United States Court of Appeals
for the Federal Circuit
______________________
LEVI STRAUSS & COMPANY,
Appellant,
v.
ABERCROMBIE & FITCH TRADING CO.,
Appellee.
______________________
2012-1495,-1496
______________________
Appeal from the United States Patent and Trademark
Office, Trademark Trial and Appeal Board Nos. 91175601
and 92049913.
______________________
Decided: June 18, 2013
______________________
GREGORY S. GILCHRIST, Kilpatrick Townsend and
Stockton LLP, of San Francisco, California, argued for
appellant. With him on the brief was GIA L. CINCONE.
J. MICHAEL KEYES, K&L Gates LLP, of Spokane,
Washington, argued for appellee. With him on the brief
was WHITNEY J. BARAN. Of counsel was BRYAN J.
SINCLAIR, of Palo Alto, California.
______________________
2 LEVI STRAUSS & CO. v. ABERCROMBIE & FITCH
Before LOURIE, O'MALLEY, and TARANTO, Circuit Judges.
TARANTO, Circuit Judge.
Abercrombie & Fitch Trading Co. created a stitching
design to use on clothing as a brand-identifying trade-
mark. It sought to register the design with the Patent
and Trademark Office for use on a wide range of clothing.
It also began to use the new mark on one line of clothing.
Levi Strauss & Co., which has used a trademark stitching
design on the pockets of its jeans for a hundred years,
challenged Abercrombie’s mark in two forums. It sued
Abercrombie in district court, alleging that the use Aber-
crombie was then making of its new mark infringed and
diluted Levi Strauss’s old stitching-design mark. Levi
Strauss also challenged Abercrombie’s registrations at the
PTO as covering uses likely to cause confusion with and
dilution of Levi Strauss’s mark.
After the district-court litigation ended, the PTO’s
Trademark Trial and Appeal Board dismissed Levi
Strauss’s registration challenges on the ground that the
result of the district-court litigation barred the challenges
in the PTO based on issue preclusion. Levi Strauss now
appeals, and Abercrombie defends the Board’s dismissal
as justified by issue preclusion or, in the alternative, by
claim preclusion. We reverse the dismissal. Ultimately
because the registrations at issue in the PTO cover a
much broader range of uses of the Abercrombie mark than
were the subject of the district-court litigation, the results
of the district-court case do not preclude Levi Strauss’s
challenges in the PTO. We remand for further proceed-
ings.
BACKGROUND
Since 1873, Levi Strauss has stitched the back pocket
of its jeans with two connecting arches that meet in the
center of the pocket. Levi Strauss holds multiple federal-
ly registered trademarks on this “Arcuate” (bow-shaped)
LEVI STRAUSS & CO. v. ABERCROMBIE & FITCH 3
design and has extensively advertised products displaying
the trademark for over a hundred years. Levi Strauss
actively monitors use of competing stitching designs and
enforces its trademark rights against perceived infringers.
In 2005, Abercrombie sought to register a “mirror im-
age stitching design” for use on “[c]lothing, namely, jeans,
skirts, pants and jackets.” U.S. Trademark Application
Serial No. 78766368 (filed Dec. 5, 2005). The registration
stated no other limitations on the goods’ nature, type,
channels of trade, or class of purchasers. Id. Abercrom-
bie subsequently divided the application. One, the par-
ent, covered jackets and sought registration on the
Principal Register; the other, the child, covered the re-
maining categories of clothing and sought registration on
the Supplemental Register. After the parent application
was published for opposition, Levi Strauss initiated
Opposition Proceeding No. 91175601. The child applica-
tion progressed into Supplemental Registration No.
3451669 without opportunity for Levi Strauss’s opposi-
tion. Levi Strauss petitioned to cancel that registration,
leading to Cancellation Proceeding No. 92049913. In both
proceedings, Levi Strauss alleges that registration of
Abercrombie’s mirror-image design should be barred
because the design, in the range of uses covered by the
registration, is likely to cause confusion with and dilute
the Levi Strauss Arcuate mark. See 15 U.S.C. § 1052(d)
(likely confusion), § 1125(c) (dilution).
On July 20, 2007, after learning that Abercrombie
was selling products that used the mirror-image design—
the “Ruehl” line of jeans—Levi Strauss sued Abercrombie
in the Northern District of California. Levi Strauss
alleged, inter alia, that Abercrombie’s use of the mirror-
image design infringed the Levi Strauss Arcuate mark (15
U.S.C. §§ 1114-1117, 1125(a)) and was likely to dilute the
4 LEVI STRAUSS & CO. v. ABERCROMBIE & FITCH
Arcuate mark (15 U.S.C. § 1125(c)). 1 The PTO then
stayed the opposition and cancellation proceedings pend-
ing disposition of the civil action.
The district court held a jury trial in December 2008,
with the jury to render a decision on the infringement
claim and an advisory opinion on the dilution claim (as to
which Levi Strauss sought only injunctive relief). At trial,
a significant aspect of Abercrombie’s defense was that its
Ruehl line of jeans and Levi Strauss products were sold in
such different channels and at such different prices that
the former could not cause the alleged kinds of harm to
the latter. See, e.g., Dec. 22, 2008 Trial Transcript at 613,
Levi Strauss & Co. v. Abercrombie & Fitch Trading Co.,
No. 07-03752 (N.D. Cal. Dec. 22, 2008), ECF No. 350
(“[Y]ou don’t have the same channels. Ruehl jeans are
sold in Ruehl stores. No Levi’s are sold in Ruehl stores.
Levi’s are sold in Kohl’s, Penney’s, Macy’s.”); Dec. 18,
2008 Trial Transcript at 52, Levi Strauss & Co. v. Aber-
crombie & Fitch Trading Co., No. 07-03752 (N.D. Cal.
Dec. 18, 2008), ECF No. 338 (arguing that the prices are
“just different for these types of jeans”).
In December 2008, the jury returned a verdict that
Abercrombie’s Ruehl-line uses of its mirror-image design
did not infringe the Arcuate mark. In April 2009, the
district court, deciding the dilution claim after the jury’s
advisory verdict on that claim, ruled that Levi Strauss
failed to prove dilution by blurring of its Arcuate mark.
On April 22, 2009, the district court entered judgment in
favor of Abercrombie on both claims—which it is useful to
1 The complaint stated separate claims for infringe-
ment and for unfair competition through likely confusion,
15 U.S.C. §§ 1114-1117, 1125(a), but as the case proceed-
ed, the latter two claims were reduced to a single “in-
fringement” claim incorporating a likely-confusion
requirement.
LEVI STRAUSS & CO. v. ABERCROMBIE & FITCH 5
describe as two judgments: the 2009 Judgment on In-
fringement and the 2009 Judgment on Dilution.
Levi Strauss did not appeal the 2009 Judgment on In-
fringement, which therefore became the final judgment on
infringement in the case. Levi Strauss did appeal the
2009 Judgment on Dilution. In 2011, the Ninth Circuit
“reversed” that judgment, and remanded the case. Levi
Strauss & Co. v. Abercrombie & Fitch Trading Co., 633
F.3d 1158, 1175 (9th Cir. 2011). The Ninth Circuit held
that dilution by blurring does not require identity or near
identity of the marks at issue (id. at 1162-73) and that the
district court’s reliance on that erroneous requirement
“affected its dilution determination” and so was not
harmless (id. at 1174).
While the Ninth Circuit appeal was pending, Aber-
crombie announced that it was shutting down the Ruehl
brand and would close the Ruehl retail locations and on-
line operations. About the same time, Abercrombie filed a
new trademark-registration application with the PTO,
which is not part of the present appeal, seeking to register
its mirror-image design on “clothing, namely bottoms,”
and disclosing use of the design on denim shorts sold
under a different Abercrombie brand name, Gilley Hicks.
Abercrombie would sell its Gilley Hicks products at differ-
ent prices, and through different channels, from those it
had adopted for its Ruehl line. For example, whereas
Abercrombie had sold Ruehl jeans at a higher price than
most Levi Strauss products sold for, it sold Gilley Hicks
products at prices much closer to the prices Levi Strauss
set for its main products.
After returning to the district court on the remand re-
garding its dilution claim, Levi Strauss asked Abercrom-
bie to agree to amend the pleadings or to augment the
record (to address the Gilley Hicks line) or to stipulate
that any injunction obtained by Levi Strauss based on the
current record would extend to the Gilley Hicks line; but
6 LEVI STRAUSS & CO. v. ABERCROMBIE & FITCH
Abercrombie refused. When Levi Strauss sought leave to
amend its complaint to include the Gilley Hicks products,
the district court declined, without explanation. Shortly
thereafter, Levi Strauss moved to voluntarily dismiss its
dilution claim under Fed. R. Civ. P. 41(a)(2), and on May
31, 2011, the district court entered judgment against Levi
Strauss dismissing its claim for dilution with prejudice.
The 2011 Judgment on Dilution was the final judgment
on the dilution claim in the case.
Back at the PTO, the opposition and cancellation pro-
ceedings then resumed. Abercrombie filed motions for
summary judgment arguing that claim preclusion and
issue preclusion barred Levi Strauss’s challenges in the
proceedings. The Board ruled that claim preclusion did
not apply because of the “significant differences” between
the “transactional facts required to establish infringement
in a district court, and cancellation of a registration at the
Board.” Levi Strauss & Co. v. Abercrombie & Fitch Trad-
ing Co., Opposition No. 91175601 & Cancellation No.
92049913, slip op. at 10 (TTAB Mar. 29, 2012). Neverthe-
less, the Board granted summary judgment dismissing
both proceedings on the ground of issue preclusion, hold-
ing “that there is no genuine dispute of material fact that
the elements of issue preclusion exist and thus operate to
bar [Levi Strauss’s] dilution and likelihood of confusion
claims” in the opposition and cancellation proceedings.
Id. at 17. Levi Strauss appeals. This court has jurisdic-
tion pursuant to 28 U.S.C. § 1295(a)(4)(B).
DISCUSSION
Neither party identifies a disputed underlying issue of
fact that is material to the preclusion questions present-
ed. Whether preclusion applies to bar a particular action
is an issue of law, which this court decides de novo. See
Foster v. Hallco Mfg. Co., 947 F.2d 469, 475 (Fed. Cir.
1991). We hold that neither issue nor claim preclusion
LEVI STRAUSS & CO. v. ABERCROMBIE & FITCH 7
bars Levi Strauss’s challenges to Abercrombie’s registra-
tions in the PTO.
I
Both doctrines preclude certain attempts at second lit-
igation chances, but only in defined circumstances, re-
flecting the need to avoid depriving litigants of their first
chances. For purposes of this case, we recite only certain
necessary conditions for preclusion. Because we find
certain necessary conditions not to be satisfied, we have
no occasion to address any other matter regarding preclu-
sion law, including what conditions would suffice for
preclusion.
Issue preclusion serves, in certain circumstances, “to
bar the revisiting of ‘issues’ that have been already fully
litigated.” Jet, Inc. v. Sewage Aeration Sys., 223 F.3d
1360, 1366 (Fed. Cir. 2000). We have stated four precon-
ditions for a second suit to be barred by issue preclusion:
(1) identity of the issues in a prior proceeding;
(2) the issues were actually litigated;
(3) the determination of the issues was necessary to
the resulting judgment; and
(4) the party defending against preclusion had a full
and fair opportunity to litigate the issues.
Id. (citing numerous authorities). What is key here is
that, in order for issue preclusion to bar litigation of an
issue raised in a second suit, there must be an earlier
determination of that issue in a first suit and the earlier
determination must have been necessary to the resulting
judgment in that suit.
Claim preclusion does not depend on an earlier court’s
resolution of a particular issue, but prevents a litigant, in
certain circumstances, from pressing issues in a second
suit that it could and should have raised in earlier litiga-
8 LEVI STRAUSS & CO. v. ABERCROMBIE & FITCH
tion even if it did not. Claim preclusion, where it applies,
prevents litigation of “all grounds for, or defenses to,
recovery that were previously available to the parties,
regardless of whether they were asserted or determined in
the prior proceeding.” Brown v. Felsen, 442 U.S. 127, 131
(1979). For that bar to apply, certain essential precondi-
tions must be met, as stated in this formulation: “a judg-
ment on the merits in a prior suit bars a second suit
involving the same parties or their privies based on the
same cause of action.” Parklane Hosiery Co. v. Shore, 439
U.S. 322, 326 n.5 (1979). Explaining that the crucial
“same cause of action” precondition requires the “same set
of transactional facts” in the two suits, we have summa-
rized the overall preconditions: “(1) there is identity of
parties (or their privies); (2) there has been an earlier
final judgment on the merits of a claim; and (3) the second
claim is based on the same set of transactional facts as
the first.” Jet, 223 F.3d at 1362. We have added that “a
common set of transactional facts is to be identified
‘pragmatically.’” Id. at 1363 (quoting Restatement (Sec-
ond) of Judgments § 24(2)).
II
Under those standards, the district court litigation be-
tween Levi Strauss and Abercrombie does not support
either issue or claim preclusion to bar Levi Strauss from
pressing its challenges to Abercrombie’s registrations in
the PTO opposition and cancellation proceedings.
A
To begin with, neither the 2009 Judgment on Dilution
nor the district court’s findings that accompanied the
judgment can support preclusion of either type, because
the 2009 Judgment on Dilution was reversed on appeal.
Dating back at least to Butler v. Eaton, 141 U.S. 240, 242-
44 (1891), a bedrock principle of preclusion law has been
that a reversed judgment cannot support preclusion;
indeed, “a second judgment based upon the preclusive
LEVI STRAUSS & CO. v. ABERCROMBIE & FITCH 9
effects of the first judgment should not stand if the first
judgment is reversed.” 18A Charles A. Wright, et al.,
Federal Practice and Procedure § 4433 (2d ed. 2002)
(footnote omitted); see id. § 4427 at 5 (“Should the judg-
ment be . . . reversed on appeal, however, res judicata [in
the sense covering both preclusion doctrines] falls with
the judgment.”); United States Postal Serv. v. Gregory,
534 U.S. 1, 15-16 (2001) (Ginsburg, J., concurring in the
judgment); In re Hedged-Investments Assocs., 48 F.3d 470,
472-73 (10th Cir. 1995); South Carolina Nat. Bank v.
Atlantic States v. Atlantic States Bankcard Ass’n, 896
F.2d 1421, 1430-31 (4th Cir. 1990); Erebia v. Chrysler
Plastics Prods. Corp., 891 F.2d 1212, 1215 (6th Cir. 1989);
Ornellas v. Oakley, 618 F.2d 1351, 1356 (9th Cir. 1980);
DiGaetano v. Texas Co., 300 F.2d 895, 897 (3d Cir. 1962).
If an initial reliance on preclusion must be reversed once
the underlying judgment is reversed, a court cannot find
preclusion in the first place based on a judgment that has
already been reversed.
That longstanding principle is readily understood in
the doctrinal terms stated above. The 2009 Judgment on
Dilution is not an extant final judgment on the merits, as
required for claim preclusion. And the 2009 district-court
findings are not necessary to a resulting judgment, as
required for issue preclusion, when, as is true in this case,
the only judgment they supported has been reversed.
There are only two extant judgments—the 2011
Judgment on Dilution and the 2009 Judgment on In-
fringement. But neither issue preclusion nor claim pre-
clusion supports dismissal of Levi Strauss’s PTO
challenges based on either of those judgments.
B
As to issue preclusion, the 2011 Judgment on Dilution
was only a voluntary dismissal with prejudice. That
judgment, while constituting an adjudication on the
merits for claim-preclusion purposes, has no issue-
10 LEVI STRAUSS & CO. v. ABERCROMBIE & FITCH
preclusive effect. Being a voluntary dismissal, it did not
depend on the 2009 findings that supported the reversed
2009 Judgment on Dilution; indeed, it did not decide any
specific issue at all. See, e.g., 18A Charles A. Wright et
al., Federal Practice and Procedure § 4435 (2d ed. 2002)
(“A stipulated dismissal with prejudice operates as an
adjudication on the merits for claim-preclusion purposes,
but ordinarily should not of itself count as the actual
adjudication of any issue.”); Amadeo v. Principal Mut. Life
Ins. Co., 290 F.3d 1152, 1159 (9th Cir. 2002) (citing nu-
merous cases for the proposition that a voluntary dismis-
sal does not actually litigate any issue).
The only possible basis for issue preclusion, therefore,
is the 2009 Judgment on Infringement, which did rest on
merits determinations of issues (by the jury). But that
judgment cannot bar Levi Strauss’s challenges in the
opposition and cancellation proceedings under the doc-
trine of issue preclusion. The PTO proceedings involve a
much broader set of issues than were presented to, or
therefore adjudicated in, that court.
In the district court, the issue was whether Aber-
crombie’s marketing of specific Ruehl-line products with
the mirror-image design was likely to cause confusion
with Levi Strauss’s Arcuate mark. That product-specific
focus in infringement litigation is common. See May-
er/Berkshire Corp. v. Berkshire Fashions, Inc., 424 F.3d
1229, 1233 (Fed. Cir. 2005) (“The issue litigated in the
district court action was whether the marketing by Berk-
shire Fashions of specific products with either the
BERKSHIRE mark or the Berkshire Fashions trade name
was likely to cause confusion with Mayer/Berkshire's
registered BERKSHIRE trademarks.”); Jet, 223 F.3d at
1364 (“In the infringement context, the ‘likelihood of
confusion’ is between the plaintiff’s registered mark and
the defendant’s use of words, symbols, etc.”). The only
findings adverse to Levi Strauss that were necessary to
the 2009 Judgment on Infringement (a judgment that
LEVI STRAUSS & CO. v. ABERCROMBIE & FITCH 11
Abercrombie did not infringe) were findings that the
specific Ruehl-line uses—on particular products, which
Abercrombie sold in particular ways at particular prices—
were not infringing.
An opposition or cancellation proceeding “requires
consideration not only of what the applicant has already
marketed or has stated the intention to market, but of all
the items for which registration is sought.” May-
er/Berkshire, 424 F.3d at 1233. Because Abercrombie
seeks to register a broad class of goods—“clothing, name-
ly, jeans, skirts, shorts, pants and jackets”—without
providing further limitations, the scope of the registra-
tions at issue exceeds what the parties litigated in the
district court. See Trademark Manual of Examining
Procedure § 1207.01(a)(iii) (presuming, absent specific
limitations from the applicant, that the “registration
encompasses all goods or services of the type described,
that they move in all normal channels of trade, and that
they are available to all classes of purchasers”). The PTO
proceedings are “based on the content of the registration
application” and not upon any specific use of the chal-
lenged mark in commerce. Mayer/Berkshire, 424 F.3d at
1232; see also 15 U.S.C. §§ 1063-1064 (stating grounds for
opposition and cancellation proceedings, respectively).
The jury’s product-specific answers about the Ruehl line
do not entail negative answers to the broader questions in
the PTO proceedings.
For that reason, this court has rejected issue preclu-
sion in similar circumstances—where infringement litiga-
tion was followed by PTO proceedings involving a
challenge to a registration of broader scope than the
subject of the infringement case. Mayer/Berkshire, 424
F.3d at 1232-34. Because of the difference in scope of the
issues, a difference of Abercrombie’s doing, this pattern
represents no improper second bite at the apple, as Aber-
crombie alleges. Nor was there anything untoward in
Levi Strauss, after securing a stay of the PTO proceedings
12 LEVI STRAUSS & CO. v. ABERCROMBIE & FITCH
to litigate its case against Abercrombie’s Ruehl-line uses,
then restarting the PTO proceedings after losing in dis-
trict court. A Levi Strauss victory in district court on the
Ruehl line of uses would seem to have required rejection
of Abercrombie’s broad registrations, because one signifi-
cant use covered by the registrations would have been
proved likely to confuse (or to dilute Levi Strauss’s mark);
that made it sensible to stay the PTO proceedings until
the district-court case ended. But the loss by Levi Strauss
on its claim of infringement by the Ruehl line does not
exhaust the grounds for challenging the broad registra-
tions, because Levi Strauss may still show that other uses
covered by those registrations (e.g., uses on differently
marketed or priced goods) come within the confusion (or
dilution) standards for rejecting registrations.
Thus, the Board erred in ruling that issue preclusion
barred Levi Strauss’s challenges in the PTO proceedings.
C
Contrary to Abercrombie’s contention, the Board’s
dismissal cannot be affirmed on the alternative ground
that Levi Strauss’s challenges to the registrations are
barred by claim preclusion. That is not for want of either
identity of parties in the two forums or merits judgments
in the district-court case: the 2009 Judgment on In-
fringement and the 2011 Judgment on Dilution are both
judgments on the merits in a case involving the same
parties as the PTO proceedings. Rather, it is because the
PTO and district-court proceedings do not involve the
same transactional facts, pragmatically judged.
As the Board concluded, Abercrombie’s assertion of
claim preclusion based on the infringement claim resolved
by the 2009 Judgment on Infringement is squarely con-
trolled, and defeated, by this court’s decisions in Jet and
Mayer/Berkshire. In both cases, this court addressed
whether a claim for trademark infringement arises from
the same transactional facts as proceedings before the
LEVI STRAUSS & CO. v. ABERCROMBIE & FITCH 13
Board, and in both it held that the “array of differences in
transactional facts conclusively demonstrates that claim
preclusion cannot serve to bar” such proceedings. Jet, 223
F.3d at 1364; see Mayer/Berkshire, 424 F.3d at 1232.
Thus, the 2009 Judgment on Infringement does not give
rise to a claim-preclusion bar on Levi Strauss’s challenges
in the PTO proceedings.
Levi Strauss’s dilution claim, resolved by the 2011
Judgment on Dilution, is not squarely covered by Jet and
Mayer/Berkshire, because those cases did not involve an
earlier dilution claim. But the rationale of the court’s
decisions in those cases extends to this situation. The
2011 Judgment on Dilution is not claim preclusive in the
PTO because the dilution claim in district court, like the
infringement claim, involved a distinctly narrower set of
product-specific transactional facts than those at issue in
the registration proceedings. The logic of Jet and May-
er/Berkshire thus requires rejection of claim preclusion
altogether in this case.
To evaluate a claim for dilution under 15 U.S.C.
§ 1125(c), a court asks if the defendant has “commence[d]
use of a mark or trade name in commerce that is likely to
cause dilution by blurring or dilution by tarnishment” of
the plaintiff’s famous mark. Moreover, “[i]n determining
whether a mark or trade name is likely to cause dilution
by blurring, the court may consider all relevant factors,
including” “[w]hether [the defendant] intended to create
an association with the famous mark” and “[a]ny actual
association between the mark or trade name and the
famous mark.” Id. Under that standard, even if (as we
need not decide) a dilution case brought in district court
might try to cover the same full set of transactional facts
relevant to a registration proceeding, a dilution case need
not be so broad. Levi Strauss’s dilution claim in district
court did not need to involve the full range of uses, pre-
sent or future, covered by Abercrombie’s registration, or to
encompass whether that range of uses is likely to dilute
14 LEVI STRAUSS & CO. v. ABERCROMBIE & FITCH
the Levi Strauss mark (or, for that matter, to cause
confusion).
In fact, all indications are that Levi Strauss’s dilution
claim, like its infringement claim, was understood as
challenging the uses of the stitching design that Aber-
crombie made on Abercrombie’s Ruehl line of clothing, not
the full range of uses Abercrombie’s registration seeks to
cover. The district court, in its instructions on the dilu-
tion claim for which it was seeking an advisory verdict,
told the jury to take into account whether “the Arcuate
trademark and the Ruehl design are used on competing
goods.” Final Jury Instructions at 30, Levi Strauss & Co.
v. Abercrombie & Fitch Trading Co., No. 07-03752 (N.D.
Cal. Dec. 22, 2008), ECF No. 348. As far as the parties
have informed us, all of the evidence was about Aber-
crombie’s use of what it then called its “Ruehl design” on
its Ruehl line of products. Abercrombie’s proposed find-
ings and conclusions reflect that limitation. See Aber-
crombie’s Proposed Findings of Fact & Conclusions of Law
Regarding Trademark Dilution Claim at 2-4, Levi Strauss
& Co. v. Abercrombie & Fitch Trading Co., No. 07-03752
(N.D. Cal. Jan. 9, 2009), ECF No. 358 (describing Aber-
crombie’s Ruehl-line use in detail, including that the
design is limited to only 27 Ruehl stores and its website
and stating that to prevail on its dilution claim Levi
Strauss must demonstrate that “Abercrombie is making
or has made use in commerce of an identical or nearly
identical trademark”). Moreover, when Levi Strauss
asked Abercrombie to agree that any injunction to be
issued if Levi Strauss prevailed on its dilution claim
would extend beyond the Ruehl products, Abercrombie
refused. That refusal seems to be an insistence, and in
any event confirms, that the case was limited to the Ruehl
line, with other possible Abercrombie uses (covered by the
challenged registrations) raising distinct issues.
This understanding of the limited scope of the dilution
claim in the district court litigation reflects the general
LEVI STRAUSS & CO. v. ABERCROMBIE & FITCH 15
reasons that the “pragmatic” approach to the “transac-
tional facts” inquiry should not treat the dilution claim
here as involving the same set of transactional facts as
the full range of facts involved in the PTO proceedings.
Such treatment would effectively require the famous-
mark owner, to avoid the claim-preclusion bar on claim-
splitting, to litigate in the initial dilution case the full
range of existing and even potential but yet-unknown
uses that are pertinent to the PTO inquiry relevant to a
broad registration. That is not pragmatically warranted.
The dilution inquiry involves, at least through the “asso-
ciation” inquiries of 15 U.S.C. § 1125(c), the effect on
consumers’ views that different real-world uses were
intended to have and do have, and the answer to that
inquiry accordingly can change as the uses change. Just
as the “actual confusion” inquiry can change as uses
change, Mayer/Berkshire, 424 F.3d at 1233-34, so can the
dilution inquiry. On both issues, the future can differ
materially from the present. The pragmatic policies of
claim preclusion do not support ignoring such differences.
Nor do they justify inviting a two-stage strategy by a rival
hoping to dilute a famous mark—start with a use that is
hardest to prove dilutive, defeat the famous-mark owner’s
challenge to that use, and then introduce more obviously
dilutive uses of the very same mark with an impunity
given by claim preclusion. For such reasons, the judg-
ment on Levi Strauss’s dilution claim in district court
does not preclude the PTO challenges any more than the
judgment on its infringement claim does.
CONCLUSION
Because the Board erred in ruling that issue preclu-
sion barred Levi Strauss’s challenges in related opposition
and cancellation proceedings, and the result cannot rest
in the alternative on claim preclusion, we reverse and
remand.
Costs.
16 LEVI STRAUSS & CO. v. ABERCROMBIE & FITCH
REVERSED AND REMANDED