CAFC Rejects Constitutionality Challenge To Appointment Of Administrative Trademark Judges, Affirms TTAB's "SCHIEDMAYER" False Association Decision

• Published date: 07 September 2021
• Subject Matter: Intellectual Property, Trademark
• Law Firm: Wolf, Greenfield & Sacks, P.C.
• Author: Mr John L. Welch

The CAFC soundly upheld the TTAB's decision ordering cancellation of a registration for the mark SCHIEDMAYER for pianos [TTABlogged here] on the ground of false association under Section 2(a). The appellate court first rejected the appellants' challenge to the constitutionality of the appointment of TTAB Administrative Law Judges, ruling that their appointments did not suffer from the defect that the Supreme Court recently fixed in U.S. v. Arthrex with regard to PTAB judges. Piano Factory Group, Inc. and Sweet 16 Musical Properties, Inc. v. Schiedmayer Celesta GmbH, 2021 USPQ2d 913 (Fed. Cir. 2021) [precedential].

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Constitutional Challenge: Appellants contended that the administrative trademark judges (ATJs) who sat on the Board panel were appointed in violation of the Appointments Clause of Article II of the Constitution, and therefore the Board's decision must be vacated. The Director of the USPTO intervened to argue that the appointments were lawful.

Appellants relied on U.S. v. Arthrex, Inc., 141 S. Ct. 1970 (2021), wherein the Supreme Court held that the administrative patent judges (APJs) of the Patent Trial and Appeal Board (PTAB), because they exercised unreviewable authority in deciding ex parte review proceedings, were acting as principal officers of the United States. Under the U.S. Constitution, principal officers must be appointed by the President and confirmed by the Senate, and since APJs were not so appointed and confirmed they were acting unlawfully. Appellants argued that the ATJs were likewise principal officers of the United States, and were unconstitutionally appointed.

In Arthrex, the Court solved the problem by making PTAB determinations reviewable by the Director of the USPTO, observing that this approach would "follow the almost-universal model of adjudication in the Executive Branch" and "aligns the PTAB with the other administrative body in the PTO, the Trademark Trial and Appeal Board." 141 S. Ct. at 1987. The CAFC observed that the Court "thus effectively confirmed that in light of the Director's authority over decisions of the TTAB, the statutory scheme governing TTAB decision-making is not subject to the Appointments Clause problem the Court identified with regard to the PTAB."

Moreover, the role of the PTO Director was addressed in the Trademark Modernization Act of 2020 (TMA), which explicitly confirmed the Director's authority to review decisions of the TTAB. "The current trademark statutes plainly render ATJs...