In a matter of first impression in the Fourth Circuit, the Western District of North Carolina considered, sua sponte, whether a plaintiff may file a civil action to review a second decision of the Trademark Trial and Appeal Board (“TTAB”) after that plaintiff previously appealed a first decision of the TTAB to the Federal Circuit.
Facts and Procedural History
The dispute centers around Princeton Vanguard’s trademark application on the Principal Register for the mark PRETZEL CRISPS for pretzel crackers, and registration for the same on the Supplemental Register. Frito-Lay opposed and petitioned to cancel Princeton Vanguard’s application and registration respectively arguing that the PRETZEL CRISPS mark was generic, or alternatively lacked secondary meaning. Agreeing with Frito-Lay, the TTAB denied the application and cancelled the registration. Princeton Vanguard appealed the TTAB’s first decision to the Federal Circuit under 15 U.S.C. §1071(a). The Federal Circuit held that the TTAB applied the wrong legal standard in evaluating genericness, vacated the decision, and remanded the case back to the TTAB for “application of the correct legal test.”
On remand, the TTAB, reached the same conclusion—that the mark PRETZEL CRISPS was generic. In appealing the TTAB’s second decision, however, Princeton Vanguard filed a civil action before the Western District of North Carolina seeking review under 15 U.S.C. §1071(b).
Before the court were the parties’ cross-motions for summary judgment. But, before reviewing the merits of the case, the district court concluded, sua sponte, that it must first determine whether it had subject matter jurisdiction under Section 1071 and asked the parties to submit briefs regarding the issue.
In interpreting Section 1071, the district court concluded that the statute provides two options to appeal a TTAB decision: (1) appealing to the Federal Circuit under 1071(a) and (2) appealing by filing a civil action in a district court under 1071(b). The district court noted that “the statute makes clear—twice—that a dissatisfied party may not do both.” Princeton Vanguard argued, however, that the proper interpretation of Section 1071 gives the option to select an appeal forum after “each and every” TTAB decision. The district court rejected this argument.
First, the district court cited to the following as relevant language of 15 U.S.C. §1071:
(a) Persons entitled to appeal; United States Court of Appeals for the Federal Circuit; waiver of civil action; election of civil action by adverse party; procedure
(1) An applicant for registration of a mark, party to an interference proceeding, party to an opposition proceeding, . . ., party to a cancellation proceeding, . . ., or an applicant for renewal, who is dissatisfied with the decision of the Director or Trademark Trial and Appeal Board, may appeal to the United States Court of Appeals for the Federal Circuit thereby waiving his right to proceed under subsection (b) of this section: Provided, That such appeal shall be dismissed if any adverse party to the proceeding, other than the Director, shall, within twenty days after the appellant has filed notice of appeal according to paragraph (2) of this subsection, files notice with the Director that he elects to have all further proceedings conducted as provided in subsection (b) of this section. Thereupon the appellant shall have thirty days thereafter within which to file a civil action under subsection (b) of this section, in default of which the decision appealed from shall govern the further proceedings in the case. . . .
(b) Civil action; persons entitled to; jurisdiction of court; status of Director; procedure
(1) Whenever a person authorized by subsection (a) of this section to appeal to the United States Court of Appeals for the Federal Circuit is dissatisfied with the decision of the Director or Trademark Trial and Appeal Board, said person may, unless appeal has been taken to said United States Court of Appeals for the Federal Circuit, have remedy by a civil action if commenced within such time after such decision, not less than sixty days, as the Director appoints or as provided in subsection (a) of this section. . . .
15 U.S.C. §1071 (emphasis added).
In interpreting this language, the District Court concluded that Section 1071(a), providing that a party who appeals a TTAB decision to the Federal Circuit “thereby waiv[es] his right to proceed under subsection(b) of this section” and Section 1071(b), providing that a party may appeal to a district court “unless appeal has been taken to [the] United States Court of Appeal for the Federal Circuit” are “without limitation as to time or a particular decision.” Further, the District Court concluded that by using “the decision” instead of “a decision” (emphasis added), “the statute suggests that there is only one, rather than a possible series of decisions, to which the statutory choice between a Federal Circuit and a District Court appeals applies”—that is, the first decision the dissatisfied party appeals. Finally, in interpreting Section 1071(a)(4) which provides that the Federal Circuit’s decision on an appeal “shall govern the further proceedings in the case,” the district court concluded that Princeton Vanguard’s reading of the statute would impermissibly constrain the de novo review by a District Court and bind the appellate review by the governing Circuit Court of Appeals to the decision of the Federal Circuit.
Next the Court considered Beaudet v. Quigg, Civ. A. No. 86-2876, 1987 WL 16329 (D.D.C. Aug. 14, 1987), an analogous patent case. In Beaudet, the patent applicant appealed the Board of Patent Appeals and Inferences’ (“BPAI”) first decision to the Federal Circuit under 35 U.S.C. §141 which provides that “by filing [an appeal to the Federal Circuit] the applicant waives his or her right to proceed under section 145 of this title”. The Federal Circuit remanded the case to the BPAI which issued a second decision in which the patent applicant also appealed but to a district court under 35 U.S.C. 145. Section 145 provides for the option of a civil remedy “unless appeal has been taken to the United States Court of Appeals for the Federal Circuit”. In interpreting Sections 141 and 145 of Title 35, the Beaudet court concluded that Title 35 “yields the entirely reasonable rule that when the Federal Circuit reversed a decision of the Board, and remands for further proceedings, any subsequent appeals must be directed to the court which has already developed the ‘law of the case.’”
The court also considered Gillette Co. v. 42 Products. Ltd., 435 F.2d 114 (9th Cir. 1970), which it found to be factually distinguishable. In Gillette, the Ninth Circuit allowed the plaintiff to pursue a District Court appeal for the second decision of the Court of Customs and Patent Appeals (“CCPA”, the TTAB’s predecessor) where the case involved a first appeal to the Federal Circuit. The Gillette court concluded, each party has the option to appeal a CCPA decision to the Federal Circuit or the District Courts, and as such, 42 Products’ appeal to the District Court was appropriate, notwithstanding Gillette’s prior appeal to the Federal Circuit, because this was 42 Products’ first appeal as a dissatisfied party under Section 1071.
Based on this precedent and the language of Section 1071, the Western District of North Carolina concluded that it lacked subject matter jurisdiction over the dispute and dismissed the case, concluding that Princeton Vanguard, by taking its first appeal to the Federal Circuit, had waived its right to appeal to the district court.
The case is Princeton Vanguard, LLC v. Frito-Lay N. Am., Inc., No. 3:17-cv-00652-KDB-DSC, 2019 U.S. Dist. LEXIS 182242 (W.N.C. Oct. 21, 2019).
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Finnegan is deeply saddened by the death of our colleague Donald R. Dunner, who passed away on October 16, 2019, after a life of dedication and inspiration to many in IP law. Don was in a category all his own with his talent and distinct knowledge of IP law. His direct approach and enthusiasm for work and life touched everyone who worked with him, and we will miss him dearly.