has made its initial disclosures [Revised 37 C.F.R. § 2.120(c)]
  • Entry of the TTAB standard protective order in all cases, unless the parties agree to a different order, or one party moves for entry of a different order and it is granted [New 37 C.F.R. § 2.116(g)]

Notably absent from the revised rules was the initially-proposed reduction in the number of interrogatories from 75 to 25.

Several of the new rules, including the rules relating to service of notices of opposition and petitions to cancel and entry of the standard TTAB protective order, take effect the end of this month.

To read the full notice, click here.

The TTABlog provides additional commentary here.

Update (8/21):  The TTAB has posted a chart summarizing the revisions on its website here.

Revised TTAB rules coming soon

The TTABlog reports that the revised TTAB rules initially proposed in a notice of proposed rulemaking on January 17, 2006 are likely to be published in the Federal Register in the next week.  The summary of the rules as initially proposed is as follows:

The United States Patent and Trademark Office (Office) proposes to amend its rules to require plaintiffs in Trademark Trial and Appeal Board (Board) inter partes proceedings to serve on defendants their complaints or claims; to utilize in Board inter partes proceedings a modified form of the disclosure practices included in the Federal Rules of Civil Procedure; and to delete the option of making submissions to the Board in CD–ROM form. In addition, certain amendments clarify rules, conform the rules to current practice, and correct typographical errors or deviations from standard terminology.

If the rules as implemented are the same as those proposed, parties to TTAB proceedings will notice several major differences, including:

  • An initial disclosure requirement
  • Reduction in the number of interrogatories from 75 to 25
  • The standard TTAB protective order entered in every case by default
  • Specific timing for disclosure of expert witnesses and reports

Representatives from the AIPLA, ABA IP section, IPO, and INTA met with the USPTO regarding the proposed rules last July, listing some of the concerns raised by the rules, so the substance of the rules may have changed since initially published for comment back in January.  We'll be watching and post a link to the revised rules when they are available.

To read the full text of the initially-proposed rules, click here

Federal Circuit affirms requirement to amend listing of goods to exclude goods in another class

In the first of two Federal Circuit rulings today, the court affirmed that the USPTO was within its authority when it refused to allow an applicant to rely on the international classification to clarify ambiguities in the listing of goods for a trademark. In affirming the TTAB, the court emphasized the deference due to the USPTO when determining the sufficiency of description of goods and services in a trademark application.

More on In re Omega SA after the jump.


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