Teresa Hipple v. SCIX LLC ( 2019 )

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_____________
No. 18-1934
_____________
TERESA HIPPLE, f/k/a Teresa Concepcion
v.
SCIX, LLC; STEEL SEAL LLC; STEEL SEAL PRO, LLC; CLEMENT HIPPLE;
COMPLETE GROUP, LLC; MELISSA MORENO, Administratrix of the Estate
of Brian M. Hipple, Deceased
CLEMENT HIPPLE,
Appellant
______________
On Appeal from the United States District Court for the
Eastern District of Pennsylvania
(No. 2-12-cv-01256)
Magistrate Judge: Hon. Thomas J. Rueter
Argued: January 23, 2019
Before: SMITH, Chief Judge, CHAGARES and BIBAS, Circuit Judges.
(Filed: July 5, 2019)
Eric L. Olavson [ARGUED]
Mary E. Witzel
David Ludwig, Esq.
Dunlap Bennett & Ludwig
211 Church Street, S.E.
Leesburg, VA 20175
Cortland C. Putbrese
Dunlap Bennett & Ludwig
8003 Franklin Farms Drive, Suite 220
Richmond, VA 23229
Counsel for Appellant
Robert Jackel [ARGUED]
399 Market Street, Suite 360
Philadelphia, PA 19106
Gerald S. Berkowitz
Robert A. Klein
Berkowitz Klein
629 B Swedesford Road
Malvern, PA 19355
Counsel for Appellee
____________
OPINION*
____________
CHAGARES, Circuit Judge.
This case comes before us on appeal of an amended final order. Appellant
Clement Hipple did not appeal the original final order, yet he attempts to attack its
conclusions by bootstrapping his appeal of the amended final order to the original
final order. Because the amended final order did not change the parties’ legal
rights or resolve a genuine ambiguity, this appeal is untimely, and we will dismiss
for lack of appellate jurisdiction.
I.
*
This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7
does not constitute binding precedent.
2
A long and complicated history precedes the issue presented to us, but only
the following background is necessary to our disposition. Hipple partially owned
and operated SCIX, LLC, which sold Steel Seal, a liquid product that seals blown
gaskets. On December 18, 2017, the District Court held that Hipple had
fraudulently obtained the Steel Seal trademark. The court found that SCIX was
the common law owner of the mark and that Hipple knowingly misrepresented
otherwise on the trademark application. The court issued an opinion and final
order (the “December Order”) declaring that “[t]he Steel Seal trademark obtained
by defendant Clement Hipple for BBB Management Group, LLC was fraudulently
obtained.” Appendix (“App.”) 22. The December Order also informed a court-
appointed receiver for SCIX –– appointed to protect appellee Teresa Concepcion’s
interest in SCIX’s assets –– that he may petition the United States Patent and
Trademark Office (“USPTO”) to cancel the mark. Hipple did not appeal.
A colleague of the court-appointed receiver contacted the USPTO to have
the fraudulent trademark cancelled. A USPTO Associate Solicitor replied that
“given that the court has already adjudicated that the registration was obtained
fraudulently by Mr. Hipple, there is no need to initiate a petition to cancel.”
Supplemental Appendix (“S.A.”) 2. This is because “[t]he court’s adjudication [of
fraud] would actually entitle the prevailing party to skip that step.” Id. Therefore,
the Associate Solicitor wrote, all that was needed was an amended order from the
District Court that specified the relevant trademark registration number and
ordered the USPTO to cancel the mark.
3
After the court-appointed receiver informed the court of the Assistant
Solicitor’s advice, on March 28, 2018, the District Court amended the December
Order by adding the trademark registration number and ordering the USPTO to
cancel the mark. Hipple appealed the March 2018 amended order (the “March
Order”) and contested the earlier finding of fraud.
II.
The District Court exercised jurisdiction under 15 U.S.C. §§ 1119 and
1121. The threshold issue is whether we have appellate jurisdiction, which is a
question we review de novo. Montanez v. Thompson, 603 F.3d 243, 248 (3d Cir.
2010).
A notice of appeal must be filed within 30 days after entry of the order
appealed from. Fed. R. App. P. 4(a)(1)(A). The Supreme Court has held that
“[o]nly when the lower court changes matters of substance, or resolves a genuine
ambiguity, in a judgment previously rendered should the period within which an
appeal must be taken . . . begin to run anew.” Fed. Trade Comm’n v.
Minneapolis-Honeywell Regulator Co., 344 U.S. 206, 211–12 (1952). Applying
this test, we have held that “[w]hen a court reenters a judgment without altering
the substantive rights of the litigants, the entry of the second judgment does not
affect the time within which a party must appeal the decisions made in the first
order.” Bridge v. U.S. Parole Comm’n, 981 F.2d 97, 102 (3d Cir. 1992). In
contrast, if the second judgment “revises the litigants’ legal rights or plainly
resolves an ambiguity that had not been clearly settled . . . then an appeal from the
4
second judgment may challenge any issues resolved or clarified by the second
judgment.” Id.
This is a “practical” test, Minneapolis-Honeywell, 344 U.S. at 212, which
we approach “from the perspective of a reasonable litigant,” Bridge, 981 F.2d at
102. “If a court order does not clearly address and decide an issue, it would be
unfair to find that a party’s failure to appeal that decision forever [forfeits] its right
to challenge a determination that it could reasonably believe was not yet decided.”
Id.
Under this test, the March Order was not newly appealable. It amended the
December Order in two ways: first, by adding the trademark registration number,
and second, by directing the USPTO to cancel the trademark. Neither of these
amendments substantively changed the parties’ rights nor resolved a genuine
ambiguity. We discuss each in turn.
First, the addition of the trademark registration number was merely a
clerical amendment. While the USPTO requested this clarification, there was
never an ambiguity as to which mark was associated with Hipple. He is connected
to only one Steel Seal trademark, and both parties knew –– or reasonably should
have known –– which trademark was at issue. And this change did not
substantively revise the parties’ legal rights. Therefore, Hipple cannot rely on this
change to extend the time in which he may appeal. See Minneapolis-Honeywell,
344 U.S. at 211 (“[T]he mere fact that a judgment previously entered has been . . .
5
revised in an immaterial way does not toll the time within which review must be
sought.”).
Second, while there is arguably a substantive distinction between allowing
the receiver to petition the USPTO to cancel the trademark and directly ordering
its cancellation, this is ultimately a distinction without a difference. Once the
District Court found that the trademark was obtained through fraud, a petition to
cancel the mark –– and the subsequent proceedings –– was unnecessary.
The Lanham Act gives district courts the power to “order the cancelation of
[trademark] registrations.” 15 U.S.C. § 1119. While petitioning the USPTO is
“the primary means of securing a cancellation,” district courts can directly “order
cancellation” because of their “concurrent power” with the USPTO. Ditri v.
Coldwell Banker Residential Affiliates, Inc., 954 F.2d 869, 873 (3d Cir. 1992); see
also Central Mfg., Inc. v. Brett, 492 F.3d 876, 883 (7th Cir. 2007) (A party “could
have asserted its rights earlier by petitioning the PTO for cancellation, but nothing
in § 1119 requires such a step.” (citation omitted)).
We have affirmed district courts’ cancellation of trademarks when the
marks were fraudulently procured. Covertech Fabricating, Inc. v. TVM Bldg.
Prods., Inc., 855 F.3d 163, 175 n.5 (3d Cir. 2017) (Because the “[trademark]
registration was fraudulently procured[,]” it “thus should be cancelled.”); Marshak
v. Treadwell, 240 F.3d 184, 197 (3d Cir. 2001) (“We thus hold that fraud in the
6
procurement of the federal mark was properly proven and that cancellation was
justified.”).1
Indeed, the Associate Solicitor of the USPTO informed the receiver’s
colleague that based on the District Court’s finding of fraud the receiver was
“entitle[d] . . . to skip that step” of petitioning for cancellation. SA 2. This
procedure appears to be more efficient and avoids an “unnecessary (and
potentially costly) adversary proceeding.” Id.; see Ditri, 954 F.2d at 873 (noting
that one “obvious reason” that district courts have concurrent jurisdiction with the
USPTO to cancel trademarks is so “an entire controversy may thus be expediently
resolved in one forum.”).
Accordingly, because the District Court found that the trademark was
obtained through fraud, there was no substantive distinction between petitioning
for cancellation and the District Court ordering it. The March Order did not revise
the parties’ legal rights or resolve an ambiguity as to those rights; therefore, his
time to appeal the December Order was not renewed. Because Hipple did not
1
Some Courts of Appeals have gone further and held it is reversible error for a
district court to refuse to order cancellation of a trademark that has been declared
invalid. CFE Racing Prods., Inc. v. BMF Wheels, Inc., 793 F.3d 571, 593–95 (6th
Cir. 2015) (reversing the district court for failing to order cancellation of a
trademark after the jury found the mark created a likelihood of confusion); Gracie
v. Gracie, 217 F.3d 1060, 1065–66 (9th Cir. 2000) (“[T]he district court erred in
refusing to cancel a mark found to be invalid.”); Bascom Launder Corp. v.
Telecoin Corp., 204 F.2d 331, 335–336 (2d Cir. 1953) (reversing the district court
because it “should have directed the cancellation” of a trademark once the mark
was found to be “merely descriptive”).
7
appeal the December Order within 30 days, his appeal is untimely, and he cannot
use his appeal of the March Order “to bootstrap [him]sel[f] within the jurisdiction
of this court.” In re Cantwell, 639 F.2d 1050, 1054 (3d Cir. 1981). Hipple raises
no issues other than those resolved in the December Order. And Hipple failed to
satisfy the procedural and substantive requirements for a writ of mandamus. As a
result, we will deny his request for this extraordinary writ.
III.
For these reasons, we will dismiss Hipple’s appeal for lack of appellate
jurisdiction.
8