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Due process DENIED? Comicsgate trademark trial SUSPENDED after change to federal law and regulations allows Poulter to skip trial.

by 06.02.2022

The Comicsgate trademark trial, Preston Poulter vs. Antonio “Cridious” Malpica and Ethan Van Sciver, has been suspended by the Trademark Trial and Appeal Board (TTAB) at the U.S. Patent and Trademark Office (USPTO) pending a motion by Poulter before USPTO to invalidate the mark, for comic books, via a new ex parte administrative hearing provided for under the Trademark Modernization Act of 2020 and a Nov. 2021 Biden administration regulation.

The new regulation under the law allows for a trial before TTAB to be suspended pending an ex parte reexamination or expungement proceeding. And then it’s up to TTAB to decide how that impacts on the cancellation proceeding. In this case, on March 23, Poulter filed for an invalidation of the Malpica Comicsgate mark via the reexamination proceeding, arguing that Malpica never used the mark because his comic Detective Dead — which raised more than $38,000 in 2018 and 2019 before the campaign was closed — that would have borne the mark was never completed and delivered to customers.

Here’s the problem.

During that time, even though the complete “Detective Dead” book was not physically distributed before an Aug. 2020 legal deadline by which Malpica had to actually use the trademark in commerce as a condition for his registration, Malpica had also opted to license his Comicsgate trademark for comic books to other Comicsgate creators, according to a recent filing by Van Sciver’s attorney, Scott Houtteman before TTAB on April 12.

According to Houtteman, Malpica licensed the Comicsgate trademark for comic books to both Anthony “Dark Gift Comics” Romano for two books, “The Dark of Midnight” and “Wart the Wizard: Sunday Follies,” the latter of which was a part of the original “Wart the Wizard” campaign by Mandy Summers, and to War Campaign for “Vestige #1”, both of which were sold and distributed prior to the Aug. 31, 2020 legal deadline: “Malpica has used the mark: to sell his comic book ‘Detective Dead’ in a crowdfunding drive, in connection with a 29 page, full color Detective Dead preview edition, on the comic book ‘Vestige’ by [Gat] Hanzo and [Donal] Delay, on ‘Wart the Wizzard!’ [sic] by DarkGift Comics and on ‘Dark of Midnight’ also by DarkGift Comics.”

At the time, in 2020, Malpica lacked legal counsel and was acting as pro se — meaning a party in a proceeding or lawsuit is representing himself — while he was still struggling to get his mark registered, which he managed to complete in spring 2020, with the USPTO issuing a full registration in July 2020.

As a result, it appears Malpica’s application before USPTO was never updated with the additional uses from DarkGift and War Campaign in commerce before the agency’s approval in July 2020. And that could become very relevant in the current reexamination proceeding. Why?

On one hand, the regulation states that in a response to a reexamination petition, once a reexamination proceeding has been instituted, amendments to an application are not allowed: “reinsertion of goods and/or services or further amendments that would add to or expand the scope of the goods and/or services shall not be permitted…”

On the other hand, federal trademark law covers all commerce regulable by Congress, and Malpica and Van Sciver are obliged to show all relevant uses in commerce related to the Comicsgate trademark registration. Per USPTO’s May 9 filing instituting the reexamination proceeding against the Malpica mark: “To avoid cancellation of the registration as to the goods and/or services upon which this proceeding was instituted, registrant must timely respond to this Office action and provide documentary evidence of the mark’s use in commerce as of the relevant date on each of the goods and/or services upon which proceedings were instituted… The Trademark Act defines ‘commerce’ as all commerce ‘which may lawfully be regulated by [the U.S.] Congress.’ … The evidence must establish use of the mark for those goods and/or services as of the deadline for filing a statement of use pursuant to Trademark Act Section 1(d), which is August 13, 2020.”

Critically, USPTO also directed Malpica and Van Sciver to “provide other evidence or explanations” of the use of the Malpica Comicsgate mark, particularly if other goods relevant to a registration “are no longer available”: “If specimens that show use of the mark as of the relevant date are no longer available for particular goods and/or services, the registrant may provide other evidence or explanations supported by a verified statement under Rule 2.20 that demonstrate the mark was used in commerce as of the relevant date.”

Meaning, the question that will have to be answered by USPTO during the reexamination is whether it will be able to consider these additional documented uses by Malpica. If, for example, Anthony Romano’s licensed use of the Comicsgate trademark from spring 2020 to present, is allowed to be considered by USPTO as a valid use in commerce, then Malpica and Van Sciver could very well prevail in the reexamination.

If not, however, then the Malpica mark will automatically be cancelled without any trial, raising significant due process concerns under the Fifth Amendment to the Constitution. Why?

The Trademark Modernization Act of 2020, which was not implemented until Nov. 2021 via regulation — after the Malpica trial had already begun — combined with the unique facts of this case appear to have created an ex post facto law situation, simultaneously, potentially preventing Van Sciver from curing the Malpica registration at USPTO because the cancellation proceeding is ongoing and potentially punishing Van Sciver for not curing the registration at USPTO after the trial began, which was impossible prior to the trial because he had not yet acquired the mark from Malpica.

One commenter in the regulation explicitly complained that the change would “undermine” existing trials, like the Poulter vs. Malpica and Van Sciver trial. Per USPTO’s description: “The other commenter disagreed that inter partes proceedings should be suspended during the pendency of ex parte proceedings under any circumstances. The commenter stated further that unless ex parte proceedings are stayed while inter partes proceedings are pending, the ex parte proceedings will have the unintended consequence of undermining inter partes proceedings, because faster resolution of an ex parte proceeding resulting in cancellation of a registration potentially moots or impacts the more robust proceedings in inter partes…”

To which, USPTO replied that expungement and reexamination proceedings would have some “bearing” on a cancellation proceeding, leaving TTAB with the discretion to suspend the trial: “If a cancellation proceeding pending before the TTAB includes nonuse as basis for cancellation, and there is an expungement or reexamination proceeding involving some or all of the goods and/or services in the cancellation proceeding, the outcome of the expungement or reexamination proceeding may have a bearing on the Board proceeding. The expungement or reexamination may result in the cancellation of the registration at issue in the Board proceeding. Therefore, the TTAB may exercise its discretion to suspend [the trial].”

And suspend the trial is exactly what TTAB did. But new punishments are not supposed to apply retroactively, and so there’s a case that the TTAB trial should actually be tried under the old rules, or else Malpica and Van Sciver’s rights would be violated under the U.S. Constitution’s Fifth Amendment and under Article I, Section 9’s prohibition of ex post facto laws.

However, generally, the ex post facto prohibition usually applies to criminal law, and limited cases of civil law where there is punitive outcome. I’d argue having USPTO cancel a trademark is indeed a punitive deprivation of intellectual property that could cost a company millions of dollars in losses.

If so, then the new law and regulation, by forcing the new rules on already ongoing proceedings — the Malpica trial was in the discovery phase when it was suspended — have potentially pulled the rug out from under not only Malpica and Van Sciver, but thousands of other cancellation trials that must provide due process that were ongoing when the changes to the law took effect. Again, there’s an argument that Malpica and Van Sciver should be entitled to a trial under the standards from the pre-Modernization Act, because to do otherwise would expose TTAB’s decision or maybe even the new law itself to being overturned on appeal because the new procedure was being applied too broadly to cases that should have been allowed to run their due course.

USPTO interlocutory attorney Katie Bukrinsky even acknowledged that the reexamination proceeding might result in one potential outcome, and the cancellation trial, if it were allowed to proceed, might result in an entirely different outcome. In Bukrinsky’s order suspending the trial, she ruled, “the reexamination proceeding may have a bearing on this proceeding, such that going forward with the cancellation proceeding prior to termination of the reexamination proceeding would be inefficient and pose a risk of inconsistent judgments.”

The explicit rationale for the change appears to be to expedite cancellation proceedings, with USPTO arguing, “ex parte proceedings generally are less costly and time-consuming, and thus an ex parte proceeding may resolve a nonuse issue more efficiently. Suspending Board proceedings in favor of expungement and reexamination proceedings is consistent with the [Trademark Modernization Act]’s objective to provide a faster and more efficient alternative to address claims of lack of proper use.” In other words, in issuing the regulation, the government cited efficiency as a justification for terminating ongoing trials.

But the Fifth Amendment’s protection of due process is not for the convenience of the government to simultaneously enforce and apply the law efficiently, it is to protect the rights of the individual from being trampled by administrative actions without judicial review and the protections afforded by rules of evidence.

In other words, Poulter might be able get the Malpica Comicsgate mark cancelled via the reexamination proceeding because USPTO might only narrowly consider the use of the mark as it relates to “Detective Dead.” If so, then, again, the Malpica Comicsgate mark would be cancelled without any trial.

On the other hand, Poulter might have lost at the now-suspended cancellation proceeding because, as one commenter argued against the adoption of the regulation, the “inter partes Board proceedings having larger evidentiary records and more thorough fact-finding…” and that evidentiary discovery process would almost certainly would have revealed that Malpica licensed the mark to DarkGift Comics and War Campaign in 2020.

But there is one more critical element that Poulter and his attorney may or may not have considered, and that is a concept called “issue preclusion”. A potential outcome should Malpica and Van Sciver manage to survive the reexamination proceeding is that all non-use claims in the cancellation proceeding could be rendered moot.

Under the regulation, just as the reexamination trumps the cancellation trial on questions of non-use, such that a mark can be cancelled for non-use via the reexamination proceeding. However, if the reexamination finds it was in use, it could impact the trial in Malpica and Van Sciver’s favor — and critically, void the non-use portions of Poulter’s original complaint.

In short, Poulter might be able to win a quick round here via the reexamination proceeding, thereby skipping the entire cancellation trial, which was set to run all the way to 2023, but he is also risking losing his central claim in the trial should the reexamination find in Malpica and Van Sciver’s favor because Poulter opted for a quicker and easier route to cancel the mark via the reexamination.

That is because, under the regulation, Malpica and Van Sciver’s response to the reexamination petition is unrebuttable by Poulter, who opted to use the expedited process instead of the prolonged cancellation trial. That is because of the ex parte nature of the proceeding, plus the regulation explicitly bars Poulter’s further involvement in the reexamination proceeding, stating, “If a proceeding is instituted, the petitioner will not have any further involvement.”

Meaning, Van Sciver’s attorney will certainly have the opportunity to present all of Malpica’s relevant uses of the Comicsgate trademark in commerce, and Poulter will have no ability to challenge them with evidence and testimony, as he would have at the trial. Poulter could have rebutted the DarkGift and War Campaign licensed uses in the petition for reexamination, although it is unclear how aware he was of these potential additional uses at the time of his petition. Either way, if Poulter loses the reexamination proceeding, he might no longer be able to argue about non-use at the cancellation trial.

In short, the reexamination could backfire on Poulter and foreclose any more opportunities to challenge the Malpica mark. It might be that Malpica did just enough with the Comicsgate mark in commerce before he assigned it to Van Sciver in 2021 in order to prevail in these proceedings.

Ultimately, however, even if the Malpica mark gets cancelled right now via the reexamination proceeding, that would expedite these proceedings, leaving Poulter’s own trademark application for Comicsgate as the next in consideration at USPTO. That is when Van Sciver and his attorney will be able to go right back to TTAB to have out the opposition to Preston’s application, arguing that Van Sciver was undisputably the first person to use Comicsgate in commerce in 2018 almost two years before Poulter’s April 2020 application, thereby reducing the long-term legal costs and getting into a proceeding where Van Sciver should have the advantage. Stay tuned.

Robert Romano is the Editor-in-Chief of Comicsgate.org.

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