Trademark proceedings are contentious proceedings, but the battle for registration of the HOUNDSTOOTH MAFIA trademark has been largely overshadowed by the now-ended dispute between the Trademark Trial and Appeal Board (TTAB) and the reviewing U.S. District Court for the Northern District of Alabama. After a three-year struggle, the TTAB vacated The Board of Trustees of The University of Alabama and Paul W. Bryant, Jr. v. William Pitts, Jr. and Christopher Blackburn, 107 U.S.P.Q. 2d 2001 (TTAB 2013) (precedential).
As a recap, in 2013, the TTAB dismissed the opposers’ claims under Section 2(d) (likelihood of confusion) and 2(a) (false association and disparagement) and concluded that opposers held no trademark rights in the houndstooth check pattern. Opposers had offered substantial evidence of the association of the pattern with the University of Alabama football team – and in particular, legendary Alabama football coach Bear Bryant (well-known for wearing a houndstooth check fedora). Dissatisfied with the TTAB’s final decision, the opposers sought de novo review by the U.S. District Court for the Northern District of Alabama. The Lanham Act provides a right of review of a TTAB decision by the district court in lieu of appeal to the Federal Circuit under 15 U.S.C. 1071 (b). Shortly after commencement of the district court action, the parties settled and entered a consent agreement whereby the HOUNDSTOOTH MAFIA application was assigned to the university, and the parties also agreed to certain facts, including that “the Houndstooth pattern has become a well-known source identifier for the university,” and that the TTAB’s order was “clearly erroneous in a number of material respects.” As a term of the consent agreement, the parties requested that the TTAB’s precedential 2013 decision be vacated. On May 27, 2014, the district court judge signed the Consent Judgment, and the University sought vacatur by the TTAB based on the judgment.
On June 23, 2015, in another precedential decision, the TTAB denied the request for vacatur, holding that vacatur was within the TTAB’s discretion, and the vacatur order was out of bounds because the district court was only empowered by statute to direct the Board to register or cancel a mark, or take actions consistent with those powers. Since the University already owned the offending mark, the issue of whether the mark was registrable was resolved. In essence, there was nothing to vacate.
In its February 23, 2016, order, the district court chastised the TTAB for failing to recognize the Consent Judgment as an actual mandate of a court sitting in appellate review, rather than a direction to the TTAB to consider vacatur in light of the settlement agreement. On March 3, 2016, the TTAB vacated its decision, noting that the Director of the United States Patent and Trademark Office specifically reserves the right to seek further review of the orders and opinions of the district court in this matter.
Who wins? Who loses? As a practical matter, even without vacatur, the University now owns the HOUNDSTOOTH MAFIA mark, and while the TTAB did vacate its 2013 decision, that is not a reversal of the decision. That the parties to the suit expressly agreed that the evidence presented to the TTAB showed that the pattern was source-identifying is not technically binding on third parties. However, should the University find itself as opposer to a different applicant asserting rights in a houndstooth check pattern, or on the receiving end of a cancellation of the assigned application that was the subject of these proceedings, it may introduce the same evidence that it had previously presented to the TTAB, without the cloud of the TTAB’s earlier decision. As the TTAB noted in its June 23, 2015, decision, the 2013 decision had been designated precedential in order to guide practitioners on the issues (not the facts) decided. It is not unusual for the TTAB to have denied vacatur of a precedential decision for this very reason.
Was the district court right to order vacatur of the TTAB decision based on the parties’ settlement agreement? One could argue that, even if the parties effectively agreed to have the TTAB decision vacated, the district court’s order exceeded its jurisdiction both by demanding vacatur and by essentially changing the facts of the case. Moreover, it could also be argued that the district court, as a court charged with reviewing the decision of an administrative court, would be bound by the Administrative Procedure Act, which provides that factual determinations by administrative agencies should be upheld unless arbitrary, capricious, an abuse of discretion, or unsupported by substantial evidence. Dickinson v. Zurko, 527 U.S. 150 (1999). Certainly other district courts have held the Administrative Procedure Act applies to them when reviewing TTAB decisions.
And for practitioners at large: a dissatisfied litigant before the TTAB may decide it is a better strategy to seek review by a district court, in consideration of the potential for a settlement that effectively vacates the TTAB ruling.