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Navigating Venue and Jurisdiction in Trademark Cases

Determining the Best Forum for Pursuing or Defending Infringement Claims

Today’s faculty features:

1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific THURSDAY, JULY 6, 2017

Megan K. Bannigan, Counsel, Debevoise & Plimpton, New York Meredith M. Wilkes, Partner, Jones Day, Cleveland

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J U L Y 6 , 2 0 1 7

MEGAN K. BANNIGAN, ESQ. MEREDITH M. WILKES, ESQ.

5

Navigating Venue and Jurisdiction in Trademark Cases

O P T I O N S F O R A T R A D E M A R K O W N E R

• F E D E R A L C O U R T
• S T A T E C O U R T
• T T A B
• I T C
• U D R P

6

Introduction

W H E R E T O F I L E ? O N W H A T B A S I S ? W I L L T H E C A S E S T A Y T H E R E ? 7

FEDERAL COURT LITIGATION

Federal Court

Subject matter jurisdiction Personal Jurisdiction Venue—TC Heartland? 8

9

Federal Court Standing

Willful Infringement for Profits?

10

Fee Shifting—Octane Fitness

11

Other Circuit Splits

12

 Presumption of Irreparable Harm  Aesthetic Functionality  Initial Interest Confusion  Nominative Fair Use

Federal Court Litigation

Advantages: Nationwide remedies available pursuant to 15 USC § 1117 Developed body of law Nationwide subpoena power

 Key considerations

 Type of case  Nature of the relationship between the

parties

 Relationship between parties and

forum

 Relief sought

13

14

State Court Litigation

State Court Litigation

• State courts have

concurrent jurisdiction with federal courts over trademark and unfair competition actions brought under the Lanham Act

 Advantages

 Provides enforcement mechanism for a

plaintiff whose trademarks do not meet federal requirements (e.g., interstate commerce)

 Punitive damages  Home team advantage

15

O P P O S I T I O N C A N C E L L A T I O N A P P E A L

16

TTAB Litigation

TTAB Proceedings

Administrative proceedings, relief limited to the application or the registration at issue Use is not enjoined No monetary relief

 Advantages

 Most cases settle, or resolve with entry

• f default

 Clears the register of potentially

infringing/problematic marks without full blown litigation

 Accelerated Case Resolution (“ACR”)  Usually faster resolution

17

TTAB Litigation

Possible Preclusive Effect B&B Hardware, Inc. v. Hargis Industries, Inc. 135 S. Ct. 1293 (2015)

 Carefully consider bringing a TTAB

action

 Issues held to have similar standards:

 Likelihood of confusion  Priority  Fraud at the PTO

 Appeal an unfavorable TTAB

decision???

18

TTAB Appeals—Where?

19

 Appeals from the trademark office

 Federal Circuit: no new evidence  District Court: new evidence, new record

Fee Shifting

20

 § 1071 Appeal to courts

(b) Civil action… (3) In any case where there is no adverse party, ... unless the court finds the expenses to be unreasonable, all the expenses of the proceeding shall be paid by the party bringing the case, whether the final decision is in favor of such party or not. 15 U.S.C. § 1071(b)(3) (emphasis added)

USPTO Attorneys’ Fees Rule

21

 NantKwest v. Lee (E.D. Va. 2016)

 The district court granted summary judgment for the PTO, but

denied the PTO’s motion for expenses regarding attorneys fees

 American Rule forbids attorneys fees because 35 U.S.C.

Section 145 does not “specifically and explicitly” allow for payment of such fees

 NantKwest v. Lee (Fed. Cir. 2017)

 Applicants who appeal, pay PTO fees  “all expenses” regardless of outcome

D O M E S T I C I N D U S T R Y A C T O F I M P O R T A T I O N 22

ITC ENFORCEMENT

International Trade Commission

Independent, quasi- judicial Federal agency with broad investigative responsibilities on matters of trade

 19 U.S.C.§ 1337 empowers the ITC to

conduct investigations into allegations

• f certain unfair practices in import

trade

 Most investigations involve patent

claims

 But, section 337 also applies to

trademark and trade dress infringement, misappropriation of trade secrets, passing off, false advertising, and violations of the antitrust laws

23

Advantages of ITC Proceedings

24

 Expedited Relief

 ITC rules within 12 -18 months after an investigation

instituted; orders effective within 60 days of issuance

 Broad Injunctive Power

 Customs can block all importation of infringing items,

regardless of whether importer was named in the investigation

 Lower injunction standard (federal court uses eBay four-factor

analysis)

 In rem/Nationwide jurisdiction

 Multiple companies can be named in a single action without

concern for personal jurisdiction issues

Limitations to ITC Proceedings

25

 Expedited Proceedings – Stays are very difficult to obtain.  Higher Costs – caused by timeline, international depositions, expert evidence.  Third Party Presence – Commission Investigative Attorney can impact the

• utcome of case.

 No Monetary Damages  Importation Requirement – requires a non-U.S. defendant who is importing

goods into the U.S.

 Domestic Industry Requirement - plaintiff must prove that it has established a

“domestic industry” in the U.S. through evidence of sales, operations, employment, etc.

D O M A I N N A M E R E C O V E R Y 26

UDRP DOMAIN NAME PROCEEDINGS

UDRP Actions

Expedited proceedings targeted solely to bad faith registration and use of domain names Usually no hearings or discovery Arbitration proceeding with a 1 or 3 member panel that is quickly resolved, but can be appealed

 UDRP Complaint

Requirements

 (1) the manner in which the domain

name(s) is/are identical or confusingly similar to a trademark or service mark in which the Complainant has rights; and

 (2) why the Respondent (domain-name

holder) should be considered as having no rights or legitimate interests in respect of the domain name(s) that is/are the subject

• f the complaint; and

 (3) why the domain name(s) should be

considered as having been registered and being used in bad faith

27

28

The Litigation Options

Federal Court Litigation State Court Litigation TTAB ITC

Speed Varies widely Varies widely Relatively quick ~ 2 years if all the way through trial Very fast, 12-18 months. Cost Can be expensive Varies, generally less expensive than federal litigation. Previously, relatively inexpensive, but with B&B that could change. Because of speed, can be less expensive than district or state court, may

• r may not stay a parallel

district court case. Remedy Monetary damages; injunction; cancellation of registration; additional damages/remedies for willful infringement, exceptional cases, and use of counterfeit mark Monetary and punitive damages; injunction. Cancellation of registration/rejection of application; no damages or injunctions available Injunctive relief only; no monetary damages. Appeal Yes, to federal court of appeals. Yes, to state court of appeals. Yes, can choose Federal Circuit (limited to record below) or district court (de novo review) Yes, can appeal to Federal Circuit. Venue Restrictions Yes, see 28 USC § 1391. Effect of TC Heartland to be considered. Varies based on state venue statutes; may be subject to removal to federal court if federal claims involved. Application or registration depending on the proceeding, may have standing issues Plaintiff must be able to establish “domestic industry” in the U.S. and an act of importation.

A S A P L A I N T I F F W H A T I S T H E I P A T I S S U E ? W H A T R E L I E F I S S O U G H T ? W H O I S T H E D E F E N D A N T ? W H E R E A R E T H E Y I N F R I N G I N G ? W H A T O T H E R C L A I M S M A Y E X I S T ? A S A D E F E N D A N T I R R E P A R A B L E H A R M P R E S U M P T I O N ? H O M E T U R F A D V A N T A G E ? E A R L Y M O T I O N P R A C T I C E ? I M P A C T V E N U E / J U R I S D I C T I O N

29

STRATEGIC CONSIDERATIONS

M E G A N K . B A N N I G A N , E S Q . M K B A N N I G A N @ D E B E V O I S E . C O M M E R E D I T H M . W I L K E S , E S Q . M W I L K E S @ J O N E S D A Y . C O M 30

QUESTIONS???