throbber
USCA4 Appeal: 19-2316 Doc: 21 Filed: 03/18/2020 Pg: 1 of 33
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`
`
`No. 19-2316
`
`UNITED STATES COURT OF APPEALS
`FOR THE FOURTH CIRCUIT
`________________
`
`SNYDER’S-LANCE, INC.; PRINCETON VANGUARD, LLC,
`
`Plaintiffs-Appellants,
`
`v.
`
`FRITO-LAY NORTH AMERICA, INC.,
`
`Defendant-Appellee.
`
`________________
`
`On Appeal from the United States District Court for the
`Western District of North Carolina,
`No. 3:17-cv-00652-KDB-DSC
`________________
`
`REPLY BRIEF FOR PLAINTIFFS-APPELLANTS
`________________
`
`DAVID H. BERNSTEIN
`JAMES J. PASTORE
`JARED I. KAGAN
`DEBEVOISE & PLIMPTON LLP
`919 Third Avenue
`New York, NY 10022
`(212) 909-6696
`
`
`PAUL D. CLEMENT
` Counsel of Record
`GEORGE W. HICKS, JR.
`JULIE M.K. SIEGAL
`KIRKLAND & ELLIS LLP
`1301 Pennsylvania Avenue, NW
`Washington, DC 20004
`(202) 389-5000
`paul.clement@kirkland.com
`
`Counsel for Plaintiffs-Appellants
`
`March 18, 2020
`
`
`
`

`

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`
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`TABLE OF CONTENTS
`
`
`TABLE OF AUTHORITIES ..................................................................................... ii
`
`INTRODUCTION .................................................................................................... 1
`
`ARGUMENT ............................................................................................................ 2
`
`I.
`
`Election Of Federal Circuit Review After A First TTAB Decision
`Does Not Foreclose A Party From Filing A District Court Action
`Challenging A Subsequent TTAB Decision Issued Years Later. .................... 2
`
`A.
`
`B.
`
`C.
`
`D.
`
`The Plain Text of §1071 Demonstrates that a Party Is Not
`Forever Bound By Its Initial Election of Federal Circuit
`Review But Instead Can Elect a New Option After Each
`TTAB Decision. .................................................................................... 2
`
`Legislative History Reinforces that §1071’s Waiver Language
`Only Limits a Dissatisfied Party to One Forum Per TTAB
`Decision, And Does Not Forever Waive a Party’s Statutory
`Right to Seek District Court Review Of A Different TTAB
`Decision Years Later. ........................................................................... 11
`
`Sound Policy Supports Allowing a Dissatisfied Party to
`Challenge a Second TTAB Decision in District Court, Rather
`Than Limiting It to Its Initial Federal Circuit Election. ..................... 14
`
`Caselaw and Commentary Support Allowing a Party to Seek
`Review of a Second TTAB Decision in District Court After
`Appealing a First TTAB Decision to the Federal Circuit. ................. 21
`
`CONCLUSION ....................................................................................................... 27
`
`CERTIFICATE OF COMPLIANCE ......................................................................... i
`
`CERTIFICATE OF SERVICE .................................................................................. ii
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`
`
`
`
`i
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`

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`
`
`Cases
`
`TABLE OF AUTHORITIES
`
`B & B Hardware, Inc. v. Hargis Indus., Inc.,
`575 U.S. 138 (2015) ............................................................................................ 11
`
`Beaudet v. Quigg,
`1987 WL 16329 (D.D.C. Aug. 14, 1987) .................................................... 21, 22
`
`Bloate v. U.S.,
`559 U.S. 196 (2010) .............................................................................................. 6
`
`Christianson v. Colt Indus. Operating Corp.,
`486 U.S. 800 (1988) ............................................................................................16
`
`Clark v. Martinez,
`543 U.S. 371 (2005) .............................................................................................. 7
`
`Dep’t of Homeland Sec. v. MacLean,
`135 S. Ct. 913 (2015) ............................................................................................ 6
`
`Gillette Co. v. “42” Prods. Ltd., Inc.,
`435 F.2d 1114 (9th Cir. 1970) ................................................................ 15, 23, 24
`
`Hoover Co. v. Coe,
`325 U.S. 79 (1945) .................................................................................. 11, 12, 13
`
`IBP, Inc. v. Alvarez,
`546 U.S. 21 (2005) ................................................................................................ 8
`
`Kappos v. Hyatt,
`566 U.S. 431 (2012) ..................................................................................... 15, 19
`
`Sijapati v. Boente,
`848 F.3d 210 (4th Cir. 2017) ................................................................................. 7
`
`Swatch AG v. Beehive Wholesale, LLC,
`739 F.3d 150 (4th Cir. 2014) ......................................................................... 11, 15
`
`Tibbetts Indus., Inc. v. Knowles Elecs., Inc.,
`386 F.2d 209 (7th Cir. 1967) .............................................................. 5, 15, 23, 24
`
`ii
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`

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`United States v. Taylor,
`975 F.2d 402 (7th Cir. 1992) ...............................................................................20
`
`Statutes
`
`15 U.S.C. §1071(a) .......................................................................................... passim
`
`15 U.S.C. §1071(b) ....................................................................................... 1, 2, 3, 6
`
`35 U.S.C. §141 .........................................................................................................12
`
`Other Authority
`
`3 Thomas McCarthy,
`McCarthy on Trademarks and Unfair Competition (5th ed. 2020) ............. 25, 26
`
`
`
`iii
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`

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`INTRODUCTION
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`Congress provided a party dissatisfied with “the decision” of the Trademark
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`Trial and Appeal Board with two options for review: appeal to the Federal Circuit
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`under 15 U.S.C. §1071(a), or file a district court action under 15 U.S.C. §1071(b).
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`Although Congress reasonably provided that a party that seeks Federal Circuit
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`review of “the decision” waives its ability to seek district court review of that same
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`decision (and vice-versa), nothing in the text, context, sound policy, or precedent
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`supports the perverse result that electing Federal Circuit review of a 2014 TTAB
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`decision precludes district court review of a different TTAB decision issued years
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`later. Indeed, that counterintuitive notion never occurred to Frito-Lay until the
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`District Court raised it sua sponte two years into this case. Frito-Lay’s belated effort
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`to embrace this newfound theory falls well short of the mark. As to text, Frito-Lay
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`merely repeats §1071’s waiver language, which only begs the question of what is
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`waived (district court review of the decision appealed or district court review of all
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`subsequent TTAB decisions), and provides no answer for the balance of the relevant
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`text. Frito-Lay cites no supporting legislative history, and it cannot explain why
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`Congress would have wanted to discourage Federal Circuit appeals or create
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`jurisdictional traps. And its only support is inapposite dicta in an unpublished
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`district court decision. In short, there is a reason Frito-Lay’s newfound statutory
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`argument escaped it for two years: it is a misreading of §1071 and it cannot stand.
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`

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`
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`I.
`
`ARGUMENT
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`Election Of Federal Circuit Review After A First TTAB Decision Does
`Not Foreclose A Party From Filing A District Court Action Challenging A
`Subsequent TTAB Decision Issued Years Later.
`
`A. The Plain Text of §1071 Demonstrates that a Party Is Not Forever
`Bound By Its Initial Election of Federal Circuit Review But Instead
`Can Elect a New Option After Each TTAB Decision.
`
`The animating principle of §1071 is choice. Specifically, §1071 gives a party
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`“who is dissatisfied with the decision of the … [TTAB]” two options for review of
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`that decision. Section 1071(a)(1) provides that such a party “may appeal to the
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`United States Court of Appeals for the Federal Circuit thereby waiving his right to
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`proceed under subsection (b).” 15 U.S.C. §1071(a)(1). Section 1071(b)(1) provides
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`that “whenever a person authorized by subsection (a)” to appeal “is dissatisfied with
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`the decision of the … [TTAB], said person may, unless appeal has been taken to said
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`United States Court of Appeals for the Federal Circuit, have remedy by a civil action
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`if commenced within [the time specified] after such decision.” Id. §1071(b)(1).
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`Section 1071(a)(1) also allows the party adverse to the dissatisfied party (i.e., the
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`party that prevailed before the TTAB) to object to the Federal Circuit appeal, in
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`which case the “appeal shall be dismissed” and the dissatisfied party can file a
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`district court action under §1071(b). Id. §1071(a)(1).
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`Nothing in this language or the rest of §1071 expressly provides or even
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`suggests that a party that “is dissatisfied with the decision of the … [TTAB]” loses
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`its ability to choose a district court forum for review of “such decision” because it
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`2
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`

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`opted for Federal Circuit review of a different, earlier decision of the TTAB. To the
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`contrary, §1071(b) expressly provides that “[w]henever” a person is authorized to
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`appeal a decision under §1071(a), that person may opt for district court review within
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`a specified number of days of “such decision,” unless an appeal is pursued instead.
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`That was all sufficiently obvious to both parties that when Princeton Vanguard
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`sought district court review of a 2017 TTAB decision under subsection (b), after
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`successfully appealing a 2014 TTAB decision under subsection (a), no one objected
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`for over two years. In belatedly contending that jurisdiction over this action was
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`absent all along, Frito-Lay merely points to the interlocking waiver language in
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`§1071(a)(1) (“thereby waiving his right to proceed under subsection (b) of this
`
`section”) and §1071(b)(1) (“unless appeal has been taken to said United States Court
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`of Appeals for the Federal Circuit”). FL.Br.16-17. But that language is plainly
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`designed to make the review routes for “the decision” mutually exclusive, and does
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`not provide or even suggest that a party that pursues a §1071(a) appeal of one TTAB
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`decision is forever barred from seeking district court review of a different TTAB
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`decision.
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`Nonetheless, Frito-Lay’s entire textual argument boils down to repeated
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`incantation of the waiver provisions in §1071(a)(1) and §1071(b)(1) and a series of
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`question-begging arguments based on those provisions. Those provisions clearly
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`provide that a party seeking Federal Circuit review of a TTAB decision thereby
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`3
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`

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`waives its right to proceed in district court as to something—either as to the same
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`TTAB decision or all subsequent TTAB decisions. The surrounding text makes clear
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`that all that is waived is the right to proceed in district court as to the same decision
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`that is being appealed to the Federal Circuit, not every subsequent TTAB decision.
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`The relevant unit for determining the who, where, and when of judicial review is
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`“the decision of the … [TTAB]” and “such decision.” Nothing in the text supports
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`the counterintuitive notion that an appeal of one such decision forecloses district
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`court review of different decisions issued years later.
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`Frito-Lay places particular emphasis on the waiver language in §1071(a)(1),
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`contending that Princeton Vanguard “ignores” this language and fails to explain why
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`it “would not be rendered superfluous by [Princeton Vanguard’s] reading of Section
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`1071 generally.” FL.Br.18-19. As an initial matter, Princeton Vanguard hardly
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`“ignore[d]” §1071(a)(1)’s waiver language. See, e.g., PV.Br.21, 27. In all events,
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`Princeton Vanguard’s interpretation does not render that language superfluous. That
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`language makes clear that by opting for Federal Circuit review of “the decision
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`of … the [TTAB],” a party “thereby waiv[es] his right to proceed” in district court
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`with respect to that same decision. 15 U.S.C. §1071(a)(1). To be sure, §1071(b)
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`reinforces the notion that the two options for reviewing “the decision of … the
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`[TTAB]” are mutually exclusive, by specifying that “[w]henever” a party is
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`authorized to seek review under “subsection (a),” it also has the option of seeking
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`4
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`district court review “unless appeal has been taken to” the Federal Circuit. But that
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`does not render any language surplusage. Rather, it renders the two provisions
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`mutually reinforcing. Subsection (a) specifies that a subsection (a) appeal is
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`exclusive of a subsection (b) district court action; subsection (b) specifies that a
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`subsection (b) district court action is exclusive of a subsection (a) appeal. The two
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`subsections are mirror images of each other and reinforce each other, but neither is
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`superfluous.
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`More important, both subsections focus on “the decision of … the [TTAB]”
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`that a dissatisfied party seeks to have reviewed. Subsection (a) by its terms provides
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`an appellate option for review of “the decision,” and subsection (b) provides for
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`district court review of “the decision,” if the dissatisfied party forgoes an appeal and
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`files in district court within a specified period of “such decision.” Nothing in either
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`provision suggests an election of one forum or the other carries any consequences
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`for subsequent TTAB decisions or subsequent phases of the broader case. See
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`Tibbetts Indus., Inc. v. Knowles Elecs., Inc., 386 F.2d 209, 212 (7th Cir. 1967) (noting
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`that, in analogous Patent Act review provisions, Congress spoke of “decisions,” not
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`“interferences or proceedings”). 1
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`1 Congress’ choice of “the decision” rather than broader language like “the
`proceedings” or “the case” must be regarded as deliberate since Congress used those
`latter words elsewhere in the same section of the statute. See 15 U.S.C. §1071(a)(1)
`
`5
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`Frito-Lay quibbles that Congress did not use “a decision” or “any decision.”
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`FL.Br.19-20. But Congress’ use of the definite article only reinforces that the whole
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`focus of subsections (a) and (b) is “the decision of the … [TTAB]” under review. If
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`Congress wanted to specify that appeal of “a TTAB decision” or “any TTAB
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`decision” had consequences for other TTAB decisions, an indefinite article might
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`have made sense. But everything in §1071 is focused on “the decision.” The party
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`seeking review is the one “dissatisfied with the decision;” timing of review is geared
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`to the date of “such decision,” §1071(b), i.e., “the date of the decision from which
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`the appeal is taken,” §1071(a)(2). It follows naturally that the consequences of
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`choosing one option for review of “the decision” are limited to such decision, rather
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`than subsequent decisions issued years later.
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`Frito-Lay emphasizes that neither the waiver language of subsection (a) nor
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`the “unless” clause of subsection (b) specifically references “the decision” or “such
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`decision.” But both clauses are dependent clauses embedded in sentences that do
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`specifically reference “the decision” or “such decision,” and can only be sensibly
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`read as referencing the TTAB decision under review, as opposed to other unspecified
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`TTAB decisions. Not every subordinate clause can be expected to repeat the same
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`clarifying language used elsewhere in the same sentence, which is why it is a mistake
`
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`(referring to “the further proceedings in the case”); Dep’t of Homeland Sec. v.
`MacLean, 135 S. Ct. 913, 919 (2015); Bloate v. U.S., 559 U.S. 196, 206-07 (2010).
`
`6
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`

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`to read a single clause in isolation from the broader statutory context. See, e.g.,
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`Sijapati v. Boente, 848 F.3d 210, 215 (4th Cir. 2017). Here, that context makes clear
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`that the waiver provision cannot be read as extending beyond “the decision of
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`the … [TTAB]” subject to the subsection (a) appeal. To the contrary, given the
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`statutory context, in the unlikely event Congress wanted to have an election of a
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`subsection (a) appeal to have consequences for all subsequent TTAB decisions,
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`Congress would have made that counterintuitive intent (as judged from the statutory
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`context) clear.
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`Indeed, Frito-Lay concedes that “the appeal taken by a party naturally applies
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`to the particular decision being appealed.” FL.Br.20. But if “the decision” is what
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`triggers a dissatisfied party’s right to review, then “the decision” must also trigger a
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`dissatisfied party’s review options. “[T]he decision” cannot mean “each TTAB
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`decision” when it comes to a dissatisfied party’s right to review, but “the first TTAB
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`decision” when it comes to the review options. See Clark v. Martinez, 543 U.S. 371,
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`378 (2005). Frito-Lay has no answer to this fundamental inconsistency in the statute
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`that its interpretation would create.
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`Frito-Lay offers a similar non-response regarding the timing provisions in
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`§1071. Frito-Lay concedes that the timing provisions start anew with each new
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`TTAB decision. See FL.Br.21 (acknowledging that “‘[t]he decision’ and ‘such
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`decision’ for timing purposes plainly refer to ‘the decision from which the appeal is
`
`7
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`

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`taken’” (quoting PV.Br.23)). It nevertheless resists the straightforward conclusion
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`that the choice of review options should reset with each new TTAB decision along
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`with the clock for seeking review. As before, its only argument is that “the review
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`options contain explicit textual waiver implications” that “are worded generally
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`without reference to a specific decision.” Id. But as noted, the waiver language
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`appears in dependent clauses in sentences that explicitly refer to “the decision” and
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`“such decision.” Moreover, under Frito-Lay’s reading of the statute, “the decision”
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`in §1071(a)(1) means something fundamentally different from “the decision from
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`which the appeal is taken” in §1071(a)(2). That violates customary canons of
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`interpretation, see IBP, Inc. v. Alvarez, 546 U.S. 21, 34 (2005) (noting that “identical
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`words used in … the same statute are generally presumed to have the same
`
`meaning”), and makes a hash of the statute. “[T]he decision” in §1071(a)(1) must
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`be the specific TTAB “decision from which the appeal is taken,” lest the appellate
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`timing provisions of §1071(a)(2) be triggered by something other than the decision
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`that gives rise to the right to appeal in §1071(a)(1). That obvious conclusion is
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`reinforced by §1071(b)(1), which addresses both the right to seek district court
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`review of “the decision” and the time limits for seeking review of “such decision”
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`in a single sentence.
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`Finally, Frito-Lay has no credible response to the difficulties that its
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`interpretation would produce in light of an adverse party’s statutory right to foreclose
`
`8
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`

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`Federal Circuit review. See PV.Br.27-28. Section §1071(a)(1) provides that even if
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`a dissatisfied party appeals to the Federal Circuit, an adverse party can object to that
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`election, in which case the dissatisfied party may file a district court action under
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`§1071(b), absent which “the decision appealed from shall govern the further
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`proceedings in the case.” Under Frito-Lay’s reading, a dissatisfied party that
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`appealed a previous TTAB decision to the Federal Circuit could be left with no
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`review right after a second TTAB decision: it would appeal to the Federal Circuit
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`(as it must under the District Court’s decision), the adverse party could then object
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`to Federal Circuit review, and the district court would lack jurisdiction under
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`§1071(b), such that the dissatisfied party would be left with no review option and be
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`subject to the TTAB “decision appealed from.”
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`Frito-Lay dismisses this problem first by insisting that it is unlikely to arise,
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`because the prevailing party before the TTAB would have little incentive to object
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`to Federal Circuit review. FL.Br.22. But if objecting to Federal Circuit review
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`would preclude any review of a favorable TTAB decision, the prevailing party would
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`have ample incentive to resist Federal Circuit review. And even beyond that obvious
`
`incentive, the prevailing party in this scenario, by definition, would have ended up
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`on the losing side of the earlier appeal and thus may well prefer a different forum.
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`Frito-Lay next suggests that even if an adverse party objected to Federal
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`Circuit appeal under §1071(a)(1), the dissatisfied party would still possess “its right
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`9
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`

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`to file a 1071(b) action at that point,” because §1071(a)(1) “explicitly provides
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`authorization for the original dissatisfied party to file a civil action in that situation.”
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`FL.Br.22-23. But that contention ignores the jurisdictional nature of the District
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`Court’s ruling. The District Court held that Princeton Vanguard’s appeal of the 2014
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`TTAB decision to the Federal Circuit deprived the District Court of subject matter
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`jurisdiction over this action. If the District Court really lacked jurisdiction because
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`of Princeton Vanguard’s 2014 appeal decision, nothing that occurred in conjunction
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`with an appeal from a subsequent decision could rectify that problem. Moreover,
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`nothing in the text of §1071(b) differentiates between Princeton Vanguard’s direct
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`invocation of its right to proceed under that section and an action that followed a
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`§1071(a) appeal and an objection. To the contrary, §1071(b) does not distinguish
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`between those two categories of district court actions.
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`Frito-Lay offers no way out of this statutory mess. In fact, there are only two
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`ways out, and neither helps Frito-Lay. The first would be to conclude that the bar
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`on district court review of a second TTAB decision following Federal Circuit review
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`of an earlier TTAB decision is not truly jurisdictional, and so the prevailing party’s
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`objection to Federal Circuit appeal of the second decision somehow nullifies the
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`waiver of district court jurisdiction effected by the dissatisfied party’s Federal
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`Circuit appeal of the first decision. But if the bar is not jurisdictional, then the
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`10
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`District Court could not have raised this objection sua sponte and Frito-Lay forfeited
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`any objection to this action by not timely objecting.
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`The second would be to adopt Princeton Vanguard’s reading of the statutory
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`text, which interprets the relevant decision for purposes of timing, waiver, and
`
`review options to be the decision that the dissatisfied party seeks to have reviewed,
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`thereby giving a dissatisfied party its two review options every time there is a new
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`TTAB decision. That construction gives consistency to the statute and maintains the
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`choice of review options that Congress provided, while preserving Congress’
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`evident intent to prevent challenges in multiple fora to the same TTAB decision.
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`B.
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`Legislative History Reinforces that §1071’s Waiver Language Only
`Limits a Dissatisfied Party to One Forum Per TTAB Decision, And
`Does Not Forever Waive a Party’s Statutory Right to Seek District
`Court Review Of A Different TTAB Decision Years Later.
`
`The text of §1071 is clear, and the legislative history only reinforces Princeton
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`Vanguard’s interpretation. Frito-Lay does not dispute that §1071’s review
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`provisions are materially identical to those in the Patent Act, that courts interpreting
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`§1071 regularly look to the Patent Act’s review provisions, or that, accordingly, the
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`legislative history of those provisions informs a proper reading of §1071. FL.Br.23-
`
`24; see, e.g., B & B Hardware, Inc. v. Hargis Indus., Inc., 575 U.S. 138, 144 (2015);
`
`Swatch AG v. Beehive Wholesale, LLC, 739 F.3d 150, 155 (4th Cir. 2014). And it
`
`concedes that in Hoover Co. v. Coe, 325 U.S. 79 (1945), the Supreme Court
`
`addressed the legislative history of the relevant Patent Act provisions. FL.Br.25.
`
`11
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`There, the Court explained that under earlier provisions, a dissatisfied party could
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`seek review of a patent decision in both the Federal Circuit’s precursor and in district
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`court. The Court further explained that Congress considered eliminating one of the
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`options altogether, but ultimately revised the provisions to allow review by either
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`the court of appeals or the district court, “but not both”—a decision made to preserve
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`“the option of producing new evidence” in a district court action. Hoover, 325 U.S.
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`at 86-87. The history recounted by Hoover thus underscores that the review
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`provisions in the Patent Act and in §1071 are intended to prevent duplicative efforts
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`to review the same decision—not to foreclose the option of producing new evidence
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`in district court based on a decision to appeal an earlier decision. See PV.Br.29-30.
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`Frito-Lay cites no legislative history whatsoever, much less any that actually
`
`supports its contrary interpretation of §1071. And its efforts to downplay the
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`legislative history cited by Princeton Vanguard are unavailing. First, Frito-Lay
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`observes that §§141(a) and 145 of the Patent Act—the “analogues” to §1071(a) and
`
`(b), as Frito-Lay acknowledges—“concern an applicant’s right to appeal a decision
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`of the PTAB in an ex parte proceeding,” while other non-analogous review
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`provisions concerning different PTAB proceedings limit a dissatisfied party to “an
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`appeal to the Federal Circuit.” FL.Br.24-25 (citing 35 U.S.C. §141(b) and (c)). That
`
`is true, but irrelevant. Statutory provisions that do not provide a choice of review
`
`options (e.g., §141(b) and (c)) obviously provide no insight into interpreting
`
`12
`
`

`

`USCA4 Appeal: 19-2316 Doc: 21 Filed: 03/18/2020 Pg: 17 of 33
`
`
`
`statutory provisions that do provide such a choice (e.g., §§141(a) and 145 and the
`
`TTAB provisions at issue here).
`
`Second, while agreeing that Congress intended in the relevant Patent Act
`
`provisions to prevent two bites at the same apple, FL.Br.25, Frito-Lay contends that
`
`“nothing in the legislative history suggests that this was Congress’s only aim in
`
`enacting the statutes.” Id. Rather, it suggests that Congress must have had some
`
`other intent because §1071 contains “much more detailed provisions related to
`
`appeal procedures and resulting waivers.” Id. at 25-26. But nothing in those more
`
`detailed procedures or any relevant legislative history suggests that Congress’ intent
`
`was to make a decision to appeal an initial TTAB decision binding with respect to
`
`subsequent TTAB decisions. Doing so would create a disincentive to exercise the
`
`very choice of judicial review routes that Congress preserved, as a decision to appeal
`
`would preclude resort to district court for subsequent orders, while pursuing judicial
`
`review in district court would preserve optionality. It would also deny a party in
`
`Princeton Vanguard’s position “the option of producing new evidence” in a district
`
`court action, contrary to the legislative intent identified in Hoover. Hoover, 325 U.S.
`
`at 87.
`
`Finally, Frito-Lay criticizes Princeton Vanguard for not identifying legislative
`
`history specifically addressing whether a party who has appealed an initial TTAB
`
`decision to the Federal Circuit may challenge a subsequent TTAB decision in district
`
`13
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`

`

`USCA4 Appeal: 19-2316 Doc: 21 Filed: 03/18/2020 Pg: 18 of 33
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`
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`court. FL.Br.26. But there is no legislative history specific to TTAB review
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`(certainly Frito-Lay identifies none), which is why the legislative history of the
`
`parallel patent provisions, as explored in Hoover, is the most relevant legislative
`
`history available. That legislative history makes plain what the text already suggests:
`
`Congress wanted to avoid giving litigants two bites at the same apple, but expressly
`
`preserved two options for judicial review of a board decision, including the district
`
`court option to allow for factual development. Frito-Lay would foreclose that
`
`opportunity, based on a review choice made years earlier in context of a different
`
`decision, without any support in the text or legislative history.
`
`C.
`
`Sound Policy Supports Allowing a Dissatisfied Party to Challenge
`a Second TTAB Decision in District Court, Rather Than Limiting
`It to Its Initial Federal Circuit Election.
`
`Frito-Lay maintains that its interpretation of §1071 “serves important policy
`
`considerations.” FL.Br.26. Its contentions do not withstand scrutiny, however. As
`
`Princeton Vanguard has explained, Frito-Lay’s interpretation will incentivize parties
`
`to bring every challenge of a TTAB decision to district court rather than forfeiting
`
`the possibility of future district court review (and the concomitant opportunity to
`
`submit new evidence and obtain de novo review). PV.Br.31-35. Frito-Lay disputes
`
`this common-sense conclusion because it “will not always” be true that it will “be
`
`advantageous for a dissatisfied party to allow new evidence on a fact question.”
`
`FL.Br.27. But that only highlights the problem. It may be true that for certain TTAB
`
`14
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`

`

`USCA4 Appeal: 19-2316 Doc: 21 Filed: 03/18/2020 Pg: 19 of 33
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`
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`decisions, like the first one here, factual development is not critical and a dissatisfied
`
`party will be content to seek a quick reversal in the Federal Circuit on purely legal
`
`grounds. But if the consequence of seeking that quick appellate reversal is to forfeit
`
`the “significant” “opportunity to present new evidence” and obtain de novo district
`
`court review for any subsequent TTAB decision, Kappos v. Hyatt, 566 U.S. 431, 435
`
`(2012), a party who would otherwise choose the appellate route will preserve its
`
`optionality by seeking district court review instead.2
`
`Frito-Lay claims that its interpretation encourages parties to “carefully
`
`evaluate the options and their consequences.” FL.Br.28. But a party cannot
`
`“evaluate the options” when there are “uncertain future” facts, such as whether the
`
`need for district court might later arise. Gillette Co. v. “42” Prods. Ltd., Inc., 435
`
`F.2d 1114, 1118 (9th Cir. 1970) (quoting Tibbetts, 386 F.2d at 212). Faced with the
`
`“consequence[]” of forever forfeiting district court review, rational parties will
`
`almost always choose district court review in the first instance, even when they
`
`
`2 Seeking to downplay the importance of de novo review, Frito-Lay contends that
`“to the extent relevant new evidence is submitted with respect to a particular issue,
`that evidence is reviewed for that issue by the district court de novo.” FL.Br.27; see
`also id. at 7. That is an incorrect statement of the law. If new evidence is submitted,
`the district court does not apply de novo review just to “that evidence” or “that
`issue.” Rather, “where new evidence is submitted, de novo review of the entire
`record is required.” Swatch, 739 F.3d at 156 (emphasis added). This makes it even
`less likely that a party that lost before the PTAB on a factual question would not find
`it “advantageous” to submit new evidence, because submitting any new evidence
`triggers de novo review of “the entire record.”
`
`15
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`USCA4 Appeal: 19-2316 Doc: 21 Filed: 03/18/2020 Pg: 20 of 33
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`
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`would otherwise opt for Federal Circuit review and even though, as Frito-Lay
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`acknowledges, most cases will not produce a second round of review. And as Frito-
`
`Lay does not dispute, artificially skewing review avenues in this manner would
`
`contradict Congress’ deliberate provision of two review options in §1071, needlessly
`
`over

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