O&M HALYARD, INC. v. SRI TRANG USA, INC et al

Filing 27

MEMORANDUM OPINION AND ORDER. Defendants' Motion to Stay, (Dkt. # 10 ), is DENIED. Signed by District Judge Sean D. Jordan on 1/18/2023. (rpc, )

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UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF TEXAS
SHERMAN DIVISION
O&M HALYARD, INC.
v.
SRI TRANG USA, INC. ET AL.

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CIVIL NO. 4:22-CV-622-SDJ

MEMORANDUM OPINION AND ORDER
Defendants have filed a motion to stay proceedings in this trademark
infringement case pending the resolution of related cancellation actions brought by
Defendants in the United States Patent and Trademark Office’s (USPTO) Trademark
Trial and Appeal Board (TTAB). The motion will be denied. Defendants have not
shown that any potential efficiencies to be gained by awaiting the TTAB’s decision
warrant a stay. To the contrary, granting the stay motion would unnecessarily delay
the final adjudication of this suit.
I. BACKGROUND
Plaintiff O&M Halyard develops, manufactures, and sells medical products
and supplies, including medical gloves, worldwide. (Dkt. #1 ¶¶ 11–12). Relevant to
the instant case, O&M Halyard owns U.S. Trademark Registration Numbers 2596539
and 3099894 for purple and grey medical gloves. Defendants Sri Trang Gloves
(Thailand) Public Company Limited; its United States subsidiary, Sri Trang USA,
Inc.; and Sri Trang Agro-Industry Public Company Limited (collectively, “Sri Trang”)
are likewise glove manufacturers. (Dkt. #10 at 5). At some point, Sri Trang began

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manufacturing medical gloves like those allegedly protected by O&M Halyard’s
trademarks, and O&M filed this lawsuit to protect the marks. (Dkt. #1 ¶¶ 24–28).
In its complaint, O&M Halyard brings federal claims against Sri Trang for
trademark infringement, trademark counterfeiting, and trademark dilution, as well
as false designation of origin, passing off, and unfair competition. O&M Halyard also
asserts a claim for trademark dilution under Texas statutory law, as well as claims
under Texas common law for trademark infringement, unfair competition, false
designation of origin, unjust enrichment, and intentional interference with economic
advantage.
Less than two months after this lawsuit was initiated, Sri Trang filed
Cancellation Numbers 92080571 and 92080584 before the TTAB requesting that the
TTAB cancel O&M Halyard’s trademark registrations for purple and grey medical
gloves. (Dkt. #10 at 6). The TTAB consolidated the cancellation requests and
suspended the actions pending the outcome of this litigation. (Dkt. #14 at 3). Sri
Trang asks the Court instead to stay proceedings in this case pending the outcome of
the TTAB actions.
II. LEGAL STANDARD
The Court has broad discretion to stay a pending matter to control its docket
and serve the interest of justice. In re Ramu Corp., 903 F.2d 312, 318 (5th Cir. 1990).
Proper consideration of a stay “calls for the exercise of judgment, which must weigh
competing interests and maintain an even balance.” Landis v. N. Am. Co., 299 U.S.
248, 254–55, 57 S.Ct. 163, 81 L.Ed. 153 (1936). If there is “even a fair possibility” that
a stay will damage someone else, then the proponent bears the burden of showing “a
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clear case of hardship or inequity.” Id. at 255. The Court’s discretion to order a stay
includes the authority to stay a matter pending the resolution of proceedings in the
USPTO. See Ethicon, Inc. v. Quigg, 849 F.2d 1422, 1426–27 (Fed. Cir. 1988); Gould
v. Control Laser Corp., 705 F.2d 1340, 1341 (Fed. Cir. 1983).
III. DISCUSSION
Sri Trang argues that staying this case pending the resolution of the TTAB
actions will simplify the issues to be decided and reduce costs for the Court and the
parties. The Court disagrees that the potential efficiencies referenced by Sri Trang
warrant a stay.
A. The Doctrine of Primary Jurisdiction is Inapplicable to this
Trademark Infringement Case.
Although not expressly stated, Sri Trang’s stay motion is grounded in the
doctrine of primary jurisdiction, a judge-made doctrine that “comes into play when a
court and an administrative agency have concurrent jurisdiction over the same
matter, and no statutory provision coordinates the work of the court and of the
agency.” Mercury Motor Express, Inc. v. Brinke, 475 F.2d 1086, 1091 (5th Cir. 1973).
When applicable, the doctrine operates to postpone judicial consideration of a case to
allow for an administrative determination of important questions by an agency with
“special competence in the area.” Id. at 1091–92.
The Court finds the Second Circuit’s decision in Goya Foods, Inc., v. Tropicana
Products, Inc., 846 F.2d 848 (2d Cir. 1988), which considered the same question of
whether to stay trademark infringement litigation pending the outcome of
registration proceedings before the TTAB, to be instructive on the application of the
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primary jurisdiction doctrine in this context. In Goya, the Second Circuit began by
noting that the doctrine’s scope is “relatively narrow,” encompassing only lawsuits
that raise “an issue, frequently the validity of a commercial rate or practice,
committed by Congress in the first instance to an agency’s determination,
‘particularly when the issue involves technical questions of fact uniquely within the
expertise and experience of an agency.’” Id. at 851 (quoting Nader v. Allegheny
Airlines, Inc., 426 U.S. 290, 304, 96 S.Ct. 1978, 48 L.Ed.2d 643 (1976)). The Goya
court went on to observe that courts typically refuse to apply the doctrine when “the
issue at stake is legal in nature and lies within the traditional realm of judicial
competence.” Id.
With these observations in place, and after examining the nature of TTAB
registration proceedings and infringement actions, the Goya court reached two
conclusions. First, the court concluded that the basic framework of federal trademark
registration differs from other statutory regimes that implicate primary jurisdiction
because the Lanham Act allows a litigant disappointed with a TTAB decision to file
an action in federal district court that is “intended to be a trial de novo.” Id. at 853;
see also B&B Hardware, Inc. v. Hargis Indus., Inc., 575 U.S. 138, 144, 135 S.Ct. 1293,
191 L.Ed.2d 222 (2015) (noting that, “[i]n district court, the parties can conduct
additional discovery and the judge resolves registration de novo”). Such a scheme of
review, the Goya court reasoned, “is thus some distance from the traditional arena of
primary jurisdiction, ‘a doctrine allocating the law-making power over certain aspects

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of commercial relations.’” Id. (cleaned up) (quoting United States v. W. Pac. R.R. Co.,
352 U.S. 59, 65, 77 S.Ct. 161, 1 L.Ed.2d 126 (1956)).
Second, the Goya court recognized that the nature of the TTAB’s registration
determination itself also weighed against “according excessive deference” to pending
TTAB proceedings. Id. A TTAB registration decision, the court explained, does not
involve “a regulated industry in which policy determinations are calculated and rates
are fixed in order to calibrate carefully an economic actor’s position within a market
under agency control.” Id. Likewise, a TTAB decision to permit, deny, or cancel
registration also “is not the type of agency action that secures ‘[u]niformity and
consistency in the regulation of business entrusted to a particular agency.’” Id.
(quoting Far East Conference v. United States, 342 U.S. 570, 574, 72 S.Ct. 492, 494,
96 L.Ed. 576 (1952)). TTAB registration decisions also do not raise “technical
questions of fact uniquely within the expertise and experience of an agency.” Id.
(internal quotation marks and citation omitted). To the contrary, the Goya court
concluded, “[l]ikelihood of consumer confusion, which is relevant to the [TTAB’s]
registration determination,” is a legal standard “with which courts have longstanding familiarity in resolving suits arising under both the Lanham Act and the
common law of trademark infringement and unfair competition.” Id.
Based on these conclusions, the Second Circuit developed the following
guidance as to whether a court should stay its proceedings pending the outcome of a
TTAB registration action. On the one hand, if the district court action “involves only
the issue of whether a mark is entitled to registration,” the doctrine of primary

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jurisdiction “might well be applicable” because the benefits of awaiting the TTAB’s
decision would rarely be outweighed by the need for a prompt adjudication. Id. On
the other hand, if the district court action concerns infringement, “the interest in
prompt adjudication far outweighs the value of having the views of the [USPTO].” Id.
at 853–54.
The Second Circuit’s reasoning in Goya is sound and has been adopted by
several courts across the country and in this circuit. See, e.g., Rhoades v. Avon Prods.,
Inc., 504 F.3d 1151, 1163–64 (9th Cir. 2007); PHC, Inc. v. Pioneer Healthcare, Inc., 75
F.3d 75, 80 (1st Cir. 1996); Officeware Corp. v. Dropbox, Inc., No. 3:11-CV-1448-L,
2012 WL 3262760, at *2–3 (N.D. Tex. Aug. 10, 2012); see also Robin Singh Educ.
Servs. v. Excel Test Prep. Inc., 274 F.App’x 399, 403 n.4 (5th Cir. 2008) (observing
favorably that “several Circuit courts have noted that federal courts are not obligated
to defer to PTO proceedings nor are PTO’s findings on infringement binding on
federal courts”).
The instant case involves issues well beyond the trademark registration
challenge raised in Sri Trang’s cancellation actions before the TTAB, including
questions of trademark infringement and dilution. Consistent with the well-reasoned
rule described in Goya, the Court concludes that the interest in prompt adjudication
of this case substantially outweighs the value of having the views of the TTAB on the
question of registration of O&M Halyard’s marks. The doctrine of primary
jurisdiction therefore is inapplicable and Sri Trang’s motion must fail.

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B. A Stay Would Unnecessarily Delay the Resolution of this Case.
Sri Trang’s motion also fails because a stay would unnecessarily delay the
resolution of this case without providing any meaningful narrowing of the issues
before the Court. Because none of O&M Halyard’s claims in this case solely involve
the registrability of the trademarks at issue in the cancellation actions before the
TTAB, the TTAB cannot resolve any of O&M Halyard’s claims against Sri Trang. As
O&M Halyard correctly notes, the TTAB will address only issues of trademark
registration, as it cannot make any determinations on infringement, dilution,
counterfeiting, or the other trademark-related claims pending in this case. Further,
O&M Halyard has asserted claims, including its tortious-interference claim, that are
not premised solely on its trademarks.
Because the TTAB lacks authority to resolve all the issues raised in this case,
the parties will wind up back in this Court regardless of the TTAB outcome. Under
similar circumstances, courts routinely reject requests to stay proceedings pending
the outcome of parallel TTAB actions. See ClipBandits, LLC v. Samora, No. 4:20-CV03054, 2020 WL 7388629, at *2 (S.D. Tex. Dec. 16, 2020) (collecting cases); see also
id. (“Courts have consistently declined to defer to TTAB when, like here, additional
claims are raised that cannot be resolved by the agency.”).
Finally, Sri Trang has not asserted, much less demonstrated, that it will suffer
any hardship or inequity if a stay is not granted. This stands in noted contrast to the
“fair possibility” that a stay would harm O&M Halyard by preventing a prompt
adjudication of its claims.

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IV. CONCLUSION
Sri Trang’s requested stay serves neither judicial economy nor the interests of
the parties and would impose potentially lengthy delays in the resolution of this case
without good cause. For these reasons, Defendants’ Motion to Stay, (Dkt. #10), is
DENIED.

So ORDERED and SIGNED this 18th day of January, 2023.

____________________________________
SEAN D. JORDAN
UNITED STATES DISTRICT JUDGE

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