District Court Grants Stay of Recently-Filed Infringement Suit in Favor of TTAB Proceeding Nearing Completion

The United States District Court for the Northern District of Georgia granted Defendant HMW's motion to stay Primerica's civil action pending resolution of a TTAB cancellation proceeding involving the mark HOW MONEY WORKS for financial services. The TTAB proceeding, commenced by Primerica in August 2019, was entering the trial testimony stage when, in April 2021, Primerica filed its complaint for unfair competition, trademark dilution, and deceptive trade practices. The court concluded that "a stay pending a decision in the TTAB Proceeding is warranted pursuant to the Court's inherent discretion, and that such a stay would not be immoderate." Primerica, Inc. v. How Money Works, LLC, Civil Action No. 1:21-CV-01613-ELR (N.D.Ga July 7, 2021).

At the TTAB, the parties had completed discovery and the Board had set a trial schedule with all briefing to be completed by November 2021. When Primerica filed its federal complaint, the TTAB suspended the cancellation proceeding at Primerica's request, but the Board noted that "if the district court suspends the civil action to allow the [TTAB Proceeding] to go forward, the Board will entertain a motion to resume the [TTAB Proceeding].

 

Defendant HMW then moved to stay the civil action, contending that Primerica would not be prejudiced by a stay, but that HMW would be harmed by having to re-litigate the case after nearly two years of proceedings before the Board. In addition, any TTAB decision would likely simplify or dispose of Primerica's civil claims. Primarica argued that granting the motion to stay would be "immoderate" and therefore an abuse of the court's discretion.

Eleventh Circuit precedent dictated that, in exercising its discretion to stay a proceeding pending resolution or related proceedings in another forum, "the district court must properly limit the scope of the stay. A stay must not be 'immoderate.'"

“When deciding whether to grant a stay, courts generally consider the following factors: (1) whether a stay would unduly prejudice or present a tactical disadvantage to the nonmovant; (2) whether a stay will simplify the issues in the case; and (3) whether discovery is complete and a trial date has been set.” Collegiate Licensing Co. v. Am. Cas. Co. of Reading, Pa., 842 F. Supp. 2d 1360, 1369 (N.D. Ga. 2012) (internal citation omitted).

The court recognized that the TTAB proceeding was near completion, but the exact length of the proposed stay was unknown. Nonetheless, the court found that a stay of the civil action was appropriate. The TTAB proceeding involves the same mark and the same parties, who have expended significant time and resources in that proceeding. The lengthy discovery process has been completed and the final aspects of the proceeding have been scheduled. In contrast, the civil action is in its infancy, no scheduling order has been entered, and no discovery has occurred. 

Primerica argued that it would be prejudiced by the stay because it could not get full relief from the Board: i.e., injunctive relief or determination of its common law claims. The district court was unmoved. Primerica could have brought suit in 2019 when it learned of HMW's alleged infringement but it chose the TTAB forum despite the limited relief available there. This initial choice undermined Primerica's claim for immediate injunctive relief to prevent irreparable harm.

The court concluded that a TTAB decision regarding underlying issues - priority, likelihood of confusion, and defendant's use of the mark - will aid in resolution of the civil action. Primerica asserted that awaiting a TTAB decision would be "pointless" because the decision would be subject to de novo review, but HMW pointed out that Primerica had offered no new evidence on the issue of priority, and that any district court review of issues untouched by new evidence would be subject to the substantial evidence standard. 

 

The court observed that a TTAB decision, even if subject to de novo review, would be likely to simplify at least some of the issue in the civil action. And so it granted the Defendant HMW's motion for a stay.

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TTABlogger comment: Perhaps it finally dawned on Primerica that it was facing defeat in the TTAB  proceeding?

Text Copyright John L. Welch 2021.