Standoff Between the Trademark Trial and Appeal Board (ttab) and the Federal Courts: What "houndstooth Mafia" Means for Judicial Authority Over Administrative Agencies

• Publication year: 2017
• Citation: Vol. 25 No. 1

Standoff Between the Trademark Trial and Appeal Board (TTAB) and the Federal Courts: What "Houndstooth Mafia" Means for Judicial Authority Over Administrative Agencies

Matthew S. Chandler
University of Georgia School of Law

STANDOFF BETWEEN THE TRADEMARK TRIAL AND APPEAL BOARD (TTAB) AND THE FEDERAL COURTS: WHAT HOUNDSTOOTH MAFIA MEANS FOR JUDICIAL AUTHORITY OVER ADMINISTRATIVE AGENCIES

Matthew S. Chandler^*

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TABLE OF CONTENTS

I. INTRODUCTION...............................................................................................2

II. BACKGROUND..................................................................................................5

A. TRADEMARKS............................................................................................5
B. CREATION OF THE UNITED STATES PATENT AND TRADEMARK OFFICE................................................................................7
C. THE USPTO'S LIMITED AUTHORITY AS AN ADMINISTRATIVE AGENCY AND THE DOMINANCE OF THE FEDERAL COURTS............8
D. THE TRADEMARK TRIAL AND APPEAL BOARD (TTAB).....................12
E. PRECLUSIVE EFFECT TO ADMINISTRATIVE DECISIONS: WHAT B&B HARDWARE MEANS TO THE RELATIONSHIP BETWEEN THE TTAB AND THE FEDERAL COURTS...........................14
F. HOUNDSTOOTH MAFIA: B&B HARDWARE'S FIRST TEST..................19

III. ANALYSIS.........................................................................................................21

A. WHAT HOUNDSTOOTH MAFIA MEANS FOR THE FUTURE RELATIONSHIP BETWEEN ADMINISTRATIVE BOARDS AND FEDERAL COURTS IN THE POST-B&B HARDWARE ERA..................21
B. HOUNDSTOOTH MAFIA REPRESENTS A STEP IN THE WRONG DIRECTION IN THE POST-B&B HARDWARE LEGAL ENVIRONMENT AND THEREFORE THE TTAB SHOULD APPEAL......................................................................................................23

IV. CONCLUSION........................................................................................................25

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I. INTRODUCTION

College football in the South is said to be tantamount to religion.¹ Its popularity in the region is unmatched by any professional sports teams, and many southerners are born and raised into families of college fans dating back generations.² Today, college football is very much a part of Southern culture and identity, with each team possessing its own unique traditions. In the context of merchandise, these traditions make money. As a result, universities will go to great lengths to protect them.

One can hardly think of the University of Alabama's football team without being reminded of its legendary coach Paul "Bear" Bryant. When one hears "Bear" Bryant, the image of the coach pacing the sideline with his famous houndstooth fedora comes to mind. Coach Bryant was not only a winning football coach; he was also a fashion trend-setter at the University of Alabama. Throughout the years of Coach Bryant's coaching tenure and beyond, Alabama fans began regularly wearing houndstooth pattern clothing to football games.³ Today, houndstooth is abundant at Alabama football games. It is probably accurate to say that Southern football fans nowadays, especially fans of teams in the NCAA's Southeastern Conference (SEC), would identify houndstooth patterns or designs as synonymous with the Alabama Crimson Tide. For Alabama fans, houndstooth is considered the "third, and unofficial" team color.⁴ The university has therefore taken advantage of the pattern's local popularity as it now sells an array of team merchandise and game day clothing with the houndstooth design.⁵ With the growing popularity of a pattern symbolizing the team and the university, there comes the need to protect it. The university has responded to this necessity by attempting to restrict the use of the pattern in other business's logos, with mixed results.⁶ The most recent instance of attempting to restrict a company's use of the pattern ignited a legal battle as heated as any contest the Bear ever coached on the football field.

The University of Alabama's lawsuit against Houndstooth Mafia is illustrative of a modern trend of universities initiating lawsuits against those accused of infringing their trademarked material.⁷ Unlike the unrivaled passion for college football and its colorful traditions, this trend is not exclusive to the

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South. Universities across the country are increasingly turning to intellectual property (IP) law to protect their images while "generat[ing] income" from the dissemination of their unmistakeable "brand[s]."⁸ These goals are oftentimes achieved through licensing agreements with those wishing to sell merchandise with the university's logos or marks; however, when unlicensed entities use the mark or create a mark which can be easily confused with the university's mark, they may become liable for infringing on the university's trademark, absent a fair use defense consistent with the presence of consumer confusion.⁹

Universities execute trademark licensing agreements by granting licenses to certain producers or distributors to create merchandise with their marks.¹⁰ Licensing agreements may be exclusive or nonexclusive and will normally spell out in detail to what extent the licensed agents are authorized to use the mark.¹¹ Perhaps most importantly, it is through trademark licensing agreements that the marks earn money for the universities—in the form of royalties.¹² Standard royalty fees are generally in the range of 8% of sales, but universities will take advantage of their increasing fame to boost overall revenue from these royalties.¹³ Today's universities, therefore, have a great interest in protecting their marks from infringers in order to maximize profits from their mark's use.

The interest that universities have in protecting their marks from infringement is demonstrated by the resources they devote to that protection. Universities today commonly have entire departments dedicated to the licensing and protection of their trademarks.¹⁴ It is also a general practice for universities to hire independent licensing firms, which not only assist in the licensing process but also may take a proactive role in fighting infringement or counterfeits.¹⁵ These resources are especially important for major universities with popular sports teams, which stand to lose significant revenue from unlicensed products.¹⁶

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The University of Alabama undoubtedly has national fame given its recent streak of football national championships and certainly has an interest in protecting its marks to drive revenue and preserve its brand. Crimson Tide fans have responded to the increase in national fame and popularity by buying and proudly showing off their Alabama merchandise—to include any team marks or clothing in the locally popular houndstooth pattern.¹⁷ In addition to the fans, the university itself has responded to this increase in fame—and therefore revenue—by aggressively initiating legal action against unlicensed vendors using or creating certain marks related to its sports teams.¹⁸ Included in these "infringing" marks (as the university sees them) are marks incorporating the houndstooth pattern—even though the University of Alabama does not own a trademark over the pattern.¹⁹

One such lawsuit has begun a legal fight which has put the relationship between the United States Patent and Trademark Office—specifically the Trademark Trial and Appeal Board (TTAB)—and the federal courts in jeopardy. When the University of Alabama sued Houndstooth Mafia, it initiated a legal battle between administrative agencies and federal courts.²⁰ The ensuing standoff has resulted in a federal court order²¹ which, on the surface, appears to be in direct conflict with a 2015 holding from the United States Supreme Court.²² Because the TTAB has explicitly stated that it is reserving the right to appeal, this standoff is not over.²³

This Note will examine the legal consequences of Board of Trustees of the University of Alabama v. Houndstooth Mafia Enterprises, LLC, (N.D. Ala. Feb. 23, 2016). Part II of this Note will discuss the background of the relationship between federal agencies and federal courts—specifically, the relationship between the courts and the United States Patent and Trademark Office. Part II will also examine the precedent set by the Supreme Court in B&B Hardware, Inc. v. Hargis Industries, Inc., 135 S. Ct. 1293 (2015). Part II will conclude with a discussion of the facts behind Houndstooth Mafia and where the case stands today.

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Part III of this Note will analyze the legal repercussions of Houndstooth Mafia and the effects that the case will have on the relationship between agencies and the courts, especially on the relationship between the courts and the Trademark Trial and Appeal Board. Furthermore, Part III will argue that the court order of Houndstooth Mafia represents a step in the wrong direction given the Supreme Court's holding in B&B Hardware. Part IV will conclude that the Trademark Trial and Appeal Board should appeal the federal court's order on the grounds that the agency's decisions have preclusive effect on the courts given the holding of B&B Hardware.

II. BACKGROUND

A. TRADEMARKS

"A trademark may be a word, logo, design, scent, sound, color, personal name, container, building or any number of other signifiers."²⁴ The Lanham Act of 1946 provides legal protection to marks by allowing their owners to file for registration with the U.S. Patent and Trademark Office (USPTO).²⁵ Mark owners may file for marks that they intend to use in commerce,²⁶ but are not legally required to do so: mark ownership "flows from prior use," but registration of a mark provides additional benefits to the owner.²⁷ Trademark registration also benefits consumers by preventing confusion as to the source of the product in order to guarantee that the consumer knows what he or she is purchasing.²⁸

However, not every mark is eligible for protection by registration. Marks must first and...