Friday, June 17, 2011

Precedential No. 14: Applying Collateral Estoppel to the Ownership Issue, TTAB Enters Summary Judgment in "WINNIE THE POOH" Trademark Dispute

The Board granted Disney's summary judgment motion in this consolidated proceeding (eleven oppositions and one cancellation) involving trademark rights in various WINNIE THE POOH marks. It ruled that collateral estoppel barred SSI from re-litigating the issue of ownership, and that absent ownership, SSI's claims for likelihood of confusion, dilution, and fraud must fail. Stephen Slesinger, Inc. v. Disney Enterprises, Inc., 98 USPQ2d 1890 (TTAB 2011) [precedential].

For a history of the litigation between these parties, see this Wikipedia entry. The subject TTAB case is a chapter in a long-running dispute concerning rights arising out of the works of A.A. Milne. This proceeding involves only the registrability of certain trademarks relating to those works.

The dispute centers around a 1983 agreement between the parties. SSI claimed that certain rights in the POOH works were reserved to it by the agreement, whereas Disney maintained that the agreement assigned all of SSI's ownership rights (including trademark rights) to Disney.

Here, Disney sought to register various marks for a variety of goods. SSI opposed on the grounds of likelihood of confusion, dilution, fraud, and lack of ownership. SSI also sought to cancel more than a dozen Disney registrations on the same grounds.

Disney moved to dismiss all of SSI's claims on the ground that SSI is collaterally estopped from re-litigating the issue of ownership of the marks because that issue was decided in a civil action between the parties in the U.S. District Court for the Central District of California in 2009.

SSI argued that the court did not actually decide the that issue, and further that any such determination was not necessary to the district court's judgment. It asserted that the court decided only whether Disney's uses were authorized, without having to reach the issue of whether there was an assignment or a mere license of the rights.

Disney contended that the issue of ownership was extensively briefed and was necessarily decided by the court in order to consider SSI's counterclaims for trademark infringement and for a declaratory judgment requiring the USPTO to correct the title of Disney's registrations.

Because both parties relied on documents outside of the pleadings, the Board treated Disney's motion to dismiss as a motion for summary judgment.

Four requirements must be met for issue preclusion to apply: (1) the issues must be identical in each case; (2) the issue must have been raised and adjudicated in the prior action; (3) the determination of the issue must have been necessary and essential to the prior judgment; and (4) the party precluded must have been fully represented in the prior case.

SSI must prove ownership here, since its claims are not based on its own federal registrations and it cannot rely on any presumption of validity. Even SSI's fraud claims are based on an alleged attempt by Disney to mislead the USPTO as to the correct ownership. In the district court, the action involved "the specific issue of which party owns the POOH marks as a result of the contracts between the parties."

There was also no dispute that the issue of ownership was raised and adjudicated in the court, and that SSI was fully represented by counsel.

Finally, as to the third factor, the Board was persuaded by the entire record that the district court's determination regarding "the nature and scope of the conveyance from SSI to Disney" was necessary and essential to the resulting judgment in the civil action."

[B]efore considering whether Disney's actions were infringing (or whether SI was entitled to have USPTO records regarding Disney's registrations corrected to show SSI as owner), the district court necessarily had to consider whether SSI had any rights in the POOH works. The question of whether Disney's uses were infringing or "authorized" is only relevant once SSI's rights are established.

And so the Board found no genuine dispute that the issue of ownership of the POOH marks to be determined here is identical to the issue raised and necessarily adjudicated n the district court. It therefore granted the motion for summary judgment.

TTABlog comment: I refuse to say that the Board pooh-poohed SSI's arguments.

Text Copyright John L. Welch 2011.


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