E.D. Va. Upholds TTAB Dismissal of SHUSTOV Cancellation Petition: Registrant Overcame Prima Facie Case of Abandonment

The United States District Court for the Eastern District of Virginia (Judge Liam O'Grady) affirmed the TTAB's decision of January 20, 2020 [TTABlogged here], dismissing a petition for cancellation of a registration of the mark SHUSTOV & Design (shown below) for various alcoholic beverages. The Board found that, although Petitioner GSH established a prima facie case of abandonment based on respondent's lack of use of the mark during the three-year period following registration, respondent successfully established its bona fide intent to commence use of the mark in commerce. The district court adopted the recommendations of Magistrate Judge that the Board's decision be affirmed and that GSH's motion for default judgment be denied. GSH Trademarks Limited v. Sia "Baltmark Invest", Case No. 1:20-cv-0271 (E.D. Va. May 18. 2021).

The Magistrate Judge reviewed the complaint "against the TTAB's decision and determined that the complaint adduced no new factual evidence that would trigger de novo review of the TTAB's factual determinations."

In reviewing a TTAB decision under Section 1071(b), a district court must conduct "de novo review of the entire record" when factual evidence is submitted. Swatch AG v. Beehive Wholesale, 739 F.3d 150, 155-56 (4th Cir. 2014). If no new evidence is submitted, the court must apply the APA substantial evidence standard to the Board's factual findings. Id. at 155. Findings of fact will be upheld "so long as they are not arbitrary, capricious, or otherwise not in accordance with law." Id.

Plaintiff's objections to the Magistrate Judge's Report and Recommendations mainly boiled down to a question of the legal significance of a specific exhibit, but the court found that even without that exhibit, substantial evidence supported the Board's decision. The testimony of defendant's witness, "standing alone, offers more than a 'mere scintilla' of support for the premise that Baltmark intended to use the disputed mark during the nonuse period. *** Combining this testimony with the corroborative evidence cited by the TTAB, the Court identifies no basis to reverse the agency's decision under the appropriate standard of review."

The court therefore affirmed the TTAB decision.

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TTABlogger comment: If you are not going to add new evidence, why seek district court review rather than appeal to the CAFC? The latter would seem to be less expensive. 

BTW: If the new nonuse provision of the TMA were in effect, how would this case have come out?

Text Copyright John L. Welch 2021.