Residential Energy Services Network, Inc. v. Building Science Institute, Ltd. Co., et al.

1                     UNITED STATES DISTRICT COURT                           
2                   SOUTHERN DISTRICT OF CALIFORNIA                          
3  RESIDENTIAL ENERGY SERVICES          Case No.: 22-cv-1641-AGS-MSB         
   NETWORK, INC.,                                                            
4                                                                            
                                       ORDER DENYING                         
                              Plaintiff,                                     
5                                      RECONSIDERATION (ECF 81)              
   v.                                                                        
6                                                                            

   BUILDING SCIENCE INSTITUTE,                                               
7                                                                            
   LTD. CO., et al.,                                                         
8                                                                            
                           Defendants.                                       
9                                                                            
        This Court preliminarily enjoined defendant Building Science Institute, Ltd. Co. 
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   (BSI), from improperly using “HERS” to describe a Home Energy Rating System, as such 
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   use likely infringed on plaintiff’s trademark. BSI moves for reconsideration. 
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                                DISCUSSION                                   
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        “Reconsideration is appropriate if the district court (1) is presented with newly 
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   discovered evidence, (2) committed clear error or the initial decision was manifestly unjust, 
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   or (3) if there is an intervening change in controlling law.” School Dist. No. 1J, Multnomah 
16                                                                            
   Cnty., Or. v. ACandS, Inc., 

5 F.3d 1255, 1263

 (9th Cir. 1993). BSI primarily argues that it 
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   has presented “newly discovered evidence” and “legal decisions” that “came into existence 
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   after the injunction issued,” while interspersing arguments about the Court’s supposed 
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   misunderstandings.  (See  ECF  93,  at  2.)  BSI  only  asks  the  Court  to  reconsider  the 
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   “likelihood of success” prong of its preliminary-injunction order. (ECF 81-1, at 8.) 
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   A.   Newly Discovered Evidence                                            
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23       BSI’s purported “newly discovered evidence” is not “new” by reconsideration-
24  motion standards. A party moving for reconsideration on this ground must “show not only 
25  that this evidence was newly discovered or unknown to it until after the hearing, but also 
26  that it could not with reasonable diligence have discovered and produced such evidence at 
27  the hearing.” Frederick S. Wyle Pro. Corp. v. Texaco, Inc., 

764 F.2d 604

, 609 (9th Cir. 
28  1985).                                                                    
1       BSI presents four items of additional evidence that existed well before this litigation 
2  began:                                                                    
3       1.  The  United  States  Patent  and  Trademark  Office’s  “files  on  Plaintiff’s  two 
          additional contemporaneously filed trademark applications which were rejected 
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          by the USPTO,”                                                     
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        2.  “Plaintiff’s  attorney’s  trademark  application  prosecution  files  for  the  marks 
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          HERS®, HERS, and HERS/HOME ENERGY RATING SYSTEM[],”                
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        3.  California Energy Commission documents “regarding the Settlement Agreement 
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          entered into between Plaintiff and the CEC,” and                   
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        4.  Portions of “Plaintiff’s trademark attorney’s files regarding the intended scope of 
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          the Settlement Agreement with CEC.”                                
11                                                                            
   (ECF 93, at 4.) But BSI had plenty of time to uncover this material during the nine weeks 
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   between the filing of the preliminary-injunction motion and the hearing on it. (See ECF 18; 
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   ECF 27). BSI has the burden of explaining why a reasonably diligent attorney could not 
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   have found these items in the months before the hearing—let alone in the nearly two years 
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   between  the  preliminary  injunction’s  issuance  and  BSI’s  belated  motion  for 
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   reconsideration. (See ECF 28; ECF 81.) It has not met that burden. See Wells Fargo Bank, 
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   N.A. v. Mahogany Meadows Ave. Trust, 

979 F.3d 1209, 1218

 (9th Cir. 2020) (noting that 
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   a reconsideration motion “may not be used to raise arguments or present evidence for the 
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   first time when they could reasonably have been raised earlier”).         
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   B.   New Law                                                              
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        Next, BSI asserts that “new law” demands a different result. But the main case it 
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   relies on—Great Concepts, LLC v. Chutter, Inc., 

90 F.4th 1333

 (Fed. Cir. 2024)—makes 
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   BSI’s burden of challenging this trademark more difficult, not less. (See ECF 81-1, at 9–13; 
24                                                                            
   ECF 93, at 4–7.) At the time of the preliminary-injunction hearing, the Ninth Circuit had 
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   long held that “filing a fraudulent incontestability affidavit [alone] provides a basis for 
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   canceling the registration itself.” Robi v. Five Platters, Inc., 

918 F.2d 1439, 1444

 (9th Cir. 
27                                                                            
   1990) (cleaned up). Chutter rejected that notion and adopted a more demanding process 
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1  for  litigants,  like  BSI,  who  dispute  a  trademark.  The  court  held  that  a  trademark 
2  “registration” may not be cancelled in its entirety solely due to “fraud in connection with 
3  acquiring incontestable status,” but that such fraud is merely a basis for cancelling the 
4  “incontestable status.” Chutter, 

90 F.4th at 1340

. After Chutter, BSI must first establish 
5  that  the  mark’s  “incontestability  status”  was  “obtained  fraudulently,”  warranting 
6  cancellation of its incontestability, and only then may it challenge the HERS mark’s 
7  registration. See 

id. at 1337, 1339

. It’s unclear why this more rigorous legal framework 
8  mandates reconsideration of this Court’s prior ruling.                    
9       Regardless,  BSI’s  new  argument  that  RESNET  engaged  in  fraud  during  the 
10  incontestability process is substantively unavailing as well. In light of the “Settlement 
11  Agreement and two abandoned trademark applications,” BSI insists that the RESNET 
12  representative who filed for trademark incontestability committed fraud by declaring that 
13  “no final decision adverse to the owner’s claim of ownership of such mark for those 
14  goods/services, or to indicate membership in the collective membership organization, 
15  exists, or to the owner’s right to register the same or to keep the same on the register; and, 
16  no proceeding involving said rights pending and not disposed of in either the U.S. Patent 
17  and Trademark Office or the courts exists.” (ECF 81-6, at 46–47; see ECF 81-1, at 12.)  
18       But BSI presents no authority that a settlement agreement is a “final decision adverse 
19  to the owner’s claim of ownership,” a “final decision adverse to” “the owner’s right to 
20  register,” or a “pending” “proceeding involving said rights.” (See ECF 81-6, at 46.) Nor 
21  does BSI offer any authority that a previously abandoned trademark application would 
22  qualify under those categories. (Id.; cf. ECF 81-5, at 4 (showing that the USPTO refers to 
23  the process as a “NOTICE OF ABANDONMENT”).) Despite BSI’s argument to the 
24  contrary, our case is far different than Chutter. The Chutter representative signed the 
25  incontestability declaration while there were two “pending” actions that challenged the 
26  mark’s validity—a “cancellation proceeding in the PTO and [an] Eleventh Circuit appeal.” 
27  90 F.4th at 1335–36. BSI has presented no evidence of any “pending” challenges to the 
28  registered trademark when the RESNET representative made the foregoing declaration in 
1  August 2013. (See ECF 81-6, at 46.) So, BSI’s fraud-during-incontestability argument 
2  fails.                                                                    
3       BSI gestures at two other cases that don’t move the needle either. First, OpenAI, Inc. 
4  v. Open A.I., Inc., 

719 F. Supp. 3d 1033

 (N.D. Cal. 2024), aff’d, No. 24-1963, 

2024 WL 5

  4763687 (9th Cir. Nov. 13, 2024), is a trial-court opinion that is not binding on this Court. 
6  It cannot qualify as “an intervening change in controlling law.” See ACandS, Inc., 

5 F.3d 7

  at 1263. And the affirmance of that case on appeal doesn’t help BSI, because the Ninth 
8  Circuit never mentioned the specific issue—prior rejections of trademark applications—
9  that BSI focuses on.                                                      
10       Second, BSI points to Heritage Alliance v. American Policy Roundtable, 

133 F.4th 11

  1063 (Fed. Cir. 2025), which held that the Trademark Trial and Appeal Board “has 
12  discretion not to accept” “five-plus years of prior continuous use as ‘prima facie evidence’ 
13  that the marks had acquired distinctiveness.” 

Id. at 1070

. But that principle was already 
14  clear from the statute, which states that the Board “‘may accept’ such proof ‘as prima facie 
15  evidence that the mark has become distinctive.’” 

Id.

 (quoting 

15 U.S.C. § 1052

(f) with 
16  emphasis added in the opinion). And, as the Heritage Alliance court itself noted, “our case 
17  law similarly recognizes the Board’s discretion to weigh the evidence” and to reject such 
18  prima facie evidence. 

Id.

 (collecting cases). Heritage Alliance is not an intervening change 
19  in controlling law.                                                       
20  C.   Clear Error                                                          
21       Finally,  BSI  asserts  that  “the  Court  committed  error  in  relying  on  Plaintiff’s 
22  representation of the Settlement Agreement with the [California Energy Commission] as 
23  being a license agreement.” (ECF 81-1, at 14.) This is so, says BSI, because RESNET 
24  “misrepresented the significance of the Settlement Agreement between Plaintiff and the 
25  CEC” and “the Court apparently accepted” that misrepresentation “as true.” (Id. at 13.)  
26       “To be clearly erroneous, a decision must strike [the Court] as more than just maybe 
27  or probably wrong; it must be dead wrong.” United States v. Hollis, 

506 F.3d 415

, 421 
28  (5th Cir. 2007). But the Court well understood the agreement’s import. In fact, after 
1 || discussing the agreement during oral argument, the Court re-reviewed the document during 
2   ||arecess and later expanded upon the agreement-related analysis when issuing a  final ruling 
3       the hearing’s end.  (See ECF 29,  at 32, 38, 46.) Even if the Court’s description of the 
4   ||agreement  as  “akin  to  a  license”  was  imprecise  (ECF 29,  at 46),  as  BSI  contends,  the 
5   ||essential  facts  of that  agreement—and the  Court’s understanding  of its  terms—has  not 
6   ||changed. BSI has not met its burden to establish that the Court was “dead wrong” about 
7   ||the agreement. See Hollis, 

506 F.3d at 421

. 
8                                     CONCLUSION 
9         BSI’s reconsideration motion is DENIED. The unopposed judicial-notice motion is 
10 || granted. (See ECF 81-3.) 
11     Dated:  November 21, 2025 

13                                          Hon. Andrew G. Schopler 
14                                          United States District Judge 
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