The Five (or More) Forums for Your Trademark Dispute, and How to Choose the Right One (Hint: Don t Choose the ITC)

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1 The Five (or More) Forums for Your Trademark Dispute, and How to Choose the Right One (Hint: Don t Choose the ITC) Travis R. Wimberly Senior Associate June 27, 2018 AustinIPLA

2 Overview of Options Federal Court State Court Trademark Trial & Appeal Board (TTAB) 2

3 Overview of Options Uniform Domain Name Dispute Resolution Policy (UDRP) or Uniform Rapid Suspension (URS) International Trade Commission (ITC) Or More 3

4 Your only options for Monetary relief Declaratory relief Injunction against domestic use of a mark* Judge with full sanctioning and contempt powers Jury trial 4

5 Claims & Elements Lanham Act and every state provide claims for TM infringement Usually identical elements: Protectable mark Likelihood of consumer confusion Most Ps assert both Lanham Act and state claims, even if redundant Leverage and optics 5

6 Jurisdiction Federal registration not required to sue under the Lanham Act 15 U.S.C. 1114(1): infringement of registered mark 15 U.S.C. 1125(a): infringement of unregistered mark 15 U.S.C. 1125(c): dilution of registered or unregistered mark State registration often required for state statutory claims, but not state common law claims E.g., Tex. Bus. & Com. Code ( Infringement of Registered Mark ) 6

7 Jurisdiction Subject-matter jurisdiction in TM lawsuits Ripeness: how far along is the threat? Standing: trademark owner or (sometimes) exclusive licensee Interstate commerce hook for federal court (very low bar) Personal jurisdiction and venue No TM-specific statutes Minimum contacts, long-arm statutes, and 28 U.S.C

8 Jurisdiction Fed & state courts have concurrent jurisdiction over Lanham Act claims Lanham Act claims OK in state court (but subject to removal) Contra Patent Act, Copyright Act Why concurrent? Historical development of TM law Strong SCOTUS presumption 28 U.S.C. 1338(a): No State court shall have jurisdiction over any claim for relief arising under any Act of Congress relating to patents, plant variety protection, or copyrights. 8

9 Jurisdiction In many TM cases, P can strategically plead to get its choice of forum Federal: Find IC hook and plead 1125(a) or 1125(c) State: Join in-state D; allege state TM claims only; say nothing about the Lanham Act ( master of the complaint rule) Certain cases where P has no choice Why is state court an afterthought in most TM cases? 9

10 Benefits (vs. TTAB, UDRP/URS, and ITC) Monetary, declaratory, and injunctive relief available One stop shop Vs. TTAB: Courts have similar authority over federal TM regs, see 15 U.S.C Vs. UDRP/URS: Courts have in rem jurisdiction over domain names with U.S. connection, see 15 U.S.C. 1125(d) (ACPA) Vs. ITC: Same authority (and then some) over domestic use and importation 10

11 Benefits (vs. TTAB, UDRP/URS, and ITC) Full sanctioning and contempt power Less potential for delay, gamesmanship, etc. Recovery of costs and attorney fees under 15 U.S.C. 1117(a) or state law Geographical forum shopping for better precedent Circuit splits on some major TM issues 11

12 Drawbacks (vs. TTAB, UDRP/URS, and ITC) Costs Obligations and stress for client Length of proceeding (vs. UDRP and ITC, at least) Must meet Article III (or analogous state law) reqs Must establish personal jurisdiction, service, and venue 12

13 Drawbacks (vs. TTAB, UDRP/URS, and ITC) More vulnerable to counterclaims Vulnerable to fee motion under 1117(a) (or possibly state law) if you lose Optics and PR considerations 13

14 A question rarely asked. 14

15 Benefits (vs. state court) Counsel s experience and comfort Judges more experienced in TM law Relatively standardized pro hac admission Fewer major logistical eccentricities (e.g., Travis County rotating docket) 15

16 Benefits (vs. state court) More robust TM case law Better procedural rules (though somewhat subjective) Better e-docketing and e-filing, especially vs. small states Greater likelihood of a written opinion on the merits 16

17 Benefits (vs. federal court) No need for IC or diversity Faster path to a TRO (even in removable cases) Fast track discovery in many states (incl. TX) No Rule 12b6 equivalent in some states Texas pre-2013 Texas post-2013 Tex. R. Civ. P. 91a (still not a 12b6; mandatory fee award to winning party) 17

18 Benefits (vs. federal court) Jury pool Not all states allow fee awards Texas does for state-registered marks only, see Tex. Bus. & Com. Code (d)(2) & (c)(2) State courts can cancel federal TM registrations, see 15 U.S.C ( the court... ) Other situational benefits? 18

19 Federal court is preferable to state court in most trademark cases but at least ask yourself the question and talk to your client about it. 19

20 Basics Hears disputes over right to register (shared jurisdiction w/ courts) Cannot hear disputes over right to use 20

21 Basics Three types of inter partes cases: 1) Opposition 2) Cancelation 3) Concurrent use 21

22 Your only option for Standalone claims for opposition or cancelation Opposition in dispute that involves no issued registration 22

23 15 U.S.C 1119 Power of court over registration In any action involving a registered mark the court may determine the right to registration, order the cancelation of registrations, in whole or in part, restore canceled registrations, and otherwise rectify the register with respect to the registrations of any party to the action. Decrees and orders shall be certified by the court to the Director, who shall make appropriate entry upon the records of the Patent and Trademark Office, and shall be controlled thereby. 23

24 Your only option for Standalone claims for opposition or cancelation Opposition in a Declaratory judgment loophole? dispute that doesn t involve any alreadyissued registration 24

25 Benefits (vs. court) TM specialist judges and interlocutory attorneys Wealth of binding precedent on nearly every TM issue Often cheaper than court (though not always) Lower jurisdictional hurdles Standing = any person who believes that he will be damaged, 15 U.S.C No Article III, personal jurisdiction, or venue concerns 25

26 Benefits (vs. court) Stronger case law on discovery proportionality Two options for appeal Federal Circuit, 15 U.S.C. 1071(a) District Court, 15 U.S.C. 1071(b) Potential for three bites at the apple instead of two Rules and deadlines often more lax than in court 26

27 Drawbacks (vs. court).rules and deadlines often more lax than in court. Limited relief (right to register only) Limited sanctioning power; no contempt power Sometimes inattentive or disinterested opposing counsel & parties 27

28 Drawbacks (vs. court) No live testimony, no jury Often no faster than court Harder to get live deposition of foreign party Written Qs by default, unless Board order for good cause Difficult to keep TTAB proceeding active if related suit gets filed in court TTAB usually orders a stay; courts usually don t 28

29 Basics Administrative complaint filed against domain-name cybersquatter Multiple providers available (e.g., WIPO and FORUM) 29

30 Elements & Burdens UDRP (preponderance of the evidence) 1) Domain name is identical or confusingly similar to a mark in which the complainant has rights 2) Registrant does not have any rights or legitimate interest in the domain name 3) Domain name was registered and is being used in bad faith URS (clear and convincing evidence) All of the above, plus one of the following: (a) mark is registered (b) mark has been validated through a court proceeding (c) a statute or treaty, in effect when the complaint was filed, specifically protects the mark 30

31 VS. Hundreds of gtlds (.com,.org,.net, etc.) and over 75 cctlds (.us,.eu,.mx, etc.) Newer gtlds only (.xyz,. ,.xxx, etc.), and a few cctlds Available relief: cancelation or transfer of domain name Available relief: suspension of domain name for remainder of current registration period, plus one extra year Complaint length limit: 5,000 words optional (WIPO), 15 pages (FORUM) Complaint length limit: 500 words Deficiencies in complaint can sometimes be corrected No opportunity to correct deficient complaint Filing fee: $1,300 and up (FORUM); $1,500 and up (WIPO) Filing fee: $375 for up to 14 domain names Avg. decision: 2 months Avg. decision: 17 days 31

32 Benefits (vs. court) Shorter, streamlined proceeding Conducted by No discovery, testimony, hearings, or motions Lower cost No jurisdictional, service, or venue hurdles 32

33 Benefits (vs. court) Available in cases where registrant, registrar, and gtld/cctld are all based outside U.S. No limitations or laches defenses Domain name automatically locked until proceeding over Contra status quo TRO/PI in court 33

34 Drawbacks (vs. court) Very limited relief transfer, cancelation, or suspension only Possibility of repeat infringement Strict elements with no wiggle room Forces some slam-dunk cybersquatting cases to court No authority to determine complex disputes or issues (e.g., priority, geographical rights, fair use) 34

35 Drawbacks (vs. court) Fewer mechanisms for consistent, predictable results No stare decisis No appeal to unifying body Complications w/ EU s GDPR and blacked-out WHOIS data Possibility of attacking an authorized domain name No reverse WHOIS to consolidate complaint 35

36 Basics 19 U.S.C Unfair practices in import trade Agency investigation that looks a lot like litigation Importation into U.S. required Domestic industry required 36

37 Basics Complainant can assert registered or unregistered marks ITC applies usual TM concepts (e.g., priority, likelihood of confusion, secondary meaning, functionality, etc.) 37

38 Basics Relief available: (1) General exclusion order (2) Limited exclusion order (3) Cease-and-desist order 38

39 Benefits (vs. court) Generally fast resolution Earliest practicable time, 19 U.S.C. 1337(b)(1) Avg. decision time: 16 months No jurisdiction, service, or venue hurdles In rem jurisdiction; commission handles service of complaint One proceeding against multiple importers, regardless of location 39

40 Drawbacks (vs. court) Prospective relief only no money damages (Very) aggressive discovery schedule and briefing deadlines Vulnerable to counterclaims Immediate removal to federal court Original claims remain in ITC possibility of parallel proceedings 40

41 Now Playing 41

42 Lou Pirkey s Twelve Reasons to Avoid the ITC 42

43 1. No home court advantage (unless you re in DC) 2. No jury 3. ITC and respondent can both argue points against you 4. Must prove importation and domestic industry 5. If you lose, subject to claim and issue preclusion 6. No money damages 43

44 7. All of the above can make settlement more difficult 8. Settlement must be approved by ITC and is presumptively public record 9. Despite aggressive discovery schedule, final decision can still take months 10. ITC may have to go to a judge to actually enforce its own orders (see C.F.R.) 11. Penalty for non-compliance is a civil fine paid to the government, not the complainant 12. No vacations 44

45 Lou s final word: You re usually better off in district court. 45

46 State agencies (cancelation of state regs) Foreign courts* and agencies Criminal counterfeiting action under 18 U.S.C Binding arbitration Any others? 46

DOMESTIC OPTIONS FOR PROTECTING YOUR TRADEMARKS IN A GLOBAL ECONOMY

Protecting Your Trademarks In a Global Economy October, 2008 DOMESTIC OPTIONS FOR PROTECTING YOUR TRADEMARKS IN A GLOBAL ECONOMY TRADEMARK LITIGATION VERSES CLAIMS UNDER SECTION 337 OF THE ITC by J. Daniel