Peju Pursues Appeal of SDNY Decision Misapplying B&B Hardware On Issue Preclusion

Six years ago we discussed here the decision of the U.S. District Court for the Southern District of New York in Cesari S.R.L. v. Peju Province Winery L.P., Civil Action No. 17 Civ. 873 (NRB) (S.D.N.Y. Dec. 11, 2017) [pdf here], in which the court granted Plaintiff Cesari's motion for partial summary judgment on its trademark infringement claim, ruling that preclusion applied to the issue of likelihood of confusion based on a 2004 TTAB decision. Several commenters, and yours truly, criticized that ruling. After battles over other issues, the case has now made its way to the Second Circuit and Peju has just filed its opening brief. [pdf here].

According to the Supreme Court in B&B Hardware, issue preclusion applies to TTAB adjudications: "s]o long as the other ordinary elements of issue preclusion are met, when the usages adjudicated by the TTAB are materially the same as those before the district court, issue preclusion should apply." Peju argued that "their actual marketplace usage of LIANA is materially different from that with the TTAB adjudicated," pointing out that the actual usage is limited to wines from grapes grown in Northern California, wines purchased by sophisticated customers, new world wines, wines priced between $40 and $60 per bottle, and wines sold on specific websites and at specific wineries. The district court, however, found this to be a "distinction without a difference in this context."

You will recall that, in her concurrence in B&B, Judge Ginsburg observed that "for a great many registration decisions issue preclusion will obviously not apply," because the Board's decisions often involve "a comparison of the marks in the abstract and apart from their marketplace usage." That is what happened here, Peju argues.

In addition to the B&B issue, Peju has raised several others in its appeal. Here is a Peju's "Statement of Issues Presented":

1. Whether the district court erred when it granted partial summary judgment in favor of Cesari in Peju I, finding a likelihood of confusion between PPW’s LIANA trademark and Cesari’s LIANO trademark based on issue preclusion in reliance on a thirteen-year-old Board summary judgment decision that was the product of a proceeding in which the Board (i) deprived Peju of its due process rights when it sua sponte converted Cesari’s motion for judgment on the pleadings into a motion for summary judgment without giving Peju notice and an opportunity to present evidence; and (ii) did not evaluate the marketplace usage of the two marks that were before the district court?


2. Whether the district court erred when it found, in its post-trial decision, that Peju’s trademark infringement was willful based solely on its prior partial summary judgment decision (Peju II), in which it found Peju acted in “bad faith” in the context of a laches affirmative defense?


3. Whether the district court, in its post-trial decision on disgorgement of Peju’s profits, erred when it declined to equitably adjust the disgorgement sum downward?


4. Whether the district court erred when it found this was an “exceptional case” under 15 U.S.C. § 1117(a)?

Read comments and post your comment here.

TTABlogger comment: Hat tip to FOBs and Peju counsel Joel MacMull and Marty Schwimmer.

Text Copyright John L. Welch 2024.