Ashe v. The PNC Financial Services Group, Inc.
Filing
31
MEMORANDUM OPINION AND ORDER GRANTING 27 Defendant's Motion to Dismiss. Signed by Judge Paul W. Grimm on 11/17/2015. (kns, Deputy Clerk)(c/m 11/17/15)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
Southern Division
*
KEITH A. ASHE,
*
Plaintiff,
*
v.
Case No.: PWG-15-144
*
THE PNC FINANCIAL SERVICES
GROUP, INC.,
*
Defendant.
*
*
*
*
*
*
*
*
*
*
*
*
*
*
MEMORANDUM OPINON AND ORDER
Plaintiff Keith A. Ashe claims that Defendant The PNC Financial Services Group, Inc.,
(“PNC”) has infringed on his SPENDOLOGY trademark through PNC’s online financial
services business, including the “PNC Virtual Wallet.” PNC has filed a motion to dismiss for
failure to state a claim, arguing that the Trademark Trial and Appeal Board’s (“Trademark
Board”) previous finding that PNC had priority of use of the SPENDOLOGY trademark bars
Ashe’s current infringement suit. Because Ashe’s claim is barred under the doctrine of collateral
estoppel, I will GRANT Defendant PNC’s motion to dismiss.
I.
BACKGROUND
Ashe, who is pro se, alleges that PNC’s use of the SPENDOLOGY trademark is “a
willful and wanton violation of the Lanham Act and 15 U.S.C. Section 1125(a).” Compl. 1, ECF
No. 1. I will treat Ashe’s claim as a trademark infringement claim under 15 U.S.C. § 1125(a).
Ashe claims that he demonstrated “use analogous to trademark use [for the
SPENDOLOGY trademark] between May 2010 and July 2010” and first began publicly using
the SPENDOLOGY trademark on June 21, 2010. Compl. 4. On October 25, 2011, Ashe filed
an application for the SPENDOLOGY trademark for “[w]eb-based personal finance tools” and
later amended this description to be “[w]eb-based personal finance tools, namely, providing a
website featuring non-downloadable instructional videos in the field of finance, online financial
calculators, and online information in the field of finance.” U.S. Trademark Application Serial
No. 85,456,136 (filed Oct. 25, 2011); see Def.’s Mot. 5, ECF No. 27; The PNC Financial
Services Group, Inc., v. Ashe dba Spendology and Spendology LLC, Opp’n No. 91207409, 2013
WL 5820850, at *1 & n.2 (T.T.A.B. 2013) (“PNC Trademark Opposition”). Ashe’s trademark
application was published in the United States Patent and Trademark Office’s Official Gazette
on June 12, 2012. U.S. Trademark Application Serial No. 85,456,136 (filed Oct. 25, 2011); see
Compl. 1. PNC did not submit its application for the SPENDOLOGY trademark until the next
day, June 13, 2012. U.S. Trademark Application Serial No. 85,650,817 (filed June 13, 2012).
Ashe and PNC traded cease-and-desist letters regarding the use of the trademark. Compl.
1. On October 10, 2012, PNC “filed a Notice of Opposition with the Trademark Trial and
Appeals Board to prevent the registration of Plaintiff’s mark.” Id. Ashe and PNC filed crossmotions for summary judgment in the proceedings before the Trademark Board.
PNC
Trademark Opposition, 2013 WL 5820850, at *1. On October 15, 2013, the Trademark Board
found that “there is no genuine dispute of material fact that [PNC] has established its prior use of
the mark SPENDOLOGY for an ‘online money management tool that allows account holders to
track balances, budgets, and expenses, by category and time period’ over [Ashe].” Id. at *6. As
2
a result, the Trademark Board granted PNC’s motion for summary judgment and refused Ashe’s
application to register the SPENDOLOGY trademark. Id.
PNC has filed a motion to dismiss for failure to state a claim under Fed. R. Civ. P.
12(b)(6). Def.’s Mot. Ashe filed an opposition, Opp’n, ECF No. 29, and PNC filed a reply,
Reply, ECF No. 30. A hearing is unnecessary. See Loc. R. 105.6.
II.
DISCUSSION
Fed. R. Civ. P. 12(b)(6) provides for “the dismissal of a complaint if it fails to state a
claim upon which relief can be granted.” Velencia v. Drezhlo, No. RDB-12-237, 2012 WL
6562764, at *4 (D. Md. Dec. 13, 2012). This rule’s purpose “‘is to test the sufficiency of a
complaint and not to resolve contests surrounding the facts, the merits of a claim, or the
applicability of defenses.’” Id. (quoting Presley v. City of Charlottesville, 464 F.3d 480, 483
(4th Cir. 2006)). To that end, the Court bears in mind the requirements of Fed. R. Civ. P. 8, Bell
Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), and Ashcroft v. Iqbal, 556 U.S. 662 (2009),
when considering a motion to dismiss pursuant to Rule 12(b)(6). Specifically, a complaint must
contain “a short and plain statement of the claim showing that the pleader is entitled to relief,”
Fed. R. Civ. P. 8(a)(2), and must state “a plausible claim for relief,” as “[t]hreadbare recitals of
the elements of a cause of action, supported by mere conclusory statements, do not suffice,”
Iqbal, 556 U.S. at 678–79. See Velencia, 2012 WL 6562764, at *4 (discussing standard from
Iqbal and Twombly). “A claim has facial plausibility when the plaintiff pleads factual content
that allows the court to draw the reasonable inference that the defendant is liable for the
misconduct alleged.” Iqbal, 556 U.S. at 678. Plaintiff is proceeding pro se, and his complaint is
to be construed liberally. See Haines v. Kerner, 404 U.S. 519, 520 (1972). However, liberal
construction does not absolve Plaintiff from pleading plausible claims. See Holsey v. Collins, 90
3
F.R.D. 122, 128 (D. Md. 1981) (citing Inmates v. Owens, 561 F.2d 560, 562–63 (4th Cir. 1977)).
I must accept the facts as alleged in Plaintiff’s complaint as true. See Aziz v. Alcolac, 658 F.3d
388, 390 (4th Cir. 2011).
If an affirmative defense “‘clearly appears on the face of the complaint,’” the Court may
rule on that defense when considering a motion to dismiss. Kalos v. Centennial Sur. Assocs., No.
CCB-12-1532, 2012 WL 6210117, at *2 (D. Md. Dec. 12, 2012) (quoting Andrews v. Daw, 201
F.3d 521, 524 n.1 (4th Cir. 2000) (citation and quotation marks omitted)). One such affirmative
defense is collateral estoppel, also known as issue preclusion. “Res judicata and collateral
estoppel ‘are based upon the judicial policy that the losing litigant deserves no rematch after a
defeat fairly suffered, in adversarial proceedings, on issues raised, or that should have been
raised.’” Grady Mgmt., Inc. v. Epps, 98 A.3d 457, 472 (Md. Ct. Spec. App. 2014) (citation
omitted). While “[c]ollateral estoppel has often been described as a doctrine absorbed within res
judicata,” it is a separate doctrine that “operates collaterally to preclude relitigation of issues that
the same parties already had litigated.” GAB Enters., Inc. v. Rocky Gorge Devel., LLC, 108
A.3d 521, 530 (Md. Ct. Spec. App. 2015). Cf. id. (“Res judicata holds parties to a claim that
they have previously litigated . . . .”) (emphasis added). When considering this defense, “‘a court
may judicially notice facts from a prior judicial proceeding.’” Brooks v. Arthur, 626 F.3d 194,
199 n.6 (4th Cir. 2010) (quoting Brooks v. Arthur, 611 F. Supp. 2d 592, 597 (W.D. Va. 2009)).
Plaintiff claims that he “demonstrated use analogous to trademark use between May 2010
and July 2010. Plaintiff’s first public use of the SPENDOLOGY trademark began on July 21,
2010.” Compl. 4. Accordingly, from the face of his complaint, Ashe clearly appears that he is
asserting priority regarding the SPENDOLOGY trademark. As discussed below, in making
these claims, Plaintiff is attempting to relitigate issues—whether he demonstrated use analogous
4
to trademark use and whether he had priority of use for the SPENDOLOGY trademark vis-à-vis
PNC—that were previously decided by the Trademark Board. See PNC Trademark Opposition,
2013 WL 5820850, at *6.
As a result, it is appropriate for me to determine, in light of
Defendant’s motion to dismiss, if Plaintiff’s claims are barred under the doctrine of collateral
estoppel.
See Kalos v. Centennial Sur. Associations, 2012 WL 6210117, at *3 (granting
defendants’ Fed. R. Civ. P. 12(b)(6) motion to dismiss on collateral estoppel grounds because
plaintiff’s statement in his complaint that bonds were fraudulent or invalid was refuted in prior
judicial proceedings).
PNC argues that Trademark Board “decisions are entitled to preclusive effect when the
ordinary elements of issue preclusion are met.” Def.’s Mot. 5. PNC claims that Ashe is barred
from bringing his suit “[b]ecause having prior rights is one of the required elements of a
trademark infringement claim and that issue has already been decided against [Ashe]” in the
Trademark Board’s decision in favor of PNC’s opposition to Ashe’s SPENDOLOGY trademark
application. Id.; see also PNC Trademark Opposition, 2013 WL 5820850, at *6.
The Supreme Court recently held that “a court should give preclusive effect to
[Trademark Board] decisions if the ordinary elements of issue preclusion are met.” B & B
Hardware, Inc., v. Hargis Indus., Inc., 135 S. Ct. 1293, 1299 (2015). The burden is on PNC to
demonstrate that collateral estoppel applies to give preclusive effect to the Trademark Board’s
decision in PNC Trademark Opposition:
To apply collateral estoppel or issue preclusion to an issue or fact, the proponent
must demonstrate that (1) the issue or fact is identical to the one previously
litigated; (2) the issue or fact was actually resolved in the prior proceeding; (3) the
issue or fact was critical and necessary to the judgment in the prior proceeding;
(4) the judgment in the prior proceeding is final and valid; and (5) the party to be
foreclosed by the prior resolution of the issue or fact had a full and fair
opportunity to litigate the issue or fact in the prior proceeding.
5
In re Microsoft Corp. Antitrust Litig., 355 F.3d 322, 326 (4th Cir. 2004). PNC has demonstrated
that all five required elements are present in this case.
A. Identical Issues
1. Priority in Previous Registration Proceeding
In registration cases, priority is determined by “[t]he common law and Lanham Act,”
which “require that trademark ownership be accorded to the first bona fide user.” HydroDynamics, Inc. v. George Putnam & Co., Inc., 811 F.2d 1470, 1472 (Fed. Cir. 1987). “[T]he
exclusive right to use of a mark . . . claimed as a trademark is founded on priority of
appropriation.” Id. (quoting New England Duplicating Co. v. Mendes, 190 F.2d 415, 417 (1st
Cir. 1951)). Registration of a trademark constitutes constructive use of the mark. 15 U.S.C.
§ 1057(c). Registration of a mark is “prima facie evidence that the registrant is the owner of the
mark” and “the registrant is granted a presumption of ownership, dating to the filing date of the
application for federal registration.” Sengoku Works, Ltd. v. RMC Intern., Ltd., 96 F.3d 1217,
1219 (9th Cir. 1996). However, “[t]o acquire ownership of a trademark, it is not enough to have
invented the mark or even to have registered it first; the party claiming ownership must have
been the first to actually use the mark in the sale of goods or services.” Id.
An applicant in trademark registration proceedings may establish an earlier priority date
than the date of registration through use analogous to trademark use.
See, e.g., Shalom
Children’s Wear Inc. v. In-Wear A/S, 26 U.S.P.Q. 2d 1516, *4*5 (1993); PNC Trademark
Opposition, 2013 WL 5820850, at *3.
Use analogous to trademark use . . . is non-technical use of a trademark in
connection with the promotion or sale of a product under circumstances which do
not provide a basis for an application to register, usually because the statutory
requirement for use on or in connection with the sale of goods in commerce has
not been met. Although never considered an appropriate basis for an application
6
to register, such use has consistently been held sufficient use to establish priority
rights as against subsequent users of the same or similar marks.
Shalom, 26 U.S.P.Q.2d 1516, at *5. “Use analogous to trademark use means use of a nature and
extent such as to create an association of the term with the user’s goods.” Malcolm Nicol & Co.,
Inc. v. Witco Corp., 881 F.2d 1063, 1065 (Fed. Cir. 1989) (quoting 1 J. McCarthy, Trademarks
and Unfair Competition § 20:4 at 1023–26 (1984)) (internal quotation marks omitted).
In the prior proceedings before the Trademark Board, it found that “there is no genuine
dispute of material fact that [PNC] has established its prior use of the mark SPENDOLOGY”
over Ashe. PNC Trademark Opposition, 2013 WL 5820850, at *6. The Trademark Board
determined that PNC proved it had “a proprietary interest in the mark SPENDOLOGY that was
obtained prior to the filing date of applicant’s application, October 25, 2011, or prior to any date
of use on which applicant may rely, including any use analogous to trademark use.” See id. at
*3.
Specifically, the Trademark Board determined that Ashe’s “indirect evidence fails to
establish use analogous to trademark use as it does not support an inference of identification in
the mind of the consuming public.” Id. at *5.1
2. Priority in Infringement Proceedings
In infringement cases, “trademark ownership is acquired by actual use of the mark in a
given market.” Emergency One, Inc. v. Am. Fire Eagle Engine Co., Inc., 332 F.3d 264, 267 (4th
Cir. 2003) (“When more than one user claims the exclusive right to use an unregistered
trademark, priority is determined by ‘the first actual use of [the] mark in a genuine commercial
transaction.’”) (citations omitted). Federal courts have applied the use analogous to trademark
use standard to determine priority in infringement cases. See Int’l Healthcare Exch., Inc. v.
1
The Trademark Board also determined that “[a]pplicant does not claim, nor does any
evidence support any other use, e.g., trade name use, that might give it priority.” PNC
Trademark Opposition, 2013 WL 5820850, at *3 (footnote omitted).
7
Global Healthcare Exch., LLC, 470 F. Supp. 2d 365, 371 (S.D.N.Y. 2007); Hous. & Servs., Inc.
v. Minton, No. 97 CIV. 2725(SHS), 1997 WL 34949 (June 24, 1997).
Such analogous use of a mark has consistently been held sufficient . . . to establish
priority rights as against subsequent users of the same or similar marks, as long as
the use is open and notorious or is of such nature and extent that the [mark] has
become popularized in the public mind.
Int’l Healthcare, 470 F. Supp. 2d at 371 (internal quotation marks omitted).
This Court has previously found that the issue of priority determined in an earlier
proceeding before the Trademark Board “is identical to priority of use in an infringement suit.”
Coryn Group II, LLC v. O.C. Seacrets, Inc., No. WDQ-08-2764, 2011 WL 6202479, at *2 (D.
Md. Dec. 6, 2011) (citing Material Supply Int’l, Inc. v. Sunmatch Indus. Co., 146 F.3d 983, 990
(D.C. Cir. 1998)). In Coryn Group II, this Court noted that a jury had previously determined that
the defendant in an infringement suit had priority of use over the party who had registered the
trademark. Id. This Court therefore determined that it was bound under collateral estoppel to
rule against the party who had registered the trademark in its appeal of the Trademark Board’s
cancellation of its registration because that party did not have priority of use. Id. Similarly, the
D.C. Circuit found that a cancellation case before the district court on appeal from the
Trademark Board and a corresponding infringement claim “involved the common legal issue of
which party owned the . . . trademark, resolution of which in turn depended on the common
factual issue of which party first used the mark.” Material Supply, 146 F.3d at 988. Ashe has
offered no precedent directly addressing any differences between the issue of priority of use in
registration cases and the issue of priority in infringement cases. Accordingly, the issues are the
same for collateral estoppel purposes.
3. B & B Hardware Does Not Stand for Position That Priority in Registration Cases
Differs from Priority in Infringement Cases
8
Ashe argues, however, that B & B Hardware supports his position that the issue of
priority in PNC Trademark Opposition is different from the issue of priority in his infringement
case before this Court. Opp’n 8. In B & B Hardware, the Supreme Court broadly held that “a
court should give preclusive effect to [Trademark Board] decisions if the ordinary elements of
issue preclusion are met” before turning to examine the narrower question (regarding likelihood
of confusion) of whether the issue before the Trademark Board in that particular registration
proceeding was identical to the issue before the district court in the infringement case. B & B
Hardware, 135 S. Ct. at 1306–08. In the context of this narrower inquiry on the likelihood of
confusion issue, the Supreme Court explained certain limits (inapplicable here) to the preclusive
effect of Trademark Board determinations. Id. at 1308. Importantly, B & B Hardware did not
involve the issue of priority in registration or infringement proceedings but rather the distinct
issue of likelihood of confusion. See id. at 1306–07. The Supreme Court discussed how the
Trademark Board examines the likelihood of confusion issue in registration proceedings from the
perspective of the trademark application. Id. at 1307 (“[T]he [Trademark] Board typically
reviews only the usages encompassed by the registration.”). When determining likelihood of
confusion in trademark suits filed in district court, the court examines marketplace usage. See id.
In this context, the Supreme Court explained a limit to the preclusive effect of Trademark Board
likelihood of confusion determinations:
If a mark owner uses its mark in ways that are materially the same as the usages
included in its registration application, then the [Trademark Board] is deciding the
same likelihood-of-confusion issue as a district court in infringement litigation.
By contrast, if a mark owner uses its mark in ways that are materially unlike the
usages in its application, then the [Trademark Board] is not deciding the same
issue. Thus, if the [Trademark Board] does not consider the marketplace usage of
the parties’ marks, the [Trademark Board]’s decision should “have no later
preclusive effect in a suit where actual usage in the marketplace is the paramount
issue.”
9
B & B Hardware, 135 S. Ct. at 1308 (citation omitted). Based on this reasoning, Ashe argues
that, because the Trademark Board considered his actual marketplace usage of the
SPENDOLOGY mark and Ashe’s usage of the trademark differed from the usage described in
his trademark application, then issue preclusion does not apply. Opp’n 10.
Ashe’s argument overlooks the scope of the Supreme Court’s findings in B & B
Hardware. The Supreme Court’s analysis on whether the issues before the Trademark Board
and the district court were identical concerned the question of likelihood of confusion, not
priority of use. See B & B Hardware, 135 S. Ct. at 1308. Likelihood of confusion was not
disputed by the parties in PNC Trademark Opposition. 2013 WL 5820850, at *2. Rather, the
issue before the Trademark Board was whether Ashe or PNC had priority of use of the
SPENDOLOGY trademark.
Id. at *3–*6.
Therefore, the Supreme Court’s finding that
preclusion is inappropriate where “the [Trademark Board] does not consider the marketplace
usage of the parties’ marks” with respect to the likelihood of confusion issue does not apply to
the distinct issue of priority of use relevant here.
For these reasons, PNC has shown that the Trademark Board’s determination of priority
of use for the purposes of trademark applications is the same as the determination of priority of
use for the purposes of infringement claims. And, as noted above, both this Court in Coryn
Group II and the D.C. Circuit in Material Supply have determined that the issue of priority of use
is the same in registration proceedings before the Trademark Board and in infringement
proceedings before courts. Ashe has failed to cite contrary authority. Therefore, I find that the
priority of use issue considered by the Trademark Board in the registration proceeding regarding
the SPENDOLOGY trademark is identical to the priority of use issue in the infringement case
before me.
10
B. Issue Resolved
The issue of PNC’s priority of use of the SPENDOLOGY trademark relative to Ashe was
resolved in the Trademark Board’s ruling. PNC Trademark Opposition, 2013 WL 5820850, at
*6 (“[T]here is no genuine dispute of material fact that [PNC] has established its prior use of the
mark SPENDOLOGY . . . .”).
C. Issue Critical and Necessary
The issue of priority was “critical and necessary to the judgment” by the Trademark
Board in PNC Trademark Opposition refusing Ashe’s registration of the SPENDOLOGY
trademark.
With respect to Ashe’s and PNC’s cross-motions for summary judgment, the
Trademark Board characterized the dispute by stating “[i]n essence, each party argues that it has
priority.” PNC Trademark Opposition, 2013 WL 5820850, at *1. Priority is a “threshold
question” in registration proceedings before the Trademark Board. AAI Motorsports Co. v.
Express Auto Options, Inc., Cancellation No. 92043113, 2006 WL 2860214, at *3 (T.T.A.B.
2006) (“With respect to any likelihood of confusion claim under Section 2(d) [of the Lanham
Act], the threshold question is priority.”). If the Trademark Board had found in favor of Ashe
with respect to the priority of his use of the SPENDOLOGY trademark, Ashe would have
prevailed in registering the trademark over PNC’s opposition. See PNC Trademark Opposition,
2013 WL 5820850, at *3. Clearly, then, priority was critical and necessary to the Trademark
Board’s judgment.
D. Judgment Final
The Trademark Board’s decision is final. PNC states, and Ashe does not contest, that
Ashe did not appeal the Trademark Board’s decision. See Def.’s Mot. 8; Opp’n 7. As a result,
PNC has demonstrated the finality of the decision in PNC Trademark Opposition.
11
E. Full and Fair Opportunity
Finally, the Supreme Court has recognized that Trademark Board proceedings in
registration cases can provide sufficient procedures to permit issue preclusion in later
infringement cases brought in district court. See B & B Hardware, 135 S. Ct. at 1310. It is not
necessary that the Trademark Board and courts have identical procedures. Id. “Rather than
focusing on whether procedural differences exist—they often will—the correct inquiry is
whether the procedures used in the first proceeding were fundamentally poor, cursory, or unfair.”
Id. (citing Montana v. United States, 440 U.S. 147, 164 & n.11 (1979)).
There is no evidence that the Trademark Board’s procedures were “ill-suited” for the
particular issue of determining whether Ashe or PNC had priority of use of the SPENDOLOGY
trademark. See id. The Trademark Board applied the Fed. R. Civ. P. 56 standard for summary
judgment proceedings, PNC Trademark Opposition, 2013 WL 5820850, at *1, and considered
the parties’ cross-motions for summary judgment after weighing the parties’ discovery
responses. Id. at *2. PNC states, and Ashe does not contest, that Ashe “served interrogatories
and document requests on PNC directed to challenging PNC’s claimed first use date of August
2010.” Def.’s Mot. 8. Ashe had a full and fair opportunity to litigate the issue of priority before
the Trademark Board.
In sum, for these reasons, PNC has demonstrated that all five elements required for issue
preclusion are present with respect to the Trademark Board’s determination that PNC had
priority of use of the SPENDOLOGY trademark. Because priority of use is a required element
12
for a trademark infringement claim, see, e.g., Emergency One, 332 F.3d 267–68, Ashe’s claim is
barred under the doctrine of collateral estoppel.2
ORDER
Accordingly, it is this 17th day of November, 2015, hereby ORDERED that Defendant’s
motion to dismiss, ECF No. 27, IS GRANTED. The Clerk SHALL DISMISS this case.
So ordered.
/S/
Paul W. Grimm
United States District Judge
dpb
2
At the end of Plaintiff’s opposition, he asserts the conclusory statement that “[t]he
evidence presented demonstrates that the Defendant willfully and wantonly violated the Lanham
Act and 15 U.S.C. § 1125(a),” and states that “the Court should grant summary judgment for the
Plaintiff.” Opp’n 21–22. As an initial matter, it is inappropriate and procedurally defective for
Plaintiff to insert a request for summary judgment in his favor inside his opposition to
Defendant’s motion to dismiss. Plaintiff’s motion for summary judgment may be denied on
these grounds alone. However, because I will grant Defendant’s motion to dismiss for the
reasons set forth above, I will deny Plaintiff’s request for summary judgment as moot.
13
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?