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The Trademark Blues: TTAB Proceedings Do Not Preclude Subsequent Infringement Lawsuits

Beasley. v. Howard is a tale of two musicians fighting over the rights to their band name. 14 F.4th 226 (3d Cir. 2021). In 1969, David Beasley (“Beasley”) founded the Camden, New Jersey-based band “The Ebonys.” Throughout the 1970s, the Ebonys achieved some commercial success and have continued to perform through the decades. In the mid-1990s, William Howard (“Howard”) joined the band, and, in 1997, Beasley obtained a New Jersey state service mark registration for THE EBONYS. After several years of performing together as The Ebonys, Beasley and Howard parted ways, and in 2012, Howard applied for and obtained a federal trademark registration for THE EBONYS. Afterward, Beasley claimed that Howard used the registered trademark to interfere with Beasley’s band and business by preventing him from registering a website domain name containing the words “the Ebonys,” convincing concert venues not to book Beasley, attempting to collect royalties from Beasley’s music, and claiming to be the true founder of The Ebonys.

Fed up, Beasley filed a petition to cancel Howard’s federal trademark registration with the Trademark Trial and Appeal Board (the “TTAB”) in 2013. Beasley claimed Howard defrauded the trademark office; however, the TTAB found the evidence unpersuasive and dismissed the petition. Four years later, Beasley filed another petition to cancel, and this time argued that Howard’s mark should be canceled because it was confusingly similar to Beasley’s THE EBONYS mark, which had priority over Howard’s mark. Not so fast, said the TTAB, which dismissed Beasley’s second petition based on claim preclusion after finding that Beasley could have, and should have, raised the issue of consumer confusion in his first petition. As a legal theory, claim preclusion protects Defendants from “the risk of repetitious suits involving the same cause of action once a court of competent jurisdiction has entered a final judgment on the merits.” United States v. Tohono O’Odham Nation, 563 U.S. 307, 315 (2011). Essentially, claim preclusion will enforce a prior judgment precluding a plaintiff from bringing forth claims that were fully litigated, but also extends to claims that the plaintiff could have asserted in the initial action

Striking out at the TTAB, Beasley brought a trademark infringement lawsuit pursuant to the Lanham Act in the United States District Court for the District of New Jersey. Howard moved to dismiss Beasley’s complaint arguing the likelihood of confusion claim had already been litigated and decided by the TTAB. In granting the motion and dismissing Beasley’s case, the District Court determined that claim preclusion barred Beasley from asserting the infringement claim because it turned on “facts and legal theories [that] were all actually litigated in the” 2017 petition. Beasley could have raised any priority of use arguments in his 2013 petition. Beasley appealed, and the Third Circuit Court of Appeals reversed.

The Third Circuit reasoned that because the TTAB is a tribunal with limited jurisdiction, focused primarily on adjudicating trademark cancellation and opposition proceedings, and does not have the ability to adjudicate infringement, issue injunctions, or award damages, the TTAB’s dismissal of Beasley’s petitions did not preclude Beasley’s subsequent lawsuit. Claim preclusion “generally does not apply where ‘[t]he plaintiff was unable to rely on a certain theory of the case or to seek a certain remedy because of the limitations on the subject matter jurisdiction of the courts. . . .’” Marrese v. Am. Acad. of Orthopaedic Surgeons, 470 U.S. 373, 382 (1985). Therefore, the Third Circuit held that because the TTAB’s jurisdictional limits do not allow it to consider the full range of facts or grant the full range of remedies relevant to violations of the Lanham Act, cancellation proceedings before it do not have claim preclusive effect against Lanham Act lawsuits in federal district court. As such, since Beasley sought damages in the federal lawsuit, which was not a remedy sought or available in the TTAB proceedings, claim preclusion is inapplicable, and his complaint should not have been dismissed.

COPYRIGHT © 2022, STARK & STARKNational Law Review, Volume XI, Number 306
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About this Author

Gene Markin Attorney Stark & Stark Law Firm
Shareholder

Gene Markin is a Shareholder in Stark & Stark’s Complex Commercial, Intellectual Property, and Cannabis Litigation Groups where he concentrates his practice on complex litigation matters involving copyright protection and infringement, trademark and trade dress infringement and enforcement, trade secret litigation, false advertising, domain name disputes, unfair competition, class actions, fraud and consumer fraud, shareholder and partner disputes, breach of contract, cannabis business disputes, cannabis intellectual property matters, cannabis insurance coverage...

609-219-7446
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