Following a federal district court judge’s strongly-worded Memorandum Opinion and Order last month, the TTAB recently vacated its own precedential ruling against the protectibility of the University of Alabama’s houndstooth pattern trademark.
In 2013, the TTAB dismissed an opposition filed by the University of Alabama against the HOUNDSTOOTH MAFIA mark on the grounds that the University had failed to show that its houndstooth pattern had acquired distinctiveness and thereby functioned as a source indicator. The University challenged the Board’s ruling in the Northern District of Alabama, and the parties later settled.
The parties presented the District Court with a Final Consent Judgment in which they agreed that the TTAB’s decision on lack of distinctiveness should be vacated. Following the Court’s entry of the Final Consent Judgment, the University filed a motion with the TTAB to vacate its decision and dismiss the action with prejudice. After the TTAB refused to vacate its earlier judgment, the University filed a motion with the District Court to enforce the Consent Judgment. After a hearing (in which the USPTO participated), the USPTO filed a motion to intervene.
The USPTO argued that the District Court had no power to vacate the TTAB’s decision based only on the parties’ settlement. The Court disagreed for two reasons. First, the Court made clear that the USPTO does not have the authority to ignore a district court’s order. According to the Court, an administrative body like the TTAB is equivalent to a lower court being reviewed by an appellate court. If an Article III court is bound by an appellate court’s decision, so too is an administrative body bound by the decision of a district court acting as a court of appellate jurisdiction.
Second, the Court found that the exceptional circumstances of the case justified the unique requirement of vacatur agreed to by the parties. The Court pointed to similar cases where parties were locked in a dispute that could not settle unless they agreed to vacatur of a prior court decision. As in these cases, the University had made clear that it would settle only if the TTAB’s decision were vacated because the precedential effect of the decision might harm it in the future.
The Court rejected the TTAB’s argument that it was not required to comply with the Court’s Order because the Court did not examine the entire factual record noting that the Final Consent Judgment was based “solely on the terms of the parties’ settlement, not the merits of the underlying claim.” The Court took exception to the TTAB’s argument that, essentially, it had on its own determined that the record before the District Court presented no legal authority justifying vacatur under these circumstances. Judge Proctor stated unequivocally: “district courts review the TTAB’s decisions, not the other way around” and ‘administrative agencies  are not free to ignore [a] court’s mandate.’”
The Court also denied the USPTO’s motion to intervene as untimely describing the USPTO’s contention that it had no way of knowing that its interests were affected by the Final Judgment until after the hearing as “disingenuous,” “drip[ping] with self-importance,” and “made in bad faith.” Ultimately, the TTAB vacated its decision but “specifically reserved the right to seek further review of the orders and opinions of the district court in this matter.”
The case is Board of Trustees of the University of Alabama v. Houndstooth Mafia Enterprises LLC, Case No. 7:13-cv-1736-RDP (N.D. Ala.) and The Board of Trustees of The University of Alabama v. Pitts, Opposition No. 91187103 (TTAB).