IP Law Daily TTAB lacked authority to ignore Alabama court order to vacate ‘houndstooth’ decision
Wednesday, February 24, 2016

TTAB lacked authority to ignore Alabama court order to vacate ‘houndstooth’ decision

By Thomas Long, J.D.

A motion by the Director of the USPTO, Michelle K. Lee, to intervene in a dispute over a houndstooth pattern mark owned by the Board of Trustees for The University of Alabama and the heir of famed football coach “Bear” Bryant has been denied as untimely by the federal district court in Birmingham, Alabama. Lee filed the motion seeking to prevent vacatur of a Trademark Trial and Appeal Board decision regarding the marks at issue; the court had ordered the TTAB decision to be vacated in a final consent judgment after the parties’ settlement of the dispute was approved. In addition, the court held, the USPTO did not have the authority to ignore the court’s order to vacate, even if Lee’s motion had been filed on a timely basis (Board of Trustees of the University of Alabama v. Houndstooth Mafia Enterprises LLC, February 23, 2016, Proctor, R.).

Trademark dispute. Defendants William Pitts, Jr., and Christopher Blackburn—owners of a business called Houndstooth Mafia Enterprises LLC—jointly applied for a use-based application to register the stylized mark “HOUNDSTOOTH MAFIA” for “shirts and hats.” The University of Alabama and Paul W. Bryant, Jr.—the son of former Alabama football coach Paul W. “Bear” Bryant—opposed registration, alleging priority and likelihood of confusion based on their longstanding and extensive use of a houndstooth pattern that was popularly identified with Coach Bryant’s fedora and the University’s educational and athletic services and related goods.

TTAB opposition proceeding. After a trial, the TTAB stated in a precedential opinion that the HOUNDSTOOTH MAFIA mark was not likely to cause confusion with the opposers’ asserted marks because the parties’ respective marks were dissimilar. The TTAB also decided that the evidence failed to show that the asserted houndstooth pattern functioned as an indicator of source or sponsorship for products sold by the University or that the HOUNDSTOOTH MAFIA mark falsely suggested a connection with the University and Coach Bryant or disparaged them. The opposition was dismissed.

District court challenge and settlement. The opposers challenged the TTAB’s order via a civil action in the Northern District of Alabama. While the action was pending, the parties reached a settlement and consented to entry of final judgment in the action in favor of the University and Bryant. The settlement resulted in assignment of all rights in the HOUNDSTOOTH MAFIA mark—including the relevant application in this case—from the applications to the University. In addition, all parties acknowledged and agreed that the TTAB’s decision favorable to Pitts and Blackburn should be vacated. The court approved the settlement and entered a final consent judgment, in which it ordered that the TTAB’s decision be vacated.

TTAB’s refusal to vacate. The University and Bryant then filed a motion to reopen the TTAB proceeding, vacate the TTAB’s decision, and dismiss the action with prejudice. However, the TTAB did not vacate its decision. More than a year later, an augmented panel of the TTAB issued a decision denying the request for vacatur and dismissal and stating that vacatur was not “necessary.”

Motion to enforce judgment. The University and Bryant then filed a motion in the district court to enforce the final consent judgment. Lee did not seek to intervene at that time. The court invited counsel for the USPTO to submit briefing and participate in the hearing on the motion. However, Lee did not file her motion to intervene until after the hearing was held.

The USPTO argued that it was not required to vacate its decision in compliance with the court’s order because the parties did not have the right to agree among themselves that the TTAB’s precedential decision should be vacated. The court disagreed. In this case, the court acted essentially as a court of appellate jurisdiction over the TTAB. Like lower courts being reviewed by appellate courts, administrative agencies generally are not free to ignore mandates issued by a reviewing court.

Moreover, the USPTO incorrectly refused to vacate the TTAB decision on the ground that vacatur was unnecessary because the final consent judgment was merely a case of mootness by settlement. A vacatur of the TTAB’s decision was a necessary condition of settlement in order to protect the parties’ interests in potential future litigation with alleged infringers, particularly those of the defendants, who lacked the financial means to defend against the appeal in the district court. Accordingly, the court concluded that the plaintiffs’ motion to enforce the consent judgment should be granted.

Timeliness of motion for intervention. The plaintiffs also challenged Lee’s petition to intervene as untimely; the court agreed. The USPTO contended that, as a non-party, it had no way of knowing that its interests were affected by the court’s final judgment until the court explained its views during the hearing on the plaintiffs’ motion to enforce the judgment.

“That argument is not only incredible, but also made in bad faith,” the court said. “The USPTO was on notice, no later than June 3, 2014 (when Plaintiffs filed their request to vacate and attached this court’s Final Consent Judgment), that this court, had pursuant to the parties’ express settlement terms, ordered vacatur of the TTAB’s decision.”

If the TTAB disagreed with and wished to challenge the settlement’s terms or the final consent judgment’s requirements, it was required to intervene in the district court action. However, rather than acting on a timely basis, the TTAB did nothing until more than a year after the final consent judgment was issued, when the TTAB issued its own ruling refusing to comply with the court order. Furthermore, Lee did not file her motion to intervene until after the hearing on the motion to enforce took place. By that time, the court said, the action was closed, and any right to intervene had been waived. Accordingly, Lee’s motion to intervene was denied.

The case is No. 7:13-cv-01736-RDP.

Attorneys: Michael I. Spearing, The University of Alabama System, for Board of Trustees of the University of Alabama. Travis Carlisle Hargrove (Page Scrantom Sprouse Tucker & Ford, PC) and David K. Herzog (Faegre Baker Daniels LLP) for Houndstooth Mafia Enterprises LLC.

Companies: Board of Trustees of the University of Alabama; Houndstooth Mafia Enterprises LLC

MainStory: TopStory Trademark AlabamaNews

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