United States: EDVA: REDSKINS Defendants Can’t Have It Both Ways

As we previously wrote about this year, the Trademark Trial and Appeal Board (TTAB) cancelled Washington Redskins owner Pro-Football Inc.'s REDSKINS trademark registrations finding that the marks are disparaging to Native Americans. Pro-Football subsequently filed a complaint in the Eastern District of Virginia seeking review of that decision. In an interesting move, defendants filed a motion to dismiss the suit alleging that there is no judicially cognizable dispute because they have no direct stake in the outcome of the case. This is despite the fact that Defendants are the very group of Native Americans who petitioned for cancellation of the REDSKINS marks in the first place. In an opinion denying the motion and confirming that defendants need not necessarily have an economic interest to nonetheless have an interest in the outcome of a review of a TTAB cancellation, Judge Lee has told the defendants they can't have it both ways. That is, they cannot now claim they have no stake in the outcome of the case when they claimed previously to the TTAB that they did, namely, that the REDSKINS marks were damaging to them. Read the full opinion here: Pro-Football, Inc. v. Blackhorse et al., No. 1:14-cv-01043-GBL-IDD (E.D. Va. Nov. 25, 2014).

The current case is a review of the TTAB's cancellation of the REDSKINS marks. The Lanham Act permits a party to contest a TTAB decision in one of two ways: under § 1071(a)(1) the party may appeal to the Federal Circuit, which is limited to reviewing the TTAB record, or under § 1071(b)(1) the party may initiate civil action in federal district court. If the party elects the latter, the court acts as a fact-finder and reviews de novo the TTAB record in addition to new evidence brought before it. Pro-Football elected to do the latter, filing a claim against the petitioners. Defendants then moved to dismiss for lack of jurisdiction, arguing there was no recognizable dispute between them and Pro-Football. They argued they have no direct stake in the outcome and that they are not "parties in interest" because the defendants have no economic or legal interest in the REDSKINS marks. The overall issue presented to the Court was whether Pro-Football can bring an action against defendants who have no commercial interest in the mark under § 1071(b) of the Lanham Act. The Court answered in the affirmative and denied the motion.

The defendants claimed there is no case in controversy because Pro-Football's dispute is with the USPTO and not them. The Court rejected this assertion. First, the defendants demonstrated standing before the TTAB to bring the petition for cancellation by showing a reasonable belief that the mark has caused or will cause them damage. This standing necessarily establishes sufficient interest in a review of the TTAB's determination.

Second, where a party has a personal stake in the outcome of a case, there is a sufficient case in controversy. Defendants argued that they have no personal stake in the outcome of the current case. However, the TTAB found that each defendant has a personal stake in the outcome of the cancellation proceeding. The TTAB's decision to proceed necessarily recognized the defendants' personal stake. Because the defendants argued then that they would continue to be damaged unless the REDSKINS marks were cancelled, a reversal of the cancellation now would certainly cause them the injury they previously alleged. "Defendants' professed interest in the cancellation of the registrations and Pro-Football's interest in the reversal of these cancellations demonstrate that each party has a 'personal stake' in this case to guarantee the issues before this Court will be presented in an adversarial context capable of judicial resolution." Op. at 11.

The defendants also contended that the current suit cannot be brought against them because they have not used the REDSKINS trademarks and therefore they do not have a legal or economic interest in the marks to make them the proper party in this dispute. The Court rejected this assertion for two reasons: (1) this is an inter partes proceeding and the defendants are the only proper adversarial party against whom Pro-Football may bring suit and (2) the defendants' interest in the outcome of the TTAB proceeding necessarily makes them parties in interest before the Court now.

A cancellation proceeding is an inter partes proceeding. When a party brings a civil suit to review an inter partes TTAB proceeding, an adversarial party in interest, and not the Director of the USPTO, is the proper defendant. See 15 USC §§ 1071(b)(2) and (4). The defendants argued that because they are not claiming rights to the same or similar trademarks as Pro-Football, they are not parties in interest. The Court was not persuaded: "Defendants were the sole representatives on behalf of the petition for cancellation, were listed as the adverse parties, and were heavily involved in the proceedings before the TTAB," and "Defendants are clearly adverse parties." Op. at 13. "A cancellation proceeding is necessarily an inter partes proceeding; and the proper defendant in a review of such proceeding is the adverse and interested party recognized by the USPTO." Op. at 13.

Furthermore, Defendants are parties in interest. A party in interest does not have to demonstrate proprietary interests in the marks as the defendants suggested. The party in interest need only have a direct and personal stake in the outcome of the case. Defendants maintain their interest from the TTAB proceeding—they have not withdrawn the petition for cancellation. They continue to allege that the registration of the REDSKINS marks damages them. The defendants' claim of disparagement before the TTAB constitutes a direct and personal stake in the outcome of the review. "Merely pointing out that Defendants have not used the registered marks and have no legal or economic interest in the marks does not absolve them of any interest in the case." Op. at 16. "Defendants show no reason why their interest would cease to exist considering reversal of the TTAB's cancellation of the REDSKINS marks would subject Defendants to the very harm they sought to eliminate by filing the petition." Id. Defendants made their bed before the TTAB and cannot avoid suit now by claiming they have no interest after all.  

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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