Friday, October 30, 2020

CORCAMORE loses at CAFC on "statutory cause of action" issue

The outcome Corcamore LLC appeals an order of the United States Patent and Trademark Office, Trademark Trial and Appeal Board. The Board entered default judgment as a sanction against Corcamore, which resulted in the cancellation of Corcamore’s trademark registration for SPROUT. On appeal, Corcamore contends that the Board erred in granting default judgment, in particular because SFM LLC lacked standing to petition for cancellation of the trademark registration. We conclude that appellee SFM was entitled to bring and maintain a petition under 15 U.S.C. § 1064, the statutory cause of action for cancellation of trademark registrations, and that the Board did not otherwise abuse its discretion in imposing default judgment as a sanction. We affirm. The CAFC noted: Whether a party is entitled to bring or maintain a statutory cause of action is a legal question that we review de novo. Empresa Cubana, 753 F.3d at 1274 (citing Lexmark, 572 U.S. at 129). In this appeal, we review de novo whether SFM pleaded sufficient facts to establish entitlement to challenge Corcamore’s registered trademark under § 1064. We first observe that there exists confusion in the law stirred by the inconsistent use of the term “standing.” As Justice Scalia observed, certain issues often discussed in terms of “standing” are more appropriately viewed as requirements for establishing a statutory cause of action. Lexmark, 572 U.S. at 128 n.4. That is the case here. To be clear, this appeal does not involve the traditional legal notions of Article III standing. This appeal focuses instead on the requirements that a party must satisfy to bring or maintain a statutory cause of action, such as a petition to cancel a registered trademark under 15 U.S.C. § 1064. (...) In Lexmark, the Supreme Court established two requirements for determining whether a party is entitled to bring or maintain a statutory cause of action: a party must demonstrate (i) an interest falling within the zone of interests protected by the statute and (ii) proximate causation. 572 U.S. at 129–34. The Court explained that those two requirements “suppl[y] the relevant limits on who may sue” under a statutory cause of action. Id. at 134. The Court made clear that the zone-of-interests requirement applies to all statutory causes of action, and that proximate causation generally applies to all statutory causes of action. Id. at 129, 133. (...) To be clear, § 1064, like § 1125(a), is a statutory cause of action provided in the Lanham Act. See Empresa Cubana, 753 F.3d at 1275–76 (holding that appellant demonstrated entitlement to a “statutory cause of action” under the Lanham Act). A “cause of action” consists of two elements: operative facts and the right or power to seek and obtain redress for infringement of a legal right which those facts show. See 1A C.J.S. Actions § 53; see also Cause of Action, Black’s Law Dictionary (11th ed. 2019) (“A group of operative facts giving rise to one or more bases for suing.”).


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