Empresa Cubana Del Tabaco v. General Cigar Co., Inc. , 753 F.3d 1270 ( 2014 )

United States Court of Appeals
for the Federal Circuit
______________________
EMPRESA CUBANA DEL TABACO,
(doing business as Cubatabaco)
Appellant,
v.
GENERAL CIGAR CO., INC.,
Appellee.
______________________
2013-1465
______________________
Appeal from the United States Patent and Trademark
Office, Trademark Trial and Appeal Board, in Cancella-
tion No. 92025859.
______________________
Decided: June 4, 2014
______________________
DAVID B. GOLDSTEIN, Rabinowitz, Boudin, Standard,
Krinsky & Lieberman, P.C., of New York, New York,
argued for appellant. With him on the brief was MICHAEL
KRINSKY.
ANDREW L. DEUTSCH, DLA Piper US LLP, of New
York, New York, argued for appellee. With him on the
brief was AIRINA RODRIGUES.
______________________
2 EMPRESA CUBANA DEL TABACO v. GENERAL CIGAR CO., INC.
Before RADER, ∗ TARANTO and HUGHES, Circuit Judges.
RADER, Circuit Judge.
Empresa Cubana Del Tabaco (d/b/a Cubatabaco) chal-
lenges the Trademark Trial and Appeal Board’s grant of
summary judgment to General Cigar Co., Inc. on the basis
that Cubatabaco—a Cuban company—lacks standing to
seek cancellation of General Cigar’s two registrations for
the trademark COHIBA (the Registrations). Because this
court finds that Cubatabaco has a statutory cause of
action to petition the Board to cancel the Registrations,
and that issue and claim preclusion do not bar Cubataba-
co’s Amended Petition to cancel the Registrations, this
court vacates the Board’s decision and remands for pro-
ceedings consistent with this opinion.
I.
Both Cubatabaco and General Cigar manufacture and
distribute cigars using the COHIBA mark. Empresa
Cubana del Tabaco v. Culbro Corp., 399 F.3d 462, 464 (2d
Cir. 2005). General Cigar, a Delaware corporation, owns
two trademark registrations for the COHIBA mark for
use in connection with cigars. J.A. 439, 482. The first,
No. 1,147,309, issued on February 17, 1981 (First Regis-
tration) and the second, No. 1,898,273, issued on June 6,
1995 for the mark in block letter format (Second Registra-
tion). Id.
Cubatabaco is a Cuban entity that owns the COHIBA
mark in Cuba and supplies cigars bearing that mark
throughout the world. Empresa, 399 F.3d at 464. The
Cuban Assets Control Regulations, 31 C.F.R. Part 15
(CACR), prohibit Cubatabaco from selling cigars in the
United States. The CACR generally prohibits a wide
∗
Randall R. Rader vacated the position of Chief
Judge on May 30, 2014.
EMPRESA CUBANA DEL TABACO v. GENERAL CIGAR CO., INC. 3
range of transactions with Cuban entities, including the
importation of products of Cuban origin. See, e.g., 31
C.F.R. §§ 515.201, 515.204. Of note, § 515.201(b) general-
ly prohibits a “transfer of property rights . . . to a Cuban
entity by a person subject to the jurisdiction of the United
States.”
The CACR is subject to exceptions. A general or
specific license allows Cuban entities to engage in certain
otherwise prohibited transactions. See, e.g., 31 C.F.R.
§§ 515.527(a)(1), 515.318. The CACR itself sets forth
general licenses. For instance, § 515.527(a)(1) expressly
authorizes Cuban entities to engage in transactions
“related to the registration and renewal” of trademarks
before the U.S. Patent and Trademark Office. Specific
licenses, on the other hand, must be requested from the
Department of Treasury’s Office of Foreign Assets Control
(OFAC). 31 C.F.R. § 515.318.
Here, Cubatabaco used a general license to attempt to
register the COHIBA mark in the United States. Specifi-
cally, in January of 1997, Cubatabaco filed an application
to register COHIBA for cigars and related goods. J.A.
711. Operating under the general license contained in 31
C.F.R. § 515.527(a)(1), Cubatabaco based its application
on its registration of the same mark in Cuba, relying on
Section 44(e) of the Lanham Act, 15 U.S.C. § 1126(e).
Section 44(e) allows an applicant to rely on a foreign
registration to register the same mark in the United
States if the applicant has a bona fide intent to use the
mark in commerce, and thus does not require actual use
at the time of filing. J.A. 291. Cubatabaco also filed a
petition to cancel the Registrations, which the U.S. Patent
and Trademark Office cited as grounds for refusing regis-
tration to Cubatabaco because its mark created a likeli-
hood of confusion. J.A. 307–08, 707.
Cubatabaco subsequently requested a special license
from OFAC to commence litigation against General Cigar
4 EMPRESA CUBANA DEL TABACO v. GENERAL CIGAR CO., INC.
for its use of the COHIBA mark. In October of 1997,
OFAC agreed and granted Cubatabaco a special license to
“initiate legal proceedings in the U.S. courts and to oth-
erwise pursue their judicial remedies with respect to
claims to the COHIBA trademark.” Empresa, 399 F.3d at
473–74. Shortly thereafter, on November 12, 1997, Cu-
batabaco sued General Cigar in the U.S. District Court for
the Southern District of New York alleging trademark
infringement and seeking, inter alia, to enjoin General
Cigar’s use of the COHIBA mark in the United States and
to cancel General Cigar’s competing Registrations. J.A.
486–502. A few weeks later, Cubatabaco requested that
the Board suspend the cancellation proceedings pending
the outcome of the district court action. The Board agreed
and stayed the proceedings. J.A. 19, 733–34.
In June 2002, the district court granted partial sum-
mary judgment. Empresa Cubana Del Tabaco v. Culbro
Corp., 213 F. Supp. 2d 247, 286–87 (S.D.N.Y. 2002). The
court cancelled the First Registration, finding that Gen-
eral Cigar had abandoned it during five years of non-use
from 1987 to late 1992. Id. at 267–71.
In March of 2004, after a bench trial, the district court
permanently enjoined General Cigar’s use of the COHIBA
mark and cancelled the Registrations, finding that Cu-
batabaco had acquired ownership of the mark under the
famous marks doctrine during the period between Gen-
eral Cigar’s abandonment of the First Registration and
the filing date of the Second Registration. Empresa
Cubana del Tabaco v. Culbro Corp., No. 97-8399, 2004
WL 925647, at *2–3 (S.D.N.Y. Apr. 30, 2004). General
Cigar appealed.
On appeal, the Second Circuit reversed the district
court’s finding of infringement and vacated cancellation of
the Registrations and any injunctive relief granted by the
district court. Empresa, 399 F.3d at 486. Specifically, the
Second Circuit held that the district court could not grant
EMPRESA CUBANA DEL TABACO v. GENERAL CIGAR CO., INC. 5
Cubatabaco the injunctive relief it sought because the
remedy would involve a prohibited transfer of property
under § 515.201 of the CACR, given that Cubatabaco
would acquire ownership of the underlying mark. Id. at
474–76. The Second Circuit noted that “General Cigar
has the full panel of property rights in the COHIBA
mark.” Id. at 476. The Second Circuit specifically did not
address the district court’s conclusion that General Cigar
had abandoned the First Registration, dismissing the
issue as moot. Id. at 472.
After the Second Circuit issued its mandate dismiss-
ing all of Cubatabaco’s remaining claims, General Cigar
moved the district court for orders dismissing Cubataba-
co’s cancellation petition before the Board as well as an
order mandating denial of Cubatabaco’s application for
registration. Empresa Cubana Del Tabaco v. Culbro
Corp., 478 F. Supp. 2d 513, 517 (S.D.N.Y. 2007). The
district court denied the motion as untimely. Id. at 517–
18. In dicta, however, the district court stated that the
Board should decide on its own the preclusive effect of the
Second Circuit’s decision, if any, leaving open the ques-
tion of whether cancellation by the Board—rather than
injunctive relief granted by federal courts—would consti-
tute a prohibited transfer under the CACR. Id. at 521.
General Cigar appealed, and the Second Circuit af-
firmed denial of the motion. Empresa Cubana del Tabaco
v. Culbro Corp., 541 F.3d 476, 479 (2d Cir. 2008). The
Second Circuit stated that it was not an abuse of discre-
tion for the district court “to let the agency decide . . .
what preclusive effect should be given to our decision.”
Id. The Second Circuit similarly did not address the open
question of whether cancellation of the Registrations by
the Board would constitute a prohibited transfer under
the CACR. Id. at 477–79.
When proceedings before the Board resumed on June
23, 2011, Cubatabaco filed its Amended Petition. J.A. 19,
6 EMPRESA CUBANA DEL TABACO v. GENERAL CIGAR CO., INC.
22–53. General Cigar answered and moved for summary
judgment on grounds that Cubatabaco lacked standing
and, moreover, that principles of issue and claim preclu-
sion barred the Amended Petition. J.A. 19, 238–57. The
Board agreed, granting General Cigar’s motion and
dismissing the Amended Petition with prejudice. J.A. 16.
The Board expressly noted that it “need not reach the
merits of the preclusion analysis” because “Cubatabaco
lacked standing to pursue the matter.” J.A. 14–16.
Although the Board acknowledged that a petitioner
generally has standing when a pending trademark regis-
tration application has been refused based on one or more
blocking registrations, the Board still found that Cubata-
baco lacked standing in light of the “binding, federal court
judgment” from the Second Circuit. J.A. 14.
In its decision, the Board cited Stephen Slesinger, Inc.
v. Disney Enters., Inc., 2011 WL 2489755 (TTAB June 8,
2011), and Gal v. Israel Military Indus. of the Ministry of
Def. of the State of Israel, 1986 TTAB LEXIS 83 (TTAB
June 10, 1986), for the proposition that “where a previous
final judgment determines that a party does not own a
property interest in a mark, the party lacks standing to
challenge another’s registration of the same mark.” J.A.
15. Notably, the determinations of no standing in
Slesinger and Gal depended on an application of issue
preclusion, whereas the Board here explicitly did not
address preclusion. J.A. 16; Slesinger, 2011 WL 2489755,
at *8 (“Disney is entitled to summary judgment based on
collateral estoppel.”); Gal, 1986 TTAB LEXIS, at *19–20
(“In determining . . . that collateral estoppel bars Gal from
asserting proprietary rights in the term ‘UZI’ in this
action, we must conclude that Gal does not have stand-
ing . . . .”).
II.
This court reviews the Board’s grant of summary
judgment de novo. See Coach Servs., Inc. v. Triumph
EMPRESA CUBANA DEL TABACO v. GENERAL CIGAR CO., INC. 7
Learning LLC, 668 F.3d 1356, 1376 (Fed. Cir. 2012);
Mayer/Berkshire Corp. v. Berkshire Fashions, Inc., 424
F.3d 1229, 1234 (Fed. Cir. 2005). The Supreme Court
recently clarified that issues sometimes discussed in
terms of “standing” are more appropriately viewed as
interpretations of a statutory cause of action. Lexmark
Int’l, Inc. v. Static Control Components, Inc., 134 S. Ct.
1377, 1386–88 (2014). Therefore, this opinion focuses on
Cubatabaco’s entitlement to the cause of action defined by
15 U.S.C. § 1064. Where entitlement turns on statutory
interpretation, this court reviews the question de novo.
Id. at 6 (applying “traditional principles of statutory
interpretation” to determine whether party has a cause of
action under the statute).
General Cigar does not separately deny that Cubata-
baco’s appeal to this court presents a case or controversy
under Article III. See id. at 1386. We have no reason to
doubt that General Cigar’s Registrations adversely affect
Cubatabaco’s interest in its current foreign sales and
potential future domestic sales should the existing prohi-
bitions be lifted.
III.
Because the USPTO refused Cubatabaco registration
based on a likelihood of confusion with General Cigar’s
Registrations, Cubatabaco has a real interest in cancel-
ling the Registrations and a reasonable belief that the
Registrations blocking its application are causing it
damage. Cubatabaco therefore has a cause of action
under the Lanham Act to seek cancellation of the Regis-
trations.
The Lanham Act provides a cause of action to “any
person who believes that he is or will be damaged . . . by
the registration of a mark” to petition the USPTO to
cancel the mark. 15 U.S.C. § 1064. Contrary to the
Board’s finding, Cubatabaco satisfies this. Though it
declined to address the preclusive effect of the Second
8 EMPRESA CUBANA DEL TABACO v. GENERAL CIGAR CO., INC.
Circuit’s decision, the Board nevertheless relied exclusive-
ly on the Second Circuit’s decision to find that Cubatabaco
lacks standing. J.A. 14–15. Indeed, the Board appears to
have read that decision as barring Cubatabaco from ever
acquiring any property interest in the mark under the
CACR. This conclusion in turn would require that Cubat-
abaco be seen as having no legitimate commercial interest
sufficient to confer standing. Id. But the Second Circuit
specifically did not address whether Cubatabaco could
seek cancellation of the Registrations with the Board.
Rather, the Second Circuit decided only that the CACR
limited the federal courts’ authority to grant Cubatabaco
injunctive relief because to do so would entail a prohibited
transfer under the CACR. Empresa, 399 F.3d at 476.
The Second Circuit’s finding in this regard is irrele-
vant to the proceeding before the Board. Before the
Board, Cubatabaco enjoys affirmative authorization to
seek cancellation emanating from the general license
provided by the CACR. In a letter to Cubatabaco’s coun-
sel in 1996, OFAC explained that § 515.527(a)(1) author-
izes Cuban entities to engage in transactions “related to
the registration and renewal” of trademarks in the
USPTO and “may be relied on . . . to petition to cancel a
prior registration of a trademark where these actions
relate to the protection of a trademark in which Cuba or a
Cuban national general license has an interest.” J.A. 483.
Furthermore, Cubatabaco has a legitimate commer-
cial interest in the COHIBA mark. Indeed, that interest
appears evident in the USPTO’s refusal of the pending
application based on a likelihood of confusion with the
Registrations. A petitioner is authorized by statute to
seek cancellation of a mark where it has “both a ‘real
interest’ in the proceedings as well as a ‘reasonable’ basis
for its belief of damage.” ShutEmDown Sports, Inc. v.
Lacy, 102 U.S.P.Q.2d 1036, 1041 (TTAB 2012) (citing
Ritchie v. Simpson, 170 F.3d 1092 (Fed. Cir. 1999)). And
a pending application that has been refused registration
EMPRESA CUBANA DEL TABACO v. GENERAL CIGAR CO., INC. 9
based on a likelihood of confusion with a registered mark
is sufficient to show that the petitioner seeking to cancel
the registered mark is the type of party Congress author-
ized under 15 U.S.C. § 1064. Id. (citing Lipton Indus.,
Inc. v. Ralston Purina Co., 670 F.2d 1024, 1029 (CCPA
1982)). As explained in Lipton, the desire for a registra-
tion with its “attendant statutory advantages” is a “legit-
imate commercial interest,” so to satisfy the requirements
for bringing a cancellation proceeding, it is enough to
show that a petitioner “filed an application and that a
rejection was made because of” some existing registered
mark. 670 F.2d at 1029.
General Cigar misinterprets the Second Circuit’s de-
cision to mean that the “CACR prevent[s] Cubatabaco
from acquiring any property interest in the U.S. COHIBA
mark at any time.” Appellee Br. 19. Neither the Second
Circuit decision nor the CACR prohibits Cubatabaco from
registering the mark. And the CACR authorizes Cubata-
baco to seek cancellation of registrations that block its
application. Here, Cubatabaco bases its application on
Section 44(e) of the Lanham Act, 15 U.S.C. § 1126(e),
which allows a foreign registrant to rely on a foreign
registration in seeking a U.S. registration for the same
mark. Section 44(e) only requires that Cubatabaco have a
bona fide intent to use the mark in commerce rather than
requiring actual use before registration. Cubatabaco
therefore has a legitimate interest in the cancellation of
the Registrations that are causing Cubatabaco damage by
blocking its application. Indeed, if Cubatabaco proves
successful in the cancellation proceedings, Cubatabaco
could obtain registration of the COHIBA mark.
Also, the Second Circuit’s decision is not a per se bar
to Cubatabaco’s claims before the Board. The Second
Circuit’s decision held only that the district court could
not enjoin General Cigar from use of the COHIBA mark
under its interpretation of the CACR’s prohibition against
transfers of property. It specifically does not address
10 EMPRESA CUBANA DEL TABACO v. GENERAL CIGAR CO., INC.
Cubatabaco’s ability to seek cancellation of the Registra-
tions before the Board, which the CACR authorizes by
general license.
Thus, because Cubatabaco has sought a registration
for the COHIBA mark in the United States, and the
Registrations currently block its application, Cubatabaco
has a statutory cause of action under the Lanham Act to
seek cancellation of the Registrations before the Board.
IV.
Although the Board declined to address preclusion in
its judgment, this court finds that neither issue nor claim
preclusion bars the Amended Petition. This court has
recognized its authority to resolve questions of law not
addressed below as long as such a ruling would not be
clearly unfair to the appellee. See Dey, L.P. v. Sunovion
Pharm., Inc., 715 F.3d 1351, 1360 n.5 (Fed. Cir. 2013)
(citing numerous authorities) (addressing an appeal from
a summary judgment); see also Delta-X Corp. v. Baker
Hughes Prod. Tools, 984 F.2d 410, 413 n.2 (Fed. Cir. 1993)
(applying Fifth Circuit law). Here, it would not be clearly
unfair to General Cigar to decide the questions of law
concerning issue and claim preclusion in the first instance
because the parties have fully briefed this issue, and
because the Board and the federal court proceedings
assembled an extensive record on the matter.
Issue preclusion requires four preconditions to erect a
bar to relitigation: (1) identity of the issues in a prior
proceeding; (2) actual litigation of those issues; (3) neces-
sity of the prior determination to the resulting judgment;
and (4) full and fair opportunities to litigate issues for the
party defending against preclusion. Levi Strauss & Co. v.
Abercrombie & Fitch Trading Co., 719 F.3d 1367, 1371
(Fed. Cir. 2013) (citing Jet, Inc. v. Sewage Aeration Sys.,
223 F.3d 1360, 1366 (Fed. Cir. 2000)). Issue preclusion
does not bar any of the grounds for which Cubatabaco
seeks cancellation of the Registrations.
EMPRESA CUBANA DEL TABACO v. GENERAL CIGAR CO., INC. 11
The Second Circuit either never addressed—or explic-
itly declined to reach the merits on—the issues that
Cubatabaco raises in Grounds 1–3 (as to the First Regis-
tration) and 6, 9, and 10 (as to the Second Registration) of
the Amended Petition.
Cubatabaco alleges in Ground 1 that General Cigar
abandoned the First Registration. J.A. 49. But the
Second Circuit explicitly stated it did “not decide whether
the District Court properly found that General Cigar had
abandoned [the First Registration] between 1987 and
1992,” finding the issue moot because it had already
decided to vacate the district court’s order cancelling the
Registrations and enjoining General Cigar from use of the
COHIBA mark. Empresa, 399 F.3d at 462. Thus, the
determination of the issue presented in Ground 1 was not
necessary to the resulting judgment.
In Grounds 2 and 3, Cubatabaco asserts that General
Cigar committed fraud on the USPTO in obtaining the
Registrations. J.A. 49. But again, the Second Circuit did
not address whether General Cigar committed fraud on
the USPTO in obtaining the First Registration, a question
that the district court explicitly did not reach when it
found General Cigar had abandoned the First Registra-
tion. Empresa, 213 F. Supp. 2d at 272. And thus again,
the issue was not necessary to the Second Circuit’s judg-
ment.
In Ground 6, Cubatabaco alleges that the Board
should cancel the Second Registration pursuant to 15
U.S.C. § 1052 because Cubatabaco used the mark in the
United States through a campaign of national advertising
and promotion before General Cigar commenced use of or
applied to register the mark in late 1992. Appellant Br.
45. The Second Circuit did not address this issue in its
decision, nor was it necessary to the judgment.
Cubatabaco asserts in Ground 9 that under Article
6bis of the Paris Convention for Protection of Industrial
12 EMPRESA CUBANA DEL TABACO v. GENERAL CIGAR CO., INC.
Property, owners of foreign marks that are well known in
the United States may cancel a registration of a confus-
ingly similar mark without requiring ownership of the
mark in the United States. Appellant Br. 52. While the
Second Circuit acknowledged this argument, it ultimately
did not reach the merits in light of its decision that the
CACR barred Cubatabaco from acquiring property rights
in the mark. Empresa, 399 F.3d at 479–80. Thus, issue
preclusion does not apply.
Cubatabaco bases Grounds 10 and 11 on the famous
marks doctrine. J.A. 51–52. Yet the Second Circuit
declined to address the vitality of the famous marks
doctrine and its application to the dispute, because it had
already decided that the CACR barred Cubatabaco from
obtaining ownership of the COHIBA mark. Empresa, 399
F.3d at 471. Issue preclusion poses no bar to Ground 10.
This court need not consider Ground 11 because Cubata-
baco submits that it will not pursue this claim. Appellant
Reply Br. 21.
In sum, issue preclusion does not bar Grounds 1–3, 6,
9, and 10 of the Amended Petition because, at a mini-
mum, the issues that Cubatabaco raises therein were not
addressed by, or necessary to, the Second Circuit’s final
judgment.
Pertinent to Grounds 4 and 8, the Second Circuit af-
firmed the district court’s finding that General Cigar’s
actions did not meet the bad faith requirement under
Cubatabaco’s New York common law unfair competition
claim. Empresa, 399 F.3d at 485. In Ground 4, Cubata-
baco asserts that General Cigar applied for and obtained
the First Registration in bad faith and for impermissible
reasons, specifically for the purpose of blocking “Cubata-
baco from entering the U.S. market with COHIBA-
branded Cuban cigars . . . and to coerce Cubatabaco into
granting distribution rights for the Cuban COHIBA.” J.A.
31, 49–50. Cubatabaco alleges in Ground 8 that “General
EMPRESA CUBANA DEL TABACO v. GENERAL CIGAR CO., INC. 13
Cigar applied for and obtained the Registration for the
purpose of capitalizing on and exploiting the renown and
reputation of the Cuban COHIBA in the United States.”
J.A. 51.
This court sees no basis for precluding Grounds 4 and
8. The issue of bad faith in the New York common law
unfair competition context is not identical to the allega-
tions of inequitable conduct made in Cubatabaco’s
grounds for cancellation of the Registrations under 15
U.S.C. § 1064. Furthermore, as the district court recog-
nized in its dismissal of the state law claim, “[u]nder New
York law, common law unfair competition claims closely
resemble Lanham Act claims except insofar as the state
law claim may require an additional element of bad faith
or intent.” Empresa Cubana del Tabaco v. Culbro Corp.,
No. 97-cv-8399(RWS), 2004 WL 602295, at *55 (S.D.N.Y.
Mar. 26, 2004) (emphasis added).
Therefore, because the bad faith determination af-
firmed by the Second Circuit is not identical to the issues
raised in Cubatabaco’s cancellation claims in Grounds 4
and 8, issue preclusion does not bar Grounds 4 and 8 of
the Amended Petition.
Issue preclusion also does not apply to Grounds 5 and
7. Grounds 5 and 7 are based on Articles 7 and 8 of the
General Inter American Convention for Trade Mark and
Commercial Protection (IAC), which allow for a party
from a contracting state like the United States and Cuba
to interfere, oppose, or otherwise cancel the trademark
registration of a party from another contracting state.
General Cigar asserts the issues underlying these claims
are firmly decided against Cubatabaco because the Sec-
ond Circuit upheld the district court’s dismissal of Cubat-
abaco’s claims under Articles 7 and 8 of the IAC.
Empresa, 399 F.3d at 482–83. In the district court litiga-
tion, Cubatabaco claimed relief under Articles 7 and 8
pursuant to Sections 44(b) and 44(h) of the Lanham Act.
14 EMPRESA CUBANA DEL TABACO v. GENERAL CIGAR CO., INC.
Id. Relying on Havana Club Holding S.A. v. Galleon S.A.,
203 F.3d 116, 124 (2d Cir. 2000), the Second Circuit
rejected that argument, holding that Cubatabaco’s IAC
claims were not “related to the repression of unfair com-
petition” and therefore did not fall “within the ambit of
Section 44(h).” Empresa, 399 F.3d at 482–83.
Here, however, Cubatabaco asserts that, unlike the
federal courts, the Board can cancel registrations directly
under Article 8 of the IAC, pursuant to the Board’s juris-
diction under 15 U.S.C. § 1067(a). See, e.g., British-Am.
Tobacco Co. v. Phillip Morris, Inc., 2001 WL 256142, at *2
(TTAB Feb. 27, 2001); see also Diaz v. Servicios de Fran-
quicia Pardo’s S.A.C., 2007 WL 549241, at *2–3 (TTAB
Feb. 16, 2007). Unlike in the district court, the Board
need not consider the interplay with Section 44(h). And
in any event, the Second Circuit certainly did not address
whether Cubatabaco could request that the Board cancel
the registrations directly under those same IAC provi-
sions. Accordingly, issue preclusion does not bar Grounds
5 and 7 for cancellation of the Registrations.
Finally, General Cigar argues that claim preclusion
should bar Cubatabaco’s Amended Petition. For claim
preclusion to bar relitigating a claim in a second suit,
three preconditions must be met: “(1) an identity of par-
ties (or their privies); (2) there has been an earlier final
judgment on the merits of a claim; and (3) the second
claim is based on the same set of transactional facts as
the first.” Levi Strauss, 719 F.3d at 1372 (quoting Jet,
223 F.3d at 1362). Due to the “array of differences in
transactional facts” between claims of infringement and
cancellation, “claim preclusion cannot serve to bar a
petition for cancellation based upon an earlier infringe-
ment proceeding.” Jet, 223 F.3d at 1364.
Claim preclusion does not bar Cubatabaco’s Amended
Petition. The Second Circuit never issued a final judg-
ment on the merits of Cubatabaco’s cancellation claims.
EMPRESA CUBANA DEL TABACO v. GENERAL CIGAR CO., INC. 15
Moreover, the transactional facts involved in the Second
Circuit decision differ from those in the cancellation
proceedings before the Board. For instance, the Second
Circuit decided that under the CACR that Cubatabaco
could not enjoin General Cigar from using the COHIBA
mark because it would entail a prohibited transfer of
property to a Cuban entity. Empresa, 399 F.3d at 476. In
the proceedings before the Board, however, Cubatabaco
need not own the mark to cancel the Registrations under
15 U.S.C. § 1064. The CACR’s effect before the Board is
necessarily different. Claim preclusion therefore does not
bar the Amended Petition.
V.
Cubatabaco has a cause of action under the Lanham
Act to petition the Board to seek cancellation of the Regis-
trations blocking its application for trademark registra-
tion. Further, principles of issue and claim preclusion do
not bar the Amended Petition. This court therefore
vacates the Board’s decision and remands for further
proceedings consistent with this opinion.
VACATED AND REMANDED