Precedential No. 22: TTAB Allows Withdrawal of Cancellation Petition Prior to Answer, Without Prejudice, Despite Federal Court Ruling Adverse to Petitioner

Petitioner Jim Beam filed a voluntary withdrawal, without prejudice, of its petition for cancellation of a registration for the mark shown immediately below, for "distilled spirits." In the petition, Jim Beam claimed that JL Beverage's "Lips Mark" was merely ornamental and lacked acquired distinctiveness. The cancellation proceeding had been suspended before JL Beverage filed its answer, in light of an infringement action brought by JL Beverage. The Board observed that, under Rule 2.114(c), a petition for cancellation "may be withdrawn without prejudice before the answer is filed." The Board saw no reason to depart from the language of the Rule, which is "plain, clear, and mentions no exceptions," and so it dismissed the petition without prejudice. Jim Beam Brands Co. v. JL Beverage Company LLC, 2021 USPQ2d 885 (TTAB 2021) [precedential]. 

The US Court of Appeals for the Ninth Circuit, on May 17, 2020, affirmed Jim Beam's victory over JL Beverage in the infringement action, finding that Jim Beam's "Pucker" vodka mark did not infringe JL Beverage's Johnny Love "Lips Mark",  based on differences between the bottle designs, marks, product names, and labels. [Ninth Circuit opinion here.]

 

In the civil action, Jim Beam had asserted counterclaims for cancellation of the "Lips Mark" registration on the ornamentality ground, as well as alleging certain claims of infringement of a prior Jim Beam registration. The Ninth Circuit upheld the district court's denial of all claims of the parties.

JL Beverage argued that the Board should dismiss the petition for cancellation with prejudice because the district court denied Jim Beam's counterclaims, which included a claim allegedly mimicking the claim pending in the Board proceeding. It urged the Board to create an exception to Rule 2.114(c) "in cases where a federal court judgment has a bearing on the Board case," but it failed to provide a persuasive reason for the Board to do so.

Finally, the Board noted that if Jim Beam files another petition for cancellation of the subject registration, JL Beverage may assert any preclusion arguments at that time.

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TTABlogger comment: Seems pretty straightforward to me. If the Rule is so plain and clear, why make this decision precedential?

Text Copyright John L. Welch 2021.