In Levi Strauss & Co. v. Abercrombie & Fitch Trading Co., Nos. 12-1495, -1496 (Fed. Cir. June 18, 2013), the Federal Circuit held that district court litigation on trademark infringement and dilution does not preclude challenges to the mark's registration at the PTO, reversing the TTAB and remanding for consideration of the PTO challenges.
Levi Strauss & Company ("Levi") owns multiple federally registered trademarks for the "Arcuate" stitching design used on the back pockets of its jeans, having used the bow-shaped pattern as a source identifier since 1873. In 2005, Abercrombie & Fitch Trading Co. ("Abercrombie") applied to register a "mirror image stitching design" on the Principal Register for use on jackets and on the Supplemental Register for use on clothing, namely, jeans, skirts, and pants. At the PTO, Levi filed an opposition to Abercrombie's application for registration on the Principal Register and a petition of cancellation for Abercrombie's registration on the Supplemental Register, arguing the design was likely to cause confusion and to dilute Levi's mark. Levi then sued Abercrombie in the Northern District of California, alleging that jeans with the "mirror image stitching design," specifically, Abercrombie's "Ruehl" line of jeans, infringed and diluted its trademarked pattern. The PTO stayed the opposition and cancellation proceedings pending resolution of the district court litigation.
In 2009, the district court ruled for Abercrombie on both infringement and dilution, termed the 2009 Judgment on Infringement and the 2009 Judgment on Dilution. Levi appealed the 2009 Judgment on Dilution to the Ninth Circuit Court of Appeals, which reversed and remanded. During the appeal, Abercrombie discontinued its Ruehl brand and filed a new trademark application for the same stitching design to be used on clothing, namely, bottoms for its Gilly Hicks brand. Back at the district court, Levi requested that Abercrombie agree to include its Gilly Hicks line for consideration. Abercrombie refused, and the district court denied Levi's subsequent request to amend its complaint. Levi thus voluntarily dismissed the case, and the district court dismissed Levi's claim for dilution in 2011. Abercrombie then filed for SJ at the PTO, arguing that claim and issue preclusion barred Levi's challenges to Abercrombie's marks. The TTAB granted SJ for Abercrombie, finding issue preclusion but not claim preclusion, and barred Levi's opposition and cancellation proceedings due to the district court litigation.
"Ultimately because the registrations at issue in
the PTO cover a much
broader range of uses of the Abercrombie mark than were the
subject of the district-court litigation, the results of the
district-court case do not preclude Levi Strauss's challenges
in the PTO." Slip op. at 2.
In reviewing the TTAB's decision, the Court reversed, holding that neither issue preclusion nor claim preclusion barred Levi's cancellation and opposition proceedings at the PTO. In addressing issue preclusion, the Court held that the 2009 Judgment on Dilution could not support either form of preclusion because the decision was reversed on appeal. "The 2009 Judgment on Dilution is not an extant final judgment on the merits, as required for claim preclusion. And the 2009 district-court findings are not necessary to a resulting judgment, as required for issue preclusion, when, as is true in this case, the only judgment they supported has been reversed." Slip op. at 9. Additionally, the 2011 Judgment on Dilution had no issue-preclusive effect because it was voluntarily dismissed and, thus, "it did not decide any specific issue at all." Id. at 10. The only adjudication potentially sufficient for issue preclusion purposes was the 2009 Judgment on Infringement. However, even this did not bar the opposition and cancellation determinations because "[t]he PTO proceedings involve[d] a much broader set of issues than were presented to, or therefore adjudicated in, that court." Id. The infringement action only considered specific products, comparing the Ruehl brand of jeans to Levi's protected trademarks. In contrast, the opposition or cancellation proceeding at the PTO involved confusion for any field of use for which Abercrombie sought registration, namely, jeans, skirts, shorts, pants, and jackets. Moreover, the PTO proceedings were not based on the goods' operation in commerce, whereas the infringement action was based in large part on how the goods appeared in the marketplace.
The Court additionally held claim preclusion inapplicable, finding the PTO proceedings and the district court proceedings "[did] not involve the same transactional facts, pragmatically judged." Id. at 12. Rather, "all indications are that Levi Strauss's dilution claim, like its infringement claim, was understood as challenging the uses of the stitching design that Abercrombie made on Abercrombie's Ruehl line of clothing, not the full range of uses Abercrombie's registration seeks to cover." Id. at 14. The Court also noted, "[A] significant aspect of Abercrombie's defense was that its Ruehl line of jeans and Levi Strauss products were sold in such different channels and at such different prices . . . ." Id. at 4. The Court further cited its denial to extend the proceedings to also include the Gilly Hicks line as evidence of the district court litigation's narrow focus. The Court reasoned that an alternative ruling would have required owners of famous marks to litigate the entire range of potential uses for the allegedly infringing mark, even those uses that may be necessary for broad PTO registration, but that are irrelevant to the dilution claim. Accordingly, the Court held that neither issue preclusion nor claim preclusion prevented Levi's challenges to Abercrombie's mark, and reversed and remanded the case for further determination of the PTO proceedings.
Judges: Lourie, O'Malley, Taranto (author)
[Appealed from TTAB]
This article previously appeared in Last Month at the Federal Circuit, July, 2013
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