Precedential No. 33: Federal Registration Defense Yields TTAB Dismissal of Dilution Claim

In a case of first impression, the Board granted Respondent APC's Rule 12(b)(6) motion to dismiss cancellation Petitioner Motion Picture Academy's claim for dilution-by-blurring, on the ground that Section 43(c)(6)(B) provides a "complete bar" to a dilution claim against a federal registration. Although the parties and commentators agree that a "clerical error" was made during passage of the Trademark Dilution Revision Act in 2006 (TDRA), the Board applied the statue as written, finding insufficient basis in the legislative history to justify an alternative reading of the statutory language. Academy of Motion Picture Arts and Sciences v. Alliance of Professionals & Consultants, Inc., 104 U.S.P.Q.2d 1234 (TTAB 2012) [precedential].

APC registered the mark OSCAR in 2011 for "providing recognition and incentives by the way of awards and contests to demonstrate excellence in the field of business consultation and information technology." The Academy petitioned to cancel on three grounds: Section 2(d) likelihood of confusion with its registered mark OSCAR for various entertainment services; section 2(a) false association; and Section 43(c) dilution-by-blurring. Prior to answer, Respondent APC filed a motion to dismiss the dilution claim, asserting the "federal registration defense."

The Board found no cases raising this issue in the federal courts or before the Board. The fact that the Board has entertained dilution claims in other cancellation proceedings was "not persuasive."

The federal registration defense was included in the Federal Trademark Dilution Act of 1995 (FTDA), which provided that "ownership by a person of a valid registration" is a "complete bar" to any action brought "under common law or a statute and that seeks to prevent dilution of the distinctiveness of a mark, label, or form of advertisement." In 2006, the TDRA sought to expand this defense to include all types of state law dilution claims by replacing "dilution of the distinctiveness of a mark" with "dilution by blurring or dilution by tarnishment."

During Senate consideration of the House bill, Section 43(c)(6) was slightly reorganized. The Senate version of the bill became law, and as a result the statute states that ownership of a federal registration acts as a "complete bar" to a federal dilution claim (as well as state law-based claims). The Academy argued that such the interpretation urged by APC would result in inconsistencies and absurd results. Commentators (and the parties) agreed that a clerical error occurred in the legislative process [by reorganizing the sub-section headings], but disagree how that "error" should be interpreted. As enacted, Section 43(c)(6) reads as follows:

(6) Ownership of valid registration a complete bar to action.
The ownership by a person of a valid registration under the Act of March 3, 1881, or the Act of February 20, 1905, or on the principal register under this chapter shall be a complete bar to an action against that person, with respect to that mark, that—
(A) (i) is brought by another person under the common law or a statute of a State; and (ii) seeks to prevent dilution by blurring or dilution by tarnishment; or
(B) asserts any claim of actual or likely damage or harm to the distinctiveness or reputation of a mark, label, or form of advertisement.

The bill as passed by Congress read as follows:

The ownership by a person of a valid registration ... shall be a complete bar to an action against that person, with respect to that mark, that--
(A) is brought by another person under the common law or a statute of a State; and
(B)(i) seeks to prevent dilution by blurring or dilution by tarnishment; or (ii) asserts any claim of actual or likely damage or harm to the distinctiveness or reputation of a mark....

The Board observed that when statutory terms are unambiguous, the language must be given effect, except in those "rare and exceptional circumstances" when there is a "clearly expressed legislative intent to the contrary."

The Academy characterized this reorganization of the language as "unintended," but the Board found "scant legislative history, and certainly not enough to support an alternative reading in this case. The Board "must apply and enforce the statute as written, rather than picking and choosing a preferred interpretation." It must "assume that Congress means what it says." If Congress intended something else, it is up to Congress to amend the statute accordingly.

Accordingly, the Board granted the motion to dismiss.

TTABlog comment: What do you think of this decision? I don't see how the Board would have the power or authority to ignore or re-cast the statutory language. What might a district court do if presented with a claim for cancellation on the ground of dilution?

Since this is an interlocutory ruling, when will it be reviewed/appealed?

PS: I think I have to file an amended answer in one of my cancellation proceedings to add a new affirmative defense.

Text Copyright John L. Welch 2012.