The Last Best Beef, LLC v. Jonathan W. Dudas, in his official capacity as Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office, etc.

We are asked in this case to decide the relationship between the
Lanham Act, 15 U.S.C. §§ 1051 et seq. (2000), and Section 206 of the
subsequently enacted Science, State, Justice, Commerce, and Related
Agencies Appropriations Act of 2006 ("§ 206"), which prohibits the
use of federal funds to "register, issue, transfer, or enforce any trademark
of the phrase ‘The Last Best Place.'" The district court deemed
§ 206 "invalid," and thus a legal nullity, on the grounds that it contradicted
but did not constitute an implied repeal or suspension of the
Lanham Act. In essence, the district court held that implied repeals
through appropriations riders, though constitutional, are so disfavored
as to be disallowed. As a result, the district court further declared that
the United States Patent and Trademark Office ("USPTO") had committed
"clear error" by complying with § 206.

However, in this case, it is the district court that erred. Congress
has the power to amend substantive legislation through appropriations
riders if it does so very clearly. It did so here in a duly enacted appropriations
act with clarity and specificity. We cannot strike down such
an act unless unconstitutional. We certainly cannot declare § 206
invalid for contravening a previously enacted piece of legislation.

I.

A Montana writer, William Kittredge, coined the phrase "The Last
Best Place" in 1988 as a title to his anthology of Montana poetry and
prose. Like a fishing line cast a thousand miles out, the phrase became
part of the Montana culture. Local businesses and the Montana state
government used it. But at first, no one trademarked it.

Between 2001 and 2004, Last Best Beef, a Nevada business, filed
eight applications with the USPTO for federal trademark registration
of the phrase "The Last Best Place" in connection with a variety of
different products and services. These included cookware, clothing,
food products, jewelry, home items, and travel, hotel, and restaurant
services.1 All this activity generated considerable opposition within
Montana.

On November 22, 2005, the President signed into law the Science,
State, Justice, Commerce, and Related Agencies Appropriations Act
of 2006. See Pub. L. No. 109-108, 119 Stat. 2290 ("Appropriations
Act"). Section 206 of the Appropriations Act, which applies to the
USPTO, provides: "Notwithstanding any other provision of this Act,
no funds appropriated under this Act shall be used to register, issue,
transfer, or enforce any trademark of the phrase ‘The Last Best
Place.'" Section 206 has been extended through a series of continuing
resolutions, the most recent of which extends the restriction through
November 16, 2007. See H.J. Res. 52, 110th Cong. §§ 101(3), 103-04,
106 (2007).

When the President signed the Appropriations Act into law, Last
Best Beef's eight trademark applications were in various stages of
consideration with the USPTO. First, the USPTO had issued Notices
of Allowances - preliminary approvals of trademark registration,
pending proof of use of the trademark in commerce - for four of the trademark applications, but it had not yet registered those trademarks.
See 15 U.S.C. § 1051(d)(1). Second, oppositions by the State of Montana
to two of the applications - on the grounds that the phrase "The
Last Best Place" is primarily a geographically descriptive term that
identifies the State of Montana and is thus not entitled to registration
under the Lanham Act, see 15 U.S.C. § 1052(e)(2) - were pending
before the Trademark Trial and Applications Board ("TTAB").
Finally, on the same day the President signed § 206 into law, but
before the USPTO became aware of the legislation, the USPTO had
issued certificates of registration for the two remaining trademarks.

Upon learning about § 206, the USPTO in January 2006 (1) cancelled
the four Notices of Allowance, (2) suspended all action pertaining
to the applications covered by the Notices of Allowance, (3) suspended
proceedings regarding the two applications being opposed by
the State of Montana before the TTAB, and (4) cancelled the two registrations
it had issued and returned those applications to pending status.

In February 2006, Last Best Beef filed a complaint in the United
States District Court for the District of Columbia, which later transferred
the case to the Eastern District of Virginia. In addition to several
constitutional claims,2 Last Best Beef contended that § 206
improperly circumvented the Lanham Act, and, therefore, the actions
the USPTO took under § 206 in January of 2006 were unlawful. As
such, Last Best Beef requested an injunction requiring the USPTO to
reinstate the cancelled registrations and Notices of Allowance.

The district court granted summary judgment for Last Best Beef,
declaring that § 206 was "invalid legislation" insofar as it "improperly
circumvent[ed]" the Lanham Act. Specifically, § 1052 of the Lanham
Act ("§ 1052") states that "[n]o trademark . . . shall be refused registration
on the principal register on account of its nature . . . ."
Although § 1052 sets forth a number of exceptions to this rule,3 the district court found that none applied to the phrase "The Last Best
Place." Thus, according to the district court, § 206 "circumvented" the
Lanham Act "by insisting that any trademark for the phrase ‘Last Best
Place' be refused registration."

Specifically, the district court concluded that § 206 did not explicitly
or implicitly suspend provisions of the Lanham Act with respect
to the phrase "Last Best Place." While the district court recognized
that an "irreconcilable conflict between two statutes is sufficient to
express congressional intent to impliedly repeal an earlier statute," the
district court deemed the conflict between § 206 and § 1052 "insufficient
to demonstrate manifest congressional intent to suspend numerous,
interdependent provisions of the Lanham Act with respect to one
phrase . . . ." The district court found § 206 particularly troublesome
because appropriations measures are not the appropriate vehicles "for
the amendment of general laws." In so concluding, the district court
emphasized that it was "not inclined to open the door to a litany of
whimsical exceptions to the Lanham Act like those that riddle the Tax
Code," as doing so would destabilize businesses and "turn the Trademark
Procedures into a statute full of holes and exceptions." According to the district court, since § 206 did not conflict with § 1052
enough to repeal it, but conflicted with it too much to be enforced,
§ 206 must be "invalid."

Finally, the district court stated that nothing in § 206 authorized the
USPTO to cancel pending trademark applications or to suspend either
the Notices of Allowance or the TTAB proceedings, and thus ordered
the USPTO to reinstate the previously issued trademarks, the suspended
Notices of Allowance, and the suspended TTAB proceedings.
Having resolved the case on statutory grounds, the district court found
it unnecessary to reach Last Best Beef's constitutional arguments.

The USPTO now appeals.

II.

Last Best Beef contends, in agreement with the district court, that
§ 206 cannot constitute an implied repeal or suspension4 of § 1052
because § 206 fails to state that it is amending either the Lanham Act
or trademark law, and indeed makes no mention of the Lanham Act
at all. Thus, Last Best Beef contends, § 206 fails the requirement set
forth in Tennessee Valley Authority v. Hill, 437 U.S. 153, 189 (1978)
("TVA"), namely that congressional intent to effectuate an implied
repeal must be unambiguous. Last Best Beef further argues that "appropriations
bills are not appropriate vehicles for the passage or
amendment of substantive law." See Andrus v. Sierra Club, 442 U.S.
347, 361 (1979) ("The distinction [between appropriations and substantive
legislation] is maintained . . . to enable the Appropriations
Committees to concentrate on financial issues and to prevent them
from trespassing on substantive legislation.") (internal quotations
omitted).

In support of these arguments, Last Best Beef relies heavily upon
the Supreme Court's decision in TVA, in which the Court held that the Endangered Species Act ("ESA") prohibited the Tennessee Valley
Authority ("TVA") from putting into operation the Tellico Dam,
despite the fact that Congress had, after the enactment of the ESA,
continued to make appropriations to the TVA, some of which were
earmarked for the Tellico Dam project. 437 U.S. at 153. In so holding,
the Court made clear "that repeals by implication are not
favored," and therefore, "the intention of the legislature to repeal must
be clear and manifest." Id. at 189 (quoting Posadas v. Nat'l City
Bank, 296 U.S. 497, 503 (1936)). Moreover, the doctrine disfavoring
repeals by implication "applies with full vigor when . . . the subsequent
legislation is an appropriations measure." TVA, 437 U.S. at 190
(emphasis in original) (quoting Committee for Nuclear Responsibility
v. Seaborg, 463 F.2d 783, 785 (D.C. Cir. 1971)).

* * *

For the full text of this case, see: http://pacer.ca4.uscourts.gov/opinion.pdf/062219.P.pdf