Winnie-the-Pooh shows up at the CAFC
The case SLESINGER v. Disney Enterprises is an appeal from the TTAB about decisions related to opposition and cancellation proceedings made by Slesinger against marks of Disney related to Winnie-the-Pooh. The TTAB relied on collateral estoppel based on a California state court decision to dismiss Slesinger's actions. The 2-1 vote at the CAFC arises from different levels of detail applied to the law of collateral estoppel.
As to assignment, from the majority:
The record shows the district court concluded that Slesinger completely granted all its rights to Disney as an assignment. See, e.g., In re Computer Eng’g Assocs., 337 F.3d 38, 46 (1st Cir. 2003) (assignment where party divests itself of “all right, interest, and control in the property”); In re Apex Oil Co., 975 F.2d 1365, 1369 (8th Cir. 1992) (“assignment” defined “as a transfer by the assignor of all rights in the property”); 3 J. Thomas McCarthy, McCarthy on Trademarks & Unfair Competi- tion § 18:1 (4th ed. 2012) (assignment is “an outright sale of all rights in . . . [a] mark,” whereas license “is a limited permit to another to use the mark”). With such a clear explanation that Slesinger conveyed all rights completely to Disney, it is immaterial that the district court used the terms “transfer” and “grant” rather than “assignment.” Moreover, it is the court’s ultimate “judgment that mat- ters,” not the language used to discuss the court’s rulings. Yamaha Corp. of Am. v. United States, 961 F.2d 245, 254 (D.C. Cir. 1992) (emphasis in original); see also Clark v. Bear Stearns & Co., 966 F.2d 1318, 1321 (9th Cir. 1992) (“When the issue for which preclusion is sought is the only rational one the fact finder could have found, then that issue is considered foreclosed, even if no explicit finding of that issue has been made.”); 18 Lawrence B. Solum, Moore’s Federal Practice – Civil § 132.03[3][e] (Matthew Bender 3d ed.) (“An issue that was necessarily implicit in a larger determination is given issue preclusive effect. An issue that is distinctly presented in the pleadings and necessarily resolved may be reflected in the decision that includes that point, although it may not be expressly mentioned in the decision.”).
Judge Reyna dissented:
The issue before us is whether the district court decided the ownership of the Winnie-the-Pooh trademarks. Because I believe the district court did not decide owner- ship of the Pooh trademarks, and because I believe that a decision on ownership was not necessary to the district court’s decision concerning trademark infringement, I respectfully dissent.
As to issue preclusion (aka collateral estoppel):
Collateral estoppel, often called “issue preclusion,” bars relitigation in a second action of an issue litigated and decided in a prior action. Because preclusion may forever bar meritorious claims and negate significant legal rights, courts must ensure that the circumstances for preclusion are “certain to every intent.” Mayer/Berkshire Corp. v. Berkshire Fashions, Inc., 424 F.3d 1229, 1234 (Fed. Cir. 2005) (citing Russell v. Place, 94 U.S. 606, 610 (1876)). Precedent weighs against deny- ing litigants a day in court unless there is a clear and persuasive basis for that denial. If there exists a reason- able doubt as to whether an issue was actually decided in the first action, preclusion should not apply in the subse- quent action. Kearns v. Gen. Motors Corp., 94 F.3d 1553, 1557 (Fed. Cir. 1996); McNellis v. First Fed. Sav. & Loan Ass’n of Rochester, New York, 364 F.2d 251, 257 (2d Cir. 1966) (“[A] reasonable doubt as to what was decided in the first action should preclude the drastic remedy of foreclosing a party from litigating an essential issue.” (internal citation omitted)). Guided by these principles, we resolve ambiguities in what issues were actually decided in a prior proceeding in favor of the party seeking to prevent application of preclusion. Charter Fed. Sav. Bank v. United States, 87 F. App’x 175, 178 (Fed. Cir. 2004) (nonprecedential).
The Supreme Court summarized the requirements of issue preclusion in Montana v. United States, 440 U.S. 147, 153-55 (1979). Issue preclusion requires (1) identity of an issue in a prior proceeding, (2) that the identical issue was actually litigated and decided, (3) that determi- nation of the issue was necessary to the judgment in the prior proceeding, and (4) that the party defending against preclusion had a full and fair opportunity to litigate the issue in the prior proceeding.
Judge Reyna's issues:
In view of the foregoing, I believe the TTAB erred on two distinct grounds when it determined that the trademark ownership issue was precluded. First, the district court did not actually decide the ownership issue. Second, resolution of the ownership issue was not essential or necessary for the district court’s decision on non- infringement.
An Exxon case is cited:
This scenario is as suggestive of a license as it is of an assignment. See Exxon Corp. v. Oxxford Clothes, Inc., 109 F.3d 1070, 1076 (5th Cir. 1997) (“A license to use a mark is a transfer of limited rights, less than the whole interest which might have been transferred.”
An old radio case is also invoked:
Disney argues that in order for the district court to evaluate whether Disney’s use of the Pooh trademarks was infringing, the court first had to determine whether Slesinger or Disney owned the rights. This is incorrect. As happened precisely in this case, an effective defense to a claim of trademark infringement can be made upon a showing of authorized use under a license. De Forest Radio Tel. & Tel. Co. v. United States, 273 U.S. 236, 242 (1927) (“If a licensee be sued, he can escape liability to the patentee for the use of his invention by showing that the use is within his license.”); see also 3 McCarthy on Trademarks and Unfair Competition §18:40 (4th ed. 2011) (“Every license carries with it a waiver of the right of the trademark owner to sue for infringement arising out of acts that fall within the scope of the license.”). Whether Disney was authorized to use the Pooh trade- marks does not solely depend on whether Slesinger or Disney owned the marks, because Disney could have been authorized to use the Pooh trademarks under a license.
As to assignment, from the majority:
The record shows the district court concluded that Slesinger completely granted all its rights to Disney as an assignment. See, e.g., In re Computer Eng’g Assocs., 337 F.3d 38, 46 (1st Cir. 2003) (assignment where party divests itself of “all right, interest, and control in the property”); In re Apex Oil Co., 975 F.2d 1365, 1369 (8th Cir. 1992) (“assignment” defined “as a transfer by the assignor of all rights in the property”); 3 J. Thomas McCarthy, McCarthy on Trademarks & Unfair Competi- tion § 18:1 (4th ed. 2012) (assignment is “an outright sale of all rights in . . . [a] mark,” whereas license “is a limited permit to another to use the mark”). With such a clear explanation that Slesinger conveyed all rights completely to Disney, it is immaterial that the district court used the terms “transfer” and “grant” rather than “assignment.” Moreover, it is the court’s ultimate “judgment that mat- ters,” not the language used to discuss the court’s rulings. Yamaha Corp. of Am. v. United States, 961 F.2d 245, 254 (D.C. Cir. 1992) (emphasis in original); see also Clark v. Bear Stearns & Co., 966 F.2d 1318, 1321 (9th Cir. 1992) (“When the issue for which preclusion is sought is the only rational one the fact finder could have found, then that issue is considered foreclosed, even if no explicit finding of that issue has been made.”); 18 Lawrence B. Solum, Moore’s Federal Practice – Civil § 132.03[3][e] (Matthew Bender 3d ed.) (“An issue that was necessarily implicit in a larger determination is given issue preclusive effect. An issue that is distinctly presented in the pleadings and necessarily resolved may be reflected in the decision that includes that point, although it may not be expressly mentioned in the decision.”).
Judge Reyna dissented:
The issue before us is whether the district court decided the ownership of the Winnie-the-Pooh trademarks. Because I believe the district court did not decide owner- ship of the Pooh trademarks, and because I believe that a decision on ownership was not necessary to the district court’s decision concerning trademark infringement, I respectfully dissent.
As to issue preclusion (aka collateral estoppel):
Collateral estoppel, often called “issue preclusion,” bars relitigation in a second action of an issue litigated and decided in a prior action. Because preclusion may forever bar meritorious claims and negate significant legal rights, courts must ensure that the circumstances for preclusion are “certain to every intent.” Mayer/Berkshire Corp. v. Berkshire Fashions, Inc., 424 F.3d 1229, 1234 (Fed. Cir. 2005) (citing Russell v. Place, 94 U.S. 606, 610 (1876)). Precedent weighs against deny- ing litigants a day in court unless there is a clear and persuasive basis for that denial. If there exists a reason- able doubt as to whether an issue was actually decided in the first action, preclusion should not apply in the subse- quent action. Kearns v. Gen. Motors Corp., 94 F.3d 1553, 1557 (Fed. Cir. 1996); McNellis v. First Fed. Sav. & Loan Ass’n of Rochester, New York, 364 F.2d 251, 257 (2d Cir. 1966) (“[A] reasonable doubt as to what was decided in the first action should preclude the drastic remedy of foreclosing a party from litigating an essential issue.” (internal citation omitted)). Guided by these principles, we resolve ambiguities in what issues were actually decided in a prior proceeding in favor of the party seeking to prevent application of preclusion. Charter Fed. Sav. Bank v. United States, 87 F. App’x 175, 178 (Fed. Cir. 2004) (nonprecedential).
The Supreme Court summarized the requirements of issue preclusion in Montana v. United States, 440 U.S. 147, 153-55 (1979). Issue preclusion requires (1) identity of an issue in a prior proceeding, (2) that the identical issue was actually litigated and decided, (3) that determi- nation of the issue was necessary to the judgment in the prior proceeding, and (4) that the party defending against preclusion had a full and fair opportunity to litigate the issue in the prior proceeding.
Judge Reyna's issues:
In view of the foregoing, I believe the TTAB erred on two distinct grounds when it determined that the trademark ownership issue was precluded. First, the district court did not actually decide the ownership issue. Second, resolution of the ownership issue was not essential or necessary for the district court’s decision on non- infringement.
An Exxon case is cited:
This scenario is as suggestive of a license as it is of an assignment. See Exxon Corp. v. Oxxford Clothes, Inc., 109 F.3d 1070, 1076 (5th Cir. 1997) (“A license to use a mark is a transfer of limited rights, less than the whole interest which might have been transferred.”
An old radio case is also invoked:
Disney argues that in order for the district court to evaluate whether Disney’s use of the Pooh trademarks was infringing, the court first had to determine whether Slesinger or Disney owned the rights. This is incorrect. As happened precisely in this case, an effective defense to a claim of trademark infringement can be made upon a showing of authorized use under a license. De Forest Radio Tel. & Tel. Co. v. United States, 273 U.S. 236, 242 (1927) (“If a licensee be sued, he can escape liability to the patentee for the use of his invention by showing that the use is within his license.”); see also 3 McCarthy on Trademarks and Unfair Competition §18:40 (4th ed. 2011) (“Every license carries with it a waiver of the right of the trademark owner to sue for infringement arising out of acts that fall within the scope of the license.”). Whether Disney was authorized to use the Pooh trade- marks does not solely depend on whether Slesinger or Disney owned the marks, because Disney could have been authorized to use the Pooh trademarks under a license.
posted by Lawrence B. Ebert at 9:34 AM
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