V.V.V. &Sons Edible Oils partially wins appeal against Meenakshi Overseas in a case involving exception and extent of claim preclusion
Date Published: Jun 21, 2021
The Indian Company V.V.V. & Sons Edible Oils (“VVV”) has a business of selling food products in many countries including the U.S. market. VVV averred that it has been using a term “IDHAYAM” to market sesame oil since the 1980s. However, in 2009 another company Meenakshi Overseas, LLC (“Meenakshi”), a New Jersey Limited Liability Company which also sells Indian foods product in the U.S. market, made an application at the US Patent and Trademark Office to register the mark IDHAYAM which was opposed by VVV. Later in 2009, VVV abandoned its opposition by way of failing to respond to the show cause, due to which the Trademark Trial and Appeal Board (“TTAB”) declared a judgment against VVV which consequently delivered full ownership over mark IDHAYAM (now known as mark 654) to Meenakshi. Subsequently, Meenakshi applied for registration of two other marks featuring the word IDHAYAM now known as “172” and “000” which were granted without any opposition. However, subsequent to the registration, VVV applied for registration of the mark IDHAYAM for edible oils which was rejected. After two years, VVV applied again for registering the same mark for cooking oils which too was rejected. Ultimately, VVV moved for cancellation of all the three marks of Meenakshi at TTAB. TTAB dismissed the petition for mark 654 on ground of its claim of preclusion (res judicata) and allowed claims against the rest of the two marks. VVV then filled a partial appeal which was dismissed by the Federal Circuit due to lack of jurisdiction. Amid this, VVV filed cases for damages and injunctive relief for all the three marks at the United States District Court for the Eastern District of California (“District Court”). The district court dismissed the claims of “654” marks on ground of claim preclusion and allowed other claims relating to the rest of the two marks i.e.,“172”&“000”. Subsequent to partial dismissal, VVV moved to amend the complaint to add another claim to issue mark “654” as invalid due to fraud. However, the motion too, was denied by the district court for the reason that claim preclusion barred the claim. Meenakshi then moved to dismiss the other claims, which were not opposed by VVV “due to the complexity of the area of law and the desire to have the Ninth Circuit Court of Appeals”. Thus, due to the non-opposition United States District Court for the Eastern District of California granted the motion to dismiss the other claims too. This appeal has now been filled at the United States Court of Appeals for The Ninth Circuit (“Appellate Court”) (V.V.V. & Sons Edible Oils Ltd. v. Meenakshi Overseas LLC, 946 F.3d 542 (9th Cir. 2019)). The Appellate Court affirms the District Court’s dismissal of claims regarding the other two marks but reverse the district court’s dismissal of VVV’s claims as to the first mark.
The panel observed that, as held in Tahoe-Sierra Pres. Council, Inc. v. Tahoe Reg’l Planning Agency, 322 F.3d 1064, 1077 (9th Cir. 2003) the claim of preclusion will apply when there is (1) an identity of claims, (2) a final judgment on the merits and (3) privity between the parties. The district court in this case observed that these criteria were met and hence the claim of preclusion will apply which ultimately barred VVV from raising any claim for mark 654. However, the Appellate panel observed that, there are some exceptions as per the Restatement (Second) of Judgments § 26(1)(c) which will apply here. Exception is of limitations on the subject matter jurisdiction of the court which prevents the litigant from presenting all of his theories of recovery or demand for relief in the court. For example, in Locus Classicus Harris v. Cty. of Orange, 682 F.3d 1126 1133–34 (9th Cir. 2012); where a retirement association challenged a retirement plan of country and sought for injunctive relief but judgment was given in favor of the country. Subsequently, again they filled a suit for damages which was dismissed by district court on ground of claim preclusion but the appellate court reversed the judgment of district court and held that as remedy of damages was not available in the first action, so claim preclusion will not apply.
Similar reasoning with greater force applies in this appeal as well. As TTAB was not authorized to deal with the issue relating to right to use or relating to the question of infringement or unfair practice, the former proceeding with TTAB was limited to issues involving registration of a trademark. Hence, it will be unfair to preclude VVV from claiming these reliefs as it was unable to claim them in the first action due to limitation of subject matter jurisdiction of TTAB. So, the appellate court reversed the judgment of district court.
The Appellate Court moved on with the issue barring to amend the complaint to add fraud claim on the mark 654 on ground of claim preclusion. Since, the claim preclusion does not apply to this suit and the claim preclusion doesn’t bar the claim then there can be no bar to amend the complaint. Hence, despite the discretion of district court to deny the amendment to plaint, the appellate panel reversed the decision of the district court to bar amendment of the application on ground of claim preclusion
For issue relating to claim involving mark “000” and ”172”, VVV contended that the dismissal of these two claims was also due to the district court’s erroneous decision of claim preclusion on mark “654”. This contention was rejected by the appellate court because district court dismissed only issues relating to mark 654 and not for the other two marks. Moreover, the district court granted a separate motion to dismiss the claims of the other two marks due to the non-opposition of VVV. For preserving an issue for appeal, a party must make an objection to the court of action. Hence, appellate court affirmed the judgment of the district court to dismiss the claim because there was no objection at the court of action and the complaint was dismissed due to non-opposition.
V.V.V. & Sons Edible Oils Ltd. v. Meenakshi Overseas LLC, 946 F.3d 542 (9th Cir. 2019)