|
|
   |
||||||
|
 |
In This IssueCourt Rules That Foreign Trademark Applicant Must Testify In United States The U.S. Court of Appeals for the Fourth Circuit recently held that a foreign company having no contact with the United States other than filing a trademark application at the U.S. Patent and Trademark Office (“PTO”) can be compelled to testify in this country about matters related to that mark. The ruling, in Rosenruist-Gestao E Servicos LDA v. Virgin Enterprises Ltd., 2007 WL 4535323 (4th Cir. Dec. 27, 2007) (F.3d citation pending) may affect whether, when, and how foreign companies choose to file trademark applications in the United States. In 2002 Rosenruist, a Portuguese company, filed an intent-to-use ("ITU") application to register VIRGIN GORDA as a mark for clothing, bags, and related goods. Two years later Richard Branson’s well-known company Virgin Enterprises opposed the application before the PTO’s Trademark Trial and Appeal Board ("TTAB"). In the opposition proceeding, which is still pending, Virgin Enterprises claims VIRGIN GORDA is likely to cause confusion with the opposer’s many VIRGIN marks. As is permitted by the TTAB, Virgin Enterprises sought to depose Rosenruist under Rule 30(b)(6) of the Federal Rules of Civil Procedure. When Rosenruist refused to appear voluntarily in the United States, Virgin Enterprises filed a motion to compel with the TTAB, seeking an order requiring Rosenruist to be deposed in Portugal. The TTAB denied the motion, stating that it has no power to order such a deposition and citing its rules on certain international procedures that would permit a foreign deposition to be held. Virgin Enterprises then served a Rule 30(b)(6) deposition subpoena on the U.S. lawyer that Rosenruist had designated as its domestic representative. Virgin Enterprises obtained the subpoena from the U.S. District Court for the Eastern District of Virginia pursuant to 35 United States Code ("U.S.C.") § 24, which allows district courts to issue subpoenas in contested PTO proceedings. Like the PTO itself, Rosenruist’s lawyer is located in the Eastern District of Virginia, which extends from Northern Virginia to Norfolk. Rosenruist moved to quash the subpoena, claiming that Virgin Enterprises was trying to circumvent the TTAB’s rules. The district court denied the motion and required Rosenruist to reimburse Virgin Enterprises for its legal fees in connection with the deposition at which Rosenruist’s lawyer but no one from the company itself appeared. However, the district court also denied Virgin Enterprises’ motion to compel Rosenruist to produce a corporate designee for deposition. The court agreed with Rosenruist that the company does not have, as specified in 35 U.S.C. § 24, a company official "residing or being within" the Eastern District of Virginia. Virginia Enterprises appealed that decision and achieved a surprising victory that may have far-reaching effects. In its two-to-one decision the court of appeals held that § 24 covers companies themselves as well as their officials and that a company’s filing an ITU application with the PTO is sufficient contact with the Eastern District of Virginia to enable the district court there to issue a subpoena to the applicant. The court of appeals reversed the district court’s denial of Virgin Enterprises’ motion to compel and remanded the case for further action. The dissenting judge noted that the majority’s "conclusory statement" that "Rosenruist’s activities in this case were sufficient to qualify it as 'being within [the] district'" is dicta buried in a footnote. He also noted that because the PTO is located in the Eastern District of Virginia and trademark-related subpoena enforcement will often be sought there, the majority opinion has, in effect, created a national standard for interpreting 35 U.S.C. § 24. The dissent predicts that the court’s decision "is bound to embroil foreign trademark applicants in lengthy, procedurally complex proceedings." Unless it is overturned on reconsideration or appeal, the Rosenruist decision is likely to make foreign companies consider more carefully whether they wish to file ITU applications in the United States or wait until they can file use-based applications here. (The case has less significance for use-based applications, because a foreign company using a mark in U.S. commerce likely already has a physical presence in this country, making the "contact" question moot.) Rosenruist also suggests that a trademark owner’s designating a domestic representative in the Eastern District of Virginia could reduce the possibility of a federal court outside the district becoming involved in PTO proceedings involving the owner’s mark. Court Puts New U.S. Patent Rules On Hold As mentioned in the Fall 2007 issue of the Tech Law Letter, several lawsuits were filed against the U.S. Patent and Trademark Office ("USPTO") last year in attempts to prevent implementation of new patent rules. The proposed rules would place significant limits on both the number of claims in a patent application and the number of continuations that an inventor can file. On October 31, 2007, the U.S. District Court for the Eastern District of Virginia issued an injunction preventing the USPTO from implementing the new patent rules on the scheduled date of November 1. Ruling in the related cases GlaxoSmithKline v. USPTO and Tafas v. USPTO, the court determined that the plaintiffs were likely to prevail on the merits of their complaints against the USPTO. Accordingly, the court held that the status quo concerning patent rules should be maintained until a final decision in each case. The court then scheduled the matter for briefing by the parties in December 2007 and January 2008. On February 8 the court heard arguments on the plaintiffs’ and the PTO’s motions for summary judgment concerning the validity of the new rules. Judge James C. Cacheris did not issue a ruling at the hearing, instead telling the parties that he will issue a written opinion as soon as his court schedule permits. We will continue to monitor the status of the USPTO’s proposed patent rules and report in the Tech Law Letter on the progress of their implementation. State Registration of Trademarks: Limited Protection May Be All You Need Like other nations the United States offers trademark registrations that are valid throughout the country, including, in the U.S. case, territories such as Puerto Rico and Guam. Under the U.S. federal system, however, the individual states also offer trademark registrations. A state registration protects a mark only within that particular state. Thus, if a trademark owner uses a mark throughout the United States or even in several states, registering the mark with the U.S. Patent and Trademark Office ("PTO") is the best way to protect the mark—assuming that no prior registrations or pending applications preclude the mark from being registered. But if an owner uses the mark only in one or perhaps two states, registering the mark at the state level-usually with a state’s corporation commission or secretary of state-may make sense. Note that using a mark in a single state would not necessarily preclude registering the mark with the PTO, as such use would likely still be in "interstate commerce" and thereby qualify the mark for federal registration. However, registering a mark at the state level is typically less expensive and frequently (although not always) faster than registering it with the PTO. For example, registering a mark with Virginia’s State Corporation Commission ("SCC") generally costs well under half as much as registering the mark with the PTO. Virginia’s filing fee is only $30 per mark per trademark class, as compared to $275 or more at the PTO, and Virginia uses the same trademark classification system as the PTO (in contrast to states such as North Carolina that have their own classification systems). While registering a mark with the PTO takes at least six months to twelve months and often longer, one can usually register a mark with the SCC in less than a month. Moreover, because far fewer marks are registered in any given state than with the PTO, there is less likelihood that a prior registration or pending application will preclude registering a mark at the state level. The owner of a mark that the PTO refuses to register because of a similar mark that is the subject of a prior registration or pending application can obtain at least some degree of protection by registering the mark in one or more states that are key territories for the owner’s business. Virginia’s trademark-registration law is typical of most states: Any certificate of registration issued by the [State Corporation] Commission under the provisions hereof or a copy thereof duly certified by the clerk of the Commission shall be prima facie evidence of the registrant’s ownership of the mark, and of the registrant’s exclusive right to use the registered mark within the Commonwealth [of Virginia] on or in connection with the goods or services specified in the certificate, and shall be admissible in evidence as competent and sufficient proof of the registration of such mark in any actions or judicial proceedings in any court of this Commonwealth. Va. Code Ann. § 59.1-92.6 (2006 & Supp. 2007). The owner of a mark registered under Virginia law has a statutory right to enforce the mark in Virginia’s state courts against any junior Virginia user of a confusing similar mark for the relevant goods or services. That right includes enforcing the state-registered mark against even a junior user of a federally registered mark. (However, the federal registration could preclude the owner of the Virginia registration from using its "state mark" outside Virginia.) The owner of a mark registered with the SCC also has the right to add Virginia statutory counts and seek Virginia statutory remedies in a trademark lawsuit brought primarily under federal law. That right could prove valuable if for some reason a court were to dismiss the federal trademark count(s). Most U.S. trademark owners who want to register their marks should try to do so with the PTO. Under certain circumstances, however, it may be advisable to register a mark at the state level. Trademark lawyers can advise clients about when state registration may be appropriate.
|
