Last Best Beef has the last word

In Last Best Beef LLC v Dudas (Case 1:06-399, September 27 2006), the US District Court for the Eastern District of Virginia has concluded that (i) a newly enacted statute that purported to modify the Lanham Act was invalid, and (ii) certain actions taken by the US Patent and Trademark Office (USPTO), pursuant to the statute, were a "clear error in judgment".

Last Best Beef LLC (LBB) owned valid trademark registrations and pending trademark applications for marks incorporating the phrase 'Last Best Place' in connection with its retail mail order service company featuring products from the state of Montana since the early 1990s. On November 22 2005, during the pendency of LBB's trademark applications, President Bush signed into law the Science, State, Justice, Commerce and Related Agencies Appropriations Act of 2006. The act, intended primarily to ensure funding for various areas and activities of the federal government, also included language prohibiting the use federal funds to register, issue, transfer or enforce any trademark comprising of the phrase 'The Last Best Place'. As explained by Montana Senator Conrad Burns, the sponsor of the amendment adding the language, its purpose was to "forbid the usage of federal dollars to trademark the phrase 'Last Best Place'". According to Burns's public statements, the phrase 'Last Best Place' "belongs to the state of Montana", notwithstanding the fact that Montana owns no registration or other ownership of the phrase. When the act became law, the USPTO suspended proceedings on LBB's pending applications (some of which had been allowed) and ordered cancellation of LBB's registrations. LBB then filed suit against the director of the USPTO and the commissioner for trademarks in an effort to have its registrations reinstated and the suspensions lifted.

The court examined whether the act was invalid and whether the actions of the USPTO taken pursuant to that act amounted to a clear error in judgment. LBB argued that notwithstanding the recently enacted legislation, there was no basis for the USPTO to refuse or suspend its applications (or to order the cancellation of its prior registrations). According to LBB, issues relating to the registration of trademarks fall under the authority of the Lanham Act and the recently enacted legislation improperly usurped that authority. Relying on the Supreme Court's ruling in Tennessee Valley Authority v Hill 437 US 153, 190-191 (1978), the court concluded that where Congress intends to use an appropriations act to modify or repeal existing law, it must do so explicitly. In this case, the court ruled that the act failed to mention any suspension, modification or repeal of the Lanham Act and failed to provide any guidance which would have demonstrated a "congressional intent to suspend numerous, interdependent provisions of the Lanham Act with respect to one phrase and to tamper with a well-established area of [US] law".

In granting summary judgment in LBB's favour, the court found no genuine issue of material fact as to the invalidity of the act. The court also held that because the language of the act provided no authority for the actions taken by the USPTO, the suspension and cancellation of LBB's applications and prior registrations was an arbitrary abuse of discretion and a clear error in judgment.

Timothy J Kelly and Sarah I Marks, Fitzpatrick Cella Harper & Scinto, New York

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