Monday, May 05, 2008

DC Circuit Rules TTAB Party May Raise New Issues in 21(b) Civil Action for Review

The U.S. Court of Appeals for the District of Columbia Circuit has reversed in part a district court ruling in a civil action under Lanham Act Section 21(b), seeking review of the TTAB's decision in Aktieselskabet af 21. November 2001 v. Fame Jeans, Inc., Opposition No. 91163436 (January 30, 2006). [TTABlogged here]. The TTAB had dismissed the Danish company's Section 2(d) opposition to registration of the mark JACK & JONES for clothing because the Canadian applicant, Fame Jeans, had priority. Neither company had used the mark in the USA, but the Canadian company had the earlier filing date. In the civil action, Opposer added several new grounds for its opposition, but the district court dismissed the complaint, deciding that the new grounds were waived because Opposer did not present them before the TTAB, and further that the TTAB had correctly ruled on the Section 2(d) claim. The court of appeals reversed, holding in part that the new claims were properly before the district court. Aktieselskabet af 21. November 2001 v. Fame Jeans, Inc., 86 USPQ2d 1527 (D.C. Cir. 2008).

Opposer attempted to add two claims in the district court action: (1) that Fame's application was void ab initio because Fame lacked a bona fide intent to use the mark, and (2) that Fame had misrepresented its intent to the PTO. The D.C. Circuit faced this question: "whether a party may ... introduce new issues not brought before the TTAB." The court joined "several of our fellow circuits in allowing new issues in Section 21(b) actions. See, e.g., Pioneer Healthcare, Inc., 75 F.3d 75, 80 (1st Cir. 1996); CAE, Inc. v. Clean Air Eng'g, Inc., 267 F.3d 660, 674 (7th Cir. 2001)."

The court observed that under Section 21(b) the district court is to decide "as the issues in the proceeding may require." The word "proceeding" refers to the district court action. "Thus, in a Section 21(b) action, a district court should decide on the issues before it, including new issues."

The court then looked at Opposer's 2(d) claim. It agreed with the TTAB that Opposer could not establish any constructive use via Section 44 prior to Fame's Section 1(b)filing date. However, it ruled that Opposer had "adequately pleaded actual use," noting that technical trademark used is not required. Citing the CAFC's Niagara decision, the Board stated that "[a]n opposer may rely on myriad forms of activities besides sales themselves, including, among others, regular business contacts, after-sales services, advertising of various forms, and marketing." The court ruled that Opposer's complaint gave "fair notice of a claim to analogous use."

"Simply put, the allegation of marketing in the United States, together with the inference of public association, is enough to give Fame fair notice of what it must contest. No more is required of a complaint."

As to Opposer's lack of bona fide intent claim, the court again found that Opposer had adequately pleaded the claim. It noted that "an opposer may defeat a trademark application for lack of bona fide intent by proving the applicant did not actually intend to use the mark in commerce or by proving the circumstances at the time of filing did not demonstrate that intent."

Finally, the court affirmed the dismissal of Opposer's common-law fraudulent misrepresentation count on the ground that Opposer "did not claim to have relied on Fame's supposedly false statement." [TTABlog note: the appellate court did not treat this claim as the usual fraud-on-the-PTO claim that we are used to; it cited only one precedent from the local D.C. court, and none of the TTAB fraud precedents].

And so, the district court judgment was reversed in part and affirmed in part.

TTABlog comment: Under Section 21(b), if the defendant resides in a foreign country, the United States District Court for the District of Columbia shall have jurisdiction. Remembering the TTAB's recent LASALLE decision [TTABlogged here], in which the successful applicant was a French trademark company specializing in the "revival" of old trademarks, would you consider bringing a civil action under Section 21(b) in the District of Columbia federal court in order to raise the issue of bona fide intent?

Text Copyright John L. Welch 2008.


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