IP Law Daily Winery precluded from re-litigating likelihood of confusion; bound by TTAB’s finding
Wednesday, December 13, 2017

Winery precluded from re-litigating likelihood of confusion; bound by TTAB’s finding

By Joseph Arshawsky, J.D.

Peju Province Winery L.P. ("Peju Province") is precluded from re-litigating, in a trademark infringement lawsuit, the issue of the likelihood of confusion between the parties’ marks, as found by the Trademark Trial and Appeal Board (TTAB) in a prior opposition proceeding, the federal district court in New York City has ruled. In 2004, the TTAB adjudicated a trademark opposition between two vintners, Cesari S.R.L. and Peju Province, ultimately refusing to register Peju Province’s pending trademark application because its mark, LIANA, was likely to cause confusion with Cesari’s previously registered mark, LIANO. Peju Province persisted in using the refused mark, so Cesari filed an infringement suit. Cesari moved for partial summary judgment on whether Peju Province is—along with co-defendants Peju Partnership and Peju Corporation—precluded from re-litigating the likelihood of confusion. Because the issues in the current lawsuit were materially the same as those in the TTAB proceeding, the court granted the motion as to Peju Province, but not as to co-defendants Peju Province Corporation ("Peju Corporation") and Peju Family Operating Partnership, L.P. (Cesari S.R.L. v. Peju Province Winery L.P., December 11, 2017, Buchwald, N.).

USPTO proceedings. Cesari is an Italian winery based in San Pietro that produces wine bearing the mark LIANO, which Cesari applied for in International Class 33. The application was granted in January 2003. A month later, Peju Province filed its own application with the USPTO to register LIANA with respect to wines in International Class 33. Cesari opposed Peju Province’s application in an opposition proceeding before the TTAB. In July 2004, the TTAB agreed that Peju Province’s applied-for mark was likely to cause confusion with its own. The TTAB’s opinion noted that LIANO and LIANA were "almost identical": "The sole distinction between the two marks is the last letter, which is insufficient to distinguish the marks’ high degree of similarity." The goods were identical. The opposition was granted. Rather than appealing the TTAB decision, or even filing a new application for a narrower use, Peju Province simply continued using the LIANA mark, selling 460 cases since 2003. In March 2016, Peju Partnership submitted a new application to register LIANA. Cesari filed another opposition and this lawsuit for trademark infringement.

Issue preclusion. On the issue of collateral estoppel, the parties dispute centers on two of the factors: (1) whether "the issues in both proceedings are identical" and (2) whether "there was a full and fair opportunity for litigation in the prior proceeding. The U.S. Supreme Court recently addressed the issue and found that issue preclusion should apply to TTAB determinations where the usages adjudicated by the TTAB are materially the same.

Identity of issues. The parties continue to each use their mark in ways that are materially the same as the usages adjudicated by the TTAB. Both parties registered their marks in International Class 33. Peju Province argued that their actual marketplace was unique and different from that which the TTAB adjudicated, as it was more "sophisticated." But the TTAB must presume that the goods move through all reasonable trade channels for such goods to all usual classes of consumers for such goods. "Because defendants have not offered any evidence that LIANA is used with respect to goods other than wines (bicycles or soda, for instance), there are no ‘non-disclosed’ usages that might necessitate a successive adjudication."

Full and fair opportunity to litigate. The TTAB converted Cesari’s motion for judgment on the pleadings into one for summary judgment, without prior notice, because Cesari had attached a copy of its trademark registration to its motion. Peju Province did not suffer any prejudice because the TTAB could have also taken judicial notice of a public record of the PTO. Moreover, Peju Province failed to pursue any recourse it had to appeal this alleged error. Instead, it just ignored the order and produced wines with the refused mark. Accordingly, Peju Province cannot re-litigate the likelihood of confusion finding against it.

Non-party preclusion. Peju Corporation and Peju Partnership were not parties to the TTAB proceedings. The record was not sufficiently developed as to the control that Peju Province exercised over the other entities. Finally, issue preclusion as to these two entities may be academic. The court denied the motion without prejudice as to these entities.

The case is No. 1:17-cv-00873-NRB.

Attorneys: Valeria Calafiore Healy (Healy LLC) for Cesari S.R.L. Jennifer L. Taylor (Morrison & Foerster LLP) for Peju Province Winery L.P.

Companies: Cesari S.R.L; Peju Province Winery L.P.

MainStory: TopStory Trademark NewYorkNews

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