DRL Enters., Inc. v. N. Atl. Operating Co., 301 F. Supp. 3d 824

Background

DRL Enterprises owns stylized federal registrations for the cigarette paper size marks "1.0," "1.25," and "1.5" (the "Point Marks") and applied to register some in standard character form.
North Atlantic Operating, North Atlantic Trading (NATC), and National Tobacco (Defendants) are longtime competitors and exclusive U.S. distributors of ZIG‑ZAG papers under a long‑term license from French supplier Bolloré.
Defendants used fractional size designations (e.g., 1¼, 1½); DRL sent cease‑and‑desist correspondence in 1997; Defendants assured they would refrain from using decimals but explicitly disclaimed any binding waiver and did not sign DRL’s proposed acknowledgment.
Bolloré previously refused in 2003 to permit NATC to use the decimal designations and in 2011 provided DRL a letter and a signed consent to registration recognizing DRL’s rights and agreeing not to challenge DRL’s registrations.
Defendants’ License Agreement requires Bolloré approval of marketing materials and contains non‑compete/termination provisions, but does not expressly prohibit Defendants from initiating TTAB proceedings or state they cannot use the Point Marks if Bolloré permits or if Bolloré exits the market.
The TTAB cancelled DRL’s stylized registrations and refused two DRL applications as generic; DRL sought district‑court review under 15 U.S.C. § 1071 and moved for summary judgment arguing Defendants lack standing.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Standing to oppose/cancel DRL's marks	Defendants lack a "real interest" because they have no present or realistic prospective right to use the Point Marks.	Competitors have a low standing threshold; as competitors who have sought to use the marks, Defendants have a real interest.	Denied summary judgment — a reasonable jury could find Defendants have standing.
Effect of the License Agreement (Bolloré relationship) on standing	The License Agreement (and Bolloré's past refusals/consent) effectively preclude Defendants from using the Point Marks, so they lack prospective injury.	License requires Bolloré approval but does not bar TTAB challenges; Bolloré might permit use if registrations are cancelled; even contractual promises do not necessarily eliminate standing.	License does not eliminate standing as a matter of law; jury could infer Bolloré would permit use if registrations were cancelled; Duramax‑style authority supports standing despite contractual limits.
1997 correspondence and proposed acknowledgment	Defendants’ prior letters and choice not to sign the acknowledgment show they acknowledged DRL's rights and gave up use, so no standing.	Letters were nonbinding, expressly "without prejudice," and did not create an enforceable waiver of rights.	Court finds letters do not conclusively strip Defendants of standing; reasonable jury could find no binding relinquishment.
Standard of review / evidentiary posture on summary judgment	(DRL seeks judgment that Defendants lack standing as matter of law.)	(Defendants emphasize fact disputes and permissive standing standard.)	Court must defer to TTAB factual findings supported by substantial evidence but reviews legal questions de novo; summary judgment denied because material factual disputes exist on standing.

Key Cases Cited

Board of Regents of Univ. of Wis. Sys. v. Phx. Int'l Software, Inc., 653 F.3d 448 (7th Cir. 2011) (district court in § 21 review both reviews TTAB de novo and may consider new evidence)
CAE, Inc. v. Clean Air Eng'g, Inc., 267 F.3d 660 (7th Cir. 2001) (substantial‑evidence deference to TTAB factual findings under APA)
Coach Servs., Inc. v. Triumph Learning LLC, 668 F.3d 1356 (Fed. Cir. 2012) (opposer must have a "real interest" and reasonable basis to believe it will be damaged)
Celotex Corp. v. Catrett, 477 U.S. 317 (U.S. 1986) (summary judgment burden on movant and standards)
Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (U.S. 1986) (court may not weigh credibility on summary judgment)