Precedential No. 21: TTAB Grants Motion to Bifurcate VELCRO Cancellation into two Phases

In a less than fasten-ating ruling arising out of its Final Pretrial Conference Pilot program, the Board granted Respondent Velcro's motion for an order bifurcating this long-running cancellation proceeding into two phases: the first dealing solely with the issue of Petitioner’s entitlement to a statutory cause of action; and the second, assuming Petitioner survives the first phase, with the issue of genericness of Respondent's registered mark VELCRO for hook-and-loop fasteners. NHDNC LLC v. Velcro BVBA and Velcro IP Holdings LLC, Cancellation No. 92074468 (September 6, 2024) [precedential].

In a seconded amended petition for cancellation, Petitioner relied on its intent-to-use application to register the mark shown above, for hook-and-loop fasteners. Velcro moved to dismiss, but the Board found that the pleading sufficiently alleged entitlement because “[a] party’s reasonable belief that registration of its application will be refused because of defendant’s registration provides a proper basis for entitlement to a cause of action.” However, the Board noted that, “Respondent . . . may attack the legitimacy of Petitioner’s assertion in the newly pleaded application that it has a bona fide intent to use the pleaded mark in commerce.”

The Board observed that courts and the Board have broad discretion to bifurcate proceedings “[f]or convenience, to avoid prejudice, or to expedite and economize” cases.

A case-by-case approach to bifurcation is applied considering several factors, including, (1) separability of issues, (2) simplification of discovery and conservation of resources, and (3) prejudice to the parties. Yung v. Raymark Indus., Inc., 789 F.2d 397, 400 (6th Cir. 1986). Bifurcation may be particularly appropriate when resolution of a single claim or issue could resolve the entire case, by “first dealing with an easier dispositive issue.”

In short, the party seeking bifurcation must establish that bifurcation will promote judicial economy, or avoid inconvenience, and that no party would be prejudiced by the separate trials. The Board has previously severed the issue of entitlement to a statutory cause of action from the substantive grounds asserted, and decided the issue of entitlement as “a single threshold question."

The Board concluded that bifurcation is appropriate here:

Now that discovery has been completed in this case, . . . severance of the issues will simplify the presentation of evidence and conserve the Board’s judicial resources by first considering entitlement, as its resolution may be dispositive of this proceeding. The issue of genericness is a fact-specific inquiry that often involves the development and review of voluminous evidence, including any expert reports. Bifurcation potentially saves the parties time and resources as a decision on the statutory entitlement issue should simplify the final pretrial conference order. The evidence of Petitioner’s entitlement to a statutory cause of action is within its control and does not present an undue burden or prejudice to Petitioner, as it is Petitioner’s burden to demonstrate its entitlement in any event.

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TTABlogger comment:Precedential? Maybe because of the pilot program approach.

Text Copyright John L. Welch 2024.