Film Producer Tries to Regain Trademark, Undo Tribunal Whoopsie

Hidden Empire Film Group LP recently launched a lawsuit hoping it’s not too late to undo the damage from missing a trademark tribunal evidence deadline, which sank its bid to reclaim rights allegedly swiped by a disgruntled actor.

The production company behind “Meet the Blacks” and “The Intruder” sued actor Mark Chalant Phifer for trademark infringement, false statements, unfair competition, and review of a Trademark Trial and Appeal Board decision. Hidden Empire lost its TTAB petition to cancel Phifer’s “Hidden Empire Film Group” trademark after its counsel failed to provide evidence in time.

The US District Court for the Eastern District of California lawsuit invokes questions about the finality of various aspects of TTAB proceedings. Decisions by the board can be appealed either to federal district court or the US Court of Appeals for the Federal Circuit. But precedent holds that in some circumstances, issues decided—or not timely raised—before the TTAB may be settled as far as courts are concerned.

Some attorneys said it shouldn’t be difficult for Hidden Empire to effectively get a do-over on the mark’s ownership in district court, since the question wasn’t decided on the merits and new evidence will be allowed. That isn’t the case at the Federal Circuit, where appeals are based on the existing record.

But intellectual property attorney Marsha G. Gentner of Dykema Gossett PLLC suggested it might not be so simple. She noted that if an attorney failed to show up for trial and present evidence, the case would be considered litigated, and new evidence in district court cases is generally limited to elements the TTAB wouldn’t consider.

“It’s sort of an open question, basically, what is going to be precluded in district court on the basis of TTAB proceedings,” she said. “I want to see it litigated, because I have questions. Maybe there’ll be some answers.”

‘Procedural Failure’

Hidden Empire began working on a movie with Phifer in 2009, but a payment dispute led to litigation and a settlement with Phifer in 2012. Hidden Empire Film Group LLC was formed by Deon Taylor and Roxanne Avent Taylor in 2011. The by-then husband-wife duo learned in 2018 that someone formed an identical LLC during a lapse in their corporate registration, so they formed the current LP entity.

In 2019, Phifer contacted the Taylors to let them know he’d registered a trademark, and demanded $625,000, 10 speaking roles, and 10 producer credits in future movies, the complaint said. Hidden Empire petitioned to cancel Phifer’s trademark, but said its counsel’s inexperience with TTAB proceedings led to the missed evidence deadline, and Phifer thwarted the challenge.

Representatives for the Taylors and Phifer didn’t respond to requests for comment.

The US Supreme Court’s 2015 opinion in B&B Hardware Inc. v. Hargis Industries Inc. held that issue preclusion—a prohibition on relitigating issues decided in a case with a final judgment—applies to TTAB rulings. As with any application, the issues must fundamentally be the same, so only new arguments challenging the particular questions decided by TTAB are barred, the court said.

Some attorneys said that because an issue wasn’t decided on the merits, issue preclusion didn’t apply, and B&B Hardware wasn’t a direct appeal of a TTAB ruling. Trademark attorney Paul Kennedy of Troutman Pepper Hamilton Sanders LLP said he thinks the court will be “sympathetic” to Hidden Empire.

“I do think it depends on the situation,” Kennedy said. “Here, I’m of the opinion that there is not issue preclusion, that the federal court will hear the matter. This was a procedural failure. They didn’t lose because the board ruled on the merits.”

If Hidden Empire appealed to the Federal Circuit, it would be chained to the TTAB record. But in the district court it can add evidence to the record to augment its case, especially to back claims not related to the question TTAB decided. Hidden Empire could still face hurdles if a judge decided it should have raised the evidence before the TTAB.

Trademark attorney Lee Eulgen of Neal Gerber & Eisenberg LLP said B&B Hardware spells out considerations for a district court to consider, but won’t restrain the court in this case.

“This was decided on procedural grounds rather than substantive,” Eulgen said. “B&B Hardware will likely leave discretion to the federal court judge to decide this case how they want to; they won’t be locked into any substantive effect.”

‘Going to Be Troublesome’

There’s not much clarity among district courts on how to handle issue preclusion, Gentner said. In some cases, courts have conflated issue preclusion with claim preclusion, for example using a withdrawn cancellation petition to bar a bid to invalidate a trademark, she said. But Hidden Empire actually had a trial where the company didn’t present evidence and a final ruling was made, she noted.

Appeals to district courts allow for new evidence. But it’s generally evidence that the board doesn’t consider because it only weighs likelihood of confusion between registered marks, not evidence of facts related to other questions like allegations of infringement, Gentner said. Courts may well find issue preclusion if a party fully litigated a case at TTAB and tried to introduce new evidence that it should have raised there.

“It’s gonna be a mess if you can basically not follow the scheduling dates and come in after and say wait a second, give me another chance,” Gentner said. “These cases are going to be troublesome. It’s just not going to be crystal clear, at least for a while.”

Gentner also said the extreme nature of the allegations that Phifer registered the mark in bad faith and the purpose of trademark law—protecting consumers from deception—could also play a role. Even if all needed elements of issue preclusion were present, she said if she were a judge, blocking such arguments and evidence “would be a tough call.”

“If there’s fraud on the Trademark Office, we can’t just let that happen” because of prior tactical missteps by the litigants, Gentner said. “If you believe everything in the complaint, you’re going to let that go? That’s a massive fraud on the public.”