Brooklyn Brewery Corp. v. Brooklyn Brew Shop, LLC

• Decision Date: 27 October 2021
• Docket Number: 2020-2277
• Citation: 17 F.4th 129
• Parties: BROOKLYN BREWERY CORPORATION, Appellant v. BROOKLYN BREW SHOP, LLC, Appellee
• Court: U.S. Court of Appeals — Federal Circuit

17 F.4th 129

BROOKLYN BREWERY CORPORATION, Appellant

v.BROOKLYN BREW SHOP, LLC, Appellee

2020-2277

United States Court of Appeals, Federal Circuit.

Decided: October 27, 2021

John Jay Dabney, I, Snell & Wilmer LLP, Washington, DC, argued for appellant. Also represented by Mary Hallerman.

Sean Reeves Marshall, Hoffmann Marshall Strong LLP, New York, NY, argued for appellee. Also represented by Charles Davison Hoffmann.

Before Dyk, O'Malley, and Hughes, Circuit Judges.

Dyk, Circuit Judge.

The Brooklyn Brewery Corporation ("Brewery") appeals a decision of the Trademark Trial and Appeal Board (the "Board"). Brewery petitioned to cancel Brooklyn Brew Shop, LLC's ("BBS") registration of the mark "BROOKLYN BREW SHOP," in standard characters, for goods identified as "Beer making kit[s]" in Class 32 (the "Cancellation"), and opposed BBS's application to register a stylized version of the same mark for beer-making kits in Class 32 and sanitizing preparations for household use in Class 5 (the "Opposition").

We affirm the Board's denial of Brewery's petition for cancellation. As for the Opposition, we dismiss the appeal as to the Class 5 goods for lack of standing. We vacate and remand in part because we find the Board erred by not entering judgment in favor of Brewery on the Class 32 goods deleted from BBS's application. As to the remaining goods in Class 32 (beer-making kits), we affirm the Board's dismissal of the claim that, under Section 2(d), the mark is likely to cause confusion. We vacate and remand with respect to the descriptiveness issue under Section 2(e)(1), because the Board erred by not reaching Brewery's claim that the applied-for mark lacked acquired distinctiveness under Section 2(f) as to the beer-making kits, but affirm the Board's refusal to consider geographic descriptiveness under Section 2(e)(2).

BACKGROUND

Appellant Brewery is in the business of brewing and selling craft beer. Its beers, which include lagers, pilsners, and brown ales, are sold to thousands of retailers throughout the United States, including Whole Foods Market and Total Wine & More. For more than thirty years, Brewery has used the marks BROOKLYN and BROOKLYN BREWERY in connection with the advertising, promotion, and sale of Brewery's beer and beer-related merchandise. Among other registrations, Brewery owns Registration No. 3,186,503 for BROOKLYN BREWERY for beer in Class 32,¹ registered in 2006.

As its name would suggest, appellee BBS was founded in Brooklyn, New York, in 2009. BBS is in the business of selling kits for making beer, as well as for wine and hard cider (hereinafter "beer-making kits"). Each kit contains brewing equipment, a cleaning sanitizer, and ingredients to make a one-gallon batch of a particular beer. BBS also sells accessories for its beer-making kits, including additional sanitizer packets. Although it began as a mom-and-pop shop selling kits at a local market, BBS's business has blossomed over the last ten years, now distributing beer-making kits in all fifty states. BBS sells its kits online and through retail stores such as Bed Bath & Beyond, Whole Foods Market, and Macy's. Between 2011 and 2015, Brewery and BBS partnered on a number of projects, including the sale of co-branded beer making kits.

On February 18, 2011, BBS applied for registration of the mark BROOKLYN BREW SHOP in standard character format in Class 32 for "Beer making kit[s]," claiming first use in March 2009. During prosecution, BBS disclaimed "exclusive right to use ‘BROOKLYN BREW’ apart from the mark," and on October 4, 2011, the U.S. Patent and Trademark Office ("PTO") issued Registration No. 4,034,439 on the Principal Register (the "'439 Registration"). J.A. 666.

Nearly three years later, on May 14, 2014, BBS filed U.S. Trademark Application Serial No. 86,280,776 (the "'776 Application") to register the mark BROOKLYN BREW SHOP, stylized as shown below:

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Unlike the '439 Registration, which was limited to Class 32 for "Beer making kit[s]," the '776 Application sought registration for a wide variety of goods in Class 32. It identified:

Alcohol-free beers; Beer; Beer making kit; Beer wort; Beer, ale and lager; Beer, ale and porter; Beer, ale, lager, stout and porter; Beer, ale, lager, stout, porter, shandy; Beer-based cocktails; Black beer; Brewed malt-based alcoholic beverage in the nature of a beer; Coffee-flavored beer; De-alcoholised beer; Extracts of hops for making beer; Flavored beers; Ginger beer; Hop extracts for manufacturing beer; Imitation beer; Malt beer; Malt extracts for making beer; Malt liquor; Non-alcoholic beer; Non-alcoholic beer flavored beverages; Pale beer; Porter; Processed hops for use in making beer; Root beer, in International Class 32.

J.A. 8, 669–72. It also sought registration for "Sanitizing preparations for household use, in International Class 5." J.A. 670. The application disclaimed "BREWSHOP" and claimed acquired distinctiveness under Section 2(f) of the Lanham Act, 15 U.S.C. § 1052(f).²

In late 2015, Brewery filed a Petition for Cancellation of the '439 Registration and a Notice of Opposition to the '776 Application, which were consolidated by the Board. Brewery challenged the registered and applied-for marks based on the following violations of the Lanham Act, 15 U.S.C. §§ 1051 et seq. : (1) the marks were "likely to cause confusion" with Brewery's marks under Section 2(d), § 1052(d) ; and (2) the marks were merely descriptive under Section 2(e)(1), § 1052(e)(1), and lacked acquired distinctiveness under Section 2(f) at the time of registration.

In its answers, BBS denied Brewery's allegations and, as to the Section 2(d) (likelihood-of-confusion) claims, asserted the affirmative defenses of laches, acquiescence, and equitable estoppel based on the parties' "substantial coexistence without any confusion" or prior challenge to BBS's marks by Brewery. BBS also moved to amend the '776 Application to delete all but "Beer making kit[s]" from the goods identified under Class 32. Brewery opposed BBS's motion to amend and the Board deferred ruling on it. Brewery filed a motion for summary judgment on its petition to cancel the '439 Registration, raising for the first time a claim that the registered mark was primarily geographically descriptive under Section 2(e)(2) of the Lanham Act, 15 U.S.C. § 1051(e)(2). The Board found Brewery had not adequately pled the claim and denied summary judgment.

On August 10, 2020, the Board issued a final written decision denying the Petition for Cancellation and sustaining in part and rejecting in part the Opposition. See Brooklyn Brewery Corp. v. Brooklyn Brew Shop, LLC , Opp'n No. 91223982, 2020 WL 4673282, at *35 (TTAB Aug. 10, 2020) (" Decision "). With respect to the Opposition, the Board (1) granted BBS's motion to amend the '776 Application to limit the Class 32 goods to "Beer making kit[s]" (but did not enter judgment in that respect); (2) rejected Brewery's Section 2(d) (likelihood-of-confusion) claim in the Opposition as to the Class 5 goods (sanitizing preparations) for failure to show likelihood of confusion, and rejected the Section 2(d) claim as to the remaining Class 32 goods (beer-making kits) in both the Cancellation and the Opposition because the defenses of laches and acquiescence applied and Brewery failed to prove inevitable confusion; (3) dismissed Brewery's geographic descriptiveness claims under Section 2(e)(2) on the ground that they had not been adequately pled; and (4) rejected Brewery's claims under Section 2(e)(1) (descriptiveness) for failure to establish that the marks were merely descriptive.

Brewery appeals. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(4)(B).

DISCUSSION

I. Brewery's Standing as to the Class 5 Goods

BBS argues that Brewery lacks both Article III and statutory standing to appeal the Board's decision dismissing the Opposition as to the Class 5 goods (sanitizing preparations). Although we have not yet had occasion to address Article III standing in a trademark case, our cases in the patent context have made clear that the statute does not set forth the exclusive test for standing when a decision of an administrative agency is appealed in federal court. The appellant must also satisfy the requirements of Article III. See, e.g., Phigenix, Inc. v. Immunogen, Inc. , 845 F.3d 1168 (Fed. Cir. 2017) ; see also Consumer Watchdog v. Wis. Alumni Rsch. Found. , 753 F.3d 1258, 1261 (Fed. Cir. 2014) ("[A]lthough Article III standing is not necessarily a requirement to appear before an administrative agency [such as the TTAB], once a party seeks review in a federal court, ‘the constitutional requirement that it have standing kicks in.’ " (quoting Sierra Club v. EPA , 292 F.3d 895, 899 (D.C. Cir. 2002) )). This is because Article III of the U.S. Constitution limits federal courts to hearing "Cases" or "Controversies," U.S. Const. art. III, § 2, cl. 1, and "Congress cannot erase Article III's standing requirements by statutorily granting the right to sue to [an appellant] who could not otherwise have standing," Phigenix , 845 F.3d at 1175 (quoting Raines v. Byrd , 521 U.S. 811, 820 n.3, 117 S.Ct. 2312, 138 L.Ed.2d 849 (1997) ).

Accordingly, we must address Article III standing.

A

"To meet the constitutional minimum for standing, the party seeking to invoke federal jurisdiction must satisfy three requirements." Consumer Watchdog , 753 F.3d at 1260–61 (citing Lujan v. Defs. of Wildlife , 504 U.S. 555, 560, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992) ). First, the party must show that it has suffered an "injury in fact" that is both "concrete and particularized" and "actual or imminent." Lujan , 504 U.S. at 560–61, 112 S.Ct. 2130 (internal quotation marks omitted). Second, it must show that the injury is fairly traceable to the challenged action. Id at 560, 112 S.Ct. 2130. And third, the party must show that it is "likely," rather than "merely speculative," that a favorable judicial decision will redress the injury. Id. at 561, 112 S.Ct. 2130 (internal...