Bd. of Trs. of the Univ. of Ala. v. Houndstooth Mafia Enters. LLC

• Decision Date: 23 February 2016
• Docket Number: Case No.: 7:13-CV-1736-RDP
• Citation: 163 F.Supp.3d 1150
• Parties: Board of Trustees of the University of Alabama, et al., Plaintiffs, v. Houndstooth Mafia Enterprises LLC et al., Defendants.
• Court: U.S. District Court — Northern District of Alabama

163 F.Supp.3d 1150

Board of Trustees of the University of Alabama, et al., Plaintiffs,

v.Houndstooth Mafia Enterprises LLC et al., Defendants.

Case No.: 7:13-CV-1736-RDP

United States District Court, N.D. Alabama, Western Division.

Signed February 23, 2016

Michael I. Spearing, The University of Alabama System, Tuscaloosa, AL, R. Charles Henn, Jr., Nichole Davis Chollet, Kilpatrick Townsend Stockton LLP, Atlanta, GA, for Plaintiffs.

Travis Carlisle Hargrove, Page, Scrantom, Sprouse, Tucker & Ford, PC, Columbus, GA, for Defendants.

MEMORANDUM OPINION

R. DAVID PROCTOR, UNITED STATES DISTRICT JUDGE

The phrase “a day late and a dollar short” has served as the theme of songs, books, poems, movies, and television shows. As explained below, it is a theme that also characterizes the respective approaches taken in this case by (1) Michelle K. Lee (“Lee”), the Undersecretary for Intellectual Property and Director of the United States Patent and Trademark Office (“USPTO”) and the USPTO's Trademark Trial and Appeal Board (“TTAB”), and (2) Defendants Houndstooth Mafia Enterprises, LLC, Christopher Blackburn, and William Pitts, Jr.

Lee has moved to intervene in this action indicating that she seeks to protect the interests of the USPTO. The USPTO says that its asserted interest is to avoid the unnecessary vacatur of one of its precedential decisions. The decision at issue was rendered by the TTAB and was favorable to Houndstooth Mafia, Christopher Blackburn, and William Pitts, Jr. (“Defendants” in this case) and unfavorable to the Board of Trustees of the University of Alabama and Paul Bryant, Jr. (“Plaintiffs” in this case). After the TTAB's ruling, in September 2013, Plaintiffs filed this action appealing that decision. While this action was pending in this court, Plaintiffs and Defendants reached a settlement of the matter. Importantly, as part of that settlement, the parties agreed to the vacatur of the TTAB's administrative decision. Defendants have explained that their primary reason for settling was financial—they were a dollar short in defending the appeal.

In May 2014, the parties submitted and the court approved the settlement and entered a Final Consent Judgment. (Doc. # 15). Among other things, the Final Consent Judgment called for the vacatur of the TTAB's decision which was favorable to Defendants. (Doc. # 15). After the court entered final judgment, the parties submitted it to the TTAB. No action was taken. More than a year passed.

Finally, in June 2015, the TTAB essentially (and inexplicably) treated the court's Order as a request, and issued a decision refusing to comply with this court's Order. (Doc. # 30-2). Thereafter, Plaintiffs moved to enforce this court's prior final judgment. (Doc. # 16). In light of those developments, this court scheduled a hearing, and invited the USPTO to participate. Through its counsel, the USPTO appeared at the hearing. It was only after the hearing that Lee sought to intervene—she is more than a day late .

This matter is before the court on (1) Plaintiffs' Motion to Enforce Consent Judgment (Doc. # 16), filed July 23. 2015, and (2) the Motion by Michelle K. Lee, Undersecretary for Intellectual Property and Director of the United States Patent and Trademark Office, to Intervene (Doc. # 28), filed September 17, 2015. These matters have been fully briefed, and the court has heard argument on the Motion to Enforce Consent Judgment. (Docs. # 20, 21, 22, 26, 27, 30, 31). After careful consideration, and with the benefit of that oral argument, the court concludes that the motion to intervene is due to be denied as untimely, and the motion to enforce the judgment is due to be granted.

I. Background

In July 2013, after five years of administrative discovery and depositions, the TTAB issued a decision dismissing an opposition filed by Plaintiffs against the registration of the HOUNDSTOOTH MAFIA mark sought by Defendants, Pitts and Blackburn. (Docs. # 16-4 at 3, 22 at 4). The University has licensed the Houndstooth pattern as a trademark in connection with various goods because it contends the pattern is well-known to be associated with the University. (See, e.g., Doc. # 22 at 13-14). The TTAB decision held that Defendants could proceed to registration on the HOUNDSTOOTH MAFIA mark. (Doc. # 1; Doc. # 16-1).

Section 107 of the Lanham Act permits a litigant to appeal a TTAB ruling directly to the Federal Circuit, 15 U.S.C. § 1071(a)(1). In the alternative, a party may file a civil action challenging the board's ruling in a federal district court, 15 U.S.C. § 1071(b)(1). Dissatisfied with the TTAB's decision, the University and Bryant elected the latter option and filed suit in this court. (Doc. # 1).

During the course of this litigation, the parties reached a settlement. Pursuant to that settlement, they presented to the court a Final Judgment of Consent. (Doc. # 14). As part of the settlement, Pitts and Blackburn assigned to the University all right, title, and interest in and to the Houndstooth Mafia mark that was the subject of the TTAB decision. (Doc. # 14-1 at 3). In addition, pursuant to the settlement all parties acknowledged and agreed that the TTAB's decision favorable to Pitts and Blackburn should be vacated. (Id. ). The court approved the parties' settlement, and entered Final Consent Judgment on May 27, 2014. (Doc. # 15). As part of that judgment, and due to the parties' express settlement terms, the court ordered that the TTAB's decision “is VACATED .” (Doc # 15 at 3 (bold and caps in original)).

It is important to understand the parties' respective reasons for reaching their settlement. Defendants pursued a settlement because they “wanted to get what they could,” and their attorneys “couldn't afford to do free work on an appeal as they had on a hearing before the TTAB.” (Doc. # 26 at 7). Plaintiffs were amenable to settlement with one non-negotiable condition: they required with respect to any resolution of the dispute. They were only willing to settle if the TTAB's 2013 decision was vacated. Plaintiffs insisted on this condition because they are repeat players¹ before the TTAB, and were concerned with the precedential effect of the TTAB's 2013 decision. (Doc. # 30-1, 30-4, 30-5). Thus, Plaintiffs made it clear that there would be no settlement unless the parties agreed to vacatur of the TTAB's unfavorable (and, in Plaintiffs' view, incorrect) decision as part of a resolution.

On September 15, 2014, after the court entered its Final Consent Judgment, which vacated the TTAB's July 2013 decision, Plaintiffs filed (what they surely believed would be) a pro forma motion to reopen the administrative action, vacate the TTAB's decision, and dismiss the action with prejudice. (Doc. # 16-3). Plaintiffs attached a copy of this court's Final Consent Judgment. (Doc. # 16-3, Ex. 2). But the TTAB took no action. It did not vacate its decision. In fact, for a substantial period of time—that is, until June 2015 (when it issued an opinion purporting to deny Plaintiffs' motion)—it took no action at all on Plaintiff's motion or upon this court's final judgment.

The TTAB has acknowledged that it monitors litigation such as the proceedings in this case. (Doc. # 33 at 5). But despite that monitoring, and even after actually receiving this court's Final Consent Judgment (Doc. # 15), the TTAB did not vacate its decision. Nor, at that time, did it seek to intervene and ask this court to reconsider its ruling. There was no appeal taken to the Eleventh Circuit. Instead, more than a year later (and after mulling over whether it would comply with the court's Final Consent Judgment), on June 23, 2015, the TTAB made its own “decision” not to comply with the parties' agreement and this court's express order contained in the Final Consent Judgment. (Doc. # 30-2).

After the TTAB entered its June 2015 decision, the University and Bryant filed their motion to enforce. (Doc. # 16). After receiving a response to that motion, the court set this case for a hearing. (Docs. # 17, 18). Lee did not seek to intervene then. Nevertheless, the court “invited” counsel for the USPTO to submit briefing and participate in the scheduled hearing. (Doc. # 17). It was only some time after the court concluded its hearing on the motion (see Doc. # 22) that Lee belatedly filed her motion to intervene. (Doc. # 28).

II. Standard of Review

Section 21 of the Lanham Act permits a party dissatisfied with a TTAB decision to either appeal directly to the Federal Circuit or bring a civil action in a federal district court. 15 U.S.C. § 1071(a), (b) ; see also Material Supply Int'l, Inc. v. Sunmatch Indus. Co., Ltd. , 146 F.3d 983, 989 (D.C.Cir.1998). “A challenge to the TTAB's decision in a district court is ‘both an appeal and a new action, which allows the parties to request additional relief and to submit new evidence.’ ” Board of Regents of University of Wisconsin System v. Phoenix Intern. Software, Inc. , 653 F.3d 448, 452 (7th Cir.2011) (quoting CAE, Inc. v. Clean Air Eng'g, Inc. , 267 F.3d 660, 673 (7th Cir.2001) ). “In such an action, the district court wears two hats: ‘[it] is an appellate reviewer of facts found by the TTAB and is also a fact-finder,’ ” provided that new evidence is introduced to the court. Id. (quoting CAE, Inc. , 267 F.3d at 674 ).

Acting in this dual capacity, a district court applies a standard of review that is a hybrid of deferential treatment and de novo scrutiny. Tequila Centinela, S.A. de C.V. v. Bacardi & Co. Ltd ., 517 F.Supp.2d 1, 3–4 (D.D.C.2007). Deferential treatment is granted to the TTAB's finding of facts, but “because ‘the district court is just as able as the TTAB to determine an issue of law,’ review of legal questions is de novo.” Id. (citing Mitchell Cosmetics SARL v. Pramil S.R.L. (Esapharma) , 2005 WL 3273371, *2 (D.D.C.2005) ).

When a party seeks intervention as a matter of right under Federal Rule of Civil Procedure 24(a)(2), she is required to (1) file a timely application for intervention, (2) show...