IP UPDATE
Exploring the Latest in Intellectual Property Law
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Exploring the Latest in Intellectual Property Law
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Ex Parte Reexamination Not Allowed After Failed IPR Challenge

by | Oct 14, 2021 |

The US Court of Appeals for the Federal Circuit found that ex parte reexamination was unavailable to a challenger who repeatedly tried and failed to raise the same arguments for the same patent in a prior inter partes review (IPR) proceeding. In re: Vivint, Inc., Case No. 20-1992 (Fed. Cir. Sept. 29, 2021) (Moore, C.J.)

Vivint sued Alarm.com in 2015 for infringement of several patents. In response, Alarm requested that the Patent Trial & Appeal Board (PTAB) institute “a litany of post-issuance review proceedings,” including three separate IPR petitions directed to one of the patents. The PTAB refused to institute two of the petitions because Alarm failed show to a reasonable likelihood that it would prevail on at least one challenged claim and also refused to institute the third petition because it represented an example of “undesirable, incremental petitioning.” According to the PTAB, Alarm had “used prior Board decisions as a roadmap to correct past deficiencies” and allowing such “similar, serial challenges to the same patent” by the same challenger risked, not only harassment of patent owners, but also frustration of congressional intent behind the America Invents Act (AIA).

More than a year later, Alarm filed a request for ex parte reexamination of the patent—a request that used repackaged versions of arguments from its unsuccessful IPR petition. Despite the striking similarity between Alarm’s prior and current arguments, including two out of the four original IPR patentability questions being copied verbatim from the failed petition into the ex parte reexamination request, the PTAB found the petition raised substantial new questions of patentability and ordered reexamination. Vivint responded by seeking dismissal of the ex parte reexamination under 37 C.F.R. § 1.181, arguing that the PTAB has the authority under 35 U.S.C § 325(d) to deny the ex parte reexamination request because that statute applies to ex parte reexaminations and IPRs with “equal force.” The PTAB rejected Vivint’s request, stating that any § 1.181 petition raising a § 325(d) challenge must be filed before reexamination is ordered.

Vivint filed a second § 1.181 petition seeking reconsideration of the § 325(d) issue, arguing that it would have been impossible for Vivint to file the § 1.181 petition before ex parte reexamination was ordered. Vivint also argued that even if the PTAB lacked general authority to terminate the reexamination, it could exercise such authority under the Administrative Procedure Act (APA). Vivint also asserted that the PTAB “acted arbitrarily and capriciously by applying the same law to the same facts and reaching a different conclusion.” The PTAB rejected Vivint’s arguments and denied its second petition, finding that Vivint could have sought a waiver of the rules having to do with the required prior-to-ex parte timing of a § 1.181 petition vis-à-vis institution of ex parte reexamination. The PTAB also noted that ex parte reexamination was not inconsistent with denying the initial IPR. Ultimately, after an examiner issued a final rejection for all claims of the patent, Vivint appealed to the PTAB. The PTAB affirmed and Vivint [...]

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Authentication Claim Under Alice—A Two-Step Process

by | Oct 14, 2021 |

The US Court of Appeals for the Federal Circuit found patent claims directed to a method of authenticating the identity of a user performing a transaction at a terminal was patent-eligible under 35 U.S.C. § 101 and reversed the district court’s entry of judgment on the pleadings. CosmoKey Solutions GmbH & Co. KG. v. Duo Security LLC, Case No. 20-2043 (Fed. Cir. Oct. 4, 2021) (Stoll, J.) (Reyna, concurring).

CosmoKey sued Duo for patent infringement and Duo moved for judgment on the pleadings, arguing that all claims of the patent at issue are ineligible under 35 U.S.C. § 101. The district court analyzed the claims under the Alice two-step framework. At step one, the court agreed with Duo, finding that the patent claims were directed to the abstract idea of authentication—the verification of identity to permit access to transactions. Relying on Federal Circuit precedent, the court reasoned that “authentication” is an abstract concept. Moving to step two, the court determined that the patent merely teaches generic computer functionality, reasoning that the patent itself admits that “the detection of an authentication function’s activity and the activation by users of an authentication function within a pre-determined time relation were well-understood and routine, conventional activities previously known in the authentication technology field.” After the court granted Duo’s motion for judgment on the pleadings, CosmoKey appealed.

Applying Third Circuit law, the Federal Circuit reversed the lower court’s decision and provided more insight into the “inventive concept” analysis and “two-step” process framework. The Federal Circuit first acknowledged that while it had previously found claims directed to authentication to be abstract, it also found claims directed to specific verification methods that depart from earlier approaches and improve technology eligible under § 101.

The Federal Circuit disagreed with the district court’s broad characterization of the claims under Alice step one, finding instead that the claims and written description suggest that the claims are directed to a more specific authentication function. Nevertheless, the Court noted that it did not need to answer this question because the patent claims satisfy Alice step two. Under step two, the Court focused on the purported technical advance and found that the invention provides a “specific improvement to authentication that increases security, prevents unauthorized access by a third party, is easily implemented, and can advantageously be carried out with mobile devices of low complexity.” The Court explained that the district court erred in its interpretation of certain sections of the specification. Specifically, the court read the specification to describe prior art that shows the steps were routine or conventional. However, the Court pointed out that the last four steps of claim one of the patent solved a technical problem in the field using steps that were not conventional.

Judge Jimmie V. Reyna concurred with the decision but took issue with the Court’s dismissal of analyzing the claims under Alice step one, finding the approach “extraordinary and contrary to Supreme Court precedent.” He noted that step two does not operate independently of step one, [...]

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Failing to Address All Reasons for Noninfringement Renders Appeal Moot

by | Oct 14, 2021 |

In deciding whether the district court correctly interpreted various claim terms in four patents related to communication techniques used in computer gaming technology, the US Court of Appeals for the Federal Circuit found that rendering a decision as to the terms for at least two of the patents would be moot. Accordingly, the Federal Circuit affirmed the district court’s grant of summary judgment on noninfringement. Acceleration Bay LLC v. Take-Two Interactive Software (Oct. 4, 2021) (Reyna, J.)

Acceleration Bay is the owner of four unrelated patents that are generally directed to communication techniques associated with computer gaming. In particular, certain of the patents teach that an originating computer sends a message to its neighbors on a broadcast channel using point-to-point connections, and that the neighboring computers then sends the message to only their neighboring connections. This reduces the number of connections that each computer must maintain and improves efficiency in the system.

Acceleration Bay filed a patent infringement suit claiming that Take-Two Interactive Software, a software designer for various video games, including Grand Theft Auto V, NBA 2K15 and NBA 2K16, directly infringed the four asserted patents. As part of the district court proceedings, multiple terms recited in the claims of the four patents were construed. In particular, the court construed the claim term “m-regular” to mean “a state that the network is configured to maintain, where each participant is connected to exactly m neighbor participants.” Additionally, the court effectively embedded this definition of “m-regular” into other construed claim terms, including “fully connected portal computer” and “each participant being connected to three or more other participants.”

After claim construction, the district court granted summary judgment of noninfringement in favor of Take-Two on all asserted patents. In granting summary judgment, the court observed that Take-Two makes software, not computer networks or broadcast channels, and therefore its customers must introduce those elements. As such, direct infringement is inappropriate because multiple entities, not just Take-Two, contribute to the allegedly infringing system. The court rejected Acceleration Bay’s argument under Centrak, Inc. v. Sonitor Techs., Inc. that Take-Two was actually the “final assembler” because it installed the software for its customers. The court additionally identified multiple reasons why the “m-regular” limitation was not met in the accused products, including the fact that Acceleration Bay identified no source code to support its theory. Acceleration Bay appealed.

With respect to two of the four patents on appeal, Take-Two argued that Acceleration Bay’s appeal is moot because it only addressed one of the two reasons the district court granted summary judgment of noninfringement. Specifically, the court granted summary judgment on these two patents because (1) the accused products do not meet the “m-regular” limitation and (2) Acceleration Bay’s “final assembler” theory fails as a matter of law. On appeal, Acceleration Bay addressed only the “final assembler” theory. As such, the Federal Circuit found that a ruling on this issue would not affect the court’s summary judgment ruling, and the appeal of these two patents is [...]

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Induced Infringement Finding May Support Willfulness Finding

by | Oct 7, 2021 |

In a redux visit, the US Court of Appeals for the Federal Circuit found that the record compelled reversal of a district court’s refusal to reinstate a jury’s willful infringement verdict and enhanced damages award but affirmed an attorneys’ fees award, taking into account the finding of willful infringement. SRI International, Inc. v Cisco Systems, Inc., Case Nos. 20-1685; -1704 (Fed. Cir. Sept. 28, 2021) (Stoll, J.)

This is the second appeal in the case. In the first appeal, the Federal Circuit found that the record was insufficient to establish that Cisco’s conduct before May 2012 (when Cisco became aware of the asserted patents) rose to the level of wanton, malicious and bad faith behavior required for willful infringement. In view of the finding, the Court concluded that Cisco could not have willfully infringed and therefore vacated the district court’s enhancement of damages for pre-May 2012 conduct. As for post-2012 conduct, the Court remanded the case to the district court to decide in the first instance whether the jury’s finding of willful infringement after May 8, 2012, (the date Cisco received notice) was supported by substantial evidence. The Court also vacated the district court’s decision to award SRI its attorneys’ fees and remanded for recalculation. On remand, the district court interpreted the original Federal Circuit opinion as requiring a more stringent standard willful infringement and concluded that substantial evidence did not support the jury verdict of willful infringement after May 8, 2012. SRI appealed.

In the second appeal, the Federal Circuit determined whether the record demonstrated that substantial evidence supported the jury’s verdict of willful infringement after May 2021. In analyzing willful infringement, the Court reviewed the instructions provided to the jury on induced infringement:

“Defendant is liable for active inducement only if plaintiff proves by a preponderance of the evidence” that, among other things, (1) “Defendant took some action intending to encourage or instruct its customers to perform acts that you, the jury, find would directly infringe”; and (2) “Defendant was aware of the asserted patents at the time of the alleged conduct and knew that its customer’s acts (if taken) would constitute infringement of an asserted patent.”

The Federal Circuit found that the jury considered the evidence provided by SRI in view of the instructions on induced infringement and that Cisco induced infringement of the asserted claims. Acknowledging that the standard for induced infringement is different than that for willful infringement, the Court nevertheless found that the jury’s unchallenged finding related to induced infringement (i.e., Cisco did not challenge the jury’s findings on appeal) and, combined with Cisco’s lack of reasonable defenses to infringement, was sufficient to support the jury’s verdict of post-2012 willful infringement. Since Cisco was found to have willfully infringed on the asserted patents, the Court determined that SRI was entitled to enhanced damages.



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No Immunity: State Right of Publicity Law is § 230 “Law Pertaining to Intellectual Property”

by | Oct 7, 2021 |

The US Court of Appeals for the Third Circuit held that § 230 of the Communications Decency Act, 47 U.S.C. § 230(c), does not preclude claims based on state intellectual property laws, reversing in part a district court’s dismissal of a plaintiff’s state law claims for violation of her right of publicity. Hepp v. Facebook, Case Nos. 20-2725; – 2885 (3d Cir. Sept. 23, 2021) (Hardiman, J.) (Cowen, J., concurring in part and dissenting in part).

In 2018, Karen Hepp, a Philadelphia newscaster, discovered a photo of herself making its way around the internet. The picture, taken without Hepp’s knowledge or consent, depicts her smiling in a convenience store and was posted in two locations online. The first post was a Facebook advertisement promoting a dating service, which encouraged users to “meet and chat with single women near you.” The second post was to Imgur and was subsequently linked to a Reddit thread, where it spurred a flurry of indecent user commentary. Hepp sued Facebook, Imgur and Reddit for violations of Pennsylvania’s right of publicity statute. The district court dismissed Hepp’s claims with prejudice, holding that all three companies were entitled to immunity as internet service providers under § 230(c). Hepp appealed.

The Third Circuit found that the district court lacked personal jurisdiction over Imgur and Reddit on a “purposeful availment” minimum contacts basis and affirmed dismissal of the claims against those parties.

With respect to Facebook, the Third Circuit considered whether it was immune under § 230(c). Section 230 of the Communications Decency Act was intended to promote the internet, specifically by preserving “the vibrant and competitive free market …unfettered by Federal or State regulation.” Accordingly, § 230(c) provides Good Samaritan protection for internet service providers, encouraging them to host and moderate third-party content by immunizing them from some publisher liability regarding certain moderation decisions. However, pursuant to § 230(e)(2), such immunization does not “limit or expand any law pertaining to intellectual property.”

The first question addressed by the Third Circuit was whether § 230(e)(2) can apply to state law claims generally. The Court acknowledged that precious few cases interpreting § 230’s intellectual property provision exist, and that the existing cases present a clear split on whether § 230(e)(2) applies only to federal intellectual property claims. The Court, adhering to what it regarded as the most natural reading of § 230(e)(2), (i.e., that a state law can be a “law pertaining to intellectual property law”) determined that application of § 230(e)(2) was not limited to federal claims. The Court was not persuaded by Facebook’s policy arguments regarding a purported increase in uncertainty regarding the contours of § 230(c) immunity if state law intellectual property claims, which vary from state to state, were exempt from such immunity.

The second question the Third Circuit addressed was whether Hepp’s right of publicity claim arose from a “law pertaining to intellectual property.” In finding that it did, the Court relied on a survey of legal dictionaries and determined that the term “intellectual property” [...]

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Federal Circuit to WD Tex.: Denial of Transfer Motion was Clear Error, Abuse of Discretion

by | Oct 7, 2021 |

For the third time in as many months, the US Court of Appeals for the Federal Circuit found clear error in the US District Court for the Western District of Texas’s denial of a defendant’s motion to transfer venue. In re Juniper Networks, Inc., Case No. 21-160 (Fed. Cir. Sept. 24, 2021) (per curiam).

WSOU Investments d/b/a Brazos Licensing filed seven complaints against Juniper Networks in the Western District of Texas for infringement of seven different patents. Juniper, a Delaware corporation headquartered in Sunnyvale, California, moved the district court to transfer the case to the Northern District of California pursuant to 28 U.S.C. § 1404(a). Juniper pointed out that Brazos is a self-described patent assertion entity that does not conduct any business other than asserting patents and argued that “whatever ties Brazos has to this District appear to have been created for the purpose of its patent litigation activities in this District.” Additionally, two of Brazos’s officers, its CEO and its president, reside in California. Juniper argued that the Northern District of California was a clearly more convenient forum, noting that potential key witnesses were located in the Northern District of California. Juniper also asserted that the accused products were designed, developed, marketed and sold primarily from its Sunnyvale headquarters. While acknowledging that six of the actions could have been brought in the Northern District of California, the district court denied Juniper’s motion to transfer based on its analysis of the four private interest and four public interest factors. Juniper petitioned the Federal Circuit for writ of mandamus directing the district court to transfer the six cases.

Applying Fifth Circuit law, the Federal Circuit noted that a motion to transfer under § 1404(a) should be granted if “the movant demonstrates that the transferee venue is clearly more convenient.” The Court noted that district courts enjoy broad discretion in transfer determinations, but that it has routinely issued mandamus when a district court’s denial of a motion to transfer amounts to clear abuse of discretion.

The Federal Circuit explained that the “single most important factor” in transfer analysis is the relative convenience and cost of attendance for witnesses. Juniper identified 11 potential witnesses, all of whom were located in the Northern District of California, while Brazos only identified one Texas-based employee as a potential witness. The district court found that this only weighed slightly in favor of transfer, assigning “little weight” to both party and prior art witnesses and concluding that many of the witnesses were “unlikely to testify.” The Court disagreed, holding that the district court clearly erred in not giving sufficient weight to this factor in light of the “striking imbalance” in the parties’ 11-to-one listing of potential witnesses. The Court noted that it previously rejected both of the arguments used by the district court to discount the weight applied to Juniper’s witnesses. In August 2021, the Court held in In re Hulu, LLC that the district court’s discounting of party and prior art witnesses was “untethered [...]

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Only One More Ratification Needed: European UPC Might Be Ready to Launch

by | Oct 7, 2021 | ,

The German parliament recently passed the Approval Act (the Act) regarding the planned European Unified Patent Court (UPC) and the protocol on a UPC on provisional application (PPA). The Act was passed after Germany’s Federal Constitutional Court rejected applications for a preliminary injunction directed against the Act. The instrument of Germany’s ratification of the PPA (not of the UPC Agreement (UPCA)) has been deposited with the European Council. The UPC Preparatory Committee published a report calling Germany’s ratification “a decisive step on the establishment of the Unified Patent Court after the work has been on hold for several years during the examination of the Agreement by the German Federal Constitutional Court.”

The PPA will only come into effect after at least 13 EU Member States (which must include Germany, Italy and France, i.e., the three Member States in which the most European Patents were in effect in 2012) ratify the PPA and deposit their respective instrument with the European Council. The PPA must also ratify the UPCA (or at least have parliament’s approval to do so) and deposit this second instrument with the European Council. In this complex scheme, the German ratification was previously the main legal hurdle.

Now, after publication of Slovenia’s Approval Act in its National Law Gazette and the expected deposit of its PPA and UPCA instruments, only one more national ratification and instrument deposit is needed to reach the required 13 ratifications. According to a note published by the Presidency of the Council of the European Union on September 24, 2021, Austria is likely to move next, whereupon the project will reach the minimum number of ratifying Member States. The Austrian Government submitted a draft for an approval act to its parliament in July 2021 and expects approval.

Upon the complete ratification of the UPCA and PPA, the UPC will form on a provisional basis and commence its existence as a legal entity. The UPC Preparatory Committee (Committee) can then formally start its work. Although there is no timeline set for the initial provisional application stage, the Committee expects that stage to continue for approximately six to 10 months following ratification. As stated in the note by the Presidency of the Council, this stage includes the adoption of the secondary legislation of the UPC, including procedures, establishment of a budget, recruitment of judges and administrative stuff, election of a president, the final configuration and testing of the file management system and ensuring that all IT infrastructure is properly set up and secured. In addition, a working agreement with the European Patent Office (EPO) on patent application and patent validation remains to be completed. Many observers regard the timeline to complete preparations as challenging, noting that several of the above points will likely require significant discussion. With these issues in mind, the Competitive Council (Council) met on September 29, 2021, to discuss further actions regarding the preparations and to invite ministers to inform the Council of recent or upcoming developments in [...]

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Copyright Claims Board’s Proposed Rulemaking: How to Initiate and Respond to a Claim

by | Oct 7, 2021 |

In January 2021, Congress enacted the Consolidated Appropriations Act. This legislation incorporates the Copyright Alternative in Small-Claims Enforcement (CASE) Act of 2020, which includes revisions to the Copyright Act with the goal of creating a new venue for copyright owners to enforce their rights without having to file an action in federal court. The new venue, called the Copyright Claims Board (CCB), is designed to serve as an alternative forum where parties may voluntarily seek to resolve certain copyright claims regarding any category of copyrighted work.

On September 29, 2021, the US Copyright Office issued proposed rules in the Federal Register to establish the initial stages of a proceeding before the CCB. The proposed rules prescribe how to file a complaint, a process that includes submitting claim and notice forms online and paying a $100 filing fee. The proposed rulemaking notes that the claim form will require less information than what is required under Federal Rules of Civil Procedure, Rule 12, as practice before the CCB will be less complex than practice in federal courts according to the Copyright Office.

After a claim is filed, a copyright claims attorney will review the claim to ensure compliance with applicable regulations. If the claim is approved, the claimant can proceed to serve the claim within 90 days. If the claim is not approved, the claimant has 30 days to file an amended claim. Counterclaims are subject to the same review process. To pass review muster, the claim must “clearly state a claim upon which relief can be granted.” § 224.1.3. Under the proposed rules, a copyright claims attorney must review the claim or counterclaim for unsuitability on the grounds set out in 17 U.S.C. § 1506(f)(3). If the copyright claims attorney concludes that the claim should be dismissed as unsuitable under CASE he or she shall recommend that the CCB dismiss the claim and set forth the basis for that conclusion. The proposed rulemaking notes that the CCB wants to avoid hearing overbroad or clearly implausible claims.

The respondent will have 60 days to opt out after receiving notice of the claim, or it will lose the opportunity to have the dispute decided in a federal court. The proposed rulemaking prescribes that the initial notice form, provided by the CCB, be similar to a summons and would require the claimant to identify the nature (i.e., infringement, noninfringement or misrepresentation) of the claims being asserted. If the respondent does not respond or opt out within 20 days after the claimant files a proof or waiver of service, then the CCB will send a second notice to supplement the initial notice by mail and email. A respondent can opt out online, using a CCB form or by mail.

All comments to the proposed rulemaking must be received no later than October 29, 2021, 11:59 pm EDT.



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One for All, and All for One . . . Except When It Comes to Patent License Comparability

by | Sep 30, 2021 |

Examining whether portfolio patent licenses can be sufficiently comparable to a single-patent license for the purposes of supporting a patent damages verdict, a split panel of the US Court of Appeals for the Federal Circuit concluded that, at least without accounting for distinguishing features, the answer is no. Omega Patents, LLC v. CalAmp Corp., Case No. 20-1793 (Fed. Cir., Sept. 14, 2021) (Prost, J.)

The most recent decision was the result of a second jury trial, after the Federal Circuit previously ordered a new trial. At issue in this appeal were certain direct-infringement findings, admission of technical expert testimony and the underlying damages determination. Multiple errors were raised regarding the latter, the most significant of which was the court’s apportionment analysis.

At trial, the jury awarded a royalty of $5 per unit to Omega for CalAmp’s infringement of a single patent that covered multi-vehicle tracking units. On appeal, CalAmp contended that patent damages law required apportionment, and that the evidence was insufficient to support apportionment. Judge Prost, joined by Judge Dyk, agreed, while Judge Hughes dissented in part.

First, the Federal Circuit rejected Omega’s argument that apportionment was unnecessary because all parts of the infringing units were covered by the claims. According to the Court, even where all elements of the infringing unit are claimed, a patentee still must approximate the value of the patented features as compared to the conventional, pre-existing elements. Thus, the jury could not, as a matter of law, merely value the entire unit.

Next, the Federal Circuit held that Omega could not rely on the entire-market-value rule to support its damages verdict. That rule permits a patentee to value the infringement where the patented feature drove demand for the entire product. But on the record here, it was undisputed that other conventional elements contributed to sales of the underlying product. At most, the record indicated that the patent technology was important or helpful—which was insufficient to show that it actually drove sales.

Lastly, Omega contended that its royalty was supported by licensing evidence, which included (1) Omega’s president’s testimony that its policy was to license its entire portfolio for a certain amount regardless of the number of patents included at the time of licensing, and (2) 18 license agreements consummated by Omega, some of which included the patent at issue. For both items, the Federal Circuit found evidence of apportionment lacking. To the first claim (i.e., that Omega would not have hypothetically licensed on a patent-by-patent basis), the Court concluded that crediting such testimony would serve as an end-run around the apportionment requirement because it did not approximate the value of the specific patent at issue. So too with the 18 license agreements, many of which identified a portfolio that included almost 50 additional patents. And although the damages expert identified the portfolio feature as distinguishing, the expert’s failure to explain how to separate out the value of the individually asserted patent was fatal.

In dissent, Judge Hughes would have permitted the conventional, more [...]

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TTAB Cancellation Proceedings Not Preclusive in District Court, Even Between Same Parties

by | Sep 30, 2021 |

Addressing the preclusive effect of judgments by tribunals with limited jurisdiction, the US Court of Appeals for the Third Circuit held that trademark cancellation proceedings before the Trademark Trial & Appeal Board (TTAB) do not have preclusive effect against trademark infringement lawsuits in federal district courts. Beasley v. Howard, Case No. 20-1119 (3d Cir. Sept. 17, 2021) (Chagares, J.)

In 1969, Beasley started a band named The Ebonys. In the mid-1990s, Howard joined the band, and in 1997, Beasley obtained a New Jersey state service mark for “The Ebonys.” Several years later, Beasley and Howard parted ways. In 2012, Howard registered “The Ebonys” as a federal trademark with the US Patent & Trademark Office (PTO).

In 2013, Beasley filed a petition with the TTAB to cancel Howard’s mark, arguing that Howard had defrauded the PTO. The TTAB rejected Beasley’s 2013 petition. In 2017, Beasley filed a second petition with the TTAB, again arguing that Howard had defrauded the PTO and for the first time arguing that Howard’s mark could be confused with Beasley’s separate “The Ebonys” mark. The TTAB rejected Beasley’s 2017 petition, this time on claim preclusion grounds, finding that Beasley should have asserted his likelihood-of-confusion claim in his 2013 petition. Beasley did not appeal either dismissal.

In 2019, Beasley initiated a lawsuit in federal district court, requesting that the court vacate Howard’s mark, award Beasley monetary damages and permit Beasley to register his own “The Ebonys” mark with the PTO. The district court dismissed Beasley’s complaint, finding that claim preclusion applied because the complaint turned on the same factual and legal arguments litigated in the 2017 petition, even though Beasley did not seek damages in the 2017 petition. Beasley appealed.

The Third Circuit reversed the dismissal, concluding that the TTAB’ s cancellation proceedings did not preclude Beasley from bringing his § 43(a) infringement claim in the district court. The Court noted that the TTAB has limited jurisdiction to determine the right to register a trademark and does not have authority to consider questions of infringement, unfair competition, injunctions or damages. It reasoned that because the TTAB does not have jurisdiction to award any remedy beyond cancellation of the mark, a broader § 43(a) cause of action for deceptive use in commerce, as alleged by Beasley, could not have been brought in a TTAB cancellation proceeding.

The Third Circuit also rejected Howard’s argument that Beasley should have brought trademark cancellation claims in the district court in the first instance, noting that even though a federal district court has authority to order a cancellation, a TTAB petition is the primary means of securing a cancellation, and that forcing Beasley to litigate in the district court in the first instance would “encourage[] litigants to sit on their claims and undermine[] the Lanham Act’s adjudicative mechanisms.”

Practice Note: In the Third Circuit, plaintiffs are encouraged to bring their trademark cancellation claims before the TTAB in the first instance, rather than waiting to bring their trademark cancellation and trademark infringement claims together before [...]

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