Vicious Brands, Inc. v. Face Co., LLC

Background

Vicious Brands, Inc., doing business as Saints & Sinners, sued Face Co., LLC, Skin Saint, LLC, and Holly Cutler. The complaint alleges trademark infringement, unfair competition and false designation of origin under federal law, fraudulent procurement of a trademark under California law, common-law trademark infringement, and common-law unfair competition. The court described these as allegations only and did not treat them as resolved facts.

The defendants had applied to register a double-S mark. Vicious Brands opposed that application in proceedings before the Trademark Trial and Appeal Board, an administrative body within the U.S. Patent and Trademark Office. The Board later suspended its proceeding after Vicious Brands moved to suspend it, and the court understood that suspension as equivalent to a stay. The federal lawsuit remained pending.

Motion and legal standard

Defendants moved to stay the federal case until the TTAB proceeding ended. The court applied the Ninth Circuit’s framework for a discretionary “docket management stay.” That framework considers: (1) possible harm from granting the stay; (2) hardship or unfairness from requiring a party to proceed; and (3) whether a stay would simplify or complicate the issues, evidence, and legal questions. The party seeking a stay bears the burden. If there is even a fair possibility that the stay would harm another party, the moving party must show a clear case of hardship or unfairness from proceeding.

The court rejected Defendants’ proposed framework, which was primarily used in cases involving patent reexamination. The court also did not analyze the motion under the primary-jurisdiction doctrine because Defendants disclaimed relying on that doctrine. The court noted that the Ninth Circuit has generally rejected applying that doctrine to TTAB proceedings in this context.

Court’s analysis

The court found a fair possibility that a stay would harm Vicious Brands. Vicious Brands sought an injunction against Defendants’ continued use of the allegedly confusing mark, but the TTAB cannot award damages or injunctive relief in an infringement action. Defendants had sold at least some products bearing the mark to customers in California. The court emphasized that this finding did not determine whether Vicious Brands was likely to prove confusion or prevail on any claim.

The court also concluded that a stay could cause substantial delay. Defendants estimated that the TTAB proceeding would take nine or ten months to be fully briefed and submitted for decision. The losing party could then seek a new district court proceeding with de novo review, meaning the court would decide the registration issue independently and could allow additional discovery and evidence. Vicious Brands stated that it would pursue that review if Defendants prevailed before the TTAB, and Defendants had not ruled out doing the same if Vicious Brands prevailed.

Defendants did not establish the required clear hardship or unfairness from proceeding in federal court. The court reasoned that the TTAB proceeding was already suspended, so the parties would not necessarily have to litigate simultaneously in both forums. The court also expected that discovery already taken before the TTAB could be used in the federal case, reducing or eliminating duplicative discovery. The court rejected Defendants’ arguments based on the risk of inconsistent results, financial-resource differences, and Vicious Brands’ earlier failure to produce documents in the TTAB proceeding. It stated that any discovery-related prejudice could be addressed in this case.

Finally, the court found that the orderly course of justice favored continuing the federal lawsuit. The TTAB can resolve only more limited issues, and its decision may be subject to further district court litigation with new discovery. The district court could resolve more of the parties’ dispute in one proceeding. The court also indicated that the case might be suitable for an expedited schedule and directed the parties to address that possibility at the upcoming case-management conference.

Disposition

The court denied Defendants’ Motion to Stay. The order did not decide the merits of Vicious Brands’ trademark, unfair-competition, or related claims, and it did not determine whether the parties’ marks were likely to cause confusion.