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17 March 2016Trademarks

US academics: vacating precedents should not be used as ‘bargaining chips’

More than 40 US academics have written to the US Department of Justice expressing their concern that the possibility of vacating legal precedents could be improperly used by parties.

In a letter dated March 16 sent to Solicitor General Donald Verrilli, the academics said they fear that legal rulings will be “treated as bargaining chips by private parties in settlement negotiations”.

The academics include representatives from Stanford Law School and Georgetown University Law Center.

Last month, the US District Court for the Northern District of Alabama scolded the Trademark Trial and Appeal Board (TTAB) for failing to vacate the precedent set in a dispute between the University of Alabama and Houndstooth Mafia Enterprises.

Both parties agreed to settle the dispute, which had seen the university’s opposition to the ‘Houndstooth Mafia’ trademark application rejected by the TTAB. The deal included a provision that vacated the TTAB ruling.

The district court endorsed the settlement, but the TTAB declined to vacate the precedent. The court subsequently ordered the TTAB to comply with the agreement, which it agreed to do earlier this month.

But the academics wrote that such agreements have dangerous implications for intellectual property law, because parties that have found their rights revoked will seek an agreement to vacate the judgment in order to assert their rights against another party in a separate suit.

The result would also be adverse implications for competition law, the academics stated, because parties will make vacatur—a court order vacating a legal proceeding—a “condition of settlement in light of the overwhelming preference of district judges to settle cases”.

“In short, settlement-related vacatur allows private parties to manipulate the body of decisional law with potentially anti-competitive effects.”

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More on this story

Trademarks
7 March 2016   The Trademark Trial and Appeal Board has vacated its decision that rejected an opposition to the ‘Houndstooth Mafia’ trademark application, following an order from a district court.
Trademarks
25 February 2016   A US court has ordered the Trademark Trial and Appeal Board to vacate a decision after the board refused to comply with a settlement that had been endorsed by the court.