[00:00:00] Speaker 03:
We have four cases this morning.

[00:00:04] Speaker 03:
The first is number 181672 Swagway LLC versus International Trade Commission, Mr. Sandel.

[00:00:14] Speaker 00:
Good morning and may it please the Court.

[00:00:16] Speaker 00:
My name is Lawrence Sandel on behalf of Appellant Swagway LLC.

[00:00:20] Speaker 00:
With my ten minutes of opening argument time, I first plan to address the Commission's erroneous legal finding of likelihood of confusion.

[00:00:28] Speaker 00:
Then I will address procedural issues regarding the Commission's unexplained denial of Swaguay's pre-hearing consent order motion.

[00:00:35] Speaker 00:
And finally, I will explain the interplay between the Court's prospective ruling on each issue.

[00:00:41] Speaker 00:
The trademark inquiry of this appeal asks this Court to weigh the six factors assessed by the Commission below to arrive at a de novo finding, unlikely to confusion.

[00:00:51] Speaker 00:
Here, all parties seem to agree that the Court should consider the Commission's factual findings regarding six factors.

[00:00:58] Speaker 00:
any one of these factors may control a particular case.

[00:01:01] Speaker 00:
And as I will explain, the actual confusion factor, and to a lesser extent, the relation in use, in manner of marketing factor, should control under the unusual circumstances presented here.

[00:01:14] Speaker 03:
So your argument is they didn't weigh in your favor the lack of evidence of actual confusion, right?

[00:01:24] Speaker 00:
Well, we actually believe that that was weighted in our favor.

[00:01:29] Speaker 00:
It was a little bit, the wording in the commission's decision is a little bit difficult to parse, and it does say, does not weigh for.

[00:01:39] Speaker 00:
But I believe, we believe, given that the, at least the commission on appeal noted that another factor was neutral.

[00:01:48] Speaker 00:
The language that does not weigh for actually suggests against.

[00:01:53] Speaker 00:
But it is part of our argument that that factor should go against and additionally that there should be an adverse inference brought because of the lack of... I'm sorry, I'm confused about what you're saying.

[00:02:07] Speaker 03:
Okay.

[00:02:08] Speaker 03:
The commission concluded that there was no evidence of actual confusion.

[00:02:14] Speaker 00:
Correct.

[00:02:14] Speaker 03:
And is your contention that that factor, instead of

[00:02:22] Speaker 03:
being neutral should avoid in your favor?

[00:02:25] Speaker 03:
Is that what you're saying?

[00:02:26] Speaker 00:
That's correct.

[00:02:26] Speaker 00:
Yeah.

[00:02:28] Speaker 00:
And we believe that it does for several reasons.

[00:02:33] Speaker 00:
One is that there was, in this case, and also as proven by the evidence possessed, there was an opportunity to show actual confusion.

[00:02:41] Speaker 00:
And that actually distinguishes a lot of the cases cited below.

[00:02:45] Speaker 00:
And of course, that was proven that there was no actual confusion in this case.

[00:02:51] Speaker 00:
And additionally, we have this.

[00:02:53] Speaker 03:
I don't know whether it was proven that there was no actual confusion because nobody, either you nor the other side, conducted a survey.

[00:03:03] Speaker 03:
It's just that the evidence that the ALJ relied on wasn't sufficient to show actual confusion.

[00:03:13] Speaker 00:
All right.

[00:03:13] Speaker 00:
Well, I would just say, usually, one point of that is the other side might have conducted a survey.

[00:03:18] Speaker 00:
We're unclear whether or not they did.

[00:03:20] Speaker 00:
It just wasn't submitted.

[00:03:22] Speaker 00:
It wasn't a clear-cut determination there was no actual confusion, but the Commission assessed the evidence presented, and based on the evidence presented from both sides, no actual confusion was found.

[00:03:38] Speaker 03:
And there was... No, I don't think they found no actual confusion.

[00:03:42] Speaker 03:
They found that the evidence wasn't sufficient to show actual confusion.

[00:03:54] Speaker 00:
The evidence that was there did not show actual confusion.

[00:04:02] Speaker 00:
So one thing that was throwing us a little bit about this, and the semantics are there, is that in the commission's appellate brief on pages, I believe, 31 and 32, they do recite that this factor does not weigh towards a likelihood of confusion, and they contrast that with

[00:04:22] Speaker 00:
another issue where they explicitly found it was neutral.

[00:04:26] Speaker 04:
So our contention is that below they found... You don't disagree with that statement.

[00:04:30] Speaker 04:
It certainly doesn't weigh in favor of.

[00:04:32] Speaker 00:
It certainly doesn't weigh in favor of, and I think we can all agree on that.

[00:04:34] Speaker 04:
So where exactly is your argument?

[00:04:37] Speaker 00:
Okay.

[00:04:37] Speaker 00:
So the argument is in several places.

[00:04:39] Speaker 00:
This is one of these cases, one of these unusual cases.

[00:04:42] Speaker 04:
Why is this case unusual?

[00:04:44] Speaker 00:
Well, one thing that makes this case unusual is that the factor for relation in use

[00:04:50] Speaker 00:
and commercial channels, that was found to weigh against the likelihood of confusion.

[00:04:57] Speaker 00:
And in all of the precedents cited against us, where there was no actual confusion and there was no finding whatsoever on actual confusion and it went ahead towards a likelihood of confusion finding, that factor weighed towards likelihood of confusion.

[00:05:14] Speaker 00:
And in particular, the Midwestern case, which is cited in that quote where

[00:05:20] Speaker 00:
It's recited that actual confusion is not necessary.

[00:05:23] Speaker 00:
That panel notes that the marketing channels factor went against the likelihood of confusion.

[00:05:30] Speaker 00:
The other thing that I believe distinguishes this case.

[00:05:32] Speaker 03:
But you don't disagree that actual confusion is not necessary, right?

[00:05:36] Speaker 00:
Yes.

[00:05:36] Speaker 00:
As a general principle, it's not needed.

[00:05:38] Speaker 00:
In cases where there exist opportunities for actual confusion, actual confusion evidence

[00:05:48] Speaker 04:
What does that mean, opportunities for?

[00:05:52] Speaker 00:
So a lot of the cases are including... Every time there's something similar in appearance, there's an opportunity for... Well, I'd say in the Midwestern case, that case dealt with a TTAB, was it appeal from TTAB, and that dealt with an intent to use trademark application.

[00:06:09] Speaker 00:
So that trademark wasn't in use, the new mark was not

[00:06:15] Speaker 00:
in real world use yet.

[00:06:16] Speaker 00:
So there actually was no opportunity for real world confusion.

[00:06:20] Speaker 00:
And indeed, in that case, the factor actual confusion is not mentioned.

[00:06:25] Speaker 04:
What does that teach us about a case like this where you are actually in play in the product?

[00:06:29] Speaker 04:
Is there?

[00:06:30] Speaker 04:
I'm sorry, Your Honor?

[00:06:31] Speaker 04:
What does that case teach us about this circumstance?

[00:06:34] Speaker 00:
Well, I think it's distinguished on this exact circumstance that there, I think what it says is, if there's no opportunity for actual confusion on one hand, and on the other hand,

[00:06:44] Speaker 00:
the marketing channels favor likelihood of confusion, then that's fine that there's no actual confusion and likelihood of confusion can result.

[00:06:53] Speaker 00:
This case is different on both of those counts because one, there was an opportunity to prove actual confusion or firm.

[00:07:01] Speaker 03:
They were both in the market for one year, right?

[00:07:05] Speaker 00:
But over a quarter million of our clients' products were sold in that one year, and the segue

[00:07:13] Speaker 00:
the larger Segway product had been in the market for quite a while.

[00:07:18] Speaker 00:
I really need to emphasize that market factor because although the names were similar and both were loosely related to transportation devices, one of them was extraordinarily more expensive than the other one, the Segway's product, and it was marketed as personal transporters larger to adults, whereas my client's product was marketed

[00:07:43] Speaker 00:
as a toy for parents to buy for their teenagers and for teenagers to buy for themselves.

[00:07:47] Speaker 04:
The price discrepancy is not something that you emphasized or even mentioned in your brief.

[00:07:51] Speaker 04:
I'm sorry?

[00:07:52] Speaker 04:
The price discrepancy is something you didn't put any weight on in your briefs.

[00:07:57] Speaker 00:
It was not emphasized as much.

[00:07:59] Speaker 04:
At all.

[00:08:01] Speaker 04:
I didn't see any strong argument at all in your brief that the price discrepancy alone should be enormously in your favor here.

[00:08:08] Speaker 00:
Well, the price discrepancy falls, as per the Commission's opinion,

[00:08:12] Speaker 00:
under that relation in use and manner of marketing factor.

[00:08:16] Speaker 00:
And that's where I see that falling in.

[00:08:17] Speaker 00:
And that factor we did discuss in our briefs, whether or not we emphasized the price factor enough or at all is a slightly different matter there.

[00:08:27] Speaker 03:
Can we turn to the motion to terminate?

[00:08:30] Speaker 03:
If we were to read the ALJ's footnote about pending motions as denying your motion to terminate and that

[00:08:40] Speaker 03:
There was nothing wrong with addressing the motion in that way.

[00:08:49] Speaker 03:
It seems to me you are still arguing that the motion to terminate had to be addressed before the ALJ went along with the hearing, right?

[00:09:01] Speaker 00:
Not necessarily, Your Honor.

[00:09:03] Speaker 00:
The ALJ certainly would have preferred that the ALJ address it before the hearing and save all those judicial resources.

[00:09:12] Speaker 00:
He was not obligated to address it before the hearing.

[00:09:14] Speaker 03:
Okay.

[00:09:16] Speaker 00:
Our main argument there is that the record is entirely devoid of reasoning.

[00:09:21] Speaker 00:
The ALJ did talk very briefly.

[00:09:24] Speaker 03:
Once the hearing was over with,

[00:09:27] Speaker 03:
Wouldn't it be fair to read the denial of the motion as denying it because it was moot?

[00:09:35] Speaker 00:
Well, I don't think that that is proper, Your Honor, because under the Alliant Tech case, the Commission is required to give an articulated rationale for why it was denied.

[00:09:54] Speaker 00:
And that footnote doesn't even, many of the footnotes, at least the one cited in

[00:09:58] Speaker 00:
The commission's brief and all the footnotes that they cite.

[00:10:01] Speaker 04:
What about the colloquy between the judge and presumably you at the time that he's denying it?

[00:10:06] Speaker 04:
Yeah.

[00:10:07] Speaker 04:
The colloquy... He says, in essence, it's too late.

[00:10:09] Speaker 00:
We're going to go ahead and... Well, in that colloquy, if he denied it there, we'd be in a different situation.

[00:10:13] Speaker 00:
He expressly declined to rule on it in that colloquy.

[00:10:17] Speaker 00:
If you read it again, he specifically says, I'm not ruling on it before the hearing, which means he must rule on it later.

[00:10:24] Speaker 00:
And in such a ruling, he must give some articulated reasoning.

[00:10:28] Speaker 00:
The footnote where he denied it by default, presumably without really any consideration, it didn't even have that superficial recitation of mootness that that default footnote has in many commission opinions.

[00:10:40] Speaker 00:
If it did, we might have a slightly different situation.

[00:10:43] Speaker 00:
The other thing that's missing is an explanation of why the commission and the ALJ chose one side over the other.

[00:10:52] Speaker 03:
And because in fact, why does this matter?

[00:10:54] Speaker 03:
I'm a little puzzled about that.

[00:10:56] Speaker 03:
It didn't seem to me that the relief that was granted, uh, as part of the settlement, it's really any different from the relief that the commission ultimately granted in this respect.

[00:11:09] Speaker 00:
The difference, the difference that we see moving forward is that, um, the interveners have argued that there is rescue to kind of effect from the commission's opinion.

[00:11:20] Speaker 00:
And there is a pending district court case.

[00:11:21] Speaker 04:
What case do they rely on for that argument?

[00:11:24] Speaker 00:
I'm sorry?

[00:11:25] Speaker 04:
Our case law is to the contrary.

[00:11:26] Speaker 04:
What case did they rely on to tell you that it's racially not a fact?

[00:11:31] Speaker 00:
I don't know that offhand.

[00:11:33] Speaker 04:
And I encourage you to- From time immemorial, our case law has been that there is no such argument.

[00:11:38] Speaker 00:
For patent cases, I know.

[00:11:40] Speaker 00:
But I think everyone's in agreement for trademark cases.

[00:11:42] Speaker 00:
I believe the intervenor's argument was that.

[00:11:44] Speaker 00:
They made it below.

[00:11:45] Speaker 00:
And that is our fear.

[00:11:46] Speaker 03:
Why would it be different for patent and trademark cases?

[00:11:50] Speaker 00:
I'd rather not argue that it should be.

[00:11:52] Speaker 00:
We don't believe that it should be.

[00:11:54] Speaker 00:
But this is an argument that we've got.

[00:11:55] Speaker 03:
So if it doesn't have any Clairol-Soppel-Ricciuticata effect, why do you care?

[00:12:01] Speaker 03:
Is there any significance to this?

[00:12:07] Speaker 04:
Why didn't your consent order even promise a more relief?

[00:12:11] Speaker 04:
Didn't you promise to destroy inventory?

[00:12:13] Speaker 04:
No, we were no longer- In your proposed- In the proposed consent order, I'm- I think you were saying you'd destroy inventory.

[00:12:20] Speaker 00:
And I believe, at that point, there wasn't any actually new inventory.

[00:12:24] Speaker 00:
There wasn't inventory there.

[00:12:25] Speaker 00:
The reason that we actually hadn't provided that.

[00:12:27] Speaker 04:
Yeah, but there was a promise if there were inventory there.

[00:12:30] Speaker 00:
I mean, we would be happy to be obligated by the consent order.

[00:12:32] Speaker 04:
I remember that the consent order that the commission put down didn't require any destroying of inventory.

[00:12:37] Speaker 00:
I'm sorry, Your Honor?

[00:12:38] Speaker 04:
The order that the commission put on your back doesn't require any destroying of inventory.

[00:12:44] Speaker 03:
So why do you care?

[00:12:47] Speaker 03:
Assuming that there is no cloud or estoppel effect, why do you care?

[00:12:51] Speaker 03:
What difference does it make?

[00:12:56] Speaker 00:
Off the top of my head, I do not think there's a difference.

[00:12:58] Speaker 00:
But if you'll allow me to end my time now and just think on that one minute during the commission's and the intervener's time, I can give you a final answer on that.

[00:13:07] Speaker 03:
OK.

[00:13:07] Speaker 03:
All right.

[00:13:08] Speaker 03:
Thank you.

[00:13:15] Speaker 03:
Mr. Lieberman?

[00:13:30] Speaker 02:
Good morning.

[00:13:31] Speaker 02:
May I please report Michael Lieberman for the International Trade Commission.

[00:13:36] Speaker 03:
Your jurisdictional argument, I'm just speaking for myself, seems frivolous.

[00:13:42] Speaker 03:
Why is it not frivolous?

[00:13:45] Speaker 03:
I'm sorry.

[00:13:46] Speaker 03:
Your jurisdictional argument, you make a jurisdictional argument, it seems to me it's frivolous that in district court,

[00:13:57] Speaker 03:
interim rulings get included in the final judgment, why wouldn't that be true here too?

[00:14:04] Speaker 02:
Well, we believe that in this case it was the final appealable determination because for several reasons.

[00:14:11] Speaker 02:
One, the denial of the appellant's motion wasn't done on the merits and

[00:14:23] Speaker 02:
to be appealable, the final decision should be an administrative, final administrative decision to exclude or to refuse to exclude articles under 337 specified sections.

[00:14:43] Speaker 04:
There's jurisdiction over the, they are appealing the exclusion order, right?

[00:14:48] Speaker 04:
Well, they're appealing... They're challenging the exclusion order.

[00:14:51] Speaker 02:
That's part of the appeal, so we...

[00:14:55] Speaker 04:
They're saying we don't like this exclusion order for two reasons.

[00:14:58] Speaker 04:
First, you made a mistake on likelihood of confusion.

[00:15:01] Speaker 04:
And second, you entered the wrong exclusion order.

[00:15:05] Speaker 04:
You entered the wrong exclusion order.

[00:15:06] Speaker 04:
You should have entered the consent order.

[00:15:08] Speaker 04:
It's just an argument against the final order that the commission handed down for which there's clearly jurisdiction.

[00:15:19] Speaker 04:
I had the same reaction to your exception argument that the presiding judge had.

[00:15:25] Speaker 04:
Their challenge on the consent order is just another argument for upsetting the final order.

[00:15:34] Speaker 02:
Isn't it?

[00:15:35] Speaker 04:
Yes or no?

[00:15:37] Speaker 02:
We didn't perceive it like that.

[00:15:39] Speaker 04:
I understand you didn't, but now you have an opportunity to see a little light.

[00:15:45] Speaker 04:
Isn't their challenge to the consent order just another ground for upsetting the final order?

[00:15:51] Speaker 02:
Well, we believe it wasn't done exactly like that.

[00:15:54] Speaker 02:
They, what they were arguing is that... Well, number one, we believe that the challenge to the jurisdiction is only with respect to the first portion of the argument, the one that relates to the denial of the consent order.

[00:16:09] Speaker 02:
As for the challenge in the merits of the exclusion, we don't dispute that they have jurisdiction.

[00:16:14] Speaker 02:
That's number one.

[00:16:15] Speaker 02:
Number two, the way how they argue their case is a little bit different.

[00:16:19] Speaker 02:
They want first to address the issues.

[00:16:21] Speaker 04:
Is there a jurisdictional restriction on the kind of arguments you can make to challenge a final order?

[00:16:28] Speaker 02:
They can do that.

[00:16:29] Speaker 02:
But the way how they do it is like this.

[00:16:32] Speaker 02:
They want first to address the issues relating to the denial of the motion for consent order.

[00:16:39] Speaker 02:
Before reaching the exclusion order, before reaching the merits of the final termination, they want

[00:16:45] Speaker 02:
to address this issue, and then, just based on that, to decide the case, to send this case back to the commission, at least, and to avoid even dealing with the merits.

[00:16:58] Speaker 02:
It's unlike the oral argument.

[00:17:00] Speaker 02:
The oral argument is completely different from the brief.

[00:17:03] Speaker 02:
And so if we follow the brief, that's our reasonable, natural reaction to the brief.

[00:17:08] Speaker 04:
I'm assuming, for purposes of argument, that your jurisdictional argument was rejected by this court.

[00:17:15] Speaker 04:
What rationale did the Commission use to deny the request for the consent?

[00:17:22] Speaker 02:
Well, the rationale was that the judge... Well, there were several considerations.

[00:17:30] Speaker 02:
One consideration was that the judge did not abuse his discretion by doing that.

[00:17:36] Speaker 03:
Commission rules specifically... He did not abuse his discretion by doing what?

[00:17:42] Speaker 02:
By denying this motion.

[00:17:46] Speaker 02:
at the stage of final determination.

[00:17:48] Speaker 02:
The commission rule expressly provides to 10 to 21.

[00:17:52] Speaker 04:
Let's get exact about when and where was the consent order request denied?

[00:17:58] Speaker 02:
Well, it was denied in the footnote, along with other pending motions as moot.

[00:18:05] Speaker 04:
Was it denied in the colloquy that took place before the judge?

[00:18:09] Speaker 02:
No.

[00:18:09] Speaker 02:
In the colloquy, it wasn't denied.

[00:18:11] Speaker 02:
In the colloquy, during the pre-hearing conference, the judge explained.

[00:18:16] Speaker 02:
that based on the essentially it was filed.

[00:18:20] Speaker 02:
The last version, there were three versions filed.

[00:18:22] Speaker 02:
It was kind of a massive filing.

[00:18:23] Speaker 02:
So the last version was filed essentially right before the hearing.

[00:18:27] Speaker 02:
The briefing on this last version was completed just a week before the hearing.

[00:18:33] Speaker 02:
So the judge said, you know, the ruling is not going to come before the end of the hearing.

[00:18:39] Speaker 03:
Why didn't he rule on the motion?

[00:18:41] Speaker 03:
I mean, you know, he could say it comes too late.

[00:18:43] Speaker 03:
That might be it.

[00:18:44] Speaker 03:
No, it wasn't too late.

[00:18:46] Speaker 03:
That might be a legitimate gram, but just to not act on it at all seems to me rather odd.

[00:18:53] Speaker 03:
Certainly in district court, if there's a settlement or a proposed settlement of part of the case, the court acts on it.

[00:19:01] Speaker 03:
You don't postpone it until the case is over with.

[00:19:05] Speaker 02:
It was filed close to the

[00:19:07] Speaker 02:
hearing.

[00:19:08] Speaker 02:
So to rule before the end of the hearing, he explained he's not going to rule.

[00:19:12] Speaker 03:
Why is that a problem?

[00:19:13] Speaker 02:
Because then the Commission has 30 days to decide whether it's a final determination.

[00:19:18] Speaker 02:
Also, complainants... The Commission has 30 days to do what?

[00:19:21] Speaker 02:
The Commission has 30 days to decide whether to review this ID.

[00:19:27] Speaker 02:
If he granted this motion by the ID, the Commission has 30 days to decide whether to review it.

[00:19:33] Speaker 02:
That would

[00:19:33] Speaker 02:
that would bring this decision after the end of the hearing.

[00:19:37] Speaker 02:
In addition, complainants oppose this motion before the judge.

[00:19:41] Speaker 02:
Therefore, it was likely that they would file petitions for review, and that would delay things even further.

[00:19:46] Speaker 04:
The ALJ has the authority to act on that motion at any time, right?

[00:19:54] Speaker 04:
That's true.

[00:19:54] Speaker 04:
And so he could act on it before the hearing began.

[00:19:57] Speaker 04:
He could act on it during the hearing.

[00:19:59] Speaker 04:
And after the hearing, he could say, I've had a hearing, but I'm still going to grant the motion.

[00:20:03] Speaker 02:
That's true.

[00:20:04] Speaker 02:
But Commission Rule 21021 expressed.

[00:20:06] Speaker 04:
So where do the 30 days cut in?

[00:20:09] Speaker 02:
Well, 30 days come by the rules when he makes a decision.

[00:20:12] Speaker 04:
What decision does he make that triggers the 30 days?

[00:20:16] Speaker 02:
Granting the motion by the ID will

[00:20:18] Speaker 04:
If he grants the motion, he has to grant an ID.

[00:20:23] Speaker 02:
He issues an ID.

[00:20:26] Speaker 04:
Is it just a separate ID?

[00:20:31] Speaker 04:
Let's assume that he decided to grant the request at one of those points in time you were talking about.

[00:20:38] Speaker 04:
He grants it in the form of an ID, right?

[00:20:41] Speaker 04:
Right.

[00:20:41] Speaker 04:
And then there are 30 days the Commission has to act on it.

[00:20:45] Speaker 04:
So now, what does that have to do with what we're talking about here today?

[00:20:49] Speaker 02:
If it's done before the hearing, the hearing takes place for a week.

[00:20:53] Speaker 04:
So that brings the... No, if he does it before the hearing... Right.

[00:20:56] Speaker 02:
It was done a week before the hearing.

[00:20:58] Speaker 04:
Don't you think an ALJ who entered a consent order before the hearing, he would enter it and then he'd wait 30 days to see if it stuck?

[00:21:06] Speaker 02:
No, he has a hearing coming immediately.

[00:21:08] Speaker 02:
He rules on the motion.

[00:21:10] Speaker 02:
Then in 30 days after the hearing, the commission decides whether to reverse or to inform the judge.

[00:21:16] Speaker 04:
Well, what does that have to do with any?

[00:21:18] Speaker 02:
I'm confused.

[00:21:19] Speaker 02:
Because that affects the scope of the hearing.

[00:21:21] Speaker 02:
He has either to carve out the issues that he grant consent or... Well, we don't know what happened here, sir.

[00:21:28] Speaker 02:
We don't know.

[00:21:29] Speaker 04:
Does anybody understand this 30-day argument?

[00:21:35] Speaker 02:
The 30-day is the time that the Commission has to decide whether to affirm or to reverse his ID.

[00:21:43] Speaker 04:
But there was never an ID in this case on the Consentor.

[00:21:47] Speaker 02:
Right.

[00:21:48] Speaker 02:
That's one of the considerations that he took into account.

[00:21:52] Speaker 02:
The commission rule permits him to proceed with the hearing if expressly states that the filing of this motion does not state the proceeding.

[00:22:02] Speaker 03:
He could say, well, it's too late.

[00:22:05] Speaker 03:
Even if I grant this.

[00:22:08] Speaker 02:
That's exactly what he did.

[00:22:09] Speaker 02:
He said that the filing was close to the hearing.

[00:22:13] Speaker 02:
It's not going to be before the hearing.

[00:22:15] Speaker 04:
You never answered my question.

[00:22:16] Speaker 04:
What was the rationale?

[00:22:18] Speaker 02:
For what?

[00:22:19] Speaker 04:
For denying it.

[00:22:21] Speaker 02:
He did deny it.

[00:22:22] Speaker 02:
He did deny it at that point.

[00:22:23] Speaker 02:
He denied it later.

[00:22:24] Speaker 04:
In the footnote.

[00:22:25] Speaker 02:
Oh, because it was rendered moot.

[00:22:28] Speaker 04:
Was the request for a consent order denied, yes or no?

[00:22:33] Speaker 02:
It was.

[00:22:33] Speaker 02:
It was.

[00:22:34] Speaker 04:
OK, so all I want to know is, what was the rationale for the denial?

[00:22:38] Speaker 02:
The rationale, he made a decision based on the merits in the final termination.

[00:22:43] Speaker 02:
As a result, that mooted this motion, and that's why he denied it.

[00:22:47] Speaker 04:
Where did he say that?

[00:22:48] Speaker 04:
Where was that articulated?

[00:22:49] Speaker 02:
It was clear from the context.

[00:22:53] Speaker 02:
At that point, all that he said, all the motions that were pending.

[00:22:59] Speaker 04:
Even though he has the power to grant the request after the hearing is over, why does the conclusion of the hearing moot the

[00:23:13] Speaker 02:
The conclusion of the hearing did move the request.

[00:23:16] Speaker 02:
He proceeded based on the rules.

[00:23:18] Speaker 02:
The rules permit him to proceed to the final determination without ruling on the motion.

[00:23:23] Speaker 02:
That was expressly permitted by the rule.

[00:23:26] Speaker 02:
Rule 21021 allows him to go to the stand.

[00:23:30] Speaker 04:
Is there a rule that says he cannot grant the consent after the final ID?

[00:23:34] Speaker 02:
The rule says that he can proceed with the hearing irrespective of filing this

[00:23:41] Speaker 02:
this motion, it doesn't automatically state the proceeding.

[00:23:44] Speaker 02:
He can reach the stage of final determination.

[00:23:47] Speaker 02:
At that stage, he makes the decision based on the merits that moves this motion.

[00:23:53] Speaker 02:
And as a result, he says that this motion, along with other motions... Are the motions in his mind?

[00:23:59] Speaker 04:
I'm sorry?

[00:23:59] Speaker 04:
It moots the request in the mind of the AOJ?

[00:24:03] Speaker 02:
Well, his decision should be conceded in light in the context when it was made.

[00:24:08] Speaker 02:
That's a common practice of tribunals.

[00:24:10] Speaker 02:
When the tribunal reaches the final determination stage, and there are pending motions that are getting mooted by the final determination, they can be denied as moot.

[00:24:23] Speaker 02:
And that's what she did.

[00:24:24] Speaker 03:
Why does it matter?

[00:24:26] Speaker 03:
Why does anybody care?

[00:24:27] Speaker 03:
I mean, the relief that was granted in the motion to terminate and the relief that was granted as part of the final decision are essentially the same.

[00:24:37] Speaker 03:
Why does the Greek hear it?

[00:24:39] Speaker 02:
Well, Appellant cares because they claim that it will have an effect, you know, is it like preclusive effect in the district.

[00:24:46] Speaker 04:
Do you think it has a preclusive effect?

[00:24:48] Speaker 02:
We did make this evaluation.

[00:24:50] Speaker 02:
It wasn't before us.

[00:24:53] Speaker 02:
It's, they actually they claim they don't believe, but interveners claim that that will have reclusive effect.

[00:25:00] Speaker 02:
But we never considered that as one of the factors.

[00:25:04] Speaker 02:
So talking about, so that was the reason why he denied it.

[00:25:09] Speaker 02:
And by the way, he has discretion to manage.

[00:25:12] Speaker 03:
Well, it may be moot.

[00:25:13] Speaker 03:
This whole issue may be moot before us, because it doesn't make any difference.

[00:25:17] Speaker 03:
It has no consequence.

[00:25:18] Speaker 02:
From our standpoint, it does make much difference at all.

[00:25:21] Speaker 02:
Now, talking about, if I may touch upon the merits of the trademark infringement in addition to this issue, essentially to clarify that the commission found that only one factor weighs against the likelihood of confusion.

[00:25:37] Speaker 02:
And that's the factor which is called relation and marketing.

[00:25:42] Speaker 02:
That's expressed language.

[00:25:44] Speaker 02:
With respect to other five factors, there was no such determination.

[00:25:48] Speaker 02:
In fact, the commission found that two factors

[00:25:50] Speaker 02:
Similarity of the marks and the strength of the senior mark, which are dispositive critical factors on this record, they weigh heavily in favor of life equal to confusion.

[00:26:01] Speaker 02:
And under these courts and commissions precedent, these two factors, when they're present, they're dispositive factors.

[00:26:08] Speaker 02:
Actually, this court held that the strength of senior mark plays a dominant role in deciding this case.

[00:26:20] Speaker 02:
The commission found, and it's not even disputed by the appellant, that these two marks were essentially virtually similar.

[00:26:29] Speaker 02:
And based on this record, there are actually, the appellant fails to show, to point to a single case where these two factors are present, and yet the likelihood of confusion is not established.

[00:26:43] Speaker 02:
We also were unable to find a single case.

[00:26:45] Speaker 03:
I think we're out of time.

[00:26:46] Speaker 03:
That's right.

[00:26:47] Speaker 03:
We're out of time.

[00:26:47] Speaker 03:
OK, thank you.

[00:26:48] Speaker 03:
Thank you.

[00:27:00] Speaker 01:
Good morning, Your Honors.

[00:27:02] Speaker 03:
So why does it make a difference whether they granted the motion to terminate, or didn't grant it, or failed to grant it?

[00:27:12] Speaker 03:
Who cares?

[00:27:15] Speaker 01:
So the issue that matters specifically to the parties is the issue of race judicata.

[00:27:20] Speaker 03:
Well, so our cases say there's no race judicata, no plot or estoppel effect.

[00:27:25] Speaker 01:
I believe that's what the patent cases say.

[00:27:26] Speaker 01:
I have to tell you,

[00:27:27] Speaker 01:
This is not the issue that I was prepared to argue in front of you.

[00:27:31] Speaker 01:
I didn't brief the issue of Arrest Judicata below for my client, but my client's position is that there is Arrest Judicata fact.

[00:27:37] Speaker 01:
Why would there be a difference between trademark and patent?

[00:27:42] Speaker 01:
Standing here right now, I can't give you an answer to that.

[00:27:44] Speaker 01:
But what I can tell you is that it's not moot here, even if you all believe that there is no difference and there will not be Arrest Judicata fact to upholding the ITC's decision.

[00:27:55] Speaker 01:
It's still not moot here because

[00:27:57] Speaker 01:
As I believe Judge Clevenger pointed out, the orders are different.

[00:28:00] Speaker 01:
And this court has to decide which order to enter.

[00:28:02] Speaker 01:
And so it's not moot at this point, even if it isn't going to have a practical effect in your opinion.

[00:28:08] Speaker 04:
Why?

[00:28:09] Speaker 03:
I mean, the settlement order is less favorable to you than the final order.

[00:28:17] Speaker 01:
That's correct.

[00:28:19] Speaker 01:
That's correct.

[00:28:20] Speaker 01:
With the exception of this res judicata issue, which my client believes is very important.

[00:28:25] Speaker 01:
And which, obviously, Swigway believes is very important as well.

[00:28:31] Speaker 01:
We'll see what happens, right?

[00:28:32] Speaker 01:
So certainly, I believe that there is strong evidence, for example, of actual confusion.

[00:28:36] Speaker 01:
And then in district court, we would be able to prove actual confusion, et cetera, et cetera.

[00:28:39] Speaker 01:
So it's hard to predict exactly how this will happen in the future.

[00:28:42] Speaker 01:
But I do believe that this, even if it doesn't seem like it has much impact, that that's the reason the parties care.

[00:28:50] Speaker 01:
It's about that argument.

[00:28:52] Speaker 01:
I want to set a little bit of context here, because I think it goes to both points.

[00:28:57] Speaker 01:
In December of 2015, Swagway received a cease and desist letter from Segway.

[00:29:02] Speaker 01:
Within a month, they had created the Swagtron brand and begun branding products.

[00:29:08] Speaker 01:
By the time this investigation began in June of 2016, they were selling with the Swagtron brand, and they had moved away from the Swagway brand.

[00:29:20] Speaker 01:
Nine months later, on the eve of trials, when we first get this consent order,

[00:29:25] Speaker 01:
nine months after they've been using the swag after the investigation began and they've switched to the Swagtron brand.

[00:29:31] Speaker 01:
There has never been any explanation, never, not below, not in the briefs, for why there was this delay.

[00:29:39] Speaker 01:
They were able to quickly switch over to using Swagtron and away from Swagway, but they've never said why they waited all this time.

[00:29:45] Speaker 04:
Is there some rule that someone is challenged if they're going to bring it to the center or they have to run in and bring it the minute they get charged?

[00:29:51] Speaker 01:
Absolutely not.

[00:29:52] Speaker 04:
There's no rule.

[00:29:53] Speaker 04:
What's wrong with the delay?

[00:29:55] Speaker 01:
What the rule says is that there needs to be good cause for the ALJ to consider the matter during or after the hearing.

[00:30:03] Speaker 01:
So they complied with the rule, which requires the motion to be brought prior to the hearing.

[00:30:07] Speaker 01:
That's what the rule says.

[00:30:08] Speaker 01:
But it also says that if you're going to consider it during or after, there has to be good cause.

[00:30:15] Speaker 01:
It doesn't explain what that good cause is.

[00:30:17] Speaker 01:
There has to be good cause for a settlement?

[00:30:20] Speaker 01:
This is not a settlement.

[00:30:22] Speaker 01:
is a voluntary, there was never a settlement.

[00:30:25] Speaker 01:
Well, you didn't agree to it.

[00:30:27] Speaker 01:
Exactly, exactly.

[00:30:28] Speaker 01:
They came in and said, we will not use swag way going forward, and we'll destroy our inventory, et cetera, et cetera, everything they said in the consent order.

[00:30:37] Speaker 01:
They came in, but they do have to show good cause.

[00:30:39] Speaker 01:
And ordinarily, when you have to show good cause, that includes explaining why you brought the motion out, why it should be considered during or after the hearing.

[00:30:48] Speaker 01:
And they haven't done that at any point.

[00:30:53] Speaker 04:
I also think that this circumstance goes to... Are you telling us that's the rationale for having denied the request?

[00:31:02] Speaker 01:
I think it's apparent from the circumstances that that is the rationale.

[00:31:05] Speaker 01:
I think the judge should have said... We're supposed to make that up.

[00:31:08] Speaker 01:
Sorry?

[00:31:08] Speaker 04:
We're supposed to just assume that that's what happened.

[00:31:12] Speaker 01:
No, Your Honor.

[00:31:12] Speaker 01:
I think it's like... Think about a hearsay objection.

[00:31:16] Speaker 01:
So if there's a hearsay objection made during a trial, and the judge denies the hearsay objection, and then the hearsay

[00:31:24] Speaker 01:
That denial is brought to you.

[00:31:26] Speaker 01:
There doesn't have to be an explanation on the record from the judge why he denies every hearsay objection.

[00:31:31] Speaker 01:
It can still be briefed because it's apparent from the context what occurred, and it's apparent from the context what the basis of his ruling was.

[00:31:39] Speaker 01:
I'd submit that the same thing is true here.

[00:31:41] Speaker 01:
He explained on the record that because the motion came so late that he was going to have to conduct a hearing regardless of what he did on the motion.

[00:31:52] Speaker 01:
I can see that's not a full statement of, and therefore you don't have the good cause for your motion.

[00:31:58] Speaker 01:
He didn't say that part.

[00:31:59] Speaker 01:
But I think it's apparent from the rule, which requires good cause to consider it during or after the hearing, and from the circumstances here, which include this nine month delay when they knew all along, knew full well that they weren't using this brand.

[00:32:13] Speaker 01:
I think it's apparent from the circumstances that that was the basis for his decision.

[00:32:20] Speaker 01:
And then briefly on the trademark, on the trademark issue, I'd call your attention particularly to the hand beauty case that we cited in our briefs.

[00:32:29] Speaker 04:
How broad is the discretion of an ALJ to grant or deny a consent order?

[00:32:36] Speaker 01:
I think the ALJ has complete discretion to... Is it unfettered?

[00:32:42] Speaker 01:
I wouldn't say unfettered because he has to follow the rules that are set forth

[00:32:46] Speaker 01:
in 2010-21.

[00:32:47] Speaker 04:
Has the commission ever reversed an ALJ's decision to deny a consent order?

[00:32:55] Speaker 01:
Not to my knowledge.

[00:33:00] Speaker 04:
If the discretion is entirely unfettered, why does the ALJ have to give a reason?

[00:33:08] Speaker 01:
I would think that just comes from the standard principles of the Administrative Procedures Act.

[00:33:12] Speaker 01:
that normally when you issue any decision, that decision affects the ultimate outcome.

[00:33:16] Speaker 04:
Isn't that because there's no such thing as unfettered discretion, typically?

[00:33:24] Speaker 04:
We review for abuse of discretion?

[00:33:26] Speaker 01:
Correct, abuse of discretion.

[00:33:28] Speaker 04:
If there's no, if your discretion is unfettered, how can there be an abuse?

[00:33:34] Speaker 01:
That's fair.

[00:33:35] Speaker 01:
I mean, I think what's tricky is the rules lay out a number of reasons, but they don't

[00:33:41] Speaker 01:
Other than saying that there must be good cause to consider this during or after the hearing, they don't provide specific reasons that would be used to deny it.

[00:33:50] Speaker 01:
So for example, there's many provisions that must be complied with.

[00:33:55] Speaker 01:
And typically, when these are denied, it's because one of those is not complied with.

[00:33:59] Speaker 01:
But you also don't typically have the situation where it's the eve of hearing and the motion comes so late that it can't moot any part of the hearing.

[00:34:08] Speaker 01:
It can't prevent the hearing from going forward.

[00:34:11] Speaker 01:
Normally, this is very simple, right?

[00:34:12] Speaker 01:
It makes the hearing simpler.

[00:34:14] Speaker 01:
It makes there less to be argued about at the hearing.

[00:34:16] Speaker 01:
It shortens things up.

[00:34:16] Speaker 01:
It saves resources.

[00:34:18] Speaker 01:
But that's not what happened here.

[00:34:19] Speaker 03:
OK, Mr. Brown, thank you.

[00:34:24] Speaker 00:
Mr. Sandell?

[00:34:28] Speaker 00:
As promised, if this court is able to state that there is no rest judicata effect, it is our position that this case is moot.

[00:34:41] Speaker 00:
uh... we will note that uh... at least below since there's a lot of issues sorry the case is moving on the the the issues appeal not not the case is moving the whole issues just this one issue well certainly we do not we do not agree with the uh... trademark ruling and it may be cited as persuasive authority even arrested a kind of fact what you're what you're saying is that there's no reason that you withdraw that portion of your appeal that challenges

[00:35:10] Speaker 04:
denial of the consent order.

[00:35:13] Speaker 00:
Yeah, if there's no res judicata effect, that part is not in the field.

[00:35:17] Speaker 04:
So it's just purely a trademark likelihood of confusion challenge against a final order that was entered.

[00:35:24] Speaker 00:
And it would go a long way to perhaps noting in the opinion that there is no res judicata effect toward what the commission had decided there.

[00:35:31] Speaker 00:
But of course, if this case court rules on it, then it will be extraordinarily persuasive on that issue.

[00:35:37] Speaker 00:
But it's no longer obligated to do so.

[00:35:42] Speaker 00:
I'd also like to note that in this case, there are very unusual circumstances that evidence of actual confusion will surface if the marks at issue were really confusingly similar, which powerfully counsels that the actual confusion factor, even if it's neutral, should be given great weight.

[00:36:02] Speaker 00:
Because the interviewers here hired a survey research expert, and presumably to conduct a survey, to this day, they have not produced the survey, and to this day,

[00:36:12] Speaker 00:
the interrears had not denied that a survey was in fact conducted.

[00:36:17] Speaker 00:
And this, especially when considered in light of the deficiencies of the other evidence that the commission discussed in its opinion, is far more than just a mere failure to offer survey evidence.

[00:36:30] Speaker 00:
So on these facts, it is reasonable to infer that a survey was generated and that the undisclosed survey

[00:36:39] Speaker 03:
actually indicated a lack of actual confusion.