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

• Decision Date: 04 June 2021
• Docket Number: CIVIL ACTION NO. 3:17-CV-00652-KDB-DSC
• Citation: 542 F.Supp.3d 371
• Parties: SNYDER'S LANCE, INC. and Princeton-Vanguard, LLC, Plaintiffs, v. FRITO-LAY NORTH AMERICA, INC., Defendant.
• Court: U.S. District Court — Western District of North Carolina

542 F.Supp.3d 371

SNYDER'S LANCE, INC. and Princeton-Vanguard, LLC, Plaintiffs,

v.FRITO-LAY NORTH AMERICA, INC., Defendant.

CIVIL ACTION NO. 3:17-CV-00652-KDB-DSC

United States District Court, W.D. North Carolina, Charlotte Division.

Signed June 4, 2021

Filed June 7, 2021

David H. Bernstein, Pro Hac Vice, James J. Pastore, Jr., Pro Hac Vice, Jared I. Kagan, Pro Hac Vice, Jeremy C. Beutler, Pro Hac Vice, Michael Compton McGregor, Pro Hac Vice, DeBevoise & Plimpton LLP, New York, NY, Alexander Miller Pearce, Wyrick Robbins Yates & Ponton LLP, Raleigh, NC, for Plaintiffs.

Alice Carmichael Richey, Nathan Adam White, Mary K. Mandeville, Alexander Ricks PLLC, Charlotte, NC, David E. Armendariz, Pro Hac Vice, William Gilbreth Barber, Pro Hac Vice, Pirkey Barber PLLC, Austin, TX, for Defendant.

FINAL ORDER AND JUDGMENT

Kenneth D. Bell, United States District Judge

In this case the Parties zealously dispute whether Plaintiffs' asserted trademark PRETZEL CRISPS is entitled to federal trademark registration. Indeed, this quarrel between two giants of the snack food industry is now more than a decade old and includes two precedential decisions of the Trademark Trial and Appeal Board ("TTAB" or "Board") and decisions from both the Federal Circuit and Fourth Circuit Courts of Appeals. By this Final Order and Judgment, after a full de novo review of the entire record before the TTAB and the additional evidence offered in this action, the Court now resolves the merits of Defendant Frito-Lay North America, Inc.'s ("Frito-Lay") challenge to the mark.

For the reasons discussed below, the Court will 1) deny the Parties' cross-motions for summary judgment; 2) affirm the TTAB's cancellation of the registration of the mark PRETZEL CRISPS for pretzel crackers on the Supplemental Register because the mark is generic; and 3) affirm the TTAB's denial of Plaintiff Princeton-Vanguard, LLC's ("Princeton-Vanguard")¹ application to register PRETZEL CRISPS on the Principal Register for the same reason.²

I. LEGAL STANDARDS, RULING ON SUMMARY JUDGMENT MOTIONS AND STIPULATION WAIVING TRIAL

Summary judgment may be granted "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56. When ruling on a summary judgment motion, a court must view the evidence and any inferences from the evidence in the light most favorable to the nonmoving party. Smith v. Collins , 964 F.3d 266, 274 (4th Cir. 2020). "Summary judgment cannot be granted merely because the court believes that the movant will prevail if the action is tried on the merits." Jacobs v. N.C. Admin. Office of the Courts , 780 F.3d 562, 568-69 (4th Cir. 2015) (quoting 10A Charles Alan Wright & Arthur R. Miller et al., Federal Practice & Procedure § 2728 (3d ed.1998)). "The court therefore cannot weigh the evidence or make credibility determinations." Id. at 569 (citing Mercantile Peninsula Bank v. French (In re French ), 499 F.3d 345, 352 (4th Cir. 2007) ). "When faced with cross-motions for summary judgment, the court must review each motion separately on its own merits to determine whether either of the parties deserves judgment as a matter of law.’ " Rossignol v. Voorhaar , 316 F.3d 516, 523 (4th Cir. 2003) (citation omitted).

The fundamental threshold issue in this action is whether Plaintiffs' mark PRETZEL CRISPS is generic and therefore not eligible for trademark protection. Whether an asserted mark is generic is a question of fact. Princeton Vanguard, LLC v. Frito-Lay N. Am., Inc. , 786 F.3d 960, 964 (Fed. Cir. 2015) (citing In re Hotels.com, LP , 573 F.3d 1300, 1301 (Fed. Cir. 2009) )³ ; see also Booking.com B.V. v. United States Pat. & Trademark Off. , 915 F.3d 171, 179 (4th Cir. 2019) (the question of whether a proposed mark is generic is a question of fact that is subject to deferential review) (citing Swatch AG v. Beehive Wholesale, LLC , 739 F.3d 150, 155 (4th Cir. 2014) ).

In reviewing the Parties' extensive supporting, opposition and reply briefs (together with thousands of pages of exhibits and the underlying record at the TTAB), it is obvious that the issue of genericness is genuinely disputed such that entry of summary judgment for any party would be inappropriate. Plaintiffs contend that it cannot be disputed that analysis of the mark, survey evidence, media references, etc. establishes that PRETZEL CRISPS is not generic. Frito-Lay's view of the record is markedly different. It argues that it is just as clear that the evidence shows that PRETZEL CRISPS is a generic mark. The truth of course lies somewhere in between the two extremes as there is at least some evidence that supports both sides. In sum, while the Court finds – on balance after carefully weighing all the evidence – that the mark is generic, that fact has plainly been genuinely disputed, requiring the Court to deny both Parties' motions for summary judgment, Doc. Nos. 28, 34.^{4 ,5}

Upon the denial of summary judgment, this matter would normally proceed to a bench trial on the merits. However, as they did before the TTAB, the Parties have waived their right to present live testimony at trial and stipulated that the Court may fully consider and rule on all the issues presented based on the written record. The Court has agreed to do so, and this Order and Judgment thus reflects the Court's final determination of the facts and resulting ruling and judgment on the merits.

While the Parties agree that the Court may rule on the merits based on the existing record without hearing further evidence at trial, the Parties sharply disagree on the Court's standard of review of the TTAB's decision and the applicable burden of proof. With respect to the standard of review, Section § 1071(b) of Title 15 of the United States Code permits a party dissatisfied with a TTAB decision to appeal to the United States Court of Appeals for the Federal Circuit or to bring a civil action in federal district court. See 15 U.S.C. § 1071(a), (b) ; Snyder's-Lance , 991 F.3d at 529. If a civil suit is commenced in district court, the record before the TTAB must be admitted as evidence on either party's motion, but the parties are also permitted to "conduct discovery and submit further testimony and other new evidence." Shammas v. Focarino , 784 F.3d 219, 225 (4th Cir. 2015).

If new evidence is presented on a disputed question of fact, the district court must make de novo factual findings that take account of both the new evidence and the administrative record before the Board. See Kappos v. Hyatt , 566 U.S. 431, 132 S.Ct. 1690, 182 L.Ed.2d 704 (2012). If no new evidence is admitted that relates to a disputed fact question, the reviewing court must apply the usual "substantial evidence" standard from the Administrative Procedures Act to the TTAB's findings of fact on that issue. See Belmora, LLC v. Bayer Consumer Care AG , 338 F. Supp. 3d 477, 483–84 (E.D. Va. 2018) ("[F]actual findings made by the Board which are untouched by new evidence presented to the court are reviewed under the substantial evidence standard mandated by the Administrative Procedure Act."); RXD Media, LLC v. IP Application Dev. , 377 F. Supp. 3d 588, 591–92 (E.D. Va. 2019), aff'd sub nom. RXD Media, LLC v. IP Application Dev. LLC , 986 F.3d 361 (4th Cir. 2021).

Although Frito-Lay urges the Court to take a narrow view of these principles and apply the standard of review independently to each discrete factual question (e.g., consumer survey evidence), the Court declines that invitation to error. Here, as noted above, genericness is a question of fact, and various types of evidence potentially bearing on consumer perception of the mark must be weighed in the discretion of the Court. Plaintiffs have submitted additional evidence to the Court on numerous issues that the Court finds may relate to genericness, including media references, consumer surveys, etc. Therefore, the Court must review all the new evidence related to genericness along with the evidence submitted to the TTAB de novo to reach its final factual determination of whether the disputed mark is generic.

Nevertheless, the Supreme Court in Kappos made clear that even though the District Court reviews all the evidence de novo , it need not ignore the findings and conclusions of the administrative agency. In Kappos , the Supreme Court adopted the Federal Circuit's rule that "the district court may, in its discretion, ‘consider the proceedings before and findings of the [administrative agency] in deciding what weight to afford an applicant's newly-admitted evidence.’ " Kappos , 566 U.S. at 445, 132 S.Ct. 1690 (quoting Hyatt v. Kappos , 625 F.3d 1320, 1335 (Fed. Cir. 2010) ). Accordingly, while the Court will consider all the evidence de novo , it will also consider the TTAB's findings in weighing the evidentiary value that will be afforded the new evidence presented by the Parties. See Id. ("[W]e conclude that the proper means for the district court to accord respect to decisions of the [agency] is through the court's broad discretion over the weight to be given to evidence newly adduced in the [ ] proceedings."); see also 3 McCarthy on Trademarks and Unfair Competition § 21:21 (5th ed.) ("McCarthy").

The burden of proof is more easily addressed. In the Federal Circuit decision in this matter, the court expressly held that Frito-Lay bears the burden to prove genericness by a preponderance of the evidence. Princeton Vanguard , 786 F.3d at 965, n.2. ("We agree with the Board that the burden was on Frito–Lay to prove genericness by a preponderance of the evidence. See Am. Med. Rehab. Providers Ass'n. v. UB Found. Activities, Inc. , Opp. No. 91158512, Canc'n No. 92043381, 2008 WL 4674613, at *3 (T.T.A.B. Sept. 23, 2008) ("In an opposition/cancellation, the opposer/petitioner has the burden of proving genericness by a ‘preponderance of the evidence.’ "); Racine Indus., Inc. v. Bane–Clene Corp. , 35 U.S.P.Q.2d 1832, 1838 (T.T.A.B. 1994) (...