In a recent precedential cancellation decision, the Trademark Trial and Appeal Board (“Board”) partially granted Respondent’s motion for summary judgment, holding that the parties’ stipulation that prior proceedings between them be dismissed “WITH PREJUDICE, with CONSENT of both parties, and without the entry of judgment against either party,” was sufficient to support a claim preclusion defense. See Farm Holding and Furniture, Inc. v. Param 1957 S.p.A, Cancellation No. 92084197 (Feb. 24, 2025) (precedential).
The Faram cancellation involved four (4) registrations for the mark FARAM, in various forms and stylizations, for use with furniture and furniture parts. Petitioner sought to cancel the registrations on grounds of abandonment and nonuse. Id. at 1-3. Respondent, however, filed a summary judgment motion based on the affirmative defense of res judicata, also known as claim preclusion, citing the parties’ dismissals of earlier proceedings by stipulation. Id. at 3.
All the registrations at issue in the cancellation had been the subject of prior proceedings between the parties before the Board. In the first set of proceedings, Petitioner filed petitions to cancel three (3) of Respondent’s registrations on grounds of abandonment and fraud (collectively, the “Prior Cancellations”). Id. Later that year, Petitioner opposed one of Respondent’s applications (which later matured into the fourth registration at issue in the current cancellation) on grounds of likelihood of confusion and false association. Id. at 4. The Prior Cancellations and opposition are collectively referred to as the “Prior Proceedings.”
In 2019, the parties later filed a “Stipulated Joint Motion To Withdraw Cancellation With Prejudice And With Consent” in the Prior Cancellations. Id. The Joint Motion provided, in relevant part, that the parties “have settled their dispute,” and “stipulate to the withdrawal of the [Prior Cancellations] WITH PREJUDICE, with CONSENT of both parties, and without entry of judgment against either party.” Id. The parties filed a similar Joint Motion in the opposition. Id. at 4-5. The Board entered orders dismissing the Prior Proceedings with prejudice in view of the parties’ stipulations. Id. at 5.
“For claim preclusion to apply, the following requirements must be satisfied: (1) the parties (or their privies) are identical; (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.” Id. at 6. The parties did not dispute the first requirement. Id. at 7.
The Board also found that the second requirement was satisfied, holding that, “[a]lthough the parties’ joint motions for withdrawal of the Prior Proceedings stated that the withdrawals should be ‘without entry of judgment against either party,’ the joint motions explicitly stated twice, in all capital letters, that the actions were to be withdrawn ‘WITH PREJUDICE,’ which … operates as a final judgment for purposes of claim preclusion.” Id.
The Board’s analysis as to the third requirement—the same set of transactional facts— proved more complicated. As to the opposed application that had not yet matured into a registration at the time of the parties’ earlier stipulation, the Board ruled that an abandonment claim could not have been brought in the opposition and that, because the application was filed under the Madrid Protocol, a claim of nonuse could only be brought three (3) years after registration. Id. at 10. Thus, the Board held that the abandonment and nonuse claims were not precluded as to that registration. Id.
As to the remaining three (3) registrations, the Board noted that “[c]laim preclusion does not bar a party from asserting claims based on activities occurring after the judgment in the earlier suit, provided that those claims are based solely upon circumstances occurring subsequent to the termination of the prior suit.” Id. Here, in support of its abandonment claim, the petitioner pointed to new facts that occurred after the parties’ earlier stipulations in 2019. Id. at 12-13. Accordingly, the Board ruled that claim preclusion did not apply to the abandonment claim to the extent it was based on events and activities occurring after the dismissal of the Prior Proceedings. Id. at 13. However, it made clear that Petitioner’s abandonment claim was precluded to the extent it was based on events and activities occurring prior to the dismissal of the Prior Proceedings. Id.
Finally, as to the nonuse claim asserted against the remaining three (3) registrations, the Board acknowledged that nonuse claims under Section 1046(6) did not become available until December 2021, after the Prior Cancellations had been dismissed. Id. at 14. Nevertheless, the Board noted that, in each of the Prior Cancellations, Petitioner alleged that “Registrant has never used the Trademark in commerce.” Id. at 14-15. Accordingly, Petitioner had, in fact, raised the never-been-used claim in the Prior Cancellations and, because it alleged no new facts in this cancellation, the Board held that claim preclusion applied to bar such claims. Id. at 15-16.
In sum, when considering whether to stipulate to the dismissal of a Board proceeding with or without prejudice, trademark practitioners should weigh the possibility of whether a dismissal with prejudice could be used against their clients in future proceedings involving the same parties. Further, if they intend to initiate proceedings on behalf of their clients against parties with whom their clients’ have already litigated, practitioners should be mindful of the possibility that their clients could face claim preclusion defenses and be sure to include allegations about events and activities that support their claims and that occurred after dismissal of the earlier proceedings.
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