Court Opinion

ID: 9578246
Source: CourtListenerOpinion
Date Created: 2023-08-21 21:43:21.353425+00
Date Added: 2024-06-11T13:25:22.871645
License: Public Domain

NEWMAN, Circuit Judge,
concurring in the judgment.
I too would affirm the judgment of the Trademark Trial and Appeal Board, but I would do so on the grounds applied by the Board; that is, that Nasalok’s claim for cancellation is precluded by the judgment against Nasalok in the United States District Court for the Northern District of Illinois.
The panel majority states that trademark invalidity is not a compulsory counterclaim in a trademark infringement action, and thus that Nasalok’s claim for invalidity in the cancellation proceeding is not precluded by Nasalok’s failure to assert invalidity in the prior infringement case. Respectfully, that question is irrelevant in this case, for validity of the mark was indeed before the district court in the infringement action. It is noteworthy that the issue of a separate test for defendant preclusion, and the attendant question of whether trademark invalidity is a compulsory or permissive counterclaim in an infringement action, was not raised on this appeal, was not mentioned by the Trademark Trial and Appeal Board, and was never briefed by either party as a ground for decision below or on this appeal. Indeed the parties agreed throughout the case that the proper test for claim preclusion is that stated and applied by the TTAB. My colleagues’ elaborate analysis of compulsory counterclaims is irrelevant, for as the TTAB recognized the cancellation proceeding raises the same grounds of invalidity that were before the district court.
The issue of validity was decided in the district court, as shown in the district court’s ruling that the trademark “is valid and enforceable.” Whether validity was rebutted with evidence, or admitted by default, is of no consequence, for the requirement that an issue was “actually litigated” applies only to issue preclusion, not claim preclusion. Maj. op. at 1323-24 n. 2. The premises of a valid and enforceable trademark, such as its distinctiveness and continuous use, were pleaded by the plaintiff, and Nasalok, a party to the action, did not dispute any of the pleadings. Failure to object to a critical issue in the district court does not preserve that issue for relit-igation in the TTAB; to the contrary, it closes the issue.
Neither Nasalok nor any of the three other defendants appealed any aspect of the district court’s decision. Whether or not validity would have been a compulsory *1331counterclaim if validity were not otherwise before the district court does not authorize the defendant to raise, in a different action, an issue that was decided against it in the earlier action and from which no appeal was taken. The extensive discussion of compulsory counterclaims has no relevance to this appeal, for the validity aspects that might have been contested by counterclaim were presented as a premise of the complaint. Although there may be circumstances in which a PTO proceeding may be brought while parties are in litigation, precedent does not support a broad authorization to relitigate in the PTO issues that were finally decided in the district court as between the same parties. As the TTAB observed, validity was decided and was not appealed. The generalizations expounded by my colleagues are inapt.
Other aspects of Part II of the court’s opinion are also of concern. For example, the panel majority expounds on public policy as justifying applying to trademarks certain policy aspects of the patent case on licensee estoppel, Lear, Inc. v. Adkins, 395 U.S. 653, 89 S.Ct. 1902, 23 L.Ed.2d 610 (1969). Patent public policy and trademark public policy are not the same. The purpose of trademark law is not the advancement of science and technology, and the purpose of patent law is not to protect reputation and guard against consumer confusion. To state, even in dictum, that Lear favors a trademark system that facilitates attacks on trademark property ignores the differing public purposes of patents and trademarks, as well as mis-perceives the policy principles of Lear. Further, no aspect comparable to Lear is at issue in this case; the court’s discussion is inappropriate dictum. I also observe the misperception of the patent ruling in Foster v. Hallco Manufacturing Co., 947 F.2d 469 (Fed.Cir.1991), which did not confront the compulsory counterclaim question, and which rejected the notion that the policy concerns of Lear alter the basic applicability of claim preclusion in patent cases. Id. at 477.
In sum, I do not concur in Part II.
In Part III the panel majority holds that because Nasalok’s cancellation petition, if granted in the PTO, would collaterally attack and (according to my colleagues’ dictum) require vacatur of the district court’s judgment of infringement, the petition should be dismissed. I agree that the petition should be dismissed, but on the ground selected by the TTAB, that is, by application of basic claim preclusion doctrine. Although precedent illustrates situations in which various actions have been taken in the Patent and Trademark Office concerning marks in litigation, Nasalok is incorrect in its position that there is an absolute right to bring a cancellation proceeding in the TTAB after having lost on the same grounds in the district court, or after having defaulted and declined to defend in the district court. Here, where Nasalok was a party to the district court proceeding and had full opportunity to raise the same grounds it raises in the cancellation proceeding, the TTAB correctly designated these aspects as res judicata: the parties are the same, the issues are the same, the transactional facts are the same, there was a final judgment of validity, and there was opportunity for appeal. See Parklane Hosiery Co. v. Shore, 439 U.S. 322, 326 n. 5, 99 S.Ct. 645, 58 L.Ed.2d 552 (1979); Lawlor v. Nat’l Screen Serv. Corp., 349 U.S. 322, 326, 75 S.Ct. 865, 99 L.Ed. 1122 (1955).
I would affirm the TTAB decision on the ground of res judicata.