The case that has drifted on

On February 24, 2017, the US Court of Appeals for the Fourth Circuit affirmed the decision of the US District Court for the Eastern District of Virginia in Treadwell Original Drifters v Original Drifters. Here, the doctrine of issue preclusion was used to rely on a prior Trademark Trial and Appeal Board (TTAB) decision to grant a motion for summary judgment based on the 2015 Supreme Court ruling in B&B Hardware v Hargis Industries.

A summary judgment action was filed to dismiss an appeal from a TTAB decision arising from the ownership of trademark rights in ‘The Drifters’. Since 1953, Bill Pinkney used the mark ‘Bill Pinkney’s Original Drifters’ and he currently owns a US trademark registration (3,649,096) for this mark. Treadwell Original Drifters—a corporation claiming ownership rights based on a former manager of the group—filed a petition for cancellation with the TTAB, which then denied the petition. Treadwell appealed to the district court to reverse this decision.

"Issue preclusion works to bind not only a party who had a “full and fair opportunity to litigate the issue”, but also a third party who is in privity with the party that fully litigated the issue in the previous action."

‘The Drifters’ refers to a doo-wop group formed in 1953. The group is still in existence and performing. Around November 1954, The Drifters, Inc was formed “to serve as the corporate owner of ‘The Drifters’ trademark and to manage the group”. George Treadwell was not an original shareholder of this corporation, but he purchased shares in this company on January 10, 1957. He was the manager of The Drifters until his death in 1967. His wife, Faye Treadwell took over the management of the group until her own death. In the district court appeal, Tina Treadwell, Faye Treadwell’s daughter, claimed ownership in the mark.

The dispute over the mark ‘The Drifters’ has been ongoing. In 1958, the Supreme Court of New York issued a decision in The Drifters v Circle Artists Corporation, where a predecessor-in-interest to Treadwell sought a preliminary injunction to stop Pinkney using the mark ‘The Drifters’. The Supreme Court of New York issued a decision denying the motion for preliminary injunction. In 2004, the TTAB issued a ruling sustaining Pinkney’s opposition to Treadwell’s application to register the mark ‘The Drifters’ (opposition no. 91151984).

Opposition denied

In 2009, the TTAB issued a decision denying the opposition to Pinkney’s pending application to register ‘Bill Pinkney’s Original Drifters’ that was filed by Singer Management Consultants and Odessa Hobbs (opposition no. 91168326). In 2015, the TTAB issued a decision dismissing Treadwell’s cancellation petition (cancellation no. 92052155).

The court applied the doctrine of issue preclusion based on the 2004 decision of the TTAB. On June 16, 1989, a predecessor-in-interest to Treadwell applied to the US Patent and Trademark Office to register the mark ‘The Drifters’ (application no. 73/807,122). Pinkney filed an opposition to this application. On September 24, 2004, the TTAB sided with Pinkney and denied registration of the predecessor-in-interest to Treadwell’s trademark application. The predecessor-in-interest to Treadwell did not appeal against this decision.

The district court indicated that the doctrine of issue preclusion is straightforward: once a court has decided an issue, it is forever settled between the parties. The district court stated that the general rule of issue preclusion provides that when an issue of fact or law is actually litigated and determined by a valid and final judgment, and the determination is essential to the judgment, “the determination is conclusive in a subsequent action between the parties, whether on the same or a different claim”. This general rule does not apply when appellate review is available.

The Fourth Circuit, in the 2004 case In re Microsoft Antitrust Litigation, laid out the elements of issue preclusion, or collateral estoppel, as follows:

(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.

Issue preclusion works to bind not only a party who had a “full and fair opportunity to litigate the issue”, but also a third party who is in privity with the party that fully litigated the issue in the previous action (Londono-Rivera v Virginia).

In the Treadwell case, the district court held that all elements of issue preclusion had been satisfied based on the TTAB’s 2004 decision to sustain opposition no. 91151984 so the parties were prevented from re-litigating the issue of priority. Because priority is the only issue Treadwell had asked the court to rule on, the district court proceeded to dismiss the action. The Fourth Circuit affirmed the decision of the district court.

James Slattery is a partner at Birch Stewart Kolasch Birch. He joined the firm in 1976 and is actively engaged in the IP field. Slattery has participated in patent, trademark and copyright litigation before Federal courts and is a frequent lecturer on US patent law. He can be contacted at: jms@bskb.com