David Beasley v. William Howard

PRECEDENTIAL

UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_____________

No. 20-1119
_____________

DAVID BEASLEY,
Appellant

v.

WILLIAM H. HOWARD
____________

On Appeal from the United States District Court
for the District of New Jersey
(D.C. Civil No. 1:19-cv-11058)
District Judge: Honorable Noel L. Hillman
_____________

Argued: November 13, 2020
_____________

Before: CHAGARES, GREENAWAY, JR., and NYGAARD,
Circuit Judges

(Opinion Filed: September 17, 2021)

Martin B. Schwimmer [ARGUED]
Leason Ellis
1 Barker Avenue
5th Floor
White Plains, NY 10601

John Welch
Wolf Greenfield & Sacks
600 Atlantic Avenue
Boston, MA 02210

Counsel for Appellant

Moshe D. Lapin [ARGUED]
Suite 840
300 East Lombard Street
Baltimore, MD 21202

Counsel for Appellee

_____________

OPINION OF THE COURT
_____________

CHAGARES, Circuit Judge.

Musicians David Beasley and William Howard are
embroiled in a long-running dispute over the rights to the band
name “Ebonys.” Beasley filed two petitions before the
Trademark Trial and Appeal Board (“TTAB”) to cancel
Howard’s registered THE EBONYS mark. The TTAB
dismissed them both. Beasley then filed a lawsuit against
Howard for trademark infringement in federal court. The

2
District Court relied on claim preclusion to dismiss Beasley’s
complaint. Beasley appeals, so we now consider whether
trademark cancellation proceedings before the TTAB have
claim preclusive effect against trademark infringement
lawsuits in federal district courts. We hold that they do not.
The TTAB’s limited jurisdiction does not allow trademark
owners to pursue infringement actions or the full scope of
infringement remedies in proceedings before it. Because the
judgments of tribunals with limited jurisdiction have limited
preclusive effect, we will reverse and remand in part the
District Court’s order so that the District Court may determine
the scope and plausibility of Beasley’s claims. But we will
affirm the District Court’s order to the extent it dismisses any
claim that Howard defrauded the U.S. Patent & Trademark
Office (“PTO”).

I.

In 1969, David Beasley founded a band named “The
Ebonys” in Camden, New Jersey. The Ebonys were one of
many bands that helped create the “Philadelphia Sound” — a
style of rhythm and blues music centered around the
Philadelphia International Records label, and which
incorporated elements of soul, funk, and disco. See generally
Jim Morrison, Forty Years of Philadelphia Sound, Smithsonian
Mag. (Feb. 18, 2011), https://www.smithsonianmag.com/arts-
culture/forty-years-of-philadelphia-sound-326818/
(documenting the genre’s history). The Ebonys achieved some
commercial success in the 1970s, but never reached the
notoriety that similar artists such as the O’Jays or the Blue
Notes achieved. The Ebonys’s popularity faded as the decade

3
progressed, but Beasley alleges that they nonetheless have
performed continuously since their formation.1

The 1990s and 2000s saw fresh developments for the
Ebonys. William Howard joined the band in the mid-1990s
and Beasley obtained a New Jersey state service mark for THE
EBONYS in 1997. Beasley and his bandmates performed with
Howard for several years thereafter.

But Beasley and Howard would soon part ways. Each
artist made his own claim to the Ebonys name, and in 2012,
Howard registered THE EBONYS as a federal trademark with
the PTO. See THE EBONYS, Registration No. 4,170,469 (the
“’469 mark”). Beasley alleges that since Howard registered
the ’469 mark, Howard’s registration has interfered — and
continues to interfere — with his business. Beasley claims that
he has not been able to register a band website that uses “the
Ebonys” in its domain name, Howard has kept concert venues
from booking Beasley’s performances, Howard has tried to
collect royalties from Beasley’s recordings, and Howard has
claimed to be the Ebonys’s true founder.

Beasley filed a petition with the TTAB to cancel the
’469 mark in 2013, contending that Howard had defrauded the
PTO. The 2013 petition recounted the Ebonys’s 1969
founding, the New Jersey service mark he had obtained for the

1
Howard contends that the Ebonys stopped performing
between 1978 and 1997. But “[b]ecause this is an appeal from
a dismissal pursuant to Federal Rule of Civil Procedure
12(b)(6), the facts in this section are as alleged by [Beasley].”
Aly v. Valeant Pharms. Int’l Inc., 1 F.4th 168, 170 n.5 (3d Cir.
2021).

4
group, Howard’s arrival and departure from the band, and the
claim that Beasley continued to operate under the Ebonys
name. The TTAB dismissed the petition the following year. It
found that for all the evidence Beasley submitted, Beasley
failed to show that Howard defrauded the PTO.

Beasley filed a second petition with the TTAB in 2017.
His 2017 petition again asserted that Howard had committed
fraud on the PTO, but also requested that the PTO cancel the
’469 mark because it could be confused with Beasley’s THE
EBONY’S mark.

The TTAB dismissed the 2017 petition. It did so on the
ground of claim preclusion, reasoning that Beasley’s 2017
fraud claim rested on the same facts as his 2013 one and that
Beasley forwent the opportunity to assert the likelihood-of-
confusion claim in his 2013 petition, because it also rested on
the same transactional facts as his 2013 fraud claim. Beasley
did not appeal either petition’s dismissal.

Unsatisfied with his results at the TTAB and proceeding
pro se, Beasley filed the lawsuit before us now in April 2019.
Beasley’s complaint once again recounted the band’s history
and his acrimonious split with Howard. He asked that the
District Court “vacate trademark ownership of” the ’469 mark,
award him monetary damages for losses from being unable to
market his band, and allow him to register his own EBONYS
trademark with the PTO. Appendix (“App.”) 28.

The District Court applied the liberal rules of
construction we require for a pro se complaint to understand
Beasley to assert a claim under section 43(a) of the Lanham
Act, 15 U.S.C. § 1125(a), which, inter alia, protects

5
unregistered and state law trademarks against infringement.
Cf. Lanham Act § 32, 15 U.S.C. § 1114 (protecting registered
trademarks from infringement). Howard moved to dismiss
Beasley’s complaint on the grounds of claim and issue
preclusion. The District Court granted the motion. It reasoned
that claim preclusion barred Beasley from asserting the claim
because it turned on “facts and legal theories [that] were all
actually litigated in the” 2017 petition, and Beasley could have
raised any priority of use arguments in his 2013 petition. App.
17-18. The District Court further concluded that claim
preclusion applied even though Beasley sought a damages
remedy he did not pursue at the TTAB, and accordingly
dismissed the complaint without reaching the merits of the
other issues the parties raised. Beasley timely appealed.

II.

The District Court had federal subject matter
jurisdiction under 28 U.S.C. § 1331 and section 39 of the
Lanham Act, 15 U.S.C. § 1121(a). We have jurisdiction to
review the District Court’s final decision under 28 U.S.C. §
1291.

We exercise plenary review over the District Court’s
dismissal of Beasley’s complaint and may affirm on any
ground supported by the record. Watters v. Bd. of Sch. Dirs.,
975 F.3d 406, 412 (3d Cir. 2020). We accept as true all factual
matters Beasley alleges, but his complaint cannot survive
unless the facts it recites are enough to state plausible grounds
for relief. See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). A
claim that relies just on “conclusory statements,” or on
“threadbare recitals of the elements of a cause of action”
without supporting factual allegations, does not establish

6
plausible grounds for relief. Fischbein v. Olson Rsch. Grp.,
Inc., 959 F.3d 559, 561 (3d Cir. 2020) (quoting City of
Cambridge Ret. Sys. v. Altisource Asset Mgmt. Corp., 908
F.3d 872, 878-79 (3d Cir. 2018)). We liberally construe pro se
filings like Beasley’s. Jones v. Unknown Dep’t of Corr. Bus
Driver & Transp. Crew, 944 F.3d 478, 483 (3d Cir. 2019).
Notwithstanding the rule of liberal construction, a pro se
complaint may not survive dismissal if its factual allegations
do not meet Iqbal’s basic plausibility standard. Mala v. Crown
Bay Marina, Inc., 704 F.3d 239, 245 (3d Cir. 2013).

III.

Beasley limits this appeal to whether the District Court
properly dismissed his section 43(a) infringement claim, so its
central issue is whether Beasley’s prior losses in cancellation
proceedings before the TTAB preclude his section 43(a) claim
before the District Court. We hold that they do not. Despite
the factual similarities between Beasley’s petitions for
cancellation and the complaint he filed in the District Court,
the jurisdictional limits on the TTAB that accompany its role
as the primary venue for narrow questions of trademark
registration ensure that proceedings before it do not carry claim
preclusive effect against subsequent Article III infringement
proceedings under section 43(a). We first address claim
preclusion’s general principles, then examine their application
to this case, and finally consider the other arguments Howard
raises in favor of affirmance.

A.

Claim preclusion — which some courts and
commentators also call res judicata — protects defendants

7
from the risk of “‘repetitious suits involving the same cause of
action’ once ‘a court of competent jurisdiction has entered a
final judgment on the merits.’” United States v. Tohono
O’Odham Nation, 563 U.S. 307, 315 (2011) (quoting Comm’r
v. Sunnen, 333 U.S. 591, 597 (1948) (quotation marks
omitted)); see also Brownback v. King, 141 S. Ct. 740, 747 n.3
(2021) (“The terms res judicata and claim preclusion often are
used interchangeably.”). The doctrine does so by “prevent[ing]
parties from raising issues that could have been raised and
decided in a prior action — even if they were not actually
litigated.” Lucky Brand Dungarees, Inc. v. Marcel Fashions
Grp., Inc., 140 S. Ct. 1589, 1594 (2020). The prior judgment’s
preclusive effect then extends not only to the claims that the
plaintiff brought in the first action, but also to any claims the
plaintiff could have asserted in the previous lawsuit. See In re
Mullarkey, 536 F.3d 215, 225 (3d Cir. 2008). Claim preclusion
similarly reaches theories of recovery: a plaintiff who asserts
a different theory of recovery in a separate lawsuit cannot avoid
claim preclusion when the events underlying the two suits are
essentially the same. See United States v. Athlone Indus., Inc.,
746 F.2d 977, 984 (3d Cir. 1984).

Recognizing the severity of claim preclusion’s
consequences, we apply the doctrine with care and only in
appropriate circumstances. See, e.g., Papera v. Pa. Quarried
Bluestone Co., 948 F.3d 607, 611 (3d Cir. 2020) (construing
ambiguities in prior dismissal against claim preclusion). When
a defendant seeks to invoke claim preclusion based on a federal
tribunal’s judgment, we require “(1) a final judgment on the
merits in a prior suit involving (2) the same parties or their
privies and (3) a subsequent suit based on the same cause of

8
action.” In re Healthcare Real Est. Partners, LLC, 941 F.3d 64,
72 (3d Cir. 2019) (quoting Mullarkey, 536 F.3d at 225).2

Claim preclusion also has limits. A predicate for the
doctrine is that “a court of competent jurisdiction ha[ve]
entered a final judgment on the merits” in the first action.
Tohono O’Odham, 563 U.S. at 315 (quoting Sunnen, 333 U.S.
at 597). The corollary to this prerequisite is that claim
preclusion “generally does not apply where ‘[t]he plaintiff was
unable to rely on a certain theory of the case or to seek a certain
remedy because of the limitations on the subject matter
jurisdiction of the courts. . . .’” Marrese v. Am. Acad. of
Orthopaedic Surgeons, 470 U.S. 373, 382 (1985) (quoting
Restatement (Second) of Judgments § 26(1)(c) (Am. L. Inst.
1982)). But cf. Humphrey v. Tharaldson Enters., Inc., 95 F.3d
624, 626 (7th Cir. 1996) (“[A]s long as there existed a tribunal
before which [plaintiff] could have consolidated all his claims
in a single lawsuit, the principles of claim preclusion bar his
current federal suit, even though he could not have raised the
federal claims before the [state administrative agency].”). This
limit to claim preclusion protects a plaintiff’s right to bring
claims that he “was not at liberty to assert” in a prior forum of
limited jurisdiction. Est. of Roman v. City of Newark, 914 F.3d
789, 805 (3d Cir. 2019). Whether claim preclusion bars
Beasley’s lawsuit depends on whether this limitation applies
here.

B.

2
The TTAB’s status as an administrative tribunal rather than
as an Article III court does not diminish its judgments’
preclusive effect. See B & B Hardware, Inc. v. Hargis Indus.,
Inc., 575 U.S. 138, 151-53 (2015).

9
 1.

There is no dispute that Beasley previously filed
petitions before the TTAB against Howard to cancel the ’469
mark and that the TTAB rendered a final judgment on the
merits against Beasley. And although his precise theory of
relief is somewhat unclear on this record, there is also no
dispute that Beasley now seeks — at minimum — damages
against Howard for trademark infringement under section
43(a) of the Lanham Act. We therefore must consider whether
Beasley’s claim is “of the type ‘that could have been brought’”
in his TTAB petitions. Roman, 914 F.3d at 804 (quoting
Duhaney v. Att’y Gen., 621 F.3d 340, 347 (3d Cir. 2010)).

We begin with the TTAB’s jurisdiction. The TTAB is
not a general-purpose tribunal for trademark disputes. Instead,
it has limited jurisdiction “to determine only the right to
register” a trademark and cannot “decide broader questions of
infringement or unfair competition.” FirstHealth of Carolinas,
Inc. v. CareFirst of Md., Inc., 479 F.3d 825, 828 (Fed. Cir.
2007) (citation omitted); see also Conolty v. Conolty
O’Connor NYC LLC, 111 U.S.P.Q.2d 1302, at *11 (T.T.A.B.
2014) (“The Board’s jurisdiction is strictly limited to
determining the right to register.” (quotation marks omitted));
U.S. Patent & Trademark Office, U.S. Dep’t of Commerce,
Trademark Trial and Appeal Board Manual of Procedure
(“TBMP”) § 102.01 (2021),
https://tmep.uspto.gov/RDMS/TBMP/current#endnote-p-
7ba818da-61d4-4980-be98-6ce79d4ba93e (“The Board is not
authorized to determine the right to use”). With that limited
jurisdiction comes “no authority to determine . . . damages or
injunctive relief.” Gen. Mills, Inc. v. Fage Dairy Processing

10
Indus. S.A., 100 U.S.P.Q.2d 1584, at *3 (T.T.A.B. 2011), relief
set aside to effect settlement sub nom. Gen. Mills, Inc. v. Fage
Lux. S.A.R.L., 110 U.S.P.Q.2d 1679 (T.T.A.B. 2014); see also
Bd. of Trs. of the Univ. of Ala. v. Pitts, 107 U.S.P.Q.2d 2001,
at *20 (T.T.A.B. 2013) (“[T]he Board can do nothing to
prevent parties from using a mark in a certain manner.”). The
TTAB therefore properly considers only narrow questions and
grants only narrow remedies: it hears challenges litigants pose
as to whether a trademark meets the Lanham Act’s criteria for
registration, and cannot dispense relief beyond whether or how
the PTO registers a mark.3

But while the TTAB’s jurisdiction is narrow, the
statutory provision under which Beasley sues is broad. Section
43(a)(1) creates liability for the deceptive “use[] in commerce”
of a mark that “is likely to cause confusion” as to the
“affiliation, . . . association[,] . . . origin, sponsorship, or
approval” of a defendant’s products, as well as for deceptive
advertising practices. 15 U.S.C. § 1125(a)(1). The provision
extends far further than the statutorily prescribed grounds on
which the TTAB can cancel a mark under section 14 of the
Lanham Act, 15 U.S.C. § 1064.4 Even insofar as the Lanham

3
The TTAB has jurisdiction over opposition proceedings to
stop it from issuing a registration, cancellation proceedings to
discontinue a registration, proceedings to determine who owns
a registration, and appeals from ex parte denials of registration.
TBMP § 102.02.
4
These include if a registered mark “becomes the generic name
for the goods or services . . . for which it is registered, or is
functional, or has been abandoned, or its registration was
obtained fraudulently or contrary to the provisions of [Lanham
Act § 2, 15 U.S.C. § 1052(a)-(c)] . . . or if the registered mark

11
Act bars the registration of trademarks which “so resemble[]”
marks previously in use so as to cause confusion, see Lanham
Act § 2(d), 15 U.S.C. § 1052(d), the cancellation provisions of
the Lanham Act give no basis for relief on the ground of how
an infringer uses a trademark in practice. See B & B Hardware,
Inc. v. Hargis Indus., Inc., 575 U.S. 138, 145 (2015) (“In
infringement litigation, the district court considers the full
range of a mark’s usages, not just those in the application.”).
As a result, the TTAB could never have granted Beasley the
damages he now seeks.

We therefore hold that a limit to claim preclusion
applies to cases, like this one, where a plaintiff seeks damages
or an injunction in a section 43(a) infringement action after
pursuing a cancellation claim before the TTAB. A section
43(a)(1)(A) infringement or “false association” claim requires
a plaintiff to prove, inter alia, that “the defendant’s use of [a]
mark[] to identify goods or services is likely to create
confusion concerning the origin of the goods or services.”
Parks LLC v. Tyson Foods, Inc., 863 F.3d 220, 230 (3d Cir.
2017) (quoting Ford Motor Co. v. Summit Motor Prods., Inc.,
930 F.3d 277, 291 (3d Cir. 1991)).5 Because the TTAB has no
jurisdiction to consider whether an infringer’s use of a mark
damages a petitioner seeking cancellation, and in turn cannot

is being used . . . to misrepresent the source of the goods or
services” with which it is used. Lanham Act § 14(3), 15 U.S.C.
§ 1064(3).
5
A section 43(a)(1)(B) false advertising claim turns on whether
a defendant “misrepresents the nature, characteristics,
qualities, or geographic origin” of a product. Parks, 863 F.3d
at 226 (quoting 15 U.S.C. § 1125(a)(1)(B)). These are also
matters outside the TTAB’s jurisdiction.

12
award any remedy beyond cancellation for the injuries a
petitioner has suffered, see FirstHealth, 479 F.3d at 828; Pitts,
107 U.S.P.Q.2d 2001 at *20, a section 43(a) claim is not one
that could have been brought in a TTAB cancellation
proceeding.

We join two of our sister Courts of Appeals in
recognizing the limited preclusive effect of TTAB
proceedings. The Court of Appeals for the Ninth Circuit
addressed similar facts to those before us in V.V.V. & Sons
Edible Oils Ltd. v. Meenakshi Overseas, LLC, 946 F.3d 542
(9th Cir. 2019). There, a common law trademark plaintiff
repeatedly petitioned the TTAB to oppose and then cancel the
registration of what it alleged were invalid marks. Id. at 544.
With no success before the TTAB, the owner then filed a
section 43(a) infringement claim in federal district court, where
the defendant successfully obtained a dismissal on the ground
of claim preclusion. Id. at 545. The Court of Appeals for the
Ninth Circuit held — as do we — that claim preclusion did not
apply, noting that “it would be unfair to preclude [the plaintiff]
from litigating [its] claims and seeking relief when barriers
existed that prevented it from doing so in the first action.” Id.
at 546.

The Court of Appeals for the Second Circuit similarly
recognized that the scope of claims and relief available in the
TTAB limits the claim preclusive effect of that body’s
judgments, noting in Jim Beam Brands Co. v. Beamish &
Crawford Ltd. that “[claim preclusion] would not apply” to a
plaintiff’s claims “[i]f an injunction against trademark
infringement was not available” at the TTAB. 937 F.2d 729,
736 (2d Cir. 1991). Our holding here reaches the same
conclusion and helps to maintain nationwide uniformity in how

13
federal Article III courts treat TTAB judgments. Because the
TTAB’s jurisdictional limits do not allow it to consider the full
range of facts or grant the full range of remedies relevant to
violations of section 43(a), cancellation proceedings before it
do not have claim preclusive effect against section 43(a)
lawsuits in federal district court.6

2.

In reaching this result, we are unpersuaded by Howard’s
argument that Beasley could and should have “pursu[ed] his
actions against Howard in district court in the first instance.”
Howard Br. 42. Howard’s understanding of claim preclusion’s
“could have been raised” requirement, CoreStates Bank, N.A.
v. Huls Am., Inc., 176 F.3d 187, 194 (3d Cir. 1999), would
oblige a plaintiff wishing to avoid claim preclusion not only to
assert every available claim, but also to choose the forum with
the broadest jurisdiction in which to do so.

We disagree with Howard’s argument. Giving TTAB
cancellation proceedings claim preclusive effect against

6
Because we conclude that claim preclusion does not apply,
we need not determine whether Beasley’s section 43(a) claim
fits best as an “infringement of an unregistered mark, passing
off” claim or false association claim under section 43(a)(1)(A),
or false advertising under section 43(a)(1)(B) — and therefore
the extent of any substantive daylight between Beasley’s
TTAB and District Court claims. Beasley Br. 15; cf. V.V.V.,
946 F.3d at 545 (assuming, without deciding, identity of
claims). We acknowledge that the sparseness of Beasley’s
complaint made these issues difficult to untangle, especially
without the benefit of counseled briefing on Beasley’s behalf.

14
district court infringement suits would be inconsistent with the
federal statutory scheme of the Lanham Act and the TTAB’s
role as the principal forum for cancellation actions. See
Restatement (Second) of Judgments § 26 cmts e-f. Assertions
of claim preclusion are “readily denied when the remedies
sought in the second action could not have been sought in the
first action, so long as there was good reason to maintain the
first action in a court or in a form of proceeding that could not
afford full relief.” 18 Charles Alan Wright, Arthur R. Miller,
& Edward H. Cooper, Federal Practice & Procedure § 4412 (3d
ed. 2021); see, e.g., Frazier v. King, 873 F.2d 820, 824 (5th
Cir. 1989) (denying claim preclusion in § 1983 case where
plaintiff had previously pursued state law remedy in
administrative forum of limited jurisdiction to avoid
“encourag[ing] plaintiffs to bypass administrative proceedings
in order to preserve their claims under § 1983”).

Such “good reason” exists here. Inter partes
proceedings before the TTAB provide an expedited vehicle to
protect both the petitioner and the public from an invalid
trademark regardless of how that mark is used, and require
more limited discovery and proof than do suits for
infringement. See 3 J. Thomas McCarthy, McCarthy on
Trademarks and Unfair Competition §§ 20:1, 20:40 (5th ed.
2021) (describing cancellation as a “second backstop” to the
PTO’s ex parte review of trademark applications); see also B
& B, 575 U.S. at 145. If a petitioner forsook any future
infringement claims against the opposing party by pursuing an
opposition or cancellation action before the TTAB, that loss of
rights would “negate and short-circuit the power of the [TTAB]
to consider such cases.” 5 McCarthy, supra, § 30:110; see also
Airs Aromatics, LLC v. Victoria’s Secret Stores Brand Mgmt.,
Inc., 744 F.3d 595, 599 (9th Cir. 2014) (interpreting district

15
court jurisdiction so as to “preserve the use of actions before
the [TTAB] as the primary vehicle for cancellation”).

We thus have made clear that even though a federal
district court “has concurrent power to order cancellation,” “a
petition to the [TTAB] is the primary means of securing a
cancellation.” Ditri v. Coldwell Banker Residential Affiliates,
Inc., 954 F.2d 869, 873 (3d Cir. 1992). To this end, a district
court’s power to grant cancellation to a plaintiff is remedial,
“rather than an independent basis for federal jurisdiction.”
Airs Aromatics, 744 F.3d at 599 (quoting Nike, Inc. v. Already,
LLC, 663 F.3d 89, 98 (2d Cir. 2011)); see also 2 Anne Gilson
Lalonde, Gilson on Trademarks § 4.10[1] (2021) (describing
court power over registration as “a remedial provision”).
Because the Lanham Act’s cancellation provision, section
14(c), does not create an independent basis for a plaintiff to sue
for cancellation in federal district court, see Windsurfing Int’l
Inc. v. AMF Inc., 828 F.2d 755, 758 (Fed. Cir. 1987), a plaintiff
like Beasley could not have selected the District Court as a
forum to raise any invalidity arguments against Howard unless
he could have maintained a trademark infringement claim in
the District Court at the same time.7 Granting claim preclusive

7
We have also been reluctant to apply claim preclusion where
it is not established that the claims in a plaintiff’s second
lawsuit “had accrued . . . or were even justiciable” at the time
of the first. Mullarkey, 536 F.3d at 230. Beasley’s complaint
suggests this possibility insofar as it seeks relief for Howard’s
“lying to audiences” and “send[ing] notice and contact[ing]
other venues not to hire [him]” in the present tense, App. 28,
but is not a model of clarity. Because we decide this appeal on
the basis of claim preclusion’s limitation, we leave it to the

16
effect to TTAB proceedings against subsequent infringement
suits would penalize trademark holders who promptly oppose
or seek to cancel an invalid mark, rather than delay litigation
until that party could assert all possible causes of action in the
District Court. A rule encouraging such delay would moreover
stand in tension with sections 14(1) and 15 of the Lanham Act,
15 U.S.C. §§ 1064(1), 1065, which urge prompt opposition and
cancellation petitions by providing that trademark registrations
over five years old are generally incontestable and cannot be
challenged.

We will not apply claim preclusion in a way that
encourages litigants to sit on their claims and undermines the
Lanham Act’s adjudicative mechanisms. As a result, we reject
Howard’s invitation to force plaintiffs to choose between
expeditiously petitioning the TTAB and vindicating eventual
infringement claims in federal court. We therefore will not
apply claim preclusion to Beasley’s infringement claims here.

C.

Howard raises the specter of “relitigation of claims” that
would “substantially increase the likelihood of inconsistent
decisions[,] . . . undercut reliance on judicial action[,] and stifle
investment in brand promotion.” Howard Br. 42. But the
application of the doctrine of issue preclusion will resolve any
concerns about relitigation and finality here. See V.V.V., 946
F.3d at 546-47 (“To the extent a party before the TTAB
litigates an issue that also arises in infringement proceedings

District Court on remand to make any necessary determination
of when Beasley’s claims accrued.

17
before a federal district court, issue preclusion would bar
relitigation.”).

Federal issue preclusion is a narrower doctrine than
claim preclusion and prevents “a party from relitigating an
issue actually decided in a prior case and necessary to the
judgment.” Lucky Brand Dungarees, 140 S. Ct. at 1594. We
apply issue preclusion from TTAB proceedings to section
43(a) suits where “an issue of fact or law is actually litigated
and determined by a valid and final judgment, and the
determination is essential to the judgment . . . in a subsequent
action between the parties, whether on the same or a different
claim.” B & B, 575 U.S. at 148 (quoting Restatement (Second)
of Judgments § 27); see also Karns v. Shanahan, 879 F.3d 504,
514 n.3 (3d Cir. 2018) (“The elements for [issue preclusion]
are satisfied when: ‘(1) the issue sought to be precluded [is]
the same as that involved in the prior action; (2) that issue [was]
actually litigated; (3) it [was] determined by a final and valid
judgment; and (4) the determination [was] essential to the prior
judgment.’” (quoting Nat’l R.R. Passenger Corp. v. Pa. Pub.
Util. Comm’n, 342 F.3d 242, 252 (3d Cir. 2003))).

Beasley concedes in his briefing that issue preclusion
applies to any fraud claim he asserted below. Beasley wisely
limited his challenge on appeal only to the District Court’s
dismissal of his section 43(a) claim, and we agree that issue
preclusion bars any claim in Beasley’s complaint seeking to
cancel Howard’s trademark on the ground of fraud. As a result,
we will affirm the District Court’s order to the extent it
dismissed any claim that Howard defrauded the PTO.8

8
Issue preclusion accordingly bars any fraud-based attempt at
cancellation that Beasley made before the District Court.

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 We also are unpersuaded by Howard’s argument that
we should affirm the District Court’s judgment on the alternate
ground that his right to use the ’469 mark is incontestable.
Section 15 of the Lanham Act, 15 U.S.C. § 1065, makes clear
that incontestability only applies “except to the extent, if any,
to which the use of a [registered mark] infringes a valid” state
or common law trademark right “continuing from a date prior
to the date of registration.” Hence, “[e]ven if a junior user’s
mark has attained incontestable status, such status does not cut
off the rights of [the] senior user.” Marshak v. Treadwell, 240
F.3d 184, 198 n.10 (3d Cir. 2001). Because Beasley alleges a
common or state law right in the Ebonys name predating
Howard’s registration of the ’469 mark, Howard’s rights are
not incontestable against Beasley’s preexisting rights in the
Ebonys name. Cf. Cuban Cigar Brands N.V. v. Upmann Int’l,
Inc., 457 F. Supp. 1090, 1100 (S.D.N.Y. 1978) (concluding
that infringement defendant could not invoke incontestability
against plaintiff owning senior common law mark), aff’d, 607
F.2d 995 (2d Cir. 1979) (unpublished table decision).
Accordingly, Howard cannot rely on incontestability as a
defense to Beasley’s infringement claim.

IV.

For the foregoing reasons, we will affirm in part the
District Court’s order to the extent it dismisses any claim that

Because Beasley only challenges the District Court’s dismissal
of his infringement claim, we do not consider whether claim
preclusion applies to any right to cancellation of Howard’s
mark that Beasley asserted before the District Court, or to any
other claims his pleadings may allege.

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Howard defrauded the PTO, and will otherwise reverse and
remand the order of the District Court.

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