Precedential No. 8: Applying Claim Preclusion, TTAB Dismisses Two of Three "DVD & Design" Cancellation Petitions

Respondent DVD FLLC moved for summary judgment on the ground of res judicata (claim preclusion) in these three consolidated cancellation proceedings involving registrations for the mark DVD & Design shown below [DVD disclaimed] for optical disks, readers, and related devices. Respondent contended that Petitioner Zoba’s fraud and abandonment claims were virtually identical to counterclaims that were previously dismissed with prejudice by stipulation and order in a prior civil action between the parties. The Board granted the motion as to two of the three proceedings. Zoba International Corp. v. DVD Format/LOGO Licensing Corporation, 98 USPQ2d 1106 (TTAB 2011) [precedential].


The Board observed that "[a] subsequent claim will be barred by claim preclusion if: '(1) there is identity of parties (or their privies); (2) there has been an earlier final judgment on the merits of a claim; and (3) the second claim is based on the same set of transactional facts as the first.'"

The Board first ruled that the CAFC's decision regarding "defendant preclusion" in Nasalok Coating Corp. v. Nylok Corp., 86 USPQ2d 1369 (Fed. Cir. 2008) [TTABlogged here] does not apply to two of the subject cancellations because Zoba was a counterclaim plaintiff, not a defendant, in the prior civil action. As to the third cancellation proceeding, the involved registration was not the subject of the civil action, and so Zoba had no obligation to assert a defense of trademark invalidity regarding that registration.

As to the summary judgment motion, there was no dispute that the parties here are identical to those in the civil action. Likewise, there was no "genuine" dispute that the stipulated order in the civil action was a final judgment.

As to the third factor for claim preclusion -- namely, whether the claims in the later proceeding are based on the same set of transactional facts as those asserted in a prior action -- the Board "must consider whether Zoba’s counterclaims comprise the same 'core [or nucleus] of operative facts' or are 'based on the same, or nearly the same, factual allegations' as those asserted in these proceedings."

The fraud claims raised by Zoba relied on the same allegedly false affidavits and specimens of use filed by DVD FLLC in renewing two of its registrations, and so the Board concluded that the third factor had been satisfied as to these claims.

Likewise, the third factor was satisfied as to Zoba's abandonment claims, which were "based on the same set of transactional facts which gave rise to Zoba’s counterclaims asserted in the civil action, namely, that DVD FLLC does not itself use the DVD LOGO in U.S. Reg. Nos. 2295726 and 2318677 as a trademark for its own goods; that the DVD LOGO is used by third parties; and that the DVD LOGO no longer identifies a single source for the goods with which the mark is used." Although the terminology used in the cancellation petitions and in the civil action counterclaims were different, that "does not raise a genuine dispute as to whether the counterclaim and the instant claims are based on the same set of transactional facts."

And so the Board granted the motion for summary judgment as to the first two cancellation proceedings.

As to the third proceeding, the involved registration "was not pleaded by DVD FLLC in the prior civil action and Zoba’s counterclaims therein did not seek to cancel that particular registration." And although the mark is the same as in the other two registrations, the goods are different and broader. There was no dispute "that the fraud and non-use counterclaims in the prior civil action and the fraud and abandonment claims in Cancellation No. 92051821 are not based on the same set of transactional facts."

Moreover, because the third registration was not pleaded in the civil action, the complaint "did not provide Zoba with notice that it had a right or need to assert a defense against U.S. Reg. No. 2711602." "In view of the foregoing, both precedent and fairness
dictate our finding that Zoba’s fraud and abandonment claims in Cancellation No. 92051821 are not barred by the doctrine of claim preclusion."

And so the Board dismissed the first two proceedings, with the third proceeding surviving.

TTABlog note: If you want to know more about the DVD logo and the DVD format, go here and here.

Text Copyright John L. Welch 2011.