Fourth Circuit Rules that Bacardi May Challenge USPTO's Renewal of HAVANA CLUB Registration via Civil Action Under the APA

In another chapter of the long-running battle over the HAVANA CLUB trademark for rum, the U.S. Court of Appeals for the Fourth Circuit has ruled that Bacardi's challenge to the USPTO's renewal of the registration for that mark may be heard in the federal courts. The EDVA district court had dismissed the case, reasoning that the Trademark Act precludes such an action, but the court of appeals held that the Administrative Procedure Act (APA) permits judicial review. Bacardi & Co. v. Vidal, Appeal No. 22-1659 (4th Cir. June 13, 2024) [published].

In 2006, Cubaexport was barred from paying the renewal fee for the HAVANA CLUB registration due to a trade embargo. It then sought a "special license" to overcome that problem while it petitioned for a reversal of the USPTO's denial of renewal. In 2016, while the petition remained pending, Cubaexport obtained the required special license, and it then paid the renewal fee. Its application for renewal was then accepted.

Bacardi, taking the position that the registration had expired by operation of law in 2006, brought suit in the EDVA under the APA, 5 U.S.C. Section 702(a), to set aside the allegedly illegal action of the USPTO. The district court dismissed for lack of subject matter jurisdiction, believing that the Trademark Act precluded judicial review under the APA. The district court relied on the provision of Section 1071(b)(2) of the Act that shields the Director of the USPTO from being named a party to an inter partes proceeding.

The Fourth Circuit, however, concluded that Section 1071 neither expressly nor impliedly precludes judicial review of registration renewal decisions under the APA.

Although the Lanham Act’s scheme for resolving competing claims over the registration of a trademark may be so comprehensive as to preclude APA review of decisions to initially register a mark or cancel it, that is not the type of claim Bacardi has brought here. And any preclusive reach of the cancellation provisions does not extend so far as to foreclose judicial review of allegedly unlawful agency action during the statutorily distinct registration renewal process.

The APA states that "[a]gency action made reviewable by statute and final agency action for which there is no other adequate remedy in a court are subject to judicial review." Section 704. The appellate court pointed out that the TTAB has explicitly ruled that an allegedly unlawful renewal cannot be challenged in a petition for cancellation under Section 14. See Bonehead Brands, LLC v. Direct Impulse Design, Inc., No. 9206833, 2019 WL 646461, at *4 (T.T.A.B. Feb. 13, 2019). Thus, cancellation proceedings are not an "adequate remedy" for the USPTO's allegedly illegal review. 

In sum, the Lanham Act does not, in express or implied terms, preclude judicial review of the PTO’s compliance with statutes and regulations governing trademark registration renewal. Nor does the Lanham Act provide an adequate remedy in court for PTO renewal orders that allegedly disregard statutory and regulatory limits. The presumption favoring judicial review of administrative action remains unrebutted, thus Bacardi may seek review of the PTO’s action under the APA.

And so, the Fourth Circuit reversed and remanded.

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TTABlogger comment: Bacardi's 2004 lawsuit against Cubaexport, challenging the TTAB's denial of Bacardi's petition for cancellation of the HAVANA CLUB registration based on other grounds, remains pending in the U.S. District Court for the District of Columbia. The history of this dispute is explained in Expropriation of Intellectual Property Rights: The HAVANA CLUB Trademark, Pablo Balañá-Vicente, The Trademark Reporter, May-June 2021 (Vol. 11 No. 3). [pdf here].

Text Copyright John L. Welch 2024.