When an administrative body like the Patent Trial and Appeal Board (PTAB) or the Trademark Trial and Appeal Board (TTAB) issues an unjust and unfair decision that robs the owner of intellectual property (IP) of a valuable property right there is little recourse. In certain circumstances, the IP owner can appeal by filing a case with our third branch of government in federal district courts or in the Court of Appeals for the Federal Circuit. In other circumstances, there is no automatic right to appeal to a court in our third branch of government whose entire reason for existence is to place a check on executive power and fix the mistakes of administrative agencies like the United States Patent and Trademark Office.
But even in situations where no automatic appeal can be taken to Article III courts, there is a glimmer of hope. That glimmer of hope is called a petition to the director of the USPTO. An IP owner—in appropriate circumstances—can file a petition asking the USPTO director—who at this time is Kathi Vidal, and whose full title is Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office—to reconsider a decision of the PTAB or TTAB and reverse, vacate or modify that decision in “appropriate circumstances.”
What are “appropriate circumstances?” Our client Royale Enamel Limited believes that the story I am about to tell you is “appropriate circumstances.” We hope you will agree and tell Kathi Vidal she should agree too.
Royale Enamel is a small British clockmaker. Royale Enamel is a business owned and operated by David Breese. David Breese handmakes mid-century modern (1950’s & 60’s) enameled clocks. Utilizing the same materials that were used during the 1950’s & 60’s, David’s colorful designs are influenced by mid-century shapes and styles. Royale Enamel clocks incorporate materials that ensure longevity, making them a stylish addition to both modern and traditional interiors.
David spent a lifetime in manufacturing and interior design and is well known for re-inventing the English Lloyd Loom Furniture production in 1985. His company Lloyd Loom of Spalding won the Queens Award for Export in 1995 & 1998. Now in semi-retirement, David maintains a small studio workshop in his hometown of Holbeach, Lincolnshire, where he personally handcrafts mid-century style Starburst Wall Clocks, Royalexe High Pressure Laminate all Clocks, Mantle Clocks and Wall Art Plaques.
Royale Enamel is a small enterprise. Its adversary is the massive publicly traded China-based company JD.com, Inc., a business based in Beijing that employs over 450,000 people with a market capitalization of over $36 billion on annual revenues of over a trillion USD in 2022. JD is a technology business that provides its customers in China with access to U.S. markets to sell goods to U.S. consumers. JD actively engages in the sale of counterfeit goods in the United States using internet marketplaces such as Walmart.com.
JD’s sale of counterfeit Royale Enamel clocks to U.S. consumers is the subject of the pending lawsuit Royale Enamel Limited v. JD E-Commerce America, Ltd., et al, Case Number 1:22-cv-23990-DPG, filed in federal court in the Southern District of Florida on December 8, 2022. JD has been sued at least a dozen times by intellectual property owners for selling cheap counterfeit knock-offs of handmade intellectual property protected products on Walmart.com and other U.S. marketplaces. Royale Enamel is one such plaintiff.
In the Florida case, Royale Enamel claims trademark infringement in violation of 15 U.S.C. § 1125(a) and copyright infringement in violation of 17 U.S.C. § 501. Royale Enamel could not assert claims for infringement of the Royale Enamel’s registered trademark under 17 U.S.C. § 1114 because while Royale Enamel’s mark was registered in the UK, Royale Enamel’s U.S. trademark application is still pending.
Royale Enamel placed its trust in the USPTO so it could secure the rights it needed to stop the counterfeiters and fraudsters. Online counterfeiters selling cheap imitations of Royale Enamel’s hand-made clocks on internet marketplaces are destroying Royale Enamel’s business. Authentic Royale Enamel clocks sell for $150 to $300 or more. Counterfeiters operating in China meanwhile sell inferior copies of Royale Enamel’s clocks for 1/10th the price. Royale Enamel is inundated with complaints from consumers duped into purchasing authentic merchandise who instead receive garbage in the mail and blame Royale Enamel for the fraud. But it is JD—whose business enables the fraudsters—who is responsible, not Royale Enamel.
Royale Enamel filed its application with the Trademark Office on May 9, 2022. Royale Enamel hoped and prayed its trademark would register promptly so that Royale Enamel could pursue claims for registered trademark infringement and counterfeiting against JD in the Florida case. Royale Enamel’s mark was published for opposition on April 4, 2023 and appeared on the verge of registration. But registration did not follow. Instead, what happened next is a miscarriage of justice that the Director of the USPTO Kathi Vidal should correct so that Royale Enamel’s trademark can proceed to registration.
On the last day of the publication window, JD filed for a first extension to oppose for 90 days. First extensions are granted by the TTAB automatically. Then on August 1, 2023—again the last possible day—JD filed opposition proceeding number 91286340. An opposition proceeding allows a senior user of a trademark to object to a junior user’s attempt to register a mark.
But JD is not a senior user of Royale Enamel’s mark. JD is not a clockmaker, and JD does not make clocks. JD is a business to consumer online retailer, a Fortune Global 500 company, and Alibaba’s chief competitor. JD’s business is technology, not clocks. JD is in intermeddler. JD’s opposition lacked any reasonable basis to claim that it had a real interest in Royale Enamel’s application. JD’s opposition was nothing more than a sham tactic calculated to obtain an advantage for JD in the Florida case.
Simply put, JD’s opposition lacked standing. It is settled law that an opposer “must have a belief that he would suffer some kind of damage if the mark is registered,” and the damage that the opposer claims must show that the opposer has “a ‘real interest’ in the proceedings” and “a ‘reasonable basis’ for his belief of damage.” Richie v. Simpson, 170 F.3d 1092, 1094 (Fed. Cir. 1999). The opposer’s belief of damage must be more than a subjective belief. Id.; McDermott v. San Francisco Women’s Motorcycle Contingent, 81 USPQ2d 1212, 1215 (TTAB 2006), aff’d unpub’d, 240 Fed. Appx. 865 (Fed. Cir. July 11, 2007), cert. denied, 552 U.S. 1109 (2008).
JD has no real interest in Royale Enamel’s mark. JD has no objective belief of damage. JD’s opposition petition is devoid of any plausible allegation showing that it has a real interest. JD’s opposition was a sham filed by an intermeddler and Royale Enamel believed the TTAB would see this clearly and dismiss the petition out of hand so Royale Enamel’s mark could proceed to registration. That should have been the just and correct result, not just for Royale Enamel, but also for the U.S. consumer who needs the protection of the USPTO against counterfeiters selling knock-off goods using stolen intellectual property on internet marketplaces.
So Royale Enamel moved to dismiss the opposition proceeding on the pleadings. And the TTAB, in response to Royale Enamel’s motion, issued a decision in which it agreed that JD’s opposition on its face failed to demonstrate standing. But instead of dismissing JD’s opposition so Royale Enamel’s mark could proceed to registration—which was the logically correct and procedurally appropriate thing to do—the TTAB instead summarily suspended the opposition proceeding indefinitely for no reason, and it did so—incredibly—in response to JD’s own motion to suspend.
The TTAB suspended the proceeding without any analysis of why suspension was warranted. The TTAB suspended the proceeding in direct contradiction to its own contrary finding that JD’s opposition lacked standing. The TTAB suspended the proceeding without determining first that the pending civil action “may have a bearing on” this proceeding as required by the TTAB Rules of Procedure. The TTAB suspended the proceeding contrary to the Board’s own rules and policies.
Royale Enamel was aghast. It moved for reconsideration. Reconsideration was denied. So Royale Enamel is now left with only a glimmer of hope. Royale Enamel has filed a petition with the Director Kathi Vidal to right a wrong and stop this flagrant abuse of our trademark system where the victim is a small enterprise that makes quality products by hand and the offender is a massive Chinese counterfeiter with no scruples willing to abuse our legal institutions for its own monetary gain.
JD’s opposition to Royale Enamel’s trademark is nothing less than an abuse of our trademark system. The Board’s suspension for no articulable reason compounds JD’s abuse of our trademark registration system. JD has no standing, therefore JD has no basis to oppose registration of Royale Enamel’s mark, and JD’s opposition should have been summarily dismissed. Instead, the Board’s summary suspension of the proceeding at JD’s request effectively handed JD exactly what it needed to avoid accountability for its IP infringement. Unless the Director intercedes, Royale Enamel will never be able to assert registered trademark infringement claims against JD and its affiliates because Royale Enamel’s mark will never be issued as long as the suspension remains in effect which will be as long as the Florida case is pending. The TTAB is complicit in the fraud and abuse of our trademark system by JD. The Board’s refusal to recognize the abuse and put a stop to it is outrageous.
But there is a glimmer of hope. At the Global Forum on Intellectual Property on September 6, 2022 in Singapore, the Director Kathi Vidal spoke eloquently of the need to “ensure that we have an intellectual property ecosystem that fosters and protects innovation, entrepreneurism, and creativity.” The Director singled out small businesses like Royale Enamel in particular as among “SMEs and those who have traditionally lacked access to the innovation ecosystem.” The Director acknowledged her job included the protection of consumers and stakeholders “from abuses of the IP system,” because “[a]buses are counter to our communal and public goals, and they benefit the few at the exclusion of the many. Whether such abuses are on the trademark register, in design patents, or in PTAB practice, they must be stopped.” See Remarks by USPTO Director Kathi Vidal at the Global Forum on Intellectual Property | USPTO (https://www.uspto.gov/about-us/news-updates/remarks-uspto-director-kathi-vidal-global-forum-intellectual-property)(emphasis added).
The Director should be true to her words and correct this injustice. The suspension should be vacated, the opposition dismissed, and Royale Enamel’s mark should be registered. Please tell the USPTO Director Kathi Vidal to do the right thing. Share this article with the USPTO on Twitter @uspto, call the Director at (800) 786-9199, or email the Director to usptoinfo@uspto.gov.
Joel B. Rothman represents clients in intellectual property infringement litigation involving patents, trademarks, copyrights, trade secrets, defamation, trade libel, unfair competition, unfair and deceptive trade practices, and commercial matters. Joel’s litigation practice also includes significant focus on electronic discovery issues such as e-discovery management and motion practice relating to e-discovery.
Joel is Board Certified in Intellectual Property Law by The Florida Bar, “AV” rated by Martindale-Hubbell, and rated 10.0 (superb) by Avvo. Joel is a former chair of the Intellectual Property Committee of the Business Law Section of The Florida Bar and a member of the Section’s Executive Council. Prior to relocating to Florida, Joel was an Assistant District Attorney in the Rackets Bureau, Investigations Division, of the Bronx District Attorney’s Office.
Joel received his J.D. with honors from the Benjamin N. Cardozo School of Law, Yeshiva University in 1991, and his B.A. magna cum laude from the State University of New York at Albany in 1988. Joel is admitted in Florida, Georgia, Washington State and New York, as well as many federal courts around the country.
The petition to the Director can be found here: https://tsdr.uspto.gov/documentviewer?caseId=sn97400531&docId=PDR20240213212541&linkId=1#docIndex=0&page=1