Steinbeck Brewing Company is a California company which does business as Buffalo Bill's Brewery. See: http://www.buffalobillsbrewery.com/. Steinbeck filed applications for the marks TASMANIAN DEVIL and TASMANIAN DEVIL BARLEY TASMANIAN HOPS WATER YEAST BUFFALO BILL'S BREWERY & Design in January 2012. The application for the design mark received an objection based on a third party application for the mark BUFFALO BILL CODY, but the application for the TASMANIAN DEVIL word mark was allowed and published for opposition in January 2013. After obtaining an extension, Warner Bros filed the opposition in July 2013.
The Opposition:
Warner Bros. did not pull any punches
in its Notice of Opposition, attacking both the quality and reputation of
Buffalo Bill's as well as Steinbeck's motivation in choosing the TASMANIAN
DEVIL mark. For example, Warner Bros. alleged that:
- "Applicant operates "Buffalo Bill's Brew Pub, a disreputable bar and restaurant in Hayward, California that often receives customer complaints about the poor quality of its operations."
- "[I]t is because of Applicant's obvious inability to build a good reputation on its own that Applicant decided to boost its sales by misappropriating Opposer's TASMANIAN DEVIL and TAZ marks, with the added ulterior motive of inducing children or minors familiar with these marks to consumer alcohol sold by Applicant."
While Warner Bros.'s hard-hitting
allegations make for an interesting read on their own, there are also a few
intriguing legal issues raised in the Opposition. For example, in
addition to the usual likelihood of confusion and dilution claims, Warner Bros.
also alleged that Steinbeck should be precluded from registering the TASMANIAN
DEVIL mark pursuant to the doctrine of res judicata or collateral estoppel. It
turns out that Warner Bros.' predecessor in interest, Time Warner, prevailed in
an opposition proceeding against Steinbeck over 10 years ago. In that case, the
Board sustained Time Warner's opposition against Steinbeck's application for
the mark TASMANIAN DEVIL GOOD FOR DRINKIN' 'N DOG BITES & Design on the
ground that Steinbeck did not own the mark, and therefore, the application was
void ab initio. So should the fact that Steinbeck was not the owner
of the previous mark in 1999 preclude it from obtaining a registration for the
TASMANIAN DEVIL mark today?
Res Judicata:
The doctrine of res judicata
encompasses two related concepts: "issue preclusion" and "claim
preclusion". "Issue preclusion refers to the effect of a judgment in
foreclosing relitigation of a matter that has been litigated and decided. This
effect also is referred to as direct or collateral estoppel." See: Migra
v. Warren City Sch. Dist. Bd. of Educ. (465 U.S. 75). In other words, if
a specific issue has been litigated and a decision issued on the merits, a
party cannot seek to raise that issue again in a different proceeding.
"Claim preclusion refers to the effect of a judgment in foreclosing
litigation of a matter that never has been litigated, because of a
determination that it should have been advanced in an earlier suit." Id.
In other words, a party may be precluded from raising a claim in a second
proceeding, even if that particular claim was not raised in the first
proceeding.
In the previous proceeding, Steinbeck stipulated to entry of summary judgment, without prejudice, because it
was merely a licensee of the mark at issue. It explained that it mistakenly
believed that its status as a licensee provided it with authority to seek
registration of the mark. In its stipulation filing, Steinbeck
expressly noted that it continued to oppose the other grounds for Time Warner's
opposition.
In its decision granting Time Warner's
motion for summary judgment, the Board noted that "Applicant has indicated
that it was not the owner of the mark when it filed the application. Thus, as a
matter of law, the application is void." Therefore, the Board found
that "opposer's motion for summary judgment on the pleaded issue of
ownership is granted; the remaining pleaded issues upon which opposer's motion
is based, as well as the remaining pleaded issues in the notice of opposition,
are moot."See: http://ttabvue.uspto.gov/ttabvue/v?pno=91119790&pty=OPP&eno=29.
It appears that Warner Bros. is arguing that the issue
of ownership of the mark was already decided, and therefore issue
preclusion should apply to this question. One would have to assume that
Steinbeck would not make the same mistake twice, and that it is now the owner
of the applied-for mark. If that is the case, Steinbeck will likely counter
that there have been changed circumstances sufficient to prevent the
application of issue preclusion.
On the claim preclusion issue, Warner Bros. will likely argue that there was a previous final decision on the merits involving a substantially similar mark, and therefore, Steinbeck should be precluded from taking a second bite at the apple.
In order to prevail on the issue of claim preclusion, Warner Bros. must show:
(1) identity of the parties or those in
privity with the parties
(2) a final judgment on the merits of the prior claim; and
(3) that the second claim is based on the same transactional facts as the first and should have been litigated in the prior case.
See: Sharp Kabushiki Kaisha v. Thinksharp, Inc., 448 F.3d 1368 (Fed. Cir. 2006).
There likely won't be any dispute about
the first and second factors, but presumably Buffalo Bill's will argue that the claims at issue here are based on a different set of transactional facts than those in the prior case, and that res judicata would also be inappropriate because the judgment in the previous case was entered without consideration of the merits of the likelihood of confusion and dilution claims.
The TTAB has previously applied claim
preclusion to situations where an applicant sought to register a mark that was
only a slight variation of an earlier mark that had been the subject of a
successful opposition proceeding (even where the prior proceeding ended in a default judgment). See: http://thettablog.blogspot.com/2007/04/ttab-applies-res-judicata-sustains.html. On the other hand the TTAB has
rejected a claim preclusion argument where parties have chosen to default in one proceeding, but defend against another proceeding for a substantially similar mark. See: http://thettablog.blogspot.com/2006/05/cafc-affirms-ttab-rejection-of-res.html. Steinbeck will be able to point to certain language in the Sharp decision to support its position that claim preclusion is inappropriate here, such as: "[t]he Supreme Court has cautioned that the offensive use of res judicata should be examined carefully to determine whether it would be unfair to the defendant."
It will be interesting to see how the Board comes out on this issue if the case proceeds to a decision.
[An interesting sidenote: this isn't
the first time that a brewery has encountered an opposition based on the
TASMANIAN DEVIL mark--Boston Beer Company's application for the mark DEVIL
MOUNTAIN TASMANIAN PALE ALE was opposed by Time Warner in 1998. The matter was
resolved by Boston Beer Company withdrawing the application, and Time Warner
withdrawing the opposition. See: http://ttabvue.uspto.gov/ttabvue/v?qs=75285428]
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