A New Deference Standard: The Rebuttable Presumption of Validity for USPTO Trademark Likelihood-of-Confusion Determinations

• Author: Lauren A. Taylor
• Position: J.D. Candidate, The University of Iowa College of Law, 2018; B.S.E., Industrial Engineering, The University of Iowa College of Engineering, 2015
• Pages: 367-393

A New Deference Standard: The Rebuttable Presumption of Validity for USPTO Trademark Likelihood-of-Confusion Determinations Lauren A. Taylor * ABSTRACT: Circuit courts are split on how much deference should be given to a United States Patent and Trademark Office (“USPTO”) trademark likelihood-of-confusion determination during litigation under Lanham Act section 43(a)(1)(A). While some courts afford a substantial amount of deference to the USPTO’s findings regarding a likelihood of confusion when it refuses to register a mark on the principal register, other courts afford little to no deference to the USPTO’s findings regarding a likelihood of confusion. This disparity among courts outlines a need for a solution that best fulfills the goals of the various courts in order to create a unified precedent of deference. By analyzing each court’s approach as to how much deference to give and by taking a closer look into the deference given to USPTO patent determinations, this Note proposes that USPTO likelihood-of-confusion determinations receive a presumption of validity in subsequent litigation. A challenger can rebut this when (1) a USPTO examiner failed to consider or was unaware of relevant evidence; (2) an examiner’s actions were arbitrary and capricious; or (3) there exists evidence of unfair prejudice. This solution better fulfills efficiency than reasonable alternatives, and in an overarching effort to create homogeny, better creates a uniform precedent of deference. I. INTRODUCTION ............................................................................. 368 II. BACKGROUND ............................................................................... 371 A. W HAT IS A T RADEMARK ? ......................................................... 372 B. F ILING A T RADEMARK A PPLICATION ......................................... 373 C. T HE USPTO’ S R EVIEW OF T RADEMARK A PPLICATIONS .............. 374 * J.D. Candidate, The University of Iowa College of Law, 2018; B.S.E., Industrial Engineering, The University of Iowa College of Engineering, 2015. 368 IOWA LAW REVIEW [Vol. 103:367 D. D EVELOPMENT OF S UBSEQUENT L ITIGATION R EGARDING A L IKELIHOOD OF C ONFUSION B ETWEEN M ARKS .......................... 377 E. W EIGHT G IVEN BY V ARIOUS C IRCUITS TO USPTO D ETERMINATIONS ................................................................... 379 III. DISCUSSION ................................................................................... 380 A. E XAMINATION OF C IRCUIT A PPROACHES ................................... 381 1. Circuits Giving Substantial Weight to USPTO Likelihood-of-Confusion Determinations ................... 381 2. Circuits Giving Little to No Weight to USPTO Likelihood-of-Confusion Determinations ................... 383 B. E XAMINATION OF P ATENT L AW AND D EFERENCE TO USPTO F ACTUAL D ETERMINATIONS ..................................................... 385 C. A S OLUTION IS N ECESSARY TO P ROMOTE THE P RINCIPLES OF A CCURACY AND E FFICIENCY TO I NCREASE U NIFORMITY A CROSS F EDERAL C IRCUITS .................................................................. 387 IV. REBUTTABLE PRESUMPTION OF VALIDITY ..................................... 388 A. S UBSEQUENT L ITIGATION S HOULD D EFER TO A USPTO D ETERMINATION U NLESS L IMITING C RITERIA E STABLISH T HAT D EFERENCE W OULD N OT B E A CCURATE AND E FFICIENT ............................................................................... 388 1. Presuming Validity of a USPTO’s Likelihood-of-Confusion Determination ............................................ 389 2. Limiting Criteria That Must Be Satisfied to Rebut Presumption of Validity ................................................ 389 B. A LTERNATIVES TO THE P ROPOSED S OLUTION ............................ 392 C. T HE P ROPOSED S OLUTION B ETTER F ULFILLS A CCURACY AND E FFICIENCY ............................................................................. 392 V. CONCLUSION ................................................................................ 393 I. INTRODUCTION Circuits are split as to how much deference should be given to a United States Patent and Trademark Office (“USPTO”) trademark likelihood-of-confusion factual determination. Likelihood of confusion with an existing mark can be grounds for denial of a trademark application. 1 Some courts afford a substantial amount of deference to the USPTO’s findings regarding 1. 15 U.S.C. § 1052(d) (2012). 2017] A NEW DEFERENCE STANDARD 369 a likelihood of confusion when it refuses to register a mark on the principal register. 2 Other courts afford little to no deference to these determinations. 3 Courts analyze the question of deference differently for legal and factual determinations. Courts have concluded that USPTO legal determinations do not have controlling deference. 4 The Supreme Court in Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc. announced a two-part test for judicial review of agency legal determinations regarding agency-administered statutes. 5 The first step is to determine “whether Congress has directly spoken to the precise question at issue. If the intent of Congress is clear . . . the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress.” If the court determines that Congress has not addressed the question at issue, then the court determines whether the agency’s construction of the [rule] is reasonable. 6 2 . See, e.g. , Syntex Labs., Inc. v. Norwich Pharmacal Co., 437 F.2d 566, 569 (2d Cir. 1971) (explaining that USPTO determinations are not conclusive, but should be given great weight); Miles Shoes, Inc. v. R.H. Macy & Co., 199 F.2d 602, 603 (2d Cir. 1952) (“ One factor to be considered in this case is the decision of the Commissioner of Patents denying registration, since his familiarity in dealing with such problems may properly be accorded substantial weight.”); Pizzeria Uno Corp. v. Temple, 566 F. Supp. 385, 397 (D.S.C. 1983) (“Trademark Office examiners who are experts in applying the test of likelihood of confusion between two marks, is entitled to great weight.”); Miss Universe, Inc. v. Little Miss U.S.A., Inc., 212 U.S.P.Q. 425, 427 n.6 (N.D. Ga. 1981) (“In reaching this conclusion [that confusion is likely], the court has given serious consideration to the Patent and Trademark Office’s rejection of the defendant’s application for registration. . . . [B]ecause of the Patent Office’s expertise in this field, the court . . . is not inclined to ignore or discount its findings.”); D.M. & Antique Imp. Corp. v. Royal Saxe Corp., 311 F. Supp. 1261, 1274 (S.D.N.Y. 1969) (“While the court is not bound by the determination of the Patent Office, nevertheless the expertise of the trademark examiners does entitle their views to respectful consideration.”) . 3 . See, e.g. , Everest Capital Ltd. v. Everest Funds Mgmt., L.L.C., 393 F.3d 755, 764 (8th Cir. 2005) (explaining that the USPTO’s determinations are merely tentative opinions and should not be given weight); Kos Pharm., Inc. v. Andrx Corp., 369 F.3d 700, 715 (3d Cir. 2004) (finding that a USPTO’s determination may be considered, but does not need to be given weight); A & H Sportswear, Inc. v. Victoria’s Secret Stores, Inc., 237 F.3d 198, 221 (3d Cir. 2000) (holding that USPTO determinations should not be given weight because the USPTO makes low-level preliminary determinations and therefore does not have all evidence in front of it); Mktg. Displays, Inc. v. TrafFix Devices, Inc., 200 F.3d 929, 934 (6th Cir. 1999) (“[N]o deference is due [to] a PTO decision with respect to evidence the PTO did not consider.”) ; Carter–Wallace, Inc. v. Procter & Gamble Co., 434 F.2d 794, 802 (9th Cir. 1970) (“Any such determination made by the Patent Office . . . [is] regarded as inconclusive . . . .”); Progressive Distrib. Servs., Inc. v. United Parcel Serv., Inc., 186 F. Supp. 3d 741, 749 (W.D. Mich. 2016) (finding that weight should not be given to USPTO determinations because the examiner did not review all evidence). 4 . See Chevron U.S.A. Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837, 842–43 (1984). 5 . Id. ; Michael J. Pender, Judicial Review of PTO Patentability: Determinations Under the Substantial Evidence Standard of Review , 82 J. PAT. & TRADEMARK OFF. SOC’Y 431, 443 (2000). 6. Pender, supra note 5, at 443 (quoting Chevron , 467 U.S. at 842–43). 370 IOWA LAW REVIEW [Vol. 103:367 The U.S. Court of Appeals for the Federal Circuit has held that this standard of deference is not applicable to USPTO regulations—“[b]ecause Congress has not vested the [USPTO] with any general substantive rulemaking power, USPTO regulations cannot possibly have the force and effect of law.” 7 Therefore, the court concluded that “the rule of controlling deference set forth in Chevron does not apply.” 8 Alternatively, USPTO factual determinations receive a different standard of deference. The standard of review given to an agency’s fact-finding is outlined in Section 706 of the Administrative Procedure Act (“APA”). 9 In Zurko v. Dickinson , the Supreme Court rejected the Federal Circuit’s contention that a “clearly erroneous” standard applied, holding “that the APA does govern the Patent and Trademark Office’s decision-making.” 10 The Court in Recot, Inc. v. M.C. Becton extended the APA standard of review to trademark factual findings. 11 This question of deference is important because it poses a concern regarding issue preclusion. The Restatement (Second) of Judgments defines issue preclusion as the scenario “[w]hen an issue of fact or law is actually litigated and determined by a valid and final judgment, and the determination is essential to the judgment, the determination is conclusive in a subsequent action between the parties, whether on the same or a different claim.” 12 This is meaningful because issue preclusion can apply when a single issue is decided before a court or administrative agency. However, issue preclusion is not...