Opinion ID: 3066602
Heading Depth: 3
Heading Rank: 2

Heading: Prior-Use Defenses

Text: The Sovereign Order challenges the holding that its incontestable marks were not infringed on account of the Florida Priory’s prior use. The Sovereign Order contends that the district court erroneously treated the defenses of prior use in sections 1115(b)(5) and (b)(6) as complete defenses on the merits. It also argues that prior use was outside the scope of our appellate mandate and that the district court erred by relying on Papanicolaou’s testimony to support its finding of prior use. The district court misinterpreted sections 1115(b)(5) and (b)(6) as providing complete defenses on the merits. The defenses in section 1115(b) rebut the conclusive presumption of validity that comes with incontestability. See 15 U.S.C. § 1115(b). When that presumption is rebutted, however, the defendant does not automatically prevail. Rebuttal reduces the conclusive presumption of validity to a prima facie presumption of validity. See Park ‘N Fly, Inc. v. Dollar Park & Fly, Inc., 469 U.S. 189, 199 n.6, 105 S. Ct. 658, 664 (1985) (“If one of the defenses [in 41 Case: 14-14251 Date Filed: 10/15/2015 Page: 42 of 49 section 1115(b)] is established, registration constitutes only prima facie and not conclusive evidence of the owner’s right to exclusive use of the mark.”). The defendant must still identify some additional reason why the plaintiff’s marks are invalid. See 15 U.S.C. § 1115(a). Here, whether or not sections 1115(b)(5) and (b)(6) apply, the Sovereign Order’s marks are presumptively valid because they are registered. See id. The district court erred by treating sections 1115(b)(5) and (b)(6) as complete defenses to infringement. See 6 McCarthy § 32:153; see also id. at § 32:157 (treating the defenses in section 1115(b) as defenses on the merits leads to the “absurdity of a challenger finding it easier to prove a defense to an incontestable registration than to an unregistered, common-law mark”). Of course, prior use can be a defense on the merits, but we agree with the Sovereign Order that any such defense would go beyond our mandate. Under the common law, prior use can defeat the validity of a plaintiff’s mark. See generally United Drug Co. v. Theodore Rectanus Co., 248 U.S. 90, 39 S. Ct. 48 (1918); Hanover Star Milling Co. v. Metcalf (Tea Rose), 240 U.S. 403, 36 S. Ct. 357 (1916). In the first appeal, however, we remanded for the district court “to consider, under the correct legal standard, confusion with respect to all of [the Sovereign] Order’s marks.” SMOM II, 702 F.3d at 1298 (emphasis added). Under the “mandate rule,” a district court can only “settle so much as has been remanded.” Litman v. Mass. Mut. Life Ins. Co., 825 F.2d 1506, 1511 (11th Cir. 42 Case: 14-14251 Date Filed: 10/15/2015 Page: 43 of 49 1987) (en banc) (quoting In re Sanford Fork & Tool Co., 160 U.S. 247, 255, 16 S. Ct. 291, 293 (1895) (internal quotation mark omitted)). Because our earlier decision remanded for the district court to consider the second element of infringement—confusion—it could not consider challenges to the first element— validity. See Barber v. Int’l Bhd. of Boilermakers, 841 F.2d 1067, 1070–71 (11th Cir. 1988). Prior use was relevant only insofar as it informed the likelihood of confusion. As explained earlier, the defenses of prior use in sections 1115(b)(5) and (b)(6) do not do so. Furthermore, the district court erred by grounding its finding of prior use in the inadmissible testimony of Papanicolaou. The district court based its finding of prior use on the same evidence that it cited for its finding of no intent—i.e., Papanicolaou’s testimony about the twentieth century documents. As we have explained, that finding was unsupported because Papanicolaou was not qualified to testify about matters beyond his personal knowledge. Accordingly, even if prior use had been within the scope of our mandate, the district court could not have relied on Papanicolaou’s testimony to find that the Florida Priory has continuously used the marks in question “since 1911.” SMOM III, No. 09-81008-CIV, slip op. at 15. In short, the district court erred when it held that the Florida Priory’s defenses of prior use defeat the Sovereign Order’s claims of infringement for its 43 Case: 14-14251 Date Filed: 10/15/2015 Page: 44 of 49 incontestable marks. The defenses in sections 1115(b)(5) and (b)(6) of the Lanham Act are not complete defenses on the merits. Those defenses, when they apply, only lower the presumption of validity afforded to incontestable marks. The Florida Priory no longer challenges the validity of the Sovereign Order’s marks, and any such challenge would be outside the scope of our appellate mandate. Even if it were relevant at this stage, the finding of prior use by the district court was unsupported because it was based on Papanicolaou’s inadmissible testimony.