TTAB applies preclusive effect of court decision on distinctiveness

United States of America

In a precedential decision in Zachry Infrastructure LLC v American Infrastructure Inc (Oppositions 91196513 and 91196514, December 30 2011), the Trademark Trial and Appeal Board (TTAB) has provided useful instruction on the preclusive effect of a prior federal court action between the same parties on the issue of distinctiveness.

The consolidated oppositions before the TTAB involved the distinctiveness of the mark AMERICAN INFRASTRUCTURE, as covered by several, co-pending applications identifying business information management in the field of construction, building construction services and other related services. The opponent, Zachry Infrastructure LLC, alleged that the marks were merely descriptive, primarily geographically descriptive, generic and/or that they had not acquired distinctiveness. Zachry was also the defendant in an infringement action brought by the applicant, American Infrastructure Inc, in federal court involving the same marks. As is often the case, the opposition proceedings were suspended while the infringement action was pending in court.

Zachry raised as defences in the infringement action that American Infrastructure’s marks were generic or descriptive and had not acquired distinctiveness. On summary judgment, the district court held in Zachry’s favour, finding that American Infrastructure’s marks were descriptive and had not achieved secondary meaning. Accordingly, American Infrastructure’s infringement claims were dismissed.

Having prevailed in federal court, Zachry moved before the TTAB for entry of judgment in its favour, alleging that the court’s decision was binding on the TTAB and dispositive of the opposition proceeding. In response, American Infrastructure voluntarily abandoned three of the five opposed applications and moved to amend the remaining two applications to seek registration on the Supplemental Register (registration on the Supplemental Register is available for non-generic terms that are not distinctive either inherently or through acquired distinctiveness, but which are capable of achieving distinctiveness). Zachry opposed the amendment and also moved for judgment in its favour as to the remaining applications on the grounds that the TTAB’s judgment in Zachry’s favour in dismissing the opposition to the abandoned three applications entitled Zachry to judgment on the ground of res judicata as to the remaining two applications.

The TTAB gave preclusive effect to the court’s decision on the issues of descriptiveness and lack of acquired distinctiveness, but held that the court’s decision did not reach the issue of genericness. As to the first part of its holding, the TTAB recognised that the court necessarily decided the same issues of descriptiveness and acquired distinctiveness that were pending in the opposition and that the doctrine of issue preclusion (collateral estoppel) thus necessitated a finding in American Infrastructure’s favour. Interestingly, American Infrastructure was not able to avoid a judgment on this issue by attempting to amend its applications to seek registration on the Supplemental Register.

Because the genericness issue was not decided by the court, the opposition on that ground was not precluded by the court’s decision. The TTAB also rejected Zachry’s attempt to claim that the dismissal in Zachry’s favour of the opposition to the three applications expressly abandoned by American Infrastructure should be given preclusive effect on the genericness claim under the doctrine of res judicata. The TTAB looked at the timing of American Infrastructure’s abandonment of the three applications at issue and determined that American Infrastructure’s abandonment was a business decision to litigate the opposition as to only some of the opposed applications, and not a deliberate attempt to evade judgment. Finally, the TTAB deferred deciding whether American Infrastructure could amend its two remaining application to seek registration on the Supplemental Register pending the outcome of the opposition on genericness.

Karin Segall, Leason Ellis LLP, White Plains

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