The U. S. Court of Appeals for the Fourth Circuit reversed a district court decision finding § 206 of the Science, State, Justice, Commerce, and Related Agencies Appropriations Act of 2006 (§ 206) invalid as contravening the Lanham Act. In so holding, the 4th Circuit reasoned that the law was valid and consistent with previous Congressional actions, and held that the U.S. Patent and Trademark Office (USPTO) had correctly complied with § 206 in canceling the applications and registrations of the Nevada-based company, Last Best Beef, for the phrase "The Last Best Place" in connection with a variety of goods and services. Last Best Beef, LLC v. Dudas, Case No. 06-2219 (4th Cir., Oct. 25, 2007) (Wilkinson, J.)
This case stemmed from Last Best Beef’s attempts to federally register the phrase "The Last Best Place" with the USPTO. Between 2001 and 2004, Last Best Beef filed approximately eight applications for "The Last Best Place." In November 2005, the Science, State, Justice, Commerce, and Related Agencies Appropriations Act of 2006 was signed into law. Section 206 prohibits the use of federal funds to "register, issue, transfer, or enforce any trademark of the phrase ‘The Last Best Place.’" When § 206 was signed into law, all eight of Last Best Beef’s trademark applications were in various stages of the examination process with the USPTO. Upon learning about § 206 in January 2006 the USPTO cancelled the four notices of allowance, suspended all action pertaining to the applications covered by the notices of allowance, suspended proceedings regarding the two applications being opposed by the State of Montana before the Trademark Trial and Appeal Board and cancelled the two registrations it had issued and returned those applications to pending status.
Almost immediately, Last Best Beef filed suit, arguing that § 206 improperly "circumvented the Lanham Act" and that, as a result, the USPTO’s actions were unlawful. The district court agreed, granting summary judgment in favor of Last Best Beef and declaring § 206 "invalid legislation." The USPTO appealed.
The Fourth Circuit reversed, finding that "[i]n fashioning § 206, Congress simply set forth an exception to the Lanham Act’s general rule that trademark registration may not be refused on the basis of the nature of the trademark." In support of its decision, the court noted that "Congress has often removed specific trademarks from the general trademark application process," such as "Smokey Bear," "Little League" and trademarks associated with the Girls Scouts of America. The court further stated that to "declare § 206 ‘invalid’ is to adopt a per se rule that Congress cannot amend or suspend prior legislation through appropriations riders." The court declined to take such a step.
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