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Exploring the Latest in Intellectual Property Law
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If at First You DuPont Succeed, Try a Different Factor

by | Jul 13, 2023 |

The US Court of Appeals for the Federal Circuit remanded a Trademark Trial & Appeal Board decision, finding that the Board incorrectly analyzed several DuPont factors, improperly disregarded the DuPont factor regarding third-party registration on similar goods, permitted the opposer to succeed without a showing of identical marks for identical goods used in the marketplace and predicated its comparative analysis on the incorrect mark. Spireon, Inc. v. Flex Ltd., Case No. 22-1578 (Fed. Cir. June 26, 2023) (Mayer, Reyna, Dyk, JJ.)

Spireon filed a trademark application for the mark FL FLEX for use in connection with “[e]lectronic devices for tracking the locations of mobile assets in the nature of trailers, cargo containers, and transportation equipment using global positioning systems and cellular communication networks.” After the Examining Attorney approved the application, Flex opposed registration on grounds of priority and likelihood of confusion with Flex’s previously registered marks: FLEX, FLEX (stylized) and FLEX PULSE.

The Board sustained Flex’s opposition based on its analysis of the DuPont factors for evaluating likelihood of confusion. There are a total of 13 factors that together form the underlying factual findings upon which the legal conclusion of likelihood of confusion is made. Not all factors are relevant in every case.

In its consideration of the first DuPont factor (the similarity of the marks), the Board addressed the strength of Flex’s marks, including the marks’ conceptual and commercial strength. The Board weighed five marks—FLEX (in three relevant commercial contexts), LOAD FLEX VALUE FLEX—and concluded that the third-party evidence did not show that Flex’s marks were either conceptually weak or inherently distinctive. The Board then considered the similarity of the marks, analyzing Spireon’s FL FLEX against FLEX, FLEX (stylized) and FLEX PLUS (rather than the actual mark FLEX PULSE). The Board found the marks highly similar and concluded that the first DuPont factor supported a finding of likelihood of confusion. The Board also addressed three other DuPont factors that it considered relevant, but no others. Spireon appealed.

The Federal Circuit reversed. The Court found that the Board erred in not considering the sixth DuPont factor, “[t]he number and nature of similar marks in use on similar goods.” This factor requires an evaluation of conceptual strength and commercial strength. Conceptual strength focuses on the degree to which a mark is descriptive in that it “directly and immediately convey[s] some knowledge of the characteristics of products.” Commercial strength focuses on the “marketplace recognition value of the mark.”

The Federal Circuit explained the relevance of third-party registrations and their bearing on a mark’s conceptual strength, noting that the Board erred in assigning a low probative value to 15 composite marks of record. The Court explained that composite third-party marks are relevant to resolving the question of whether the “shared segment—in this case, ‘flex’—has a commonly understood” meaning in the pertinent field and to the crowded nature of the field in which the flex root is used. As the Court explained, proof of use or non-use is material because the sixth DuPont factor only considers [...]

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Personal Jurisdiction? Selling Products via Interactive Website Will Do It

by | Jul 13, 2023 |

The US Court of Appeals for the Ninth Circuit reversed and remanded a district court’s dismissal for lack of personal jurisdiction, deciding that the sale of a product via an interactive website provides sufficient “minimum contacts” to support jurisdiction over a nonresident defendant in a state where the defendant causes the product to be delivered. Herbal Brands, Inc. v. Photoplaza, Inc., Case No. 21-17001 (9th Cir. July 5, 2023) (Graber, Clifton, Christen, JJ.)

Herbal Brands sells health, wellness, fitness and nutrition products directly to consumers and through authorized third-party retailers in Arizona. Photoplaza sold Herbal Brands products through two e-commerce storefronts without Herbal Brands’ permission. Herbal Brands sent three cease-and-desist letters, stating that Photoplaza’s sales harmed Herbal Brands in Arizona. Herbal Brands accused Photoplaza of trademark infringement and unfair competition under the Lanham Act, false advertising under the Lanham Act and tortious interference with contracts and business relationships under Arizona law. The district court granted Photoplaza’s motion to dismiss for lack of personal jurisdiction. Herbal Brands appealed.

The Ninth Circuit noted that Photoplaza failed to submit any evidence to contradict the jurisdictional allegations in the complaint. The Court found that under its three-part test, Photoplaza had sufficient minimum contacts with Arizona to warrant personal jurisdiction:

  1. Photoplaza purposefully directed its activities at the forum.
  2. Herbal Brands’ harm arose out of Photoplaza’s contacts with Arizona.
  3. Exercise of jurisdiction over Photoplaza would be reasonable.

The second and third prongs of the Ninth Circuit’s test were easily resolved. Herbal Brands’ claimed harm rose out of and related to Photoplaza’s conduct of selling the products to Arizona residents. The Court referred to its 2004 holding in Schwarzenegger regarding a plaintiff’s burden to establish jurisdiction, whereupon the burden shifts to the defendants under the seven-factor balancing test of Freestream Aircraft (2018). The Court found that Photoplaza did not meet its burden to present a compelling case that exercising jurisdiction would be unreasonable.

The bulk of the Ninth Circuit’s decision focused on the first prong (purposeful availment), which applies when “a case sounds in tort,” such as claims of trademark infringement, false advertising and tortious interference with business relationships, each of which requires an intentional tortious or “tort-like” act. Referring to the effects test from the 1984 Supreme Court decision in Calder v. Jones, the Ninth Circuit explained that Photoplaza purposefully directed its activities toward the forum if it (1) committed an intentional act, (2) expressly aimed at the forum state, (3) causing harm that Photoplaza knew was likely to be suffered in the forum state. Related to the Calder test’s first and third prongs, Photoplaza’s product sales to Arizona residents were intentional acts, and the cease-and-desist letters informed Photoplaza that its actions caused harm in Arizona.

Regarding the “express aiming” prong, the Ninth Circuit explained that when a website itself is the only jurisdictional contact, the analysis turns on whether the site had a forum-specific focus or whether the defendant exhibited an intent to cultivate an audience in the forum. The Court explained that [...]

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It’s a Hard Rock Life: Guitar-Shaped Hotel Warrants Trademark, but Hilton Doesn’t

by | Jun 22, 2023 |

In a twin set of precedential opinions, the Trademark Trial & Appeal Board laid the foundation for determining whether building designs can be trademark protected as service marks. In re Palacio Del Rio, Inc., Ser. Nos. 88412764; 88437801 (TTAB May 25, 2023) (Shaw, Goodman, Hudis, ATJs); In re Seminole Tribe of Florida, Ser. No. 87890892 (TTAB May 25, 2023) (Taylor, Greenbaum, Johnson, ATJs).

The subjects of the opinions were the designs of the Hilton Palacio del Rio in San Antonio, Texas, and the Seminole Hard Rock Hotel & Casino in Hollywood, Florida. The Board concluded that the former was nondistinctive trade dress, whereas the latter constituted protectable trade dress. For reference, the two designs at issue appear below:

In the Hilton case, Hilton sought separate registrations for the three-dimensional design of the “River” and “Street” sides of its hotel building due to their “unique and readily recognizable design,” consisting of a pattern of alternating protruding and receding rectangular shapes created by the assembly of the hotel’s modular guest rooms. Similarly, Seminole Tribe argued that its guitar-shaped building was akin to product packaging that can be protected under trade dress.

In both cases, the Board anchored its analysis in Supreme Court precedent in Two Pesos v. Taco Cabana (1992) and Wal-Mart Stores v. Samara Bros. (2000), but with a different result in each case. As an initial matter, in both the Hilton and Seminole cases, the Board confirmed that a building structure, if inherently distinctive and not mere product design, could constitute protected trade dress. The Board analogized a hotel’s design to product packaging, which dispensed with the need to show secondary meaning.

Where the outcomes diverged, however, was the distinctiveness of the buildings that the two entities sought to protect. In the Hilton case, the Board determined that the record did not demonstrate that the Palacio del Rio’s building design was sufficient to differentiate it from competitor hotels. Although Hilton submitted customer declarations claiming that the Rio’s design was unique, the Board did not credit such evidence on the grounds that the customers did not have personal knowledge about what was commonplace in the hotel industry and that the declarations were substantively scant.

In the Seminole case, the Board found that the record reflected that no other hotel had the Hard Rock’s unique guitar design. Analogizing to In re Frankish Enterprises (TTAB 2015), in which a monster truck was found distinguishable from all other monster truck designs of record, the Board concluded that the guitar design was inherently distinctive.

Practice Note: Now that hotels have cracked the door open for building design trademarks, it remains to be seen whether other types of unique buildings will follow suit. As the two cases collectively demonstrate, developing a supportive record—i.e., one founded by compelling evidence of uniqueness—is likely necessary to secure a trade dress for building design.

Rick [...]

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False Advertising: Verifiably False Versus Subjective Opinion

by | Jun 22, 2023 |

In a case originally based on a false advertising claim under § 43(a) of the Lanham Act, the US Court of Appeals for the Ninth Circuit affirmed in part, reversed in part and remanded the district court’s dismissal of the claim. The Ninth Circuit concluded that the defendant’s description of a competitor’s software product was plausibly alleged as an element of false advertising. Enigma Software Group USA, LLC v. Malwarebytes, Inc., Case No. 21-16466 (9th Cir. June 2, 2023) (Clifton, Bumatay, Baker, JJ.) (Baker, J., concurring) (Bumatay, J., dissenting).

Enigma is a security software company whose products detect and remove malicious software such as viruses, spyware, adware and ransomware. Malwarebytes is a direct competitor of Enigma and sells products aimed at detecting and removing malware and other potentially threatening programs on users’ computers. Enigma originally brought this action in the US District Court for the Southern District of New York, but the case was moved to the Northern District of California on a motion to transfer filed by Malwarebytes. The California court ruled that Enigma’s claims were barred by § 230 of the Communications Decency Act, a ruling that the Ninth Circuit reversed, holding that § 230 did not apply to “blocking and filtering decisions that [we]re driven by anticompetitive animus.” The Ninth Circuit remanded the case.

On remand, Enigma asserted four causes of action:

  1. False advertising in violation of the Lanham Act
  2. Violation of New York General Business Law (NYGBL) § 349, which prohibits deceptive and unlawful business practices
  3. Tortious interference with contractual relations
  4. Tortious interference with business relations.

On Malwarebytes’s motion to dismiss for failure to state a claim, the district court found that (for the Lanham Act claim) Enigma’s allegation that Malwarebytes’s designations were “just [nonactionable] subjective opinions” rather than “verifiably false.” On appeal, Enigma argued that designations of its products as malicious, threats and potentially unwanted programs were factually false and misrepresented the very purpose of the software.

To state a claim for false advertising under § 43(a) of the Lanham Act, Enigma had to plausibly allege the following:

  • Malwarebytes made a false statement of fact in a commercial advertisement.
  • The statement deceived or had the tendency to deceive a substantial segment of its audience.
  • The deception was material, in that it was likely to influence the purchasing decision.
  • The false statement entered interstate commerce.
  • Enigma was or was likely to be injured as a result.

To show falsity, Enigma had to allege that the statement was literally false, either on its face or by necessary implication, or that the statement was literally true but likely to mislead or confuse consumers.

The Ninth Circuit found that, taken as true at the motions stage, Enigma’s allegations were sufficient to state a Lanham Act claim because Malwarebytes’s designations employed terminology that was substantively meaningful and verifiable in the cybersecurity context. While terms such as “malicious” and “threatening” are adjectives subject to numerous interpretations, the Court found that in the context of software competitors, a [...]

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“TRUMP TOO SMALL” Trademark Decision Heads to Supreme Court

by | Jun 15, 2023 | ,

The Supreme Court agreed to review the US Patent & Trademark Office’s (PTO) challenge to a February 2022 ruling by the US Court of Appeals for the Federal Circuit. In the ruling at issue, the Federal Circuit held that applying Sec. 2(c) of the Lanham Act (which bars registration of a trademark that consists of or comprises a name of a particular living individual without their written consent) may unconstitutionally restrict free speech in violation of the First Amendment in certain instances. Vidal v. Elster, Docket No. 22-704 (Supr. Ct., June 5, 2023).

In 2018, Steve Elster filed an application to register the mark TRUMP TOO SMALL for use on t-shirts, in reference to a 2016 Republican presidential primary debate exchange between then-candidate Donald Trump and Senator Marco Rubio (R-FL). The PTO examining attorney and subsequently the Trademark Trial & Appeal Board refused registration of the mark on grounds that it clearly referred to former President Trump, and that Elster did not have written consent to use former President Trump’s name, in violation of Sec. 2(c) of the Lanham Act. On Elster’s appeal, the Federal Circuit ruled that the Board’s refusal to register the trademark TRUMP TOO SMALL for use on t-shirts involved content-based discrimination that was not justified by a compelling or substantial government interest.

Following PTO Director Vidal’s January 2023 petition for a writ of certiorari, the Supreme Court granted cert and will consider whether the First Amendment allows content-based but viewpoint-neutral restrictions on which trademarks may be registered—and in this case, the PTO’s restriction on marks that consist of or comprise a name identifying a particular living individual (such as former President Donald Trump) except by their written consent.

The issue on which cert was granted: Whether the refusal to register a trademark under 15 U.S.C. § 1052(c) violates the free speech clause of the First Amendment when the mark contains criticism of a government official or public figure.



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Quack, Waddle and Duck: Order That Grants Injunctive Relief Is an Injunction

by | Jun 15, 2023 |

The US Court of Appeals for the Fourth Circuit vacated and remanded a district court ruling, finding that the district court failed to properly apply the Federal Rules of Civil Procedure (FRCP) in granting injunctive relief. Wudi Industrial (Shanghai) Co., Ltd. v. Wong et al., Case Nos. 22-1495; -1662 (4th Cir. June 5, 2023) (Gregory, King, JJ.) (Rushing, J., dissenting). The dissent argued that the district court simply entered a permissible order enforcing a settlement agreement between the parties.

The FRCP outlines the necessary criteria and steps for courts to grant injunctive relief. FRCP 52(a)(2) requires courts to state the findings and conclusions that support their actions. FRCP 65(d) requires courts to state the reasons why the injunction was issued, state the injunction’s terms specifically or describe the restrained/required act(s) in detail. Per the Supreme Court’s Ebay test, a party seeking injunctive relief must demonstrate the following:

  • It has suffered an irreparable injury.
  • Remedies available at law, such as monetary damages, are inadequate to compensate for that injury.
  • Considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted.
  • The public interest would not be disserved by an injunction.

Wudi Industrial competes with Wai L. Wong and his business entity GT Omega Racing (collectively, GTOR) in marketing video gaming chairs and other products. GTOR challenged Wudi’s GTRACING trademark registration in a cancellation proceeding at the Trademark Trial & Appeal Board, alleging that the mark encroached on GTOR’s earlier use of GT OMEGA RACING. The Board ruled in favor of GTOR, and Wudi initiated a first appeal at the district court. The parties subsequently entered into a concurrent-use agreement that assigned to Wudi the right to use the GTRACING word mark in all global markets except within a European carve-out of 53 named countries in exchange for a $4.5 million payment to GTOR. Under the agreement, Wudi was barred from purchasing ad words from search engines and shopping sites or using any social media platforms to promote GTRACING in the European carve-out countries.

In May 2022, GTOR filed a motion for enforcement in the district court, alleging breach because some of Wudi’s marketing and promotional content in the European carve-out contained the GTRACING mark. The district court granted GTOR’s motion and issued a first order. Under threat of contempt for noncompliance, Wudi was ordered to cease impermissible conduct and take down all posts accessible in the European carve-out containing GTRACING within seven days. In June 2022, the district court issued a second order stating that the first order was a grant of specific performance, not a preliminary injunction. Wudi appealed both orders.

The Fourth Circuit vacated and remanded the district court’s first and second orders because of procedural errors amounting to abuses of discretion, despite the dissent’s argument that the orders merely enforced the parties’ agreement. The Court concluded that the first order constituted a preliminary injunction, later made permanent by the second order, because “if it walks like a duck, quacks like a [...]

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Lanham Act Liability May Apply to Copyrighted Material

by | Jun 8, 2023 | ,

The US Court of Appeals for the Ninth Circuit found that liability under the Copyright Act and liability under the Lanham Act are not mutually exclusive and that liability under the Copyright Act does not negate trade dress damages under the Lanham Act. Jason Scott Collection, Inc. v. Trendily Furniture, LLC, Case No. 21-16978 (9th Cir. May 30, 2023) (Wardlaw, Bumatay, Schreier (sitting by designation), JJ.)

Jason Scott Collection (JSC) and Trendily Furniture are high-end furniture manufacturers that sell their products in the Texas market. In 2016, Trendily intentionally copied three unique furniture designs by JSC and sold them to Texas retailers. Both collections featured heavy carved wood pieces with detailed embellishments and metal elements. The record showed that Trendily’s collection had been based on photographs of the preexisting JSC collection. The Trendily pieces were so similar that even JSC had initially mistaken the furniture as its own when confronted by a retailer. After JSC filed suit, the district court granted summary judgment to JSC on its copyright claim. Following a bench trial, the district court held Trendily liable on the trade dress claim. On that claim, the district court awarded almost $133,000 in prospective lost annual profits over a period of three years, which amounted to about six times the almost $20,000 in retrospective gross profits awarded on JSC’s copyright claim. Trendily appealed.

To obtain a judgment for trade dress infringement, a plaintiff must prove that the claimed trade dress is nonfunctional, the claimed trade dress serves a source-identifying role because it is either inherently distinctive or has acquired a secondary meaning and the defendant’s product creates a likelihood of confusion. Trendily argued that JSC had not adequately established a secondary meaning (for trade dress the parties stipulated was not inherently distinctive) or likelihood of confusion. The Ninth Circuit, however, found that the district court found adequate evidence of secondary meaning through copying and through confusion by retailers and consumers in the high-end furniture market. The Ninth Circuit also found that the district court had correctly found likelihood of confusion, putting special emphasis on Trendily’s intentional and precise copying of the JSC pieces leading to retailer confusion.

Turning to the damages award, Trendily argued that because copying is a commercially acceptable and necessary act in terms of competition, Trendily should only be held liable under the Copyright Act, rather than for trade dress infringement under the Lanham Act. However, the Ninth Circuit affirmed that liability under the Copyright Act and liability under the Lanham Act are not mutually exclusive and that liability under the Copyright Act did not negate the judgment against Trendily for trade dress damages under the Lanham Act. The Court then affirmed the trade dress damages award, finding that the prospective damages incurred when one of JSC’s business relationships fell apart because of Trendily’s copied furniture were reasonably foreseeable and had been “satisfactorily demonstrated.” The Court emphasized that the law only required “crude measures of damages in cases of intentional infringement.”

Finally, the Ninth Circuit affirmed [...]

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All’s Well That Edwell: Two Markets Can Be Substantially Different if Defined Narrowly Enough

by | Jun 8, 2023 |

Despite evidence of actual confusion and seemingly similar services, the US Court of Appeals for the Tenth Circuit upheld a district court’s noninfringement finding concerning two nearly identical education-related marks because the parties targeted different goods and marketing channels. M Welles & Assocs., Inc. v. Edwell, Inc., Case No. 22-1248 (10th Cir. May 31, 2023) (Ebel, Bacharach, JJ.) (Tymkovich, J., dissenting). In his dissent, Judge Tymkovich criticized the lower court for characterizing the scope of the parties’ services too narrowly and observed that “[a]ny court can find some differences between businesses and markets at a particular level of generality.”

M Welles & Associates provides classes, seminars and certification workshops in the project management space under the brand name EDWEL (derived from “education done well”). The classes are designed for professionals in a variety of industries, including information technology, healthcare, education and the military. Welles primarily advertises its services via social media, Google and email, and further owns a variety of domain names incorporating both EDWEL and EDWELL. The defendant, Edwell, is a nonprofit organization that provides mental health coaching services to schoolteachers using the domain name Edwell.org and the brand name EDWELL (derived from “to be an educator and to be well”). Edwell operates by partnering with schools to provide its services and currently has partnerships with 10 K-12 public schools. Edwell does not target institutions of higher learning and does not offer services to corporations.

Welles first learned of Edwell’s services when it received a call from a potential customer asking about classes at Denver North High School—classes that were in fact offered by Edwell, not Welles. Welles sent a cease-and-desist notice to Edwell, which rebranded to “Educator Wellness Project” for a short time before reverting back to EDWELL. Welles then sued Edwell for trademark infringement, and the district court found that there was no likelihood of confusion. Welles appealed.

Welles raised three arguments on appeal:

  1. The magistrate judge used the wrong legal standard in assessing likelihood of confusion.
  2. The Tenth Circuit should adopt a presumption of confusion.
  3. The magistrate judge clearly erred in the analysis of Edwell’s intent, the similarity of the parties’ services and marketing, the degree of purchaser care and actual confusion.

Welles also moved to supplement the appellate record with new evidence of actual confusion that occurred after the trial.

Supplementation

The Tenth Circuit first addressed Welles’s motion, finding that there was no legitimate basis for supplementing the record. Fed. R. of Civ. P. 10(e) permits a court to modify the appellate record “only to the extent necessary to ‘truly disclose what occurred in the district court.’” Because the new evidence of actual confusion was not before the district court, the Tenth Circuit concluded that Rule 10(e) would not permit it to be added to the record. The Court further reasoned that the rare exception to Rule 10, which permits the court to supplement the record to correct misrepresentations, demonstrate mootness, or raise an issue for the first time on appeal, did not [...]

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Electra Powers Second Circuit’s False Endorsement Analysis

by | Jun 8, 2023 |

Following on the heels of its 2021 decision in Electra v. 59 Murray, the US Court of Appeals for the Second Circuit affirmed the summary judgment denial of a Lanham Act claim related to false endorsement premised upon the unauthorized use of photographs in connection with promotional materials. Souza et. al. v. Exotic Island Enterprs., Inc., Case No. 21-2149 (2d Cir. May 19, 2023) (Lynch, Nardini, Menashi, JJ.) The Second Circuit also affirmed the district court’s summary judgment denial of Lanham Act false advertising and New York state right of publicity claims.

The operator of a gentlemen’s club used photographs of current and former professional models in social media posts promoting the club. The photographs were obtained without the models’ permission through a third-party vendor. The models sued the club operator asserting false endorsement, false advertising and right of publicity violations. The parties filed dueling summary judgment motions in February 2021. During the pendency of those motions, the Second Circuit decided Electra, a case involving overlapping plaintiffs suing on several of the same causes of action based on highly similar fact patterns. The district court subsequently granted the club operator’s motion for summary judgment and denied the models’ motion. The models appealed.

The Second Circuit relied heavily on its Electra decision to affirm the district court’s denial of the models’ false endorsement claim. To prevail on a false endorsement claim under Section 43 of the Lanham Act, the models were required to prove that there was a likelihood of confusion between their goods or services and those of the club operator. Likelihood of consumer confusion is evaluated using the eight Polaroid factors:

  1. Strength of the trademark
  2. Similarity of the marks
  3. Proximity of the products and their competitiveness with one another
  4. Evidence that the senior user may bridge the gap by developing a product for sale in the market of the alleged infringer’s product
  5. Evidence of actual consumer confusion
  6. Evidence that the imitative mark was adopted in bad faith
  7. Respective quality of the products
  8. Sophistication of consumers in the relevant market.

First, the models argued that the district court oversimplified the “strength of the mark” analysis (factor 1) to focus only on the recognizability of the mark. The Second Circuit disagreed, explaining that not only was Electra’s focus on recognizability binding precedent but also, that factor was required to be evaluated in the context of the mark’s strength in the false endorsement context (i.e., as a function of the extent to which the endorser’s identity could be linked with the product being sold). In other words, without an adequate showing that the models were recognized in the social media posts promoting the club, there could be no case of endorsement, let alone false endorsement.

Second, the models challenged the district court’s exclusion of their expert testimony on certain Polaroid factors. The district court excluded surveys conducted by the models’ expert as unreliable because they suffered from various methodological flaws and, therefore, did not provide a reliable [...]

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Common Sense: Nonparties Not Precluded by Ex Parte Reexamination Termination

by | Jun 8, 2023 |

In a precedential decision, the US Patent & Trademark Office (PTO) Trademark Trial & Appeal Board denied a motion for judgment based on either claim or issue preclusion, and in the alternative for a show cause order, in a challenger’s petition. Common Sense Press Inc. d/b/a Pocket Jacks Comics v. Ethan Van Sciver and Antonio J. Malpica, Cancellation No. 92075375, 2023 BL 171365 (TTAB May 19, 2023) (Wellington, Pologeorgis, English, ATJs).

Common Sense Press filed a petition to cancel the registration for the mark “Comics Gate” for comics. In its petition, Common Sense asserted claims of nonuse, abandonment and fraud. The Respondents denied the allegations in the petition and also raised unclean hands by petitioner as a defense.

Common Sense also requested reexamination of the “Comics Gate” mark, which the PTO Director instituted on May 9, 2022. The cancellation proceeding was suspended pending the outcome of the reexamination. The Respondents were instructed to submit evidence to establish use of their mark for comics as of the August 13, 2020, deadline for filing a statement of use, as required under Section 1(d) of the Lanham Act.

The Respondents’ Section 1(d) statement showed that the “Comics Gate” mark was used in connection with comics sales in interest commerce and that such comics were provided via interest trade channels during the relevant period. In view of the Respondents’ evidence, the PTO Director determined that use had been demonstrated for comics and terminated the reexamination.

With the Notice of Termination in hand, the Respondents requested that the Board enter judgment in their favor in the cancelation proceeding as to nonuse and abandonment based on issue preclusion or, in the alternative, issue a show cause order to Common Sense as to why judgment should not be entered against them.

The Board denied the Respondents’ request, reasoning that termination of a reexamination proceeding does not preclude future nonuse challenges. Nor does such a reexamination termination decision have preclusive effect on a petitioner seeking cancellation, even if the petitioner requested the terminated reexamination. Citing due process concerns, the Board explained that the termination of an ex parte reexamination proceeding in which the petitioner necessarily does not participate may not serve as a basis for preventing the petitioner from raising even identical challenges in another action. The Board further noted that while the applicable statute “contains explicit estoppel provisions that bar the filing of future expungement or reexamination proceedings as to the identical goods or services once a proceeding of the same kind has been instituted . . . neither the statute nor regulations set forth a limitation on any party’s ability to petition to cancel a registration just because it is or has been the subject of a reexamination or expungement proceeding.” Thus, the Board concluded there is no basis to issue a show-cause order to a litigant who never appeared in a prior action.

Practice Note: This case serves as a reminder of the metes and bounds of an ex parte reexamination or expungement proceeding. Although [...]

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