Precedential No. 32: No Preclusive Effect in Cancellation Proceeding if Challenged Registration Survives Reexamination or Expungement

In a rather straightforward ruling, the Board held that "the termination of a reexamination or expungement proceeding in favor of a registrant cannot be the basis for the registrant’s assertion of claim or issue preclusion in a proceeding before the Board to cancel that registration." The Board therefore denied respondents' motion for judgment and resumed the cancellation proceeding. Common Sense Press Inc. d/b/a Pocket Jacks Comics v. Ethan Van Sciver and Antonio J. Malpica, 2023 USPQ2d 601 (TTAB 2023) [precedential].

In October 2020, Common Sense petitioned to cancel a registration for the mark COMICS GATE for "comics," claiming nonuse, abandonment, and fraud. In March 2023, Common Sense filed a petition to the Director under Section 1066b of the Trademark Act, requesting reexamination of the challenged registration, and at the same time moving to suspend the cancellation proceeding. 

The USPTO instituted the reexamination proceeding, informing respondents that, in order to avoid cancellation, they must submit evidence sufficient to "establish use of the mark for [comics] as of the deadline for filing a statement of use pursuant to Trademark Act Section 1(d), which is August 13, 2020."

The reexamination proceeding was terminated on January 6, 2023, the notice of termination stating that:

Upon review of the evidence of record, the USPTO determined that registrant has demonstrated use of the mark in commerce for all goods, subject to the proceeding. 37 C.F.R. § 2.93(c)(3)(i).

The evidence and arguments provided by the registrant demonstrates valid use of the relevant goods [use of the mark, not use of the goods? - ed.] in interstate commerce. Registrant has also established that the relevant goods were provided through trade channels that directly affect interstate commerce during the period of time relevant to this proceeding.

Accordingly, no change is required to the registration, and the proceeding is terminated. 37 C.F.R. § 2.94.

A person who requests institution of a reexamination [no use as of a certain date] or an expungement [no use ever] proceeding must submit "all documentary evidence supporting a prima facie case of nonuse of the mark in commerce and an itemized index of such evidence.” 37 C.F.R. § 2.91(c)(9). If the proceeding is instituted, the requestor has no further involvement, the matter proceeds on an ex parte basis (15 U.S.C.1066a(d); 1066b(e)), and the registrant may rebut the prima facie case of nonuse (15 U.S.C. 1066a(e), (f); 1066b(f)). If the registrant successfully rebuts the evidence and complies with all outstanding requirements, the proceeding is terminated with no change to the registration. 15 U.S.C. §§ 1066a(g), 1066b(g).

The Board began with a review of the statute and the Rules. It pointed out, although the Trademark Act contains explicit estoppel provisions that bar the filing of future expungement or reexamination proceedings as to the identical goods or services once a proceeding of the same kind has been instituted (5 U.S.C. §§ 1066a(j), 1066b(j); accord 37 C.F.R. § 2.92(d)(1) and (2)), neither the statute nor the regulations set forth a limitation on any party’s ability to petition to cancel a registration just because it is or has been the subject of a reexamination or expungement proceeding. See generally 15 U.S.C. §§ 1066a, 1066b; 37 C.F.R. §§ 2.91-2.94. Likewise, the Trademark Rules provide that “termination of an expungement or reexamination proceeding in favor of the registrant does not bar future nonuse cancellation actions under [Trademark Rule] § 2.111 with respect to the registration.”

Moreover, the statute provides that the decision to institute (or not) “shall not prejudice any party’s right to raise any issue and rely on any evidence in any other proceeding” except as provided in sections 1066a(j) and 1066b(j). 15 U.S.C. §§ 1066a(c)(3), 1066b(d)(3).

Apart from the statutory language, the Board observed that, since reexamination and expungement proceedings are ex parte proceedings, "they have no preclusive effect against a petitioner who seeks to cancel that same registration through a cancellation proceeding – even if that petitioner also submitted the petition requesting institution of a reexamination or expungement proceeding. See Blonder--Tongue Labs., Inc. v. Univ. of Ill. Found., 402 U.S. 313, 329, 169 USPQ 513, 519 (1971) ("litigants ... who never appeared in a prior action [ ] may not be collaterally estopped without litigating the issue....)."

Further, inasmuch as a person who files a petition requesting institution of a reexamination or expungement proceeding is not a party to that ex parte proceeding, he or she has no right to appeal the Director’s decision in that proceeding. As we recently stated, “[i]f a party cannot appeal the outcome of an earlier proceeding, then the second action is not barred under either [claim or issue] preclusion.” Valvoline Licensing & Intellectual Prop. LLC v. Sunpoint Int’l. Grp. USA Corp., 2021 USPQ2d 785, at *7 (TTAB 2021).

On January 9, 2023, respondents filed a two-page "Notice of Termination of Re-examination and Motion for Judgment," arguing that issue preclusion should be applied with regard to Petitioner Common Sense's nonuse claim. The Board, finding no basis for claim or issue preclusion, denied the motion for judgment and resumed the cancellation proceeding.

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TTABlogger comment: Difficult to see how respondents expected to succeed on this motion.

Text Copyright John L. Welch 2023.