Bank v. Al Johnson's Swedish Rest. ( 2019 )

NOTE: This disposition is nonprecedential.
United States Court of Appeals
for the Federal Circuit
______________________
TODD C. BANK,
Appellant
v.
AL JOHNSON'S SWEDISH RESTAURANT & BUTIK,
INC.,
Appellee
______________________
2019-1880
______________________
Appeal from the United States Patent and Trademark
Office, Trademark Trial and Appeal Board in No.
92069777.
______________________
Decided: December 9, 2019
______________________
TODD C. BANK, Kew Gardens, NY, pro se.
KATRINA HULL, Markery Law LLC, Gaithersburg, MD,
for appellee. Also represented by JACQUELINE PATT.
______________________
Before WALLACH, CLEVENGER, and HUGHES, Circuit
Judges.
2 BANK v. AL JOHNSON'S SWEDISH REST.
WALLACH, Circuit Judge.
Appellant Todd C. Bank appeals the opinion of the U.S.
Patent and Trademark Office’s Trademark Trial and Ap-
peal Board (“TTAB”) granting Appellee Al Johnson’s Swe-
dish Restaurant & Butik, Inc.’s (“Swedish Restaurant”)
motion to dismiss Mr. Bank’s petition to cancel registration
of the Swedish Restaurant’s trade dress that “consists of
goats on [a] grass roof,” 1 bearing the Registration Number
2,007,624 (“Goats on the Roof Registration”), under Fed-
eral Rule of Civil Procedure 12(b)(6). Bank v. Al Johnson’s
Swedish Restaurant & Butik, Inc., No. 92069777 (T.T.A.B.
Mar. 27, 2019) (A.A. 2–16); 2 see A.A. 14–16 (Petition to
Cancel). 3 For the limited purpose of determining whether
Mr. Bank has standing to bring his claim, we have jurisdic-
tion pursuant to 28 U.S.C. § 1295(a)(4)(A) (2012).
DISCUSSION
I. Standard of Review and Legal Standard
“Standing is a question of law that this court reviews
de novo.” Coach Servs., Inc. v. Triumph Learning LLC,
668 F.3d 1356, 1376 (Fed. Cir. 2012). While a plaintiff
must show a “case or controversy” between parties to es-
tablish standing before a federal court, “[t]he ‘case’ and
1 “[T]rade dress constitutes a ‘symbol’ or ‘device’ for
purposes of the” Lanham Act that may be registered as a
trademark.” Wal-Mart Stores, Inc. v. Samara Bros., Inc.,
529 U.S. 205, 209 (2000); see 15 U.S.C. § 1127 (2012).
2 “A.A.” refers to the Appellant’s Appendix attached
to its Principal Brief.
3 Following the issuance of its opinion on March 27,
2019, the TTAB granted Mr. Bank twenty days to amend
his Petition to Cancel. A.A. 1 (Order Denying the Petition
to Cancel). Because Mr. Bank did not amend within the
allotted twenty days, on May 2, 2019, the TTAB denied the
Petition to Cancel with prejudice. A.A. 1.
BANK v. AL JOHNSON'S SWEDISH REST. 3
‘controversy’ restrictions do not . . . apply to matters before
[an] administrative agenc[y,]” such as the TTAB. Id. (cit-
ing Ritchie v. Simpson, 170 F.3d 1092, 1095 (Fed.
Cir. 1999)). Instead, standing before an administrative
agency is conferred by statute. Here, “[a] petition to cancel
a registration of a mark” may be filed “by any person who
believes that he [or she] is or will be damaged . . . by the
registration of a mark[.]” 15 U.S.C. § 1064. “[C]ancellation
is most often premised on the grounds listed in [15 U.S.C.
§ 1052.]” Young v. AGB Corp., 152 F.3d 1377, 1380 (Fed.
Cir. 1998). “The party seeking cancellation must prove two
elements: (1) that it has standing; and (2) that there are
valid grounds for canceling the registration.” Cunning-
ham v. Laser Golf Corp., 222 F.3d 943, 945 (Fed. Cir. 2000)
(citing 15 U.S.C. § 1064).
To successfully establish standing in a trademark op-
position prosecution, the opposer must plead and prove
facts showing that he or she has “a real interest in the pro-
ceedings and [has] a reasonable basis for his [or her] belief
of damage.” Ritchie, 170 F.3d at 1095 (internal quotation
marks omitted). Typically, standing is not a demanding
requirement. Regarding the real interest requirement, “an
opposer must have a legitimate personal interest in the op-
position.” Coach Servs., 668 F.3d at 1376 (internal quota-
tion marks and citation omitted). Regarding the second
inquiry, an “opposer’s belief of damage must have a reason-
able basis in fact.” Id. (internal quotation marks and cita-
tion omitted). “[T]here is no requirement that damage be
proved in order to establish standing[.]” Int’l Order of Job’s
Daughters v. Lindeburg & Co., 727 F.2d 1087, 1092 (Fed.
Cir. 1984).
II. Mr. Bank Lacks Standing to Petition to Cancel a Reg-
istration Because He Failed to Plead a Real Interest and
Reasonable Basis for His Belief of Damage
The TTAB concluded that Mr. Bank lacked standing to
bring the appeal and granted the Swedish Restaurant’s
4 BANK v. AL JOHNSON'S SWEDISH REST.
Motion to Dismiss. A.A. 8. Specifically, the TTAB ex-
plained that, as “the only grounds for cancellation is the
claim of functionality . . . [Mr. Bank] must adequately
plead his standing to assert a claim of functionality.”
A.A. 7 (emphasis omitted). 4 The TTAB determined that
Mr. Bank did not sufficiently allege standing for a number
of reasons. First, the TTAB stated that Mr. Bank failed to
“plead[] that he has a present or prospective right or inter-
est in [the Swedish Restaurant’s] involved mark or any
other facts sufficient to allege his standing.” A.A. 8. Sec-
ond, it explained that Mr. Bank’s “pleading of standing is
vague and does not relate specifically to the involved ser-
vice mark.” A.A. 8. Finally, the TTAB concluded that the
petition “d[id] not allege that [Mr. Bank] ha[d] a reasonable
belief of harm.” A.A. 8. Mr. Bank contends that the TTAB
4 Under the Lanham Act, “[n]o trademark by which
the goods of the applicant may be distinguished from the
goods of others shall be refused registration on the princi-
pal register on account of its nature unless it . . . comprises
any matter that, as a whole, is functional.” 15 U.S.C.
§ 1052(e)(5) (emphasis added). Moreover, a petition to can-
cel registration is permitted on the grounds of functional-
ity. Id. § 1064(3) (permitting petitions to cancel “[a]t any
time if the registered mark . . . is functional”). To deter-
mine functionality, the following factors are reviewed:
(1) the existence of a utility patent disclosing the
utilitarian advantages of the design; (2) advertis-
ing materials in which the originator of the design
touts the design’s utilitarian advantages; (3) the
availability to competitors of functionally equiva-
lent designs; and (4) facts indicating that the de-
sign results in a comparatively simple or cheap
method of manufacturing the product.
Valu Eng’g, Inc. v. Rexnord Corp., 278 F.3d 1268, 1274
(Fed. Cir. 2002).
BANK v. AL JOHNSON'S SWEDISH REST. 5
incorrectly interpreted the standing requirements for a pe-
tition to cancel a registration by conflating the standing
and merits requirements, Appellant’s Br. 4, and by incor-
rectly finding standing limited to competitors of a mark
holder, id. at 9. We disagree with Mr. Bank.
Mr. Bank failed to plead “a real interest in the proceed-
ings” and “a reasonable basis” for his belief of damage.
Ritchie, 170 F.3d at 1095 (internal quotation marks and ci-
tation omitted). Mr. Bank sought to cancel the Goats on
the Roof Registration as functional, alleging that the trade
dress “is demeaning to” goats, which, in turn, “is offensive
to [Mr.] Bank and denigrates the value he [and others]
place[] on the respect, dignity, and worth of animals.”
A.A. 15. As an initial matter, the sole standing argument
that Mr. Bank raised before the TTAB, A.A. 6–8, and re-
cites on appeal, Appellant’s Br. 9, is that the Swedish Res-
taurant’s trade dress was disparaging to himself as it “is
demeaning to” goats, A.A. 15. Yet as Mr. Bank conceded
before the TTAB, the Supreme Court’s decision in Matal v.
Tam, 137 S. Ct. 1744, 1764 (2017), foreclosed his argument,
as it held unconstitutional the prohibition on the registra-
tion of disparaging marks under the Lanham Act. A.A. 31–
32 (explaining that, following the issuance of Tam, Mr.
Bank “acknowledge[d] that disparagement [wa]s no longer
a cognizable claim under the [Lanham] Act”). In Tam, the
Court held as unconstitutional 15 U.S.C. § 1052(a) of the
Lanham Act, concluding that its prohibition on disparaging
marks was invalid under the First Amendment protection
of speech. See Tam, 137 S. Ct. at 1765. To the extent that
Mr. Bank relies upon disparagement either as the grounds
for his petition or, as discussed below, to establish his
standing, the argument is without merit after Tam.
In any event, Mr. Bank provided no grounds for stand-
ing. First, Mr. Bank failed to plead a real interest in the
cancellation proceedings. See Ritchie, 170 F.3d at 1095. To
make such a pleading, an “opposer must have a direct and
personal stake in the outcome of the opposition.” Id.; see
6 BANK v. AL JOHNSON'S SWEDISH REST.
Empresa Cubana Del Tabaco v. Gen. Cigar Co., 753 F.3d
1270, 1275 (Fed. Cir. 2014) (explaining that a real interest
may be shown by a “legitimate commercial interest,” such
as a rejection of a competitor’s proposed mark). Mr. Bank
failed to provide any reason other than to allege that the
Goats on the Roof Registration is “demeaning to goats” and
that the “respect, dignity, and worth of animals” were af-
fected by that alleged demeaning. See generally A.A. 15.
For the reasons discussed above, the disparagement clause
of the Lanham Act is stricken as unconstitutional. See
Tam,137 S. Ct. at 1765; see also Iancu v. Brunetti, 139 S.
Ct. 2294, 2299 (2019) (holding the Lanham Act’s bar on the
registration of “immoral” or “scandalous” trademarks in vi-
olation of the First Amendment). Mr. Bank provided no
other basis to suggest he maintained a direct and personal
stake in the outcome and so we conclude that Mr. Bank
failed to plead to a real interest.
Second, Mr. Bank failed to plead “a reasonable basis
for his belief of damage.” Ritchie, 170 F.3d at 1095. While
Mr. Bank asserted that the trade dress “is offensive to nu-
merous persons,” including himself, because it was de-
meaning to goats, he failed to articulate how this reason
survives Tam. See generally Appellant’s Br. 3–10. While
Mr. Bank is not required to prove his case at the pleading
stage, he must provide allegations sufficient to show his as-
sertion of damage. See Ritchie, 170 F.3d at 1098 (explain-
ing that “[f]or standing purposes, the facts asserted by an
opposer need not prove his case on the merits,” but “the
reasonableness of an opposer’s basis for his belief of dam-
age” must be shown). Mr. Bank did not do so here. Accord-
ingly, the TTAB properly determined that Mr. Bank lacked
standing.
On appeal, Mr. Bank raises several counterarguments,
all of which are unavailing. First, Mr. Bank contends that
the TTAB erred in granting the Swedish Restaurant’s Mo-
tion to Dismiss by “misunderstanding [the] basic standing
doctrine” with the merits of his claim when the TTAB
BANK v. AL JOHNSON'S SWEDISH REST. 7
stated that “an individual’s personal offense to a mark is
[not] sufficient to plead standing to assert a claim of func-
tionality.” Appellant’s Br. 4 (quoting A.A. 7) (emphasis al-
tered). The TTAB’s opinion itself belies such an argument.
The TTAB first analyzed standing as a threshold matter
and concluded that it was not alleged in the petition.
A.A. 8. In doing so, the TTAB explained that Mr. Bank had
conceded that Tam prevented the use of disparagement as
a ground for his opposition petition. A.A. 6–7. The TTAB
subsequently addressed Mr. Bank’s claim of functionality
and determined the pleadings also provided no standing.
A.A. 7. The TTAB did not conflate the two requirements
and instead reviewed Mr. Bank’s petition in total to see if
standing was sufficiently alleged. See Ritchie, 170 F.3d
at 1095.
Second, Mr. Bank argues that the TTAB improperly
limited standing to a mark holder’s competitors. Appel-
lant’s Br. 7. He is incorrect. Instead, the TTAB identified
a variety of grounds which would provide standing. A.A. 5
(“In order to plead standing to challenge a registration
based on a claim that the mark is functional, a plaintiff
must plead that it is a competitor, that it is engaged in the
manufacture or sale of the same or related goods, or that it
otherwise has a current or prospective right or interest in
using the mark.” (emphasis added)). Moreover, the TTAB
relied upon Ritchie, which itself provides for the proposi-
tion that standing is not limited to competitors. See gener-
ally A.A. 4–8. See Ritchie, 170 F.3d at 1096–97 (“In no case
has this court ever held that one must have a specific com-
mercial interest, not shared by the general public, in order
to have standing as an opposer.”).
Finally, Mr. Bank contests the TTAB’s alleged conclu-
sion that “the mark in question [must be] part of a class of
marks to which the petitioner might also object.” Appel-
lant’s Br. 9 (capitalization altered); see A.A. 8 (asserting
that Mr. Bank’s “pleading of standing is vague and does not
relate specifically to the involved service mark”). To the
8 BANK v. AL JOHNSON'S SWEDISH REST.
extent that Mr. Bank is challenging the statement as one
which creates a “class of marks” requirement, such an in-
terpretation strains the meaning of the cited portion of the
TTAB’s opinion. Instead, when read in its entirety, the
cited portion does not create a new requirement for a “class
of marks” and is consistent with the remainder of the opin-
ion in establishing Mr. Bank’s failure to sufficiently allege
his standing. See generally A.A. 7.
Swedish Restaurant moves for its costs and attorney
fees under Federal Rule of Appellate Procedure 38. See
Fed. R. App. P. 38 (“If a court of appeals determines that
an appeal is frivolous, it may, after a separately filed mo-
tion or notice from the court and reasonable opportunity to
respond, award just damages and single or double costs to
the appellee.”). Swedish Restaurant explains that because
Mr. Bank petitioned the TTAB three times on this matter,
all of which were dismissed for lack of standing, and ap-
pealed the final decision to this court, where the case was
“frivolous as filed and frivolous as argued[,]” damages are
warranted. Appellee’s Mot. for Sanctions 6 (citing State In-
dus., Inc. v. Mor-Flo Indus., Inc., 948 F.2d 1573, 1578 (Fed.
Cir. 1991)). Mr. Bank responded with his own motion for
sanctions, rebutting assertions made in Swedish Restau-
rant’s motion and seeking excessive costs under 28 U.S.C.
§ 1927, which permits a court to order a party “who so mul-
tiplies the proceedings in any case unreasonably and vexa-
tiously” to pay attorney fees. See generally Appellant’s Mot.
for Sanctions. See also 28 U.S.C. § 1927. We conclude that
this appeal and Mr. Bank’s motion for sanctions are frivo-
lous. Mr. Bank filed multiple petitions with the TTAB re-
garding the Goats on the Roof Registration, all of which
were dismissed for, inter alia, standing. Mr. Bank was af-
forded the opportunity to revise his petition and remedy
the standing defect, which he did not do. Despite the fact
that Mr. Bank was informed by the TTAB that his dispar-
agement claim was based on an unconstitutional and
stricken section of the Lanham Act, he raises it again
BANK v. AL JOHNSON'S SWEDISH REST. 9
before this court. Based on these facts and our analysis,
Mr. Bank’s appeal is frivolous. See Finch v. Hughes Air-
craft Co., 926 F.2d 1574, 1583 (Fed. Cir. 1991) (concluding
that the appellant’s “decision to file this appeal can only be
seen as a frivolous waste of the resources of this court and
of the time and money of his hapless opponent” where there
were multiple grounds to affirm the underlying opinion,
each of which “would be sufficient to require affirmance”).
Even though Mr. Bank appears pro se before us, he is an
attorney and bears the commensurate obligations. Id.
at 1583 (concluding that, even when an attorney appears
pro se, he or she is “chargeable with knowledge of . . . our
rules”). Accordingly, we grant Swedish Restaurant’s mo-
tion for costs and attorney fees, including the costs and fees
incurred in relation to the parties’ sanctions motions, and
deny Mr. Bank’s motion for sanctions.
CONCLUSION
Because Mr. Bank lacks standing, we do not have ju-
risdiction to review this appeal. Accordingly, Mr. Bank’s
appeal from the U.S. Patent and Trademark Office’s Trade-
mark Trial and Appeal Board is
DISMISSED
COSTS
Costs and attorney fees to Swedish Restaurant.