Snyder's-Lance, Inc. v. Frito-Lay N. Am., Inc.

Decision Date17 March 2021
Docket NumberNo. 19-2316,19-2316
Citation991 F.3d 512
Parties SNYDER'S-LANCE, INC.; Princeton Vanguard, LLC, Plaintiffs - Appellants, v. FRITO-LAY NORTH AMERICA, INC., Defendant - Appellee.
CourtU.S. Court of Appeals — Fourth Circuit

ARGUED: Paul D. Clement, KIRKLAND & ELLIS LLP, Washington, D.C., for Appellants. William G. Barber, PIRKEY BARBER PLLC, Austin, Texas, for Appellee. ON BRIEF: David H. Bernstein, James J. Pastore, DEBEVOISE & PLIMPTON LLP, New York, New York; George W. Hicks, Jr., Julie M.K. Siegal, KIRKLAND & ELLIS LLP, Washington, D.C., for Appellants. David E. Armendariz, PIRKEY BARBER PLLC, Austin, Texas, for Appellee.

Before NIEMEYER, WYNN, and FLOYD, Circuit Judges.

Reversed and remanded by published opinion. Judge Wynn wrote the opinion, in which Judge Niemeyer and Judge Floyd joined.

WYNN, Circuit Judge:

This case presents a narrow question of statutory interpretation: whether a party to a trademark dispute who appeals a decision of the Patent and Trademark Office's Trademark Trial and Appeal Board ("Trademark Board") to the Federal Circuit may, after vacatur and remand by the Federal Circuit and the issuance of a new decision by the Trademark Board, seek review of that second decision in federal district court.

The district court answered this question in the negative and dismissed the case for lack of jurisdiction. But we reach a different conclusion. In this matter of first impression for our Circuit, we join our sister circuits that have considered this question and hold that a district court may review a subsequent decision of the Trademark Board in such circumstances.

Accordingly, we reverse the district court's judgment dismissing the case for lack of subject matter jurisdiction and remand for further proceedings.

I.

The Lanham Act is the United States’ federal trademark law. Under the Lanham Act, trademarks that are "distinctive""those that are arbitrary (‘Camel’ cigarettes), fanciful (‘Kodak’ film), or suggestive (‘Tide’ laundry detergent)"—are entitled to the "valuable benefits" of registration on the principal register. U.S. Pat. & Trademark Off. v. Booking.com B. V. , ––– U.S. ––––, 140 S. Ct. 2298, 2302, 207 L.Ed.2d 738 (2020) (most internal quotation marks omitted). These benefits include "a presumption that the mark is valid." Id.

By contrast, trademarks that are merely "descriptive"—such as " ‘Park ’N Fly’ airport parking"—generally may only be registered on the supplemental register, which "accords more modest benefits." Id. (citing Park ’N Fly, Inc. v. Dollar Park & Fly, Inc. , 718 F.2d 327, 331 (9th Cir. 1983), rev'd on other grounds , 469 U.S. 189, 105 S.Ct. 658, 83 L.Ed.2d 582 (1985) ). There is an exception for descriptive terms which have "acquired distinctiveness" by "achiev[ing] significance in the minds of the public as identifying the applicant's goods or services," id. at 2303 (internal quotation marks omitted), such as "American Airlines," OBX-Stock, Inc. v. Bicast, Inc. , 558 F.3d 334, 340 (4th Cir. 2009) (capitalization modified). Such trademarks are eligible for registration on the principal register. Booking.com , 140 S. Ct. at 2303. Finally, generic terms are not eligible for registration on either register because "[t]he name of the good itself (e.g. , ‘wine’) is incapable of distinguishing one producer's goods from the goods of others." Id. (alterations and most internal quotation marks omitted).

In 2004, Plaintiff Princeton Vanguard, LLC1 sought to register the mark "PRETZEL CRISPS" in reference to one of its products, flat pretzel crackers. The trademark examiner denied registration on the principal register as a distinctive mark but allowed registration on the supplemental register as a descriptive mark.

In 2009, Plaintiffs reapplied for registration on the principal register, believing that the mark had by that time acquired distinctiveness. However, Defendant Frito-Lay North America, Inc. opposed registration, arguing that "PRETZEL CRISPS" was "generic for pretzel crackers and thus ... not registrable," or alternatively, that it was "highly descriptive of a type of cracker product and has not acquired distinctiveness." Princeton Vanguard, LLC v. Frito-Lay N. Am., Inc. , 786 F.3d 960, 963 (Fed. Cir. 2015). The dispute went before the Trademark Board, where the parties developed an extensive factual record before fact discovery closed in 2012. The Trademark Board sided with Defendant in 2014, concluding that "PRETZEL CRISPS" was generic.

Frito-Lay N. Am., Inc. v. Princeton Vanguard, LLC , 109 U.S.P.Q.2d 1949, 1960 (T.T.A.B. 2014). It did not reach the acquired-distinctiveness question. Id. at 1960 n.13.

Plaintiffs then faced a choice. Under the Lanham Act, they could seek review of the Trademark Board's 2014 decision in either the Federal Circuit (pursuant to 15 U.S.C. § 1071(a) ) or a district court (pursuant to § 1071(b) ). The two paths have distinctive features. The Federal Circuit path generally provides for faster resolution of the appeal and restricts the record to that developed before the Trademark Board. See 15 U.S.C. § 1071(a)(4). Additionally, the Federal Circuit "review[s] the [Trademark] Board's factual findings for substantial evidence." In re St. Helena Hosp. , 774 F.3d 747, 750 (Fed. Cir. 2014). By contrast, the district court path allows for additional development of the record and de novo review—but it opens the appellant up to counterclaims by the other party. See B & B Hardware, Inc. v. Hargis Indus., Inc. , 575 U.S. 138, 144, 135 S.Ct. 1293, 191 L.Ed.2d 222 (2015) ; 3 J. Thomas McCarthy, Trademarks and Unfair Competition § 21:20 (5th ed. 2020 & Supp. 2021).

If the appellant elects Federal Circuit review under § 1071(a), the appellee can choose instead to have the case proceed in district court pursuant to § 1071(b). See 15 U.S.C. § 1071(a)(1). But the reverse is not true. In other words, either party can force selection of § 1071(b) (district court) review, but neither can force selection of § 1071(a) (Federal Circuit) review. Federal Circuit review occurs only when the appellant selects it and the appellee acquiesces in that selection.

Plaintiffs opted for the § 1071(a) route and appealed the Trademark Board's 2014 decision to the Federal Circuit. They assert that they made this choice because they wished to raise only a legal issue and believed the Federal Circuit would be the more efficient route. Defendant did not elect to force § 1071(b) review in district court instead.

Accordingly, the case proceeded before the Federal Circuit, which agreed with Plaintiffs in 2015. The Federal Circuit concluded that the Trademark Board had "applied the incorrect legal standard in evaluating whether the mark [wa]s generic." Princeton Vanguard , 786 F.3d at 962. Specifically, the court concluded the Trademark Board had erroneously evaluated the terms "PRETZEL" and "CRISPS" separately, rather than the complete phrase "PRETZEL CRISPS." Id. at 969. Moreover, the court noted that the Trademark Board could not "disregard the results of survey evidence without explanation," as its decision appeared to do. Id. at 970. Accordingly, the Federal Circuit "vacate[d] and remand[ed to the Trademark Board] for further proceedings." Id. at 962.

On remand, in a 2017 decision, the Trademark Board again concluded that "PRETZEL CRISPS" was generic. Frito-Lay N. Am., Inc. v. Princeton Vanguard, LLC , 124 U.S.P.Q.2d 1184, 1204 (T.T.A.B. 2017). However, the Trademark Board also concluded, in the alternative, that "PRETZEL CRISPS" lacked acquired distinctiveness. Id. at 1206.

This time, Plaintiffs sought review of the Trademark Board's 2017 decision in federal district court pursuant to § 1071(b). They assert that they opted for district court review of the Trademark Board's second decision because they wished to expand the record to include additional evidence of acquired distinctiveness that had arisen in the intervening years—something they could only do in district court.

The case proceeded for two years in district court. The parties cross-moved for summary judgment and introduced new evidence. But before the district court could rule on the motions, the case was reassigned to a different judge. The court then raised for the first time the question of whether it had jurisdiction to review the Trademark Board's 2017 decision in light of Plaintiffs’ earlier election of Federal Circuit review of the Trademark Board's 2014 decision. The parties briefed the issue, with Plaintiffs arguing for jurisdiction and Defendant arguing against.

After considering the parties’ arguments, the court dismissed the case without prejudice for lack of subject matter jurisdiction. The court concluded that Plaintiffs’ initial election of the § 1071(a) path meant that they could only appeal subsequent decisions by the Trademark Board to the Federal Circuit. Princeton Vanguard, LLC v. Frito-Lay N. Am., Inc. , 414 F. Supp. 3d 822, 824 (W.D.N.C. 2019). This appeal followed.

II.

This Court "reviews a dismissal for lack of subject matter jurisdiction and questions of statutory interpretation de novo." United States ex rel. Carson v. Manor Care, Inc. , 851 F.3d 293, 302 (4th Cir. 2017).

III.

Under 28 U.S.C. § 1295, "the Federal Circuit shall have exclusive jurisdiction" of appeals from decisions of the Trademark Board. 28 U.S.C. § 1295(a)(4)(B). Accordingly, the question of whether § 1071(b) applies—thus modifying § 1295 ’s otherwise bright-line rule and permitting review by the district court—implicates our jurisdiction and that of the court below.

In cases involving statutory interpretation, "we begin our analysis with the text of the governing statute[ ]. Only when statutory text is ambiguous do we consider ‘other indicia of congressional intent such as the legislative history.’ " Copley v. United States , 959 F.3d 118, 123 (4th Cir. 2020) (citation omitted) (quoting Lee v. Norfolk S. Ry. Co. , 802 F.3d 626, 631 (4th Cir. 2015) ).

We conclude that the statutory text of the Lanham Act,...

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