Mcle Self-study Article: Bubble, Bubble, Oil-no Trouble?
| Publication year | 2020 |
| Author | Jane Shay Wald |
Jane Shay Wald
Irell & Manella, LLC
April Hua
Irell & Manella, LLC
(See end of this article for information on receiving 1.0 hour MCLE self-study credit.)
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We examine here the significance of V.V.V. & Sons Edible Oils Ltd. v. Meenakshi Overseas, LLC,1 a recent case from the Ninth Circuit Court of Appeals.
To understand what happened, some context is important, which requires that we take you back to B&B Hardware, Inc. v. Hargis Indus., Inc.2 There, the U.S. Supreme Court determined the circumstances under which issue preclusion applied. These circumstances allowed a district court to rely on a Trademark Trial and Appeal Board ("TTAB" or "Board") decision to preclude further litigation. The case caused practitioners before the Board considerable consternation at first.
When B&B Hardware was decided, in 2015, opinions flew among colleagues. CLE lectures raised questions. Articles were published, questions were raised. Should the parties to a Board proceeding handle an opposition or petition to cancel more like a district court proceeding, with far more extensive evidence than might otherwise be part of a TTAB record? This would make the TTAB forum far more costly to navigate, but perhaps worth the expense to have a more complete record in case B&B Hardware were applied. Would it be best to initiate more cases in the federal courts, side-stepping the helpful resolution function that Board cases sometimes serve because there is often less immediacy, and therefore less at stake? Will a courthouse-first approach invariably favor the deep-pocket party? Or, the countervailing thinking went, should Board cases be tried in the most minimal way, to deliberately avoid making a record? Wouldn't this up the chances that issue preclusion would be unfair, since there would be such a skeletal record? Or would the "opportunity" to have a fuller record boomerang? Theories abounded.
A few years passed and the initial hand-wringing and the "worst case" speculations were blunted, replaced over time by a growing complacency that not much had changed or would change. Relatively few courts were faced with the issue at all. Over a dozen cases considering potential applicability of B&B Hardware, including two in the Southern District of California and one in the Central District of California, found there was no preclusive effect from the TTAB suit , see accompanying Table of Cases Regarding Preclusive Effect of TTAB suit. Indeed, the Southern District of California, in Hanginout, Inc. v. Google, Inc.,3 found that B&B Hardware was not as far-reaching as plaintiff contended. That district court recently cited Hanginout for the point that "regardless of how thoroughly an issue is litigated before the TTAB, if the unsuccessful party appeals the decision, deference to the TTAB is no longer efficient." Med. Extrusion Techs., Inc. v. Apollo Med. Extrusion Techs., Inc.4 However, a few courts deciding the issue did find a TTAB decision preclusive.
The sidebar provides examples of how courts have dealt with the post-B&B Hardware issue.
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TABLE OF CASES REGARDING PRECLUSIVE EFFECT OF TTAB SUIT| Case | Issue | Outcome |
|---|---|---|
| Assa Realty, LLC v. Sol. Grp. Corp., 2018 WL 1313432, at *3 (S.D. Fla. Mar. 12, 2018) | Right to use mark based on priority of use | TTAB decision given preclusive effect |
| Ashe v. PNC Fin. Servs. Grp., Inc., 165 F. Supp. 3d 357, 361 (D. Md. 2015), dismissed, 647 F. App'x 156 (4th Cir. 2016), on reh'g, 652 F. App'x 155 (4th Cir. 2016), and aff'd, 652 F. App'x 155 (4th Cir. 2016) | Priority of use | TTAB decision given preclusive effect. Court rejected Ashe's argument that actual marketplace usage of mark differed from usage in application; inapposite here because the issue was priority of use, not likelihood of confusion. On appeal, the Fourth Circuit affirmed that the issue of priority was identical in the TTAB and district court since Ashe alleged no actual use of the mark apart from those described in his trademark application. |
| Brookwood Funding, LLC v. Avant Credit Corp., Inc., No. 1:14-CV-2960-SCJ, 2015 WL 11504556, at *5 (N.D. Ga. July 28, 2015) | Existence of trademark rights | No issue preclusion. Distinguished B&B because, here, Brook-wood was appealing the trademark examiner's decision to the TTAB (no finality); and, court cannot conclude issue preclusion should apply on a motion to dismiss |
| Cesari S.r.L. v. Peju Province Winery L.P., No. 17 CIV. 873(NRB), 2017 WL 6509004, at *3 (S.D.N.Y. Dec. 11, 2017) | Likelihood of confusion | TTAB decision given preclusive effect; rejected Peju's argument that their actual marketplace usage of the LIANA mark was materially different from that which the TTAB adjudicated (wine is still wine, even if for more "sophisticated" customers). |
| CFA Inst. v. Am. Soc'y of Pension Professionals & Actuaries, No. 3:19CV00012, 2019 WL 1983062, at *2 (W.D. Va. May 3, 2019) | Whether to grant stay based on potential B&B preclusion from TTAB's concurrent opposition proceeding (which was suspended pending outcome of this civil action) | Did not grant stay. "Accordingly, any issues that TTAB would have decided that might have lead to issue preclusion in this Court will instead be decided by this Court and may result in issue preclusion at the TTAB." (cites B&B) |
| CSL Silicones Inc. v. Midsun Grp. Inc., 170 F. Supp. 3d 304, 318 n.12 (D. Conn. 2016) | Refusal of Midsun's trademark application | No claim preclusion. No issues were actually litigated and determined (footnote) because CSL filed and withdrew a Petition to Cancel Midsun's mark, and the TTAB dismissed the challenge with prejudice. |
| Dille Family Tr. v. Nowlan Family Tr., 276 F. Supp. 3d 412, 433 (E.D. Pa. 2017) | Abandonment | No issue preclusion. Different issues - cancellation proceeding dealt with whether Plaintiff ceased to use the mark for the goods covered by its federal registrations, while the district court case dealt with a wider range of goods and services. |
| FAZE Apparel, LLC v. Faze Clan, Inc., No. 218CV02052RGKJEM, 2018 WL 3830027, at *3 n.2 (C.D. Cal. May 22, 2018) | Likelihood of confusion | No issue preclusion. Issue not "actually litigated" in the TTAB because the proceeding was a default judgment. |
| Hanginout, Inc. v. Google, Inc., No. 13CV2811 AJB (NLS), 2015 WL 11254689, at *4 (S.D. Cal. June 3, 2015) | Whether to grant stay pending resolution |
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