Anatomy of a Trademark Case

By: Brian D. Kaider, Esq.

In earlier articles, I have discussed the benefits of federal registration of trademarks, how they differ from patents and copyrighted materials, and how far you should go to protect your marks.  But, when someone decides to take the ultimate step to initiate litigation, I find that they often have little understanding of the process, the timelines, the costs, and the burdens involved.  This article is meant to give a high-level view of what a litigation entails, either at the U.S. Patent and Trademark Office or in federal court.

Two Venues

  If your goal is to oppose the pending registration of another person’s trademark, or to cancel such a registration after it issues, you will generally bring your case to the USPTO’s Trademark Trials and Appeals Board (TTAB).   On the other hand, if you believe that someone is infringing your trademark and you want to seek monetary damages, you will file a lawsuit in a U.S. District Court.  There is overlap in these proceedings; for example, you can seek to cancel a registered trademark as part of a court case, but there are differences as well; e.g., you cannot seek monetary damages at the TTAB.  Generally, though, the processes in both venues are similar.

Before Filing – Due Diligence

  Whether at the TTAB or in federal court, before you file your case, you are obligated to ensure that you have a proper basis for doing so.   Your attorney will ask many questions and likely want to see some documentation.  This is their due diligence process to see whether you have reasonable grounds to bring your case and to assess your likelihood of success in the matter.  They are looking for such issues as: whether you own a valid trademark and have standing to bring the case; whether the other party has a valid trademark and, if so, which party has priority in its rights; the similarity of the two trademarks and their channels of trade; evidence of when and how the other party has used its mark, etc.  If, after reviewing these materials, the attorney agrees that you have a reasonable basis for your case, they will draft the initial filing documents.  In the TTAB, these would be a Notice of Opposition or a Petition for Cancellation; in federal court, it would be a Complaint.  For simplicity sake, I will refer to all of these documents as complaints.

Filing the Complaint

  Your attorney will synthesize the material you provide into a complaint.  While complaints have a required structure that is somewhat dry and formulaic, because it is the first opportunity to educate the TTAB or judge as to what the case is about, it should paint a very clear picture of how you have been aggrieved and the other party is responsible.  The cost of this stage of the case will depend upon the complexity of the issues and, of course, your attorney’s hourly rate.  For a complex case, it may take as much as 30-40 hours of attorney time to do the legal research, analysis, investigation, and draft the complaint.  The government filing fees for the complaint, whether at the TTAB or in federal court are $400.

Discovery

  This is the stage of litigation of which clients tend to have the least understanding, and for good reason.  It’s a complex array of processes and rules and is frequently the source of many disputes between the parties.  For this reason, it is also often the most expensive part of the litigation process.

  As a general matter, “discovery” is the process through which you get information from the other side in order to try to prove your case.  In both TTAB proceedings and court litigations, the discovery process is fairly broad, meaning that you are allowed to ask for a wide array of information from the other side.  Court litigations, however, are broader in scope because, for example, those cases usually involve monetary damages, which are not at issue in TTAB proceedings. This is also one of the reasons that court litigations are more expensive.

  There are four basic tools in discovery: interrogatories, requests for production, requests for admission, and depositions. 

Interrogatories are simply questions you ask the other side and they are required to answer.  For example, you might ask the other party to describe the dates and circumstances under which they created and adopted their trademark. 

Requests for production are how you ask the other party to provide you with documents or other tangible items in their possession.  As an example, you might ask the other party to produce documents that demonstrate the geographic areas in which they have sold products under the challenged trademark. 

Requests for admission are statements of fact that you ask the other side to admit or deny.  These can be useful to narrow the issues and pin your opponent down on specific points.  For example, you might ask the other party to admit that they did not use their trademark before a particular date. 

Depositions are probably the most dreaded discovery tool.  Through a deposition, you subpoena a witness to physically appear in a room with your attorney and to answer questions under oath in the presence of a stenographer and/or video recorder that will take down their every word.  Depending upon the complexity of the case, these depositions may last as long as 7 hours, each.

  Often, there will be several rounds of written discovery between the parties before depositions are taken.  This enables the parties to review the documents and narrow the issues so they may ask more pointed questions of the deposition witnesses.  This written discovery process can be lengthy, arduous, and disruptive to the parties’ businesses.  The parties generally have 30 days to respond to each discovery request, so the whole discovery process can take anywhere from several months to several years in more complicated cases. 

In addition to drafting and responding to each other’s requests, the attorneys will often have protracted discovery disputes, arguing about the scope of the requests, the disclosure of confidential business information, or the application of attorney-client privilege.  Most clients dramatically underestimate the amount of time it will take to complete discovery, the amount of time and effort they will have to spend in collecting documents and responding to requests, and the costs involved. 

Experts

  All of the discovery issues mentioned above relate to what are called “fact witnesses.”  This can be anyone who has factual information relevant to the case.  In most instances, the requests will be directed to the company and/or individual owners or employees of the company.  In some cases, the litigants may also seek discovery from third parties who have no direct involvement in the matter, but nevertheless have information relevant to the case.  There is another category of discovery, however, relating to expert witnesses.

  In trademark cases, experts will sometimes be called by one or both sides to provide opinions as to whether there is a likelihood that the relevant public will be confused as to the source of goods due to the similarity of the two trademarks.  Sometimes these experts will conduct surveys of the public.  The experts will then draft a written report of their findings and stating their opinions.  The other side will usually then take a deposition of the expert to try to expose weaknesses in their opinions.  While experts can be extremely useful, they also dramatically add to the cost of the litigation due to their fees as well as the cost of associated discovery.

Motions

  Throughout the case, but particularly after discovery, each party may file a variety of motions with the TTAB or court.  A motion is a document requesting the court to decide an issue.  For example, if the other party refuses to provide certain requested documents, you might file a motion to compel, asking the court to require the party to produce the documents.  There may also be motions to dismiss the case, motions for sanctions for abusing the discovery process, motions to exclude evidence or disqualify an expert, and many more.  After discovery is completed, the parties will often file a motion for summary judgment, in which the party claims that there are no material facts in dispute between the parties and therefore they are entitled to win the case as a matter of law.

  With all motions, the other party will have an opportunity to file a written opposition to the motion.  In some cases, the motion will be decided by the court just on the basis of these written briefs, but for more complex issues, the parties or the court may request an oral hearing to present the issues to the court in-person.

Trial

  Up to this point, the processes at the TTAB and in federal court are very similar.  This is where they diverge significantly. 

  At the TTAB, the plaintiff will have a period of time in which they may present evidence to the board in support of their case.  They first have to make “pre-trial disclosures,” telling the board and the other party what witnesses they will present, for example.  Then there will be a “trial” period during which they present their case: they will submit various documents and affidavits, and may take testimonial depositions of the witnesses either through live testimony or written questions. At the conclusion of this period, the defendant will have an opportunity to do the same.  The plaintiff will then have an additional period for rebuttal.  Once these “trial” periods are complete, each side will have an opportunity to file a brief, arguing the facts to the board.  This entire process from the beginning of the plaintiff’s trial phase, to the filing of the last brief, may take as long as 9-10 months.  Upon completion of the briefs, one or both parties may ask the board for an oral hearing.  After all of the briefs are completed and, if requested, the hearing has taken place, the Board will then take all of the evidence under consideration and render its decision.  This process may take several more months.

  By contrast, a trial in federal court is the process with which people are more familiar.  As with a TTAB proceeding, the parties will make certain disclosures to the court and may argue about what evidence may be presented, but the trial phase itself is what people typically expect.  It is a live process in front of a jury and/or judge in which the parties may call witnesses to testify and may present physical evidence for the court’s consideration.  It is a more interactive process, where each side may cross examine each other’s witnesses immediately.  The whole trial process generally may take a couple days to several weeks.

Conclusion

  Whether at the TTAB or in federal court, a trademark litigation is a lengthy, costly, and exhausting endeavor.  Whenever possible, parties should attempt alternative means to resolve disputes that are far less burdensome.  But, when litigation cannot be avoided, the parties should at least have a full understanding of the timeline, the processes, and the costs involved.  While most cases at the TTAB and in federal court settle, the parties should be prepared for the case to go all the way through trial.  Every case is different, but parties should expect a trademark case to take 1 ½ –  2 years to complete, sometimes more.  A TTAB case that goes to trial will certainly cost in the tens of thousands of dollars and often will reach six figures.  A federal court case will start in the hundreds of thousands and may reach seven figures in more complicated matters.  It is imperative that the parties have a full and frank discussion with their attorneys about all of the issues discussed herein.

  Brian Kaider is a principal of KaiderLaw, an intellectual property law firm with extensive experience in the craft beverage industry.  He has represented clients from the smallest of start-up breweries to Fortune 500 corporations in the navigation of regulatory requirements, drafting and negotiating  contracts, prosecuting trademark and patent applications, and complex commercial litigation.  bkaider@kaiderlaw.com, (240) 308-8032

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