Stephen Slesinger, Inc. v. Disney Enterprises, Inc.

United States Court of Appeals
for the Federal Circuit
__________________________
STEPHEN SLESINGER, INC.,
Appellant,
v.
DISNEY ENTERPRISES, INC.,
Appellee.
__________________________
2011-1593
(Opposition Nos. 91179064, 91182358, 91183644,
91186026, 91187261, 91188860, 91191230, 91192691,
91194551, 91196019, and 91198046; and
Cancellation No. 92046853)
__________________________
Appeal from the United States Patent and Trademark
Office, Trademark Trial and Appeal Board.
____________________________
Decided: December 21, 2012
____________________________
ROGER L. ZISSU, Fross Zelnick Lehrman & Zussu,
P.C., of New York, New York, argued for appellant. With
him on the brief were DAVID DONAHUE and MICHAEL
CHIAPPETTA. Of counsel was RICHARD Z. LEHV.
DANIEL M. PETROCELLI, O’Melveny & Myers LLP, of
Los Angeles, California, argued for appellee. With him on
SLESINGER v. DISNEY ENTERPRISES 2
the brief were CASSANDRA L. SETO; and MARK E. MILLER,
of San Francisco, California.
__________________________
Before RADER, Chief Judge, O’MALLEY, and REYNA, Cir-
cuit Judges.
Opinion for the court filed by Chief Judge RADER. Dis-
senting opinion filed by Circuit Judge REYNA.
RADER, Chief Judge.
The Trademark Trial and Appeal Board (“Board”)
dismissed with prejudice Stephen Slesinger, Inc.’s
(“Slesinger” or “SSI”) challenge to the trademark rights
related to A.A. Milne’s literary work featuring Winnie-
the-Pooh and other characters owned by Disney Enter-
prises, Inc. (“Disney”). During the course of the parties’
dispute, Slesinger filed twelve opposition and cancellation
proceedings with the Board consolidated under Stephen
Slesinger, Inc. v. Disney Enter., Inc., 98 U.S.P.Q.2d 1890
(T.T.A.B. 2011) (the “Consolidated Proceedings”). Because
the Board properly barred Slesinger’s proceeding, granted
summary judgment, and dismissed the case due to collat-
eral estoppel, this court affirms.
I.
For decades, Slesinger and Disney have disputed the
Winnie-the-Pooh rights in both state and federal courts as
well as at the Board. This case questions the registration
of various trademarks derived from the Winnie-the-Pooh
works. Because the Board premises its dismissal on
collateral estoppel, this court addresses briefly the back-
ground of Slesinger’s and Disney’s agreements about the
marks.
In 1930, A.A. Milne transferred to Stephen Slesinger
exclusive merchandising and other rights based on the
3 SLESINGER v. DISNEY ENTERPRISES
Winnie-the-Pooh works in the United States and Canada.
In 1961, Slesinger exclusively “assigned, granted, and set
over to” Walt Disney Productions the rights in the 1930
agreement with A.A Milne. Milne ex rel. Coyne v.
Slesinger, No. 2:02-cv-0858, 2009 WL 3140439, at *2 (C.D.
Cal. Sept. 25, 2009) (“Seller hereby assigns, grants, and
sets over unto the purchaser all of the further rights in
and to said work’ [sic] which are set forth in Paragraph 3
hereof. . .”).
In a 1983 agreement, Slesinger acknowledged its
transfer and assignment of “rights it had acquired from
A.A. Milne to Disney by agreement dated 14 June 1961.”
Id. The 1983 agreement then revoked the prior agree-
ments and gave Slesinger “all of the rights in the work
which were transferred to [Slesinger] in 1930 and
amended from time to time.” Id. In turn, Slesinger
transferred its rights back to Disney, as the agreement
also provided that Slesinger “assigns, grants, and sets
over unto Disney the sole and exclusive right in the
United States and Canada to project, exhibit, and broad-
cast visually and audibly any motion pictures . . .” as well
as “various further rights in and to said work, which
include merchandise . . .” television, radio, and analogous
processes. Id.
While the agreement sought to resolve the parties’
previous disputes and clarify their contractual arrange-
ments, the parties interpret the 1983 agreement differ-
ently. Slesinger contends it retained rights in the Winnie-
the-Pooh works, while Disney maintains Slesinger as-
signed all rights to Disney.
In 1991, before the present litigation began, Slesinger
brought an action in Los Angeles Superior Court alleging
Disney breached the 1983 agreement. Slesinger claimed
Disney’s revenue from Winnie-the-Pooh products was not
SLESINGER v. DISNEY ENTERPRISES 4
accurately calculated, meaning that Disney underpaid
royalties. Specifically, Slesinger alleged in state court
that the 1983 agreement gave Disney valuable rights “in
exchange for a share of the receipts from exploitation of
the Pooh characters.” Id. at *4. In the state court pro-
ceedings, Slesinger acknowledged that the 1983 agree-
ment “regranted, licensed and assigned all rights acquired
rights [sic] to Disney.” Id. Slesinger further explained
that “the grant of all ‘further rights’ in and to the Pooh
Characters . . . is a catch-all designed to ensure that
Slesinger was granting . . . all of the additional commer-
cial exploitation rights Slesinger acquired that are not
specifically mentioned in the 1983 Agreement.” Id. The
California state court ultimately dismissed Slesinger’s
claim, and the California Court of Appeals affirmed.
Meanwhile, the parties’ dispute over royalties pro-
ceeded in the Central District of California. In October
2006, Slesinger amended its district court claim to allege
that Disney’s exploitation of the Winnie-the-Pooh charac-
ters infringed Slesinger’s trademarks and copyrights.
Disney moved to dismiss the claim because Slesinger had
admitted in state court that Disney’s uses of the Winnie-
the-Pooh characters were authorized. Disney also con-
tended that Slesinger granted all of the rights it had in
the Winnie-the-Pooh characters to Disney and that
Slesinger retained no rights which Disney could infringe.
In 2009, the district court considered the parties’ cross
motions for summary judgment based on the 1983 agree-
ment and addressed the agreement’s scope, judicial
estoppel, and California’s Business and Professions Code.
The district court noted the parties’ actions indicated the
Winnie-the-Pooh rights were transferred to Disney in the
1983 agreement. Between 1983 and 2006, Disney regis-
tered at least fifteen trademarks. In 2004, Disney regis-
tered copyrights in forty-five works and renewed
5 SLESINGER v. DISNEY ENTERPRISES
copyright registrations for another fourteen. In contrast,
Slesinger did not attempt to perfect or register trade-
marks or copyrights before asserting its district court
claims. The district court further noted that Slesinger
never objected to those registrations until 2006, when the
state court dismissed Slesinger’s claims for royalty
agreement breach. Accordingly, the California district
court based its judgment against Slesinger on “the con-
duct of the parties over the nearly 50 years of their rela-
tionship.” Id.
The district court also addressed Slesinger’s argu-
ments that it did not relinquish all the rights it received
from A.A. Milne to Disney. However, because Slesinger
could not specifically identify any retained right, the court
determined that the contracts did not permit any reten-
tion of rights. Thus, upon its review of the 1983 agree-
ment, the court found that Slesinger granted its acquired
rights to Disney. In sum, given the parties’ conduct, and
the “clear terms” of the agreements, the district court
determined that Slesinger “transferred all of its rights in
the Pooh works to Disney, and may not now claim in-
fringement of any retained rights.” Id.
Applying the doctrine of judicial estoppel, the district
court found Slesinger’s arguments “inconsistent with
statements made and positions taken by SSI in the state
court litigation.” Id. at *5. In state court, Slesinger “has
insisted that Disney’s uses of the works were derived from
the SSI grants of ‘all’ rights to sound, word, picture repre-
sentation, television, any representational device, similar
or allied devices, videocassettes, promotion and advertis-
ing in all media, exploitation and licensing in all media.”
Id. at *4. Thus, the district court based its finding of
estoppel on Slesinger’s inconsistent positions. Id. at *5
(“SSI’s conduct demonstrates a blatant effort to salvage
SLESINGER v. DISNEY ENTERPRISES 6
its lawsuit against Disney by taking an [sic] taking en-
tirely inapposite and inconsistent posture in this case.”).
This dispute at the Board began in December 2006.
Slesinger now attempts to cancel Disney’s applications to
register the marks POOH, WINNIE THE POOH,
CLASSIC POOH, MY FRIENDS TIGGER & POOH, and
other marks comprising the names or images of “Pooh”
and related fictional characters. Slesinger claims the
agreement with Disney is a license, which does not grant
Disney the right to register the marks. Disney maintains
the agreement assigned all the Winnie-the-Pooh rights to
Disney and filed a motion to dismiss. Treating the motion
as one for summary judgment, the Board found that
collateral estoppel barred Slesinger’s claims and granted
Disney’s motion. The Board’s decision relied on the
earlier district court order in Milne ex rel. Coyne v.
Slesinger, No. 2:02-cv-0858 (C.D. Cal. Sept. 25, 2009).
Accordingly, this court therefore considers the Board’s
application of collateral estoppel based on the Central
District of California’s ruling. This court has jurisdiction
over Slesinger’s appeal pursuant to 28 U.S.C.
§ 1295(a)(4)(B) and 15 U.S.C. § 1071(a)(1).
II.
This court reviews the Board’s decision to grant sum-
mary judgment without deference. Odom’s Tenn. Pride
Sausage, Inc. v. FF Acquisition, LLC, 600 F.3d 1343, 1345
(Fed. Cir. 2010). The doctrine of issue preclusion, or
collateral estoppel, protects the finality of judgments by
“preclud[ing] relitigation in a second suit of issues actu-
ally litigated and determined in the first suit.” In re
Freeman, 30 F.3d 1459, 1465 (Fed. Cir. 1994) (citing
Lawlor v. Nat’l Screen Serv. Corp., 349 U.S. 322, 326
(1955)). Collateral estoppel requires four elements: (1) a
prior action presents an identical issue; (2) the prior
7 SLESINGER v. DISNEY ENTERPRISES
action actually litigated and adjudged that issue; (3) the
judgment in that prior action necessarily required deter-
mination of the identical issue; and (4) the prior action
featured full representation of the estopped party. See
Laguna Hermosa Corp. v. United States, 671 F.3d 1284,
1288 (Fed. Cir. 2012) (citing Freeman, 30 F.3d at 1465).
Slesinger concedes that this case satisfies the first
and fourth factors. Indeed, the Central District of Cali-
fornia litigated the identical issue, the scope of the 1983
agreement, and Slesinger was fully represented.
On the second factor, Slesinger contends that the dis-
trict court did not properly consider the critical issue on
the scope of the 1983 agreement. The record shows that
the district court extensively analyzed the scope of the
1983 agreement. For example, Slesinger specifically
presented this identical issue as its Second Claim for
Relief. Indeed Slesinger maintained in that action that
the 1983 agreement was a license rather than an assign-
ment. Likewise, the parties’ district court briefing exten-
sively addressed the agreement’s scope as an assignment
or a license. Accordingly, the record shows that the
district court litigated and decided the identical issue.
Slesinger, however, argues that the district court did
not specifically declare that Slesinger “has no rights at
all”, thus implying some rights may survive the 1983
agreement. To bolster this contention, Slesinger argues
the district court’s ruling, which uses the term “retained
rights,” implies Slesinger licensed its rights to Disney.
Also, it claims the district court’s “broad” conclusion did
not definitively resolve the license or assignment issue.
Slesinger notes the district court did not use the term
“assignment” and its reference to the “grant” or “transfer”
supports Slesinger’s contention the 1983 agreement was a
license because such terms are associated with licensing.
SLESINGER v. DISNEY ENTERPRISES 8
To the contrary, the Board properly addressed these
points and dismissed them as meritless. In the words of
the Board, “[t]he clear wording of the district court’s order
does not support SSI’s contention that the decision was
focused only on whether a particular array of uses by
Disney of the POOH works was authorized.” Consoli-
dated Proceedings, 98 U.S.P.Q.2d at 1897.
From this court’s perspective, the Board’s determina-
tion accurately tracks the district court’s holding that the
1983 agreement represented “a transfer from SSI to
Disney of all of SSI’s interests in the Pooh characters,”
Milne, 2009 WL 3140439 at *4 (emphasis in original), and
that “under the clear terms of the parties’ agreements,
SSI transferred all of its rights in the Pooh works to
Disney, and may not now claim infringement of any
retained rights.” Id. Moreover, the “unambiguous nature
of the contracts is strongly supported by the conduct of
the parties over the nearly 50 years of their relationship,”
as both parties treated the agreements as constituting a
complete assignment of Slesinger’s rights to Disney. Id.
Thus, the record shows that the district court did not find
that Slesinger “retained” some rights. See Freeman, 30
F.3d at 1466 (“[T]he requirement that the issue have been
actually decided is generally satisfied if the parties to the
original action disputed the issue and the trier of fact
decided it.”) (citing Mother’s Rest., Inc. v. Mama’s Pizza,
Inc., 723 F.2d 1566, 1569 (Fed. Cir. 1983)).
The record shows the district court concluded that
Slesinger completely granted all its rights to Disney as an
assignment. See, e.g., In re Computer Eng’g Assocs., 337
F.3d 38, 46 (1st Cir. 2003) (assignment where party
divests itself of “all right, interest, and control in the
property”); In re Apex Oil Co., 975 F.2d 1365, 1369 (8th
Cir. 1992) (“assignment” defined “as a transfer by the
assignor of all rights in the property”); 3 J. Thomas
9 SLESINGER v. DISNEY ENTERPRISES
McCarthy, McCarthy on Trademarks & Unfair Competi-
tion § 18:1 (4th ed. 2012) (assignment is “an outright sale
of all rights in . . . [a] mark,” whereas license “is a limited
permit to another to use the mark”). With such a clear
explanation that Slesinger conveyed all rights completely
to Disney, it is immaterial that the district court used the
terms “transfer” and “grant” rather than “assignment.”
Moreover, it is the court’s ultimate “judgment that mat-
ters,” not the language used to discuss the court’s rulings.
Yamaha Corp. of Am. v. United States, 961 F.2d 245, 254
(D.C. Cir. 1992) (emphasis in original); see also Clark v.
Bear Stearns & Co., 966 F.2d 1318, 1321 (9th Cir. 1992)
(“When the issue for which preclusion is sought is the only
rational one the fact finder could have found, then that
issue is considered foreclosed, even if no explicit finding of
that issue has been made.”); 18 Lawrence B. Solum,
Moore’s Federal Practice – Civil § 132.03[3][e] (Matthew
Bender 3d ed.) (“An issue that was necessarily implicit in
a larger determination is given issue preclusive effect. An
issue that is distinctly presented in the pleadings and
necessarily resolved may be reflected in the decision that
includes that point, although it may not be expressly
mentioned in the decision.”).
Finally, after determining that Slesinger had no own-
ership interest in the Pooh rights, the district court con-
cluded that Slesinger “fully adjudicated all claims and
counterclaims” and held “all of [Slesinger’s] Counter-
claims are dismissed on the merits and with prejudice.”
Milne, 2009 WL 3140439 at *6. The district court un-
equivocally decided that Slesinger was not entitled to its
requested relief. Therefore, the record shows that the
district court ruled on and denied Slesinger’s specific
request for an order directing the Board to correct Dis-
ney’s Pooh-related trademark registrations to reflect
Slesinger’s name.
SLESINGER v. DISNEY ENTERPRISES 10
The third element of the estoppel formula prevents
“the incidental or collateral determination of a nonessen-
tial issue from precluding reconsideration of that issue.”
Mother’s Rest., 723 F.2d at 1571. In this instance, the
district court’s ruling is neither incidental nor collateral.
Rather it directly addressed Slesinger’s ownership inter-
est in the Pooh rights. The record shows that the evalua-
tion of these rights was clearly an essential element of the
judgment. Indeed the district court had to determine this
issue before deciding whether Disney’s uses of the Win-
nie-the-Pooh rights were infringing. Likewise, it was
essential to first determine whether Slesinger had any
ownership rights in the marks before considering
Slesinger’s request to correct Disney’s trademark regis-
trations to Slesinger’s name.
Accordingly, the Board correctly applied collateral es-
toppel to prevent Slesinger from asserting a claim that its
1983 grant of rights to Disney was a license as opposed to
an assignment.
AFFIRMED
COSTS
Each party shall bear its own costs.
United States Court of Appeals
for the Federal Circuit
__________________________
STEPHEN SLESINGER, INC.,
Appellant,
v.
DISNEY ENTERPRISES, INC.,
Appellee.
__________________________
2011-1593
(Opposition Nos. 91179064, 91182358, 91183644,
91186026, 91187261, 91188860, 91191230, 91192691,
91194551, 91196019, and 91198046; and
Cancellation No. 92046853)
__________________________
Appeal from the United States Patent and Trademark
Office, Trademark Trial and Appeal Board.
__________________________
REYNA, Circuit Judge, dissenting.
The issue before us is whether the district court de-
cided the ownership of the Winnie-the-Pooh trademarks.
Because I believe the district court did not decide owner-
ship of the Pooh trademarks, and because I believe that a
decision on ownership was not necessary to the district
court’s decision concerning trademark infringement, I
respectfully dissent.
SLESINGER v. DISNEY ENTERPRISES 2
I. COLLATERAL ESTOPPEL
Collateral estoppel, often called “issue preclusion,”
bars relitigation in a second action of an issue litigated
and decided in a prior action. Because preclusion may
forever bar meritorious claims and negate significant
legal rights, courts must ensure that the circumstances
for preclusion are “certain to every intent.”
Mayer/Berkshire Corp. v. Berkshire Fashions, Inc., 424
F.3d 1229, 1234 (Fed. Cir. 2005) (citing Russell v. Place,
94 U.S. 606, 610 (1876)). Precedent weighs against deny-
ing litigants a day in court unless there is a clear and
persuasive basis for that denial. If there exists a reason-
able doubt as to whether an issue was actually decided in
the first action, preclusion should not apply in the subse-
quent action. Kearns v. Gen. Motors Corp., 94 F.3d 1553,
1557 (Fed. Cir. 1996); McNellis v. First Fed. Sav. & Loan
Ass’n of Rochester, New York, 364 F.2d 251, 257 (2d Cir.
1966) (“[A] reasonable doubt as to what was decided in
the first action should preclude the drastic remedy of
foreclosing a party from litigating an essential issue.”
(internal citation omitted)). Guided by these principles,
we resolve ambiguities in what issues were actually
decided in a prior proceeding in favor of the party seeking
to prevent application of preclusion. Charter Fed. Sav.
Bank v. United States, 87 F. App’x 175, 178 (Fed. Cir.
2004) (nonprecedential).
The Supreme Court summarized the requirements of
issue preclusion in Montana v. United States, 440 U.S.
147, 153-55 (1979). Issue preclusion requires (1) identity
of an issue in a prior proceeding, (2) that the identical
issue was actually litigated and decided, (3) that determi-
nation of the issue was necessary to the judgment in the
prior proceeding, and (4) that the party defending against
preclusion had a full and fair opportunity to litigate the
issue in the prior proceeding. Montana, 440 U.S. at 153–
3 SLESINGER v. DISNEY ENTERPRISES
55. The burden is on the party seeking preclusion to show
“that the same issue was ‘actually and necessarily deter-
mined’ in the prior proceeding.” Connors v. Tanoma Min.
Co., Inc., 953 F.2d 682, 684-85 (D.C. Cir. 1992).
We owe no deference to a determination by the
Trademark Trial and Appeal Board (“TTAB”) on preclu-
sion. In re Trans Texas Holdings Corp., 498 F.3d 1290,
1296 (Fed. Cir. 2007). As it has been observed by other
courts, the correctness of the earlier decision is not an
issue, and it is irrelevant to the application of the estop-
pel. Westwood Chem., Inc. v. U. S., 525 F.2d 1367, 1375
(Ct. Cl. 1975). It is therefore inappropriate to consider
whether the earlier decision was correct; the law “does not
authorize unbridled excursions into the record of the
earlier trial before applying the estoppel of the previous
judgment.” See Gammino v. Sprint Commnc’ns. Co. L.P.,
No. 10-2493, 2011 WL 3240830 (E.D. Pa. July 29, 2011).
In view of the foregoing, I believe the TTAB erred on
two distinct grounds when it determined that the trade-
mark ownership issue was precluded. First, the district
court did not actually decide the ownership issue. Second,
resolution of the ownership issue was not essential or
necessary for the district court’s decision on non-
infringement.
A. A REASONABLE DOUBT
The basic question before the district court was
whether Disney had infringed the Pooh trademarks.
Disney asserted as a defense to infringement that it had a
legal right to use the Pooh trademarks based on a trans-
fer of the marks from Slesinger to Disney. The court was
asked to resolve whether the transfer effected a license
(for use), or an assignment (sale) of the trademarks. The
parties briefed the license-assignment issue, so there is no
question as to whether the license-assignment issue was
SLESINGER v. DISNEY ENTERPRISES 4
litigated. But there exists reasonable doubt whether the
district court actually decided the issue. The court does
not explicitly state in clear, plain language whether the
grant of rights, i.e., the transfer, was a license or an
assignment. In relevant part, the district court’s opinion
states,
Disney puts forth two main contentions in its Mo-
tion: First, that Slesinger granted to Disney all of
the rights it had in the Pooh characters, and re-
tained no rights which Disney could infringe, and
second, that Slesinger's counterclaims are incon-
sistent with its earlier position in the Superior
Court action that Disney’s uses of the Pooh char-
acters were authorized and royalty-producing. The
Court agrees with both propositions.
Milne ex rel. Coyne v. Slesinger, 2:02CV08508-FMC-
PLAX, 2009 WL 3140439 at *1 (C.D. Cal. Sept. 25, 2009)
(emphases added). The district court’s use of the phrase
“granted to Disney all of the rights” could indicate an
assignment, but it could also indicate a license to use, i.e.,
to promote, advertise and otherwise exploit the commer-
cial value of the trademarks. See, e.g., In re Polar Music
Int’l AB, 714 F.2d 1567, 1569 (Fed. Cir. 1983) (“Subject to
certain terms and conditions, Atlantic is granted the right
to use the mark ‘ABBA’ and likenesses of the group in
connection with the promotion, advertising, distribution,
exploitation, and sale of records embodying the master
recordings made by appellant.” (emphases added)).
Similarly, the district court’s conclusion that Slesinger
“retained no rights which Disney could infringe” is equally
consistent with either a license or an assignment. The
court’s recognition that “Disney’s uses of the Pooh charac-
ters were authorized and royalty-producing” can reasona-
bly refer to an assignment, but the words chosen by the
court are more consistent with a license given the implied
5 SLESINGER v. DISNEY ENTERPRISES
extension of authority and the obligation for continued
royalty payments for use of the Pooh trademarks.
Indeed, the district court’s opinion appears to suggest
that Slesinger retained some rights to the Pooh trade-
marks, but that any rights retained were insufficient to
support an infringement action. Milne, 2009 WL 3140439
at *4 (“Slesinger transferred all of its rights in the Pooh
works to Disney, and may not now claim infringement of
any retained rights.”). This scenario is as suggestive of a
license as it is of an assignment. See Exxon Corp. v.
Oxxford Clothes, Inc., 109 F.3d 1070, 1076 (5th Cir. 1997)
(“A license to use a mark is a transfer of limited rights,
less than the whole interest which might have been
transferred.” (emphases added; internal quotation marks
omitted)); Consol. Foods Corp. v. United States, 569 F.2d
436, 437 (7th Cir. 1978) (“This issue of whether a transfer
of the use of a trademark is a sale or a license for tax
purposes is a thorny one . . . .” (emphasis added)). It
follows that a finding that some or all rights were trans-
ferred is not itself determinative of ownership.
The district court’s failure to definitively and ex-
pressly state whether the transfer was a license or as-
signment is striking and illuminating. The district court’s
resort to ambiguity on the issue is significant given that
the parties fully briefed the issue. One explanation could
be that the district court found it unnecessary to actually
decide the issue as long as it focused on whether Disney
had a legal right to use the Pooh trademarks. In any
event, there exits reasonable doubt whether the court
actually decided that the transfer was accomplished via
an assignment, i.e., by outright sale. On that basis alone,
collateral estoppel should not apply.
SLESINGER v. DISNEY ENTERPRISES 6
B. OWNERSHIP NOT ESSENTIAL
For operation of preclusion, an issue must also be
necessary to the judgment in the previous action.
Mother’s Rest., Inc. v. Mama’s Pizza, Inc., 723 F.2d 1566,
1571 (Fed. Cir. 1983) (“In order to give preclusive effect to
a particular finding in a prior case, that finding must
have been necessary to the judgment rendered in the
previous action.”). The relevant question here is whether
the district court was necessarily required to decide
whether the transfer of the Pooh trademarks was an
assignment in order for the court to resolve the issue of
trademark infringement. See id. The answer is no.
Disney argues that in order for the district court to
evaluate whether Disney’s use of the Pooh trademarks
was infringing, the court first had to determine whether
Slesinger or Disney owned the rights. This is incorrect.
As happened precisely in this case, an effective defense to
a claim of trademark infringement can be made upon a
showing of authorized use under a license. De Forest
Radio Tel. & Tel. Co. v. United States, 273 U.S. 236, 242
(1927) (“If a licensee be sued, he can escape liability to the
patentee for the use of his invention by showing that the
use is within his license.”); see also 3 McCarthy on
Trademarks and Unfair Competition § 18:40 (4th ed.
2011) (“Every license carries with it a waiver of the right
of the trademark owner to sue for infringement arising
out of acts that fall within the scope of the license.”).
Whether Disney was authorized to use the Pooh trade-
marks does not solely depend on whether Slesinger or
Disney owned the marks, because Disney could have been
authorized to use the Pooh trademarks under a license.
The majority acknowledges that the district court
never directly addresses the license-assignment issue, and
the majority cites authorities discussing application of
7 SLESINGER v. DISNEY ENTERPRISES
preclusion where no explicit findings were made in the
prior action. Those authorities, however, require that the
precluded issue be “the only rational one the fact finder
could have found,” Clark, 966 F.2d at 1321; that the issue
was “necessarily implicit in a larger determination,”
Moore’s Federal Practice – Civil § 132.03[3][e]; and that
the issue was “necessarily resolved,” id. That is not the
case here. Here, ownership of the Pooh trademarks was
not the only rational basis on which a fact finder could
find non-infringement. An equally rational basis is that
Disney was an authorized user under a license. It follows
that collateral estoppel cannot apply.
Because the court could have disposed of Slesinger’s
infringement claims solely on the basis that Disney was
authorized to use the Pooh trademarks, it is clear that a
decision on ownership of the rights was not essential to
the court’s judgment on infringement. This alone is
sufficient to preclude the application of collateral estop-
pel.
Based on the foregoing, I believe the TTAB erred in
precluding Slesinger from disputing the ownership of the
Pooh trademarks. I therefore respectfully dissent.