A dispute between the judicial and executive branch continues to intensify in Alabama over the TTAB’s refusal to comply with a federal district court judge’s order vacating a TTAB precedential decision.  At stake are two important questions:  (1) whether private parties may by agreement obtain a consent judgment ordering vacatur of a precedential TTAB decision where the reviewing court was not presented with the administrative record; and (2) whether an executive agency has the authority to refuse compliance with a federal district court’s order.

The case began with an application to register the mark HOUNDSTOOTH MAFIA for shirts and hats.  On July 22, 2013, the TTAB issued a precedential decision dismissing an opposition filed by The Board of Trustees of The University of Alabama and the son of football coach Paul W. Bryant.  The University had argued that the applicants’ mark was likely to be confused with trademark rights it owned as a result of its longstanding use of a houndstooth pattern, as well as its ownership of an Alabama state trademark registration for PAUL W. BRYANT MUSEUM, depicting a likeness of Coach Bryant wearing a houndstooth-patterned fedora.  After a full trial, briefing, and an oral hearing, the TTAB concluded that the University had failed to show acquired distinctiveness in the alleged houndstooth pattern mark and that the houndstooth pattern does not function as a source indicator.

The University sought review of the TTAB’s decision in district court.  However, the parties settled while the case was still pending and consented to entry of final judgment in favor of the University.  The parties jointly submitted a proposed consent judgment in which the parties stipulated as a factual matter (and contrary to the TTAB’s findings) that the houndstooth pattern enjoys “widespread association with the University” and that it “has become a well-known source identifier for the University.”  Critically, the proposed consent judgment stated, “Plaintiffs believe the Board’s Order is clearly erroneous in a number of material respects . . . [and] [t]he parties acknowledge and agree that the Board’s Order should be vacated.”  Judge Proctor entered the consent judgment in its entirety, and vacated the TTAB’s order without further discussion.  Neither party ever submitted the administrative record to the Court for review.

The TTAB refused to vacate.  Citing the importance of agency precedents to the wider trademark community as well as the policy goals of the agency, the USPTO (which has submitted two statements of interest in the case after “extensive deliberation” with the Department of Justice) argued that the parties did not have the right to agree among themselves that the TTAB’s decision should be vacated without having actually obtained judicial review of the TTAB’s factual findings and legal conclusions.  The USPTO further noted that the TTAB’s decision has already been cited as precedent against another trademark applicant, whose case has been suspended pending the outcome of this litigation.

Though Judge Proctor specifically invited the USPTO’s comment, he does not appear pleased with the agency’s challenge.  At a hearing in August 2015, he remarked, “I’m not sure that I’m required to explain myself to an administrative agency other than to say what I found and why I found it” and “I don’t think you’re entitled to sit up in Washington and have your client say nanny-nanny boo-boo to me.”  Judge Proctor explained that though he did not provide any explanation in the order, he did not merely “rubber stamp” the settlement.  He made clear that his order approving the settlement had come after significant deliberation and he had expressly intended to overrule the TTAB’s decision by signing off on the consent agreement.  He further clarified:

We’re dealing with you trying to assert as precedent something that the parties and the Court all agreed was flat wrong.  I keep saying “flat wrong” because I can’t really come up with a better adjective to describe it. I just think it was so — it wasn’t even in the ballpark. . . . That was my take when I saw the 75-page decision . . . .

The USPTO is not backing down.  Most recently, Michelle Lee, Director of the USPTO, moved to intervene in the case to defend the TTAB’s decision.  However, Ms. Lee may face an uphill battle.  Judge Proctor specifically noted in his Briefing Order that as part of any reply brief filed, she needs to address why her motion is not untimely “for the simple reason that this action has been closed since May 27, 2014, and they never moved to intervene either while the action was pending, or in order to seek appellate review of this court’s Final Judgment . . . .”

The case is The Board of Trustees of The University of Alabama v. Pitts, Case No. 7:13-cv-01736 (N.D. Ala.).