Monday, January 09, 2012

Precedential No. 37: TTAB Applies Res Judicata to 2(f) Issue, But Not Genericness, in AMERICAN INFRASTRUCTURE Oppositions

In this well-reasoned and instructive decision, the Board entered partial summary judgment in two oppositions, concluding that collateral estoppel (issue preclusion) barred consideration of the issue of acquired distinctiveness under Section 2(f) in light of a judgment in an earlier civil action between the parties. However, it rejected Opposer Zachry’s assertion that claim preclusion applied to the issue of genericness due to Applicant’s default in three related oppositions. Zachry Infrastructure, LLC v. American Infrastructure, Inc., 101 USPQ2d 1249 (TTAB 2011) [precedential].

Applicant sought to register the mark AMERICAN INFRASTRUCTURE in standard character form for various construction services. Zachry alleged that the mark is generic for the services, or is merely descriptive under Section 2(e)(1), primarily geographically descriptive under Section 2(e)(2), and lacking in acquired distinctiveness. The Board consolidated these two proceedings with the three related oppositions, each involving a mark that included the phrase AMERICAN INFRASTRUCTURE in design form, and with additional wording in two of the marks. It then suspended all of the proceedings pending the outcome of a civil action brought by Applicant against Zachry, based on Zachry’s use of AMERICAN INFRASTRUCTURE as part of its (prior) name.

The district court entered summary judgment against Applicant, ruling that it had failed to provide sufficient evidence to create a genuine factual issue regarding Zachry's defense of lack of acquired distinctiveness. In view of the court ruling, Opposer Zachry filed a motion for judgment in all five pending opposition proceedings. Applicant then expressly abandoned the applications for the three design marks that included the words AMERICAN INFRASTRUCTURE, and the Board entered judgment by default against Applicant in those three oppositions.

Along with its opposition to the motion for judgment, Applicant filed an unconsented motion to amend the two standard character mark applications to seek registration on the Supplemental Register. It asserted that the district court did not determine that the AMERICAN INFRASTRUCTURE mark was incapable of distinguishing its services and that its motion to amend to the Supplemental Register should therefore be granted.

Applicant asserted that the district court did not determine that the AMERICAN INFRASTRUCTURE mark was incapable of distinguishing its services and that its motion to amend to the Supplemental Register should therefore be granted.

The Board agreed with Zachry that issue preclusion applied to the question of whether AMERICAN INFRASTRUCTURE had acquired distinctiveness. In the two standard character applications, Applicant sought registration under Section 2(f), thereby conceding that the mark is not inherently distinctive. Applicant therefore had to prove acquired distinctiveness in order to obtain a Principal Registration. However, the issue of acquired distinctiveness was fully litigated in the civil action and the determination that the mark had not acquired distinctiveness was necessary to the court's judgment. The judgment was therefore binding on the Board and barred re-litigation of the issue.

As to genericness, the Board ruled that issue preclusion did not apply because the transactional facts at issue differed between the civil action and the oppositions. The civil action involved a claim by Applicant that its mark is distinctive and protectable, and the issue of whether Zachry had infringed. In the oppositions, however, the issue is Applicant’s right to register. Moreover, the district court did not consider whether AMERICAN INFRASTRUCTURE is generic for Applicant’s services, nor did it need to make that determination in order to enter summary judgment on Applicant’s civil claims.

Opposer Zachry further contended that the entry of default judgment in the other three oppositions, which also included claims of genericness, required that judgment also be issued on that claim in these two oppositions. However, because the marks in those three proceedings were different from the standard character mark at issue here, and because the two standard character applications were filed before the entry of the default judgments, claim preclusion does not apply here. As the CAFC stated in Sharp Kabushiki Kaisha v. ThinkSharp, Inc., 79 USPQ2d 1376, 1379 (Fed. Cir. 2006), “a trademark owner is entitled to choose which opposition to defend, when the proceedings are not an attempt to evade the effect of a previous adverse judgment on the merits.” In other words, the Board concluded, Applicant is not required to defend all five oppositions in order to preserve its right to litigate two of them.

Finally, in accordance with its usual practice, the Board deferred until final hearing (or summary judgment) Applicant’s motion to amend to the Supplemental Register.

TTABlog comment: The Board observed in footnote 8 that Applicant did not claim that its mark had acquired distinctiveness during the period between entry of the court judgment and Zachry’s filing of its motion for judgment. In other words, the court judgment that the mark lacked acquired distinctiveness has a limited preclusive effect, in that it merely says that as of the date of the ruling the mark had not become distinctive.

Text Copyright John L. Welch 2012.


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