Cigar King, LLC v. Corporacion Habanos, S.A. ( 2014 )

NOTE: This disposition is nonprecedential.
United States Court of Appeals
for the Federal Circuit
______________________
CIGAR KING, LLC,
Appellant,
v.
CORPORACION HABANOS, S.A. AND
EMPRESA CUBANA DEL TABACO
(doing business as Cubatabaco),
Appellees.
______________________
2013-1531
______________________
Appeal from the United States Patent and Trademark
Office, Trademark Trial and Appeal Board in Cancellation
No. 92053245.
______________________
Decided: May 23, 2014
______________________
FRANK HERRERA, H New Media Law, of Delray Beach,
Florida, argued for appellant.
DAVID B. GOLDSTEIN, Rabinowitz, Boudin, Standard,
Krinsky & Lieberman, P.C., of New York, New York
argued for appellees.
______________________
2 CIGAR KING, LLC v. CORPORACION HABANOS, S.A.
Before PROST, MAYER, and HUGHES, Circuit Judges.
PROST, Circuit Judge.
Cigar King, LLC, appeals from the final judgment of
the United States Patent and Trademark Office Trade-
mark Trial and Appeal Board (“Board”) cancelling two of
Cigar King’s trademark registrations. Corporacion Ha-
banos S.A. v. Cigar King, Ltd., Cancellation No.
92053245, 2013 WL 6056505 (T.T.A.B. June 12, 2013)
(“Board Decision”). For the reasons that follow, we dis-
miss this appeal as moot.
BACKGROUND
Cigar King obtained registrations for the marks
“HAVANA SOUL” and “HABANA LEON,” Registration
Nos. 3,207,740 and 3,207,741, respectively, for “cigars
made with Cuban seed tobacco” on February 13, 2007. On
November 1, 2010, appellees Corporacion Habanos, S.A.
and Empresa Cubana Del Tabaco (doing business as
Cubatabaco) (“Habanos”) filed a petition for cancellation
on the grounds that both marks are geographically decep-
tive and deceptively misdescriptive.
On January 11, 2011, after Cigar King failed to re-
spond to the petition, the Board issued a Notice of Default
to show cause why default judgment should not be en-
tered. Over a month later, on February 24, 2011, Cigar
King moved to set aside the default and filed its Answer
and Counterclaims shortly thereafter. On April 28, 2011,
the Board set aside its Notice of Default.
In September 2011, Habanos served discovery re-
quests on Cigar King. After Cigar King failed to respond
in any way, the Board granted Habanos’ motion to com-
pel. The Board ordered Cigar King to take several specif-
ic actions within thirty days, and warned that “[i]f
respondent does not comply with this order, petitioners’
remedy is to file a motion for sanctions under Trademark
Rule 2.120(g)(1).” J.A. 53 n.18. When Cigar King did,
CIGAR KING, LLC v. CORPORACION HABANOS, S.A. 3
indeed, fail to comply with the order, Habanos filed a
motion for sanctions, including entry of judgment.
Cigar King’s entire response to the motion for sanc-
tions was as follows:
1. Registrant conducted a thorough search of its
records for responsive documents.
2. Registrant has no other responsive documents.
Registrant voluntarily takes the sanction of hav-
ing all of its affirmative defenses stricken with the
exception of the affirmative defense that Petition-
ers lack standing. Registrant also voluntarily ac-
cepts that it will not be able to rely upon certain
documents requested but not produced as evi-
dence in this matter relating to the first two ele-
ments of Petitioners’ 2(e)(3) claim. Registrant
merely requests that it be given the opportunity to
post a defense that Petitioners’ [sic] lack standing
and to defend against the third and final element
of the Petitioners’ [Section] 2(e)(3) claim.
Board Decision, 2013 WL 6056505, at *2 (quoting Cigar
King’s response). In effect, Cigar King agreed that it
should be sanctioned, and sought only to challenge Haba-
nos’ standing.
The Board found that Cigar King had refused to com-
ply with many of the requirements of the order to compel,
and concluded that entry of judgment against Cigar King
was necessary to remedy its “willful noncompliance” and
“deliberate action to impair petitioner’s ability to present
its case.” Id. at *3. The Board therefore concluded: “[t]he
petition to cancel is granted, judgment is hereby entered
against respondent, and Registration Nos. 3207740 and
3207741 will be cancelled in due course.” Id. Cigar King
filed a notice of appeal to this court on that same day.
4 CIGAR KING, LLC v. CORPORACION HABANOS, S.A.
Subsequent to the notice of appeal, the Board can-
celled both of the registrations at issue in this case be-
cause Cigar King failed to file affidavits certifying that
the marks are still in use, as required by Section 8 of the
Lanham Act, 15 U.S.C. § 1058. J.A. 141, 149.
We have jurisdiction pursuant to 15 U.S.C. § 1071.
DISCUSSION
Cigar King argues that Habanos did not have stand-
ing to challenge its marks because, as Cuban nationals
who are legally foreclosed from selling their products in
the United States, they have neither a “real interest” in
the proceedings nor a “reasonable basis” for its belief of
damage. Cigar King never presented this argument
below because its marks were cancelled as a sanction for
failure to comply with the Board’s discovery order prior to
reaching the merits. Thus, although Cigar King does not
present it this way, Cigar King’s argument requires a
finding that the Board abused its discretion in granting
judgment as a sanction, and Cigar King therefore should
have been permitted to present its standing argument in
an adjudication on the merits of the cancellation proceed-
ing. Habanos responds that this court need not address
Cigar King’s arguments because the appeal became moot
when Cigar King’s registrations were cancelled for failure
to file Section 8 affidavits. We agree with Habanos.
“The test for mootness . . . is whether the relief sought
would, if granted, make a difference to the legal interests
of the parties (as distinct from their psyches, which might
remain deeply engaged with the merits of the litigation).”
Nasatka v. Delta Scientific Corp., 58 F.3d 1578, 1581
(Fed. Cir. 1995) (citation omitted). “If an event occurs
while a case is pending on appeal that makes it impossi-
ble for the court to grant any effectual relief whatever to a
prevailing party, the appeal must be dismissed as moot.”
Id. (internal quotation marks omitted). That is precisely
what occurred here. Indeed, Cigar King does not dispute
CIGAR KING, LLC v. CORPORACION HABANOS, S.A. 5
that it failed to file the mandatory Section 8 affidavit for
either registration at issue in this case, nor that the
marks were cancelled for that reason. Thus, even if we
were to agree with Cigar King on the merits, and reverse
the Board’s judgment against Cigar King (a question on
which we offer no opinion), the marks would remain
cancelled. 1 This appeal is therefore moot.
The only question that remains, therefore, is whether
the Board’s underlying judgment should be vacated. We
conclude that it should not. The Supreme Court has
advised that vacatur of a judgment that becomes moot on
appeal is appropriate when the appeal became moot
through “happenstance” or “where mootness results from
the unilateral action of the party who prevailed in the
lower court.” U.S. Bancorp. Mortg. Co. v. Bonner Mall
P’ship, 513 U.S. 18, 23 (1994). Where “the party seeking
relief from the judgment below caused the mootness by
voluntary action,” however, “the losing party has volun-
tarily forfeited his legal remedy by the ordinary processes
of appeal or certiorari, thereby surrendering his claim to
the equitable remedy of vacatur.” Id. at 24-25. In this
case, it was undisputedly Cigar King’s unilateral action of
failing to file mandatory Section 8 affidavits that ren-
dered the appeal moot. We conclude that Cigar King
1 We are not persuaded that the Board’s June 12,
2013 Judgment effectively “deemed” the marks cancelled,
such that Cigar King was not required to file its Section 8
affidavits. To the contrary, the Board’s Manual of Proce-
dure § 806 specifies that the Director shall not cancel a
registration pursuant to a Board decision granting cancel-
lation until the proceeding has become final, which does
not happen until after any appeals have been determined.
Consistent with those rules, because Cigar King had filed
a timely appeal, the Director had not cancelled the regis-
trations based on the June 12 Judgment.
6 CIGAR KING, LLC v. CORPORACION HABANOS, S.A.
should not be permitted to benefit from that action by
avoiding the collateral consequences of the Board’s judg-
ment, which resulted from Cigar King’s own “willful
noncompliance” with the Board’s orders. We thus decline
to vacate the Board’s judgment.
CONCLUSION
For the foregoing reasons, we dismiss Cigar King’s
appeal as moot and decline to vacate the Board’s judg-
ment.
DISMISSED AS MOOT