Earlier this month, the Ninth Circuit issued a precedential decision that could potentially change the course of a trademark applicant’s ability to register a mark. In BBK Tobacco & Foods LLP v. Central Agriculture Inc., 97 F.4th 668 (9th Cir. 2024), the Court held that district courts have jurisdiction to alter or cancel trademark applications in an action brought under 15 U.S.C. § 1119.
The dispute and Ninth Circuit’s ruling
BBK Tobacco & Foods LLP (BBK) distributes smoking-related products under the mark “RAW.” Central Coast Agriculture, Inc. (Central Coast) sells cannabis products under the mark “Raw Garden.” BBK sued Central Coast for trademark infringement and related claims, and also sought to cancel several of Central Coast’s trademark applications. The district court granted summary judgment in favor of BBK on its cancellation claims and Central Coast appealed, arguing that the district court lacked jurisdiction to cancel its trademark applications.
On appeal, the Court found that the “[p]lain language” of Section 37 of the Lanham Act, 15 U.S.C. § 1119, “grants a district court jurisdiction to consider challenges to the trademark applications of a party” to an action that involves a registered trademark. BBK, 97 F.4th at 670. Specifically, the Court interpreted the terms “determine the right to registration” and “rectify the register” to “include[] the power to decide disputes over trademark applications.” Id. The Court also found that its holding “advances the interest of resolving registration disputes in a single action.” Id. at 671.
Judge Butamay’s dissent
Judge Butamay wrote a lengthy dissent, which focused on, among other things, federal courts’ historical deference to the United States Patent and Trademark Office (USPTO) for reviewing trademark applications in the first instance, and the text of Section 37, which he said explicitly refers to trademark registrations, not applications.
He also noted that the Lanham Act contemplates opposing trademark applications before the USPTO, not federal courts. Id. at 675-76. Federal courts should be involved, he writes, only after a party claims the application was denied or granted in error. Id. The Court’s decision, he stated, “short-circuit[s] Congress’s will” by allowing courts to “interfere[e] prematurely” in resolving disputes over trademark applications.
Implications of the ruling
While the BBK decision allows a plaintiff in an infringement action to “kill two birds with one stone,” it fails to address significant questions posed by this new trademark application review process.
First, the decision is silent as to the statutory deadline for opposing trademark applications before the USPTO. Typically, an opposer has a statutory deadline of 30 days to oppose an existing trademark application, which may be extended by an additional 30 days and further extended for good cause. 15 U.S.C. § 1063. The BBK decision does not address whether this deadline will play any role in an opposer’s ability to seek review of a trademark application before the district court. Notably, the opposition deadline for one of Central Coast’s trademark applications that BBK sought to cancel had already passed when BBK filed suit in the district court.
Second, the decision creates uncertainty regarding the trademark application process, could potentially increase costs for applicants, and could deter the filing of new applications.
Finally, the decision does not address the question of potentially conflicting decisions by the district court and USPTO regarding an application’s registrability.
