Proctor Order

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UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ALABAMA

WESTERN DIVISION

BOARD OF TRUSTEES OF THE

UNIVERSITY OF ALABAMA, et al.,

Plaintiffs,

v.

HOUNDSTOOTH MAFIA

ENTERPRISES LLC et al.,

Defendants.

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Case No.: 7:13-CV-1736-RDP

MEMORANDUM OPINION

The phrase a day late and a dollar short has served as the theme of songs, books,

poems, movies, and television shows. As explained below, it is a theme that also characterizes

the respective approaches taken in this case by (1) Michelle K. Lee (Lee), the Undersecretary

for Intellectual Property and Director of the United States Patent and Trademark Office

(USPTO) and the USPTOs Trademark Trial and Appeal Board (TTAB), and (2) Defendants

Houndstooth Mafia Enterprises, LLC, Christopher Blackburn, and William Pitts, Jr.

Lee has moved to intervene in this action indicating that she seeks to protect the interests

of the USPTO. The USPTO says that its asserted interest is to avoid the unnecessary vacatur of

one of its precedential decisions. The decision at issue was rendered by the TTAB and was

favorable to Houndstooth Mafia, Christopher Blackburn, and William Pitts, Jr. (Defendantsin

this case) and unfavorable to the Board of Trustees of the University of Alabama and Paul

Bryant, Jr. (Plaintiffs in this case). After the TTABs ruling, in September 2013, Plaintiffs

filed this action appealing that decision. While this action was pending in this court, Plaintiffs

and Defendants reached a settlement of the matter. Importantly, as part of that settlement, the

FI2016 Feb-23 P

U.S. DISTRICT

N.D. OF AL

Case 7:13-cv-01736-RDP Document 34 Filed 02/23/16 Page 1 of 21


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parties agreed to the vacatur of the TTABs administrative decision. Defendants have explained

that their primary reason for settling was financialthey were a dollar short in defending the

appeal.

In May 2014, the parties submitted and the court approved the settlement and entered a

Final Consent Judgment. (Doc. # 15). Among other things, the Final Consent Judgment called

for the vacatur of the TTABs decision which was favorable to Defendants. (Doc. # 15). After

the court entered final judgment, the parties submitted it to the TTAB. No action was taken.

More than a year passed.

Finally, in June 2015, the TTAB essentially (and inexplicably) treated the courts Order

as a request, and issued a decision refusing to comply with this courts Order. (Doc. # 30-2).

Thereafter, Plaintiffs moved to enforce this courts prior final judgment. (Doc. # 16). In light of

those developments, this court scheduled a hearing, and invited the USPTO to participate.

Through its counsel, the USPTO appeared at the hearing. It was only after the hearing that Lee

sought to intervene she is more than a day late.

This matter is before the court on (1) PlaintiffsMotion to Enforce Consent Judgment

(Doc. # 16), filed July 23. 2015, and (2) the Motion by Michelle K. Lee, Undersecretary for

Intellectual Property and Director of the United States Patent and Trademark Office, to Intervene

(Doc. # 28), filed September 17, 2015. These matters have been fully briefed, and the court has

heard argument on the Motion to Enforce Consent Judgment. (Docs. # 20, 21, 22, 26, 27, 30,

31). After careful consideration, and with the benefit of that oral argument, the court concludes

that the motion to intervene is due to be denied as untimely, and the motion to enforce the

judgment is due to be granted.



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I. Background

In July 2013, after five years of administrative discovery and depositions, the TTAB

issued a decision dismissing an opposition filed by Plaintiffs against the registration of the

HOUNDSTOOTH MAFIA mark sought by Defendants, Pitts and Blackburn. (Docs. # 16-4 at 3,

22 at 4). The University has licensed the Houndstooth pattern as a trademark in connection with

various goods because it contends the pattern is well-known to be associated with the University.

(See, e.g., Doc. # 22 at 1314). The TTAB decision held that Defendants could proceed to

registration on the HOUNDSTOOTH MAFIA mark. (Doc. # 1; Doc. # 16-1).

Section 107 of the Lanham Act permits a litigant to appeal a TTAB ruling directly to the

Federal Circuit, 15 U.S.C. 1071(a)(1). In the alternative, a party may file a civil action

challenging the boards ruling in a federal district court, 15 U.S.C. 1071(b)(1). Dissatisfied

with the TTABs decision, the University and Bryant elected the latter option and filed suit in

this court. (Doc. # 1).

During the course of this litigation, the parties reached a settlement. Pursuant to that

settlement, they presented to the court a Final Judgment of Consent. (Doc. # 14). As part of the

settlement, Pitts and Blackburn assigned to the University all right, title, and interest in and to the

Houndstooth Mafia mark that was the subject of the TTAB decision. (Doc. # 14-1 at 3). In

addition, pursuant to the settlement all parties acknowledged and agreed that the TTABs

decision favorable to Pitts and Blackburn should be vacated. (Id.). The court approved the

parties settlement, and entered Final Consent Judgment on May 27, 2014. (Doc. # 15). As part

of that judgment, and due to the parties express settlement terms, the court ordered that the

TTABs decision is VACATED. (Doc #15 at 3 (bold and caps in original)).



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Final Consent Judgment (Doc. # 15), the TTAB did not vacate its decision. Nor, at that time, did

it seek to intervene and ask this court to reconsider its ruling. There was no appeal taken to the

Eleventh Circuit. Instead, more than a year later (and after mulling over whether it would

comply with the courts Final Consent Judgment), on June 23, 2015, the TTAB made its own

decisionnot to comply with theparties agreement and this courts express order contained in

the Final Consent Judgment. (Doc. # 30-2).

After the TTAB entered its June 2015 decision, the University and Bryant filed their

motion to enforce. (Doc. # 16). After receiving a response to that motion, the court set this case

for a hearing. (Docs. #17, 18). Lee did not seek to intervene then. Nevertheless, the court

invited counsel for the USPTO to submit briefing and participate in the scheduled hearing.

(Doc. # 17). It was only some time after the court concluded its hearing on the motion (seeDoc.

# 22) that Lee belatedly filed her motion to intervene. (Doc. # 28).

II. Standard of Review

Section 21 of the Lanham Act permits a party dissatisfied with a TTAB decision to either

appeal directly to the Federal Circuit or bring a civil action in a federal district court. 15 U.S.C.

1071(a), (b);see also Material Supply Intl, Inc. v. Sunmatch Indus. Co., Ltd., 146 F.3d 983, 989

(D.C. Cir. 1998). A challenge to the TTABs decision in a district court is both an appeal and

a new action, which allows the parties to request additional relief and to submit new evidence.

Board of Regents of University of Wisconsin System v. Phoenix Intern. Software, Inc.,653 F.3d

448, 452 (7th Cir. 2011) (quoting CAE, Inc. v. Clean Air Engg, Inc., 267 F.3d 660, 673 (7th Cir.

2001)). In such an action, the district court wears two hats: [it] is an appellate reviewer of facts

found by the TTAB and is also a fact-finder,provided that new evidence is introduced to the

court. Id. (quoting CAE, Inc., 267 F.3d at 674).



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III. Analysis

The USPTO raises two issues that must be addressed by the court. First, it argues that it

was not required to vacate its 2013 decision in compliance with the Order because the parties

did not have the right to agree among themselves that the Boards precedential decision should

be vacated .3 (Doc. # 20 at 2). Second, the court must determine whether Lees motion to

intervene is timely. The court addresses each of these questions in turn.

A. PlaintiffsMotion to Enforce Consent Judgment

Plaintiffs have moved to enforce the Final Consent Judgment and challenge the USPTOs

decision to ignore this courts order to vacate the TTABs prior unfavorable ruling. The USPTO

contends that U.S. Bancorp Mortgage Co. v. Bonner Mall Partnership, 513 U.S. 18 (1994),

stands for the proposition that this court was without power to vacate the TTAB decision based

merely on the parties settlement. However, this argument misses the mark for at least two

reasons. As discussed below (in Section III(B) of this opinion), the argument should have been

made (if at all) after a timely motion to intervene followed by either (1) a request to modify the

courts order and/or (2) an appeal to the Eleventh Circuit (the court that reviews this court). As

noted already (and again discussed more fully below), the USPTO did not timely seek to

intervene, filed no motion to modify (or reconsider), and took no such appeal. But even putting

aside the untimeliness of the motion to intervene and addressing the merits of t he USPTOs

argument, U.S. Bancorp does not control here. Rather, this case is more closely aligned with

Major League Baseball Properties, Inc. v. Pacific Trading Cards, Inc., 150 F.3d 149 (2nd Cir.

1998).

3At another point in its briefing, the USPTO says that it seeks to prevent the unnecessary vacatur of its

judicial decision[]. (Doc. # 33 at 12). This argument betrays a misunderstanding (or worse) of the process of

appellate review of the TTABs decisions. The court addresses that subject in more detail below.



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Although the trial court is free to address, as a matter of first impression, those issues not

disposed of on appeal, it is bound to follow the appellate courts holdings, both expressed and

implied.Piambino, 757 F.2d at 1119 (internal citations omitted). If an Article III court is so

bound by an appellate courts decision, it follows that an administrative body (like the TTAB) is

similarly constrained by a district courts decision made while that court is acting as an appellate

court reviewing a decision of the TTAB.5

2. The USPTOs Position is Wrong on the Merits; This is Not Merely a

Case of Mootness by Settlement.

In addition to not having the authority to ignore this court s final judgment, the TTABs

reason for refusing to vacate its decision is also erroneous. The principle argument offered by

the TTAB is that, under U.S. Bancorp, its precedential decision does not become moot based

on the partiessettlement of the action. But the TTAB misapplies the Supreme Courtsdecision

in U.S. Bancorp. It also flatly mischaracterizes the facts of that case.

In U.S. Bancorp, unlike the situation here, the settlement did not involve a provision in

which the parties agreed to vacate a lower court decision. To the contrary, the creditor (U.S.

Bancorp Mortgage Co.) made a request to vacate, but the debtor (Bonner Mall Partnership)

opposed it. Indeed, the Courts own discussion of the proceedings in U.S. Bancorp makes this

fact clear:

Bancorp then petitioned for a writ of certiorari. After we granted the petition, 510

U.S. 1039 (1994), and received briefing on the merits, Bancorp and Bonner

stipulated to a consensual plan of reorganization, which received the approval ofthe Bankruptcy Court. The parties agreed that confirmation of the plan constituted

a settlement that mooted the case. Bancorp, however, also requested that we

5 Curiously, however, the TTAB refuses to accept the concomitant responsibility placed upon courts to

obey the orders of a reviewing court. Section 1071(b)(1) contemplates that district courts may review the TTABs

decisions; therefore, the principles of Section 2106 are relevant to such review. And, without question, the

principles that can be extrapolated from Section 2106 require the TTABs compliance with this courts appellate

Order. When a Section 1071(b)(1) reversal or remand occurs, the TTAB does not thereafter sit as an independent

arbiter of whether a reviewing court got it right.



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