Wednesday, October 27, 2021

The CAFC gets into beer making and trademarks in the Brooklyn Brewery case: standing, inevitable confusion, and more

The outcome:

The Brooklyn Brewery Corporation (“Brewery”) appeals a decision of the Trademark Trial and Appeal Board (the “Board”). Brewery petitioned to cancel Brooklyn Brew Shop, LLC’s (“BBS”) registration of the mark “BROOKLYN BREW SHOP,” in standard characters, for goods identified as “Beer making kit[s]” in Class 32 (the “Cancellation”), and opposed BBS’s application to register a stylized version of the same mark for beer-making kits in Class 32 and sanitizing preparations for household use in Class 5 (the “Opposition”). We affirm the Board’s denial of Brewery’s petition for cancellation. As for the Opposition, we dismiss the appeal as to the Class 5 goods for lack of standing. We vacate and remand in part because we find the Board erred by not entering judgment in favor of Brewery on the Class 32 goods deleted from BBS’s application. As to the remaining goods in Class 32 (beer-making kits), we affirm the Board’s dismissal of the claim that, under Section 2(d), the mark is likely to cause confusion. We vacate and remand with respect to the descriptiveness issue under Section 2(e)(1), because the Board erred by not reaching Brewery’s claim that the applied-for mark lacked acquired distinctiveness under Section 2(f) as to the beer-making kits, but affirm the Board’s refusal to consider geographic descriptiveness under Section 2(e)(2)

The standing issue

BBS argues that Brewery lacks both Article III and statutory standing to appeal the Board’s decision dismissing the Opposition as to the Class 5 goods (sanitizing preparations). Although we have not yet had occasion to address Article III standing in a trademark case, our cases in the patent context have made clear that the statute does not set forth the exclusive test for standing when a decision of an administrative agency is appealed in federal court. The appellant must also satisfy the requirements of Article III. See, e.g., Phigenix, Inc. v. Immunogen, Inc., 845 F.3d 1168 (Fed. Cir. 2017); see also Consumer Watchdog v. Wis. Alumni Rsch. Found., 753 F.3d 1258, 1261 (Fed. Cir. 2014) (“[A]lthough Article III standing is not necessarily a requirement to appear before an administrative agency [such as the TTAB], once a party seeks review in a federal court, ‘the constitutional requirement that it have standing kicks in.’” (quoting Sierra Club v. EPA, 292 F.3d 895, 899 (D.C. Cir. 2002))). This is because Article III of the U.S. Constitution limits federal courts to hearing “Cases” or “Controversies,” U.S. Const. art. III, § 2, cl. 1, and “Congress cannot erase Article III’s standing requirements by statutorily granting the right to sue to [an appellant] who could not otherwise have standing,” Phigenix, 845 F.3d at 1175 (quoting Raines v. Byrd, 521 U.S. 811, 820 n.3 (1997)). Accordingly, we must address Article III standing.

Consumer Watchdog is cited

“To meet the constitutional minimum for standing, the party seeking to invoke federal jurisdiction must satisfy three requirements.” Consumer Watchdog, 753 F.3d at 1260–61 (citing Lujan v. Defs. of Wildlife, 504 U.S. 555, 560 (1992)). First, the party must show that it has suffered an “injury in fact” that is both “concrete and particularized” and “actual or imminent.” Lujan, 504 U.S. at 560–61 (internal quotation marks omitted). Second, it must show that the injury is fairly traceable to the challenged action. Id at 560. And third, the party must show that it is “likely,” rather than “merely speculative,” that a favorable judicial decision will redress the injury. Id. at 561 (internal quotation marks omitted). Although certain of these requirements, “namely immediacy and redressability,” may be relaxed “where Congress has accorded a procedural right to a litigant,” Consumer Watchdog, 753 F.3d at 1261 (citing Massachusetts v. EPA, 549 U.S. 497, 517–18 (2007)), the “requirement of injury in fact is a hard floor of Article III jurisdiction that cannot be removed by statute,” id. (quoting Summers v. Earth Island Inst., 555 U.S. 488, 497 (2009)).
To establish injury in fact in a trademark case, an opposer must demonstrate a concrete and particularized risk of interference with the rights that flow to it from registration of its own mark, or some other Article III injury. This does not require that an opposer show that it faces a risk of potential trademark infringement liability, though that could be sufficient to establish standing. It may also establish standing by showing that if a mark is not canceled, or if an application is granted, the very registration and use of the mark would cause the opposer concrete and particularized harm.
Thus, the test for likelihood-of-confusion or descriptiveness purposes is whether the challenger and registrant compete in the same line of business and failure to cancel an existing mark, or to refuse registration of a new mark, would be likely to cause the opposer competitive injury. To be clear, an opposer cannot show standing by merely showing the registrant competes with the opposer and receives a benefit from an unlawful trademark. See Already, LLC v. Nike, Inc., 568 U.S. 85, 96–100 (2013) (“Taken to its logical conclusion, the theory seems to be that a market participant is injured for Article III purposes whenever a competitor benefits from something allegedly unlawful— whether a trademark, the awarding of a contract, a landlord-tenant arrangement, or so on. We have never accepted such a boundless theory of standing.”). A more particularized showing of harm is required. Id.

Here, Brewery never explains how granting the application to register the mark for sanitizing preparations in Class 5 would cause Brewery to suffer an Article III injury. To be sure, BBS’s sanitizing preparations are used in connection with beer-making kits. But Brewery does not make or sell sanitizing preparations. The Board found that “sanitizing preparations are only peripherally related to beermaking kits, much less beer” and that there was no indication in the record that “[BBS’s] sanitizing preparations for household use—particularly when sold individually—are likely to travel in the same channels of trade . . . as [Brewery’s] beer.” Decision, 2020 WL 4673282, at *20. When pressed on this issue at oral argument on appeal, Brewery urged that it would suffer possible injury if it were ever to expand its business to the sale of sanitizing preparations. See Oral Arg. 02:50–02:57, available at 2277_08302021.mp3.

Laches (and inevitable confusion) also arise:

Before the Board, BBS successfully argued that the defenses of laches and acquiescence applied to Brewery’s Section 2(d) claims in the Cancellation and as to the beermaking kits in the Opposition. The defense of laches in a trademark proceeding “requires a showing of undue delay in asserting rights against a claimant to a conflicting mark and prejudice resulting therefrom.” Nat’l Cable Television Ass’n, Inc. v. Am. Cinema Eds., 937 F.2d 1572, 1580 (Fed. Cir. 1991). And to establish acquiescence, the Board requires a defendant to prove that the plaintiff’s conduct amounted to an assurance to defendant, “either express or implied[,] that plaintiff w[ould] not assert [its] trademark rights against the defendant.” CBS, Inc. v. Man’s Day Publ’g Co., 205 U.S.P.Q 470, 1980 WL 30129, at *5 (TTAB 1980); see also Coach House Rest. Inc. v. Coach & Six Rests., Inc., 934 F.2d 1551, 1558 (11th Cir. 1991) (setting forth test for acquiescence in trademark cases). Here, the Board found that Brewery’s more than fouryear delay in bringing an action was unreasonable given that Brewery “was long aware of the nationwide sales of [BBS’s] beer-making kits.” Decision, 2020 WL 4673282, at *14. Between 2011 and 2016, Brewery publicly collaborated with BBS on the sale of “co-branded beer-making kits, books on beer making, and educational programs on beer making.” Id. at *15. During that time, the Board found, “[Brewery] actively represented that it would not assert a right or a claim against [BBS’s] use of its BROOKLYN [BREW] SHOP mark in connection with beermaking kits.” Id. Finding no valid excuse for Brewery’s delay in asserting its rights that could outweigh the material prejudice BBS would suffer from the delay, the Board held the defenses were applicable in this case. As a result, Brewery could not overcome the defenses and prevail on its Section 2(d) claims as to the beer-making kits unless it established “inevitable confusion.” See Australian Therapeutic, 965 F.3d at 1372; see also Ultra-White Co., Inc. v. Johnson Chem. Indus., Inc., 465 F.2d 891, 893– 94 (CCPA 1972) (finding six-year delay in filing a petition to cancel did not make a laches defense where confusion was inevitable).

Of note

The Board rejected this argument, explaining that “[t]he mark must [] be regarded as a whole, including the disclaimed matter, in evaluating similarity to other marks.” Decision, 2020 WL 4673282, at *11 n.74 (citing In re Nat’l Data Corp., 753 F.2d 1056, 1059 (Fed. Cir. 1985)). “[A] disclaimer does not remove the disclaimed matter from the mark,” nor does “a Section 2(f) claim . . . remove matter from the mark.” Id. In National Data Corp., we held that “[t]he technicality of a disclaimer . . . has no legal effect on the issue of likelihood of confusion,” because “[t]he public is unaware of what words have been disclaimed during prosecution of the trademark application at the PTO.” 753 F.2d at 1059; see also Specialty Brands, Inc. v. Coffee Bean Distribs., Inc., 748 F.2d 669, 672 (Fed. Cir. 1984) (disregarding the fact that the applicant had disclaimed the word “spice” apart from SPICE VALLEY for the purposes of likelihood-of-confusion analysis, because “the marks are viewed in their entireties”). The Board did not commit legal error in finding that the defense of laches was available in the opposition proceeding as to the beer-making kits, so its application of laches was not an abuse of discretion.


Post a Comment

<< Home