IP Law Daily, TRADEMARK—TTAB: Board bifurcates trial to first decide petitioner’s entitlement to statutory cause of action, (Sep 11, 2024)

By Cheryl Beise, J.D.

Bifurcation to determine the petitioner’s bona fide intent to use its pleaded mark would simplify the presentation of evidence and conserve judicial resources.

In a proceeding seeking cancellation of a registration for typed mark VELCRO on the ground that the mark is generic for hook and loop-type fasteners, the Trademark Trial and Appeal Board in a precedential decision has granted the respondent’s motion to bifurcate the proceeding to first consider the petitioner’s entitlement to a statutory cause of action before addressing the merits of the petitioner’s genericness claim. Given the persistent issues of fact regarding the petitioner’s bona fide intent to use its applied-for composite mark SPORT VELCRO WHOLESALERS and design mark, bifurcation would simplify the case, not prejudice the petitioner, and could be dispositive of the proceeding (NHDNC LLC v. Velcro BVBA, No. 92074468 (T.T.A.B. Sept. 6, 2024)).

Petitioner, NHDNC, LLC, sought to cancel Velcro BVBA’s typed mark VELCRO, registered in 1975 for “separable fasteners-namely, hook and loop-type fasteners and components thereof,” in International Class 26. The Board noted that the petitioner had amended its petition to cancel several times in an attempt to adequately plead entitlement to a statutory cause of action. The petitioner’s original petition was abandoned and its amended petition was dismissed for failure to allege entitlement to a statutory cause of action. The Board found that in connection with its application to register the mark VELCO for “velcro fasteners; separable fasteners, namely, velcro type fasteners and components thereof,” the petitioner only alleged “speculative future business” plans.

The petitioner then filed a new application to register the mark SPORT VELCRO WHOLESALERS and design for hook and loop fasteners. The same day, the petitioner filed a second amended petition for cancellation of the registrant’s VELCRO mark. The respondent moved to dismiss for lack of standing, but this time the Board found that the petitioner sufficiently alleged entitlement to a statutory cause of action for pleading purposes.

The respondent then filed a motion for summary judgment, asserting that the petitioner did not have a bona fide intent to use the pleaded mark in commerce. In December 2023, the Board found that there remained for trial a genuine issue of material fact regarding the petitioner’s bona fide intent and entitlement to a cause of action.

“In view of the many contentious motions filed in this proceeding,” the Board determined that the case was suitable for the Board’s Final Pretrial Conference Pilot program. At a pre-trial conference, the Administrative Trademark Judge assigned to the conference suggested to the parties that they could streamline this case by entering into a stipulation for bifurcation of the issues. The petitioner said it did not wish to stipulate to bifurcation and declined to discuss the matter with the respondent. The respondent filed a motion to bifurcate.

Bifurcation. Under Fed. R. Civ. P. 42(b), made applicable to the Board by Trademark Rule 2.116(a), 37 C.F.R. § 2.116(a), courts and the Board have broad discretion to bifurcate proceedings “[f]or convenience, to avoid prejudice, or to expedite and economize” cases. Factors courts consider when deciding bifurcation include: (1) separability of issues, (2) simplification of discovery and conservation of resources, and (3) prejudice to the parties. The party seeking bifurcation bears the burden of establishing that bifurcation will promote judicial economy, or avoid inconvenience, and that no party would be prejudiced by the separate trials.

In this case, the respondent argued that bifurcation would streamline this case and not prejudice the petitioner, and potentially could save significant time and resources. The petitioner contended the motion to bifurcate was improper and baseless and would increase the burden and expense of the proceeding.

The Board agreed with the respondent and granted their motion. “Now that discovery has been completed in this case, given the genuine dispute regarding Petitioner’s entitlement, and whether it has a bona fide intent to use its pleaded mark in commerce, severance of the issues will simplify the presentation of evidence and conserve the Board’s judicial resources by first considering entitlement, as its resolution may be dispositive of this proceeding,” the Board said.

The Board also noted that the substantive issue of genericness involves “a fact-specific inquiry that often involves the development and review of voluminous evidence, including any expert reports.”

Moreover, bifurcation would not prejudice or burden the petitioner because the evidence of entitlement is within it control and it must prove entitlement in any case.

The Case is Cancellation No. 92074468.

Judge: Johnson, M.

Attorneys: Howard Eichenblatt (Law Offices of Howard Eichenblatt) for NHDNC LLC. Erik Paul Belt (McCarter & English, LLP) for Velcro BVBA and Velcro IP Holdings LLC.

Companies: NHDNC LLC; Velcro BVBA; Velcro IP Holdings LLC

Cases: Trademark USPTO