Precedential No. 9: TTAB Denies HOLLYWOOD HOTEL Summary Judgment Motion, Finding No Claim Preclusion

The Board denied Applicant Zarco Hotels' FRCP 12(b)(6) motion to dismiss this opposition to registration of the mark HOLLYWOOD HOTEL for hotel and restaurant services, ruling that claim preclusion, based on an earlier opposition, did not apply. The Board first construed the motion as one for summary judgment and then concluded that Opposers' claims of likelihood of confusion and geographical descriptiveness were not decided in the prior opposition (which was sustained on the ground of nonownership) [TTABlogged here], and therefore those claims could be brought in this proceeding. Hollywood Casinos, LLC and Penn Entertainment, Inc. v. Zarco Hotels Inc., 2024 USPQ2d 985 (TTAB 2024) [precedential].

The parties relied on matters outside the pleadings and "clearly treated the motion as one for summary judgment," and so the Board so treated it as well. See FRCP 12(d); Haider Cap. Holding Corp. v. Skin Deep Laser MD, LLC, 2021 USPQ2d 991, at *1-2 (TTAB 2021) (construing motion to dismiss as motion for summary judgment where basis is claim preclusion and moving party relies on matter outside of pleadings); Urock Network, LLC v. Sulpasso, 115 USPQ2d 1409, 1410 n.5 (TTAB 2015) (motion to dismiss considered as one for summary judgment where it asserts claim preclusion)./

The "Prior Opposition" was based on a claim of likelihood of confusion with two registered marks. The opposer moved to amend the notice of opposition to add a geographical descriptiveness claim but the Board denied the motion as untimely. The Board ultimately sustained the opposition on the ground that the applicant was not the owner of the mark at the time the opposed application was filed; it did not reach the likelihood of confusion claim. The CAFC affirmed.

Under the doctrine of claim preclusion, a second action is barred by if (1) the parties (or their privies) are identical; (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. Jet, Inc. v. Sewage Aeration Sys., 223 F.3d 1360, 55 USPQ2d 1854, 1856 (Fed. Cir. 2000). Furthermore, if a party cannot appeal the outcome of an earlier action, then the second action is not barred by claim preclusion. See AVX Corp. v. Presidio Components, Inc., 923 F.3d 1357, 2019 USPQ2d 171683, at *4-5.

Opposer Hollywood Casinos was successful in asserting the nonownership claim in the Prior Opposition and obtained the relief it requested (denial of the application). Because the Board did not decide the likelihood of confusion claim, Hollywood could not cross-appeal on that issue, nor on the issue of the attempted geographical descriptiveness claim. Consequently, Opposer Hollywood Casinos "lacked statutory entitlement to appeal the prior decision of the Board."

Applicant Zarko conceded that the likelihood of confusion claim was not barred in its entirety, but argued that this claim should be limited to the two registered marks in the Prior Opposition. The Board disagreed. 

Because Opposers’ original likelihood of confusion claim is not extinguished, Opposers’ amended likelihood of confusion claim based upon their additional registrations and common law rights that could have been raised in the Prior Opposition also is not extinguished. There is no reason why claim preclusion would apply to only the latter claim and not the former.

As to the geographical descriptiveness claim, although the Board refused to add that claim in the Prior Proceeding, there was no decision on the merits regarding that claim. That refusal was not appealable since Hollywood Casinos obtained all the relief it sought, and so claim preclusion cannot apply.

The Board therefore denied Zarko's construed motion for summary judgment.

Read comments and post your comment here.

TTABlogger comment: The Board said that, because Hollywood Casino was the victor in the prior proceeding, it could not appeal any adverse ruling because it lacked "statutory entitlement" to appeal. Should that be "Article III standing" rather than statutory entitlement?

Text Copyright John L. Welch 2024.