District Court Rules on Motion to Dismiss Counterclaim in Appeal from TTAB’s “Bullet-Shaped-Antenna” Decision

ESR Performance Corp. has commenced a civil action in the U.S. District Court for the Middle District of Florida, seeking review of the Board’s decision granting a petition for cancellation of ESR’s registration for the product configuration mark shown below (shaped like “a bullet cartridge”) for “automobile antennas.” [TTABloggedhere]. The Board rejected petitioner JVMAX’s claim that the design is aesthetically functional because JVMAX failed to prove a competitive need for use of that shape. The Board, however, found that the applied-for mark lacked acquired distinctiveness. The district court recently ruled on Plaintiff ESR’s motion to dismiss parts of defendant’s counterclaim, which included a count based on aesthetic functionality and a count requesting cancellation of several pending ESR trademark applications. ESR Performance Corp. v. JVMAX, Inc., Civil Action No. 6:18-cv-1601-Orl-37GJK (M.D. Fla. May 7, 2019).

Issue Preclusion re Aesthetic Functionality? One count of JVMAX’s counterclaim sought cancellation of ESR’s registration based on aesthetic functionality. ESR moved to dismiss, contending that issue preclusion barred this attack because the TTAB had already found against JVMAX on aesthetic functionality. The court pointed out, however, that ESR is appealing the Board’s decision and therefore the decision is under de novo review. “Only if a party fails to seek review is the TTAB decision entitled to a preclusive effect.” The court therefore declined to dismiss this count.

Cancellation of Pending Trademark Applications?: The court granted the motion to dismiss with respect to JVMAX’s claim for cancellation of several pending trademark applications of ESR. Section 37 of the Lanham Act gives the court power to cancel a registration, or otherwise rectify the register as to a registration. However, Section 37 does not apply to a pending application, and therefore the court concluded that it lacked subject matter jurisdiction over this count.

The court noted that some courts have exercised jurisdiction over a pending trademark application when one of the parties has a registered mark with “sufficient nexus” to the pending trademark applications. But even if the court did consider the nexus, “the relationship is insufficient here.” The pending applications are for word marks, whereas the mark involved in this appeal is a product configuration mark.

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TTABlog comment: Plaintiff ESR included infringement and unfair competition claims. JVMAX’s counterclaim included a count for unfair competition.