Federal Circuit Enforces Jurisdictional Discovery Where Existing Record Is Insufficient
By Carrie R. Grandinetti

In two recent cases, the U.S. Court of Appeals for the Federal Circuit vacated dismissals based on a lack of personal jurisdiction and remanded due to insufficient evidence of record. In Trintec v. Pedre , the Federal Circuit ordered the District Court of District of the Columbia to reconsider its decision that it lacks personal jurisdiction over Pedre, a New York corporation, in a patent infringement suit brought by Trintec. Trintec Industries, Inc. v. Pedre Promotional Products, Inc. , Case No. 04-1293 (Fed. Cir., Jan. 19, 2005) (Freidman, S.J.). Similarly, in CEA v. CMO , the Federal Circuit vacated a Delaware district court’s decision that Delaware does not have jurisdiction over CMO, a Taiwanese corporation, in a suit for patent infringement. Commissariat a l’Energie Atomique v. Chi Mei Optoelectronics Corporation , Case No. 04-1139 (Fed. Cir., Jan. 19, 2005) (Dyk, J.),

In Trintec v. Pedre , Trintec sued Pedre over two patents that cover automated small volume production of printed faces for use in wristwatches, clocks and similar instruments. The district court gave no reasons for its decision that it lacks personal jurisdiction over Pedre. The Federal Circuit concluded that more evidence is needed before a decision as to the existence of specific or general personal jurisdiction could properly be made and ordered the district court to reconsider its decision.

Trintec offered evidence in support of its claim of jurisdiction showing the following:

• Pedre operated an interactive website to advertise its products to Washington, D.C., customers with internet access
• Third-party websites made Pedre products available and/or provided hyperlinks to Pedre.com to Washington, D.C., customers with internet access
• Pedre exhibited at two trade shows in Washington, D.C.
• A sales representative makes two annual visits to Washington, D.C. a year
• Pedre made minimal actual sales in Washington, D.C.

The Federal Circuit explained that each fact proffered by Trintec was too ambiguous to permit the Federal Circuit to make an informed judgment on the jurisdictional issue. The Federal Circuit stated that on remand the district court should take all necessary action to ensure that the record is adequate to determine whether it has personal jurisdiction over Pedre. The Federal Circuit emphasized that if the district court concludes that the existing record is insufficient to support personal jurisdiction, then Trintec is entitled to jurisdictional discovery.

In CEA v. CMO , CEA sued CMO over two patents directed to technology for the design and manufacture of LCDs and related products. CMO is the world’s third-largest manufacturer of LCD modules, which other companies incorporate into computer monitors and sell to brand-name computer manufacturers. CEA contends CMO derives substantial revenue from sales in Delaware. The Federal Circuit stated that the U.S. Supreme Court in its 1987 Asahi case was evenly split on whether the mere introduction of products into the “stream of commerce” is sufficient under the due process clause to confer jurisdiction. The Federal Circuit did not decide that question, but remanded for discovery on “additional conduct” such as marketing arrangements and the role of CMO’s website as a channel to customers. The Federal Circuit held that the district court erred in denying CEA’s request for jurisdictional discovery and ordered the district court to grant limited jurisdictional discovery and to further consider its jurisdiction based on such discovery.

Patents / Appeal and Attorney Fees

Details, Details . . . Federal Circuit Requires a Record to Preserve Issues for Appeal or Justify Attorney Fee Award
By Matthew F. Weil

The U.S. Court of Appeals for the Federal Circuit has reaffirmed the exacting standard for preserving challenges to the sufficiency of the evidence for appeal. Junker v. Eddings , Case Nos. 04-1208, -1271 (Fed. Cir., Feb. 8, 2005) (Newman, J.). The Court also held that the district court may not award attorney fees in excess of those actually incurred without detailing its reasons for doing so.

Junker, an inventor and a salesman of medical devices, obtained a design patent on a propeller-shaped design for an introducer sheath. At trial, a Texas jury found the defendants liable for willful infringement. The defendants appealed, challenging the jury’s verdict on a factual grounds not argued to the jury or squarely presented in a judgment as a matter of law (JMOL) motion at the close of all evidence. The Federal Circuit declined to entertain the new argument, pointing out that Rule 50(a) provides that a motion for JMOL made before the case is submitted to the jury “shall specify . . . the facts on which the moving party is entitled to the judgment” in order to give the non-moving party an opportunity to cure the defects in proof and to inform the trial court of the precise issues it must decide in ruling on the motion.

According to the Court, the general statements in the defendants’ original JMOL motion were not adequate to inform either Junker or the district court that the defendants’ challenges to the validity of the design patent involved certain specific elements of the design later asserted as a basis for the appeal.

The district court also awarded Junker attorney fees of $275,000 under 35 U.S.C. § 285. This amount was almost double the $126,712.50 Junker’s attorney actually charged Junker. The Court noted that the kind of evidence usually analyzed in determining a reasonable attorney fee (“hourly time records, full expense statements, documentation of attorney hourly billing rates in the community for the particular type of work involved, the attorney’s particular skills and experience, and detailed billing records or client’s actual bills showing tasks performed in connection with the litigation”) was “[c]onspicuously absent” from the district court’s fee award order. Lacking a record upon which to base its review, the Federal Circuit vacated and remanded the fee award.

Trademark / Likelihood of Confusion

A Mark Is Famous if it Is Famous to the Relevant Consuming Public
By Jong Pil (JP) Hong

The U.S. Court of Appeals for the Federal Circuit affirmed the Trademark Trial and Appeal Board’s (TTAB) decision that the mark VEUVE ROYALE for sparkling wine would likely cause confusion with the marks VEUVE CLICQUOT PONSARDIN and VEUVE CLICQUOT. The Federal Circuit, however, held that there is no likelihood of confusion with the mark THE WIDOW. Palm Bay Imports, Inc. v. Veuve Clicquot Ponsardin Maison Fondee En 1772 , Case No. 04-1042 (Fed. Cir., Feb. 9, 2005) (Lourie, A.).

Palm Bay filed an intent-to-use trademark application for the mark VEUVE ROYALE for sparkling wine. Veuve Clicquot Ponsardin (VCP) filed an opposition alleging a likelihood of confusion with its own marks. The TTAB refused registration of VEUVE ROYALE finding a likelihood of confusion with three marks: VEUVE CLICQUOT PONSARDIN, VEUVE CLICQUOT and THE WIDOW.

Palm Bay appealed TTAB’s finding on four DuPont factors: the fame of VCP’s; third-party use of the term VEUVE; the similarity of the marks; and purchaser sophistication.

The Federal Circuit, for the first time, addressed the question of what segment of the consuming public must be aware of a mark in order for it to be considered famous. The Federal Circuit held that it is not the general public awareness standard, but the relevant consuming public, i.e., “the class of customers and potential customers of a product or service, and not the general public.” For the mark at issue, the relevant consuming public is purchasers of champagne and sparkling wine. Under this standard, VCP’s substantial sales volume; advertising expenditures; ranking as the second leading champagne brand in the United States; media exposure; and widespread presence in restaurants, liquor stores, wine shops and other retail establishments made VCP’s marks famous.

As to the similarity of the marks, the common term VEUVE is an arbitrary term as applied to champagne and sparkling wine. In addition, VEUVE, as the first word to appear on the label, is a prominent feature. Likewise, VEUVE also constitutes “the dominant feature” in the commercial impression created by VEUVE ROYALE because ROYALE is more laudatory and less source-indicating than VEUVE. The Federal Circuit distinguished other cases where the courts found no likelihood of confusion based on common terms because the common terms were generic or non-distinctive terms.

For the third DuPont factor under review — third-party use of the term VEUVE — Palm Bay argued that at least five other different alcoholic beverages use the term VEUVE. The Federal Circuit, however, agreed with the TTAB that the only evidence, an industry trade publication distributed to the trade, was insufficient to show that the consumers actually encounter these brands in the marketplace. Palm Bay also argued that at least six stores in New York, as well as internet websites and restaurant lists, used another third-party mark VEUVE DE VERNAY for sparkling wine. The Federal Circuit explained although that the evidence showed more than de minimis use, it did not rise to the level of demonstrating that the single third-party use was so widespread as to “condition” the consuming public, where customers have been educated to distinguish between different marks on the basis of minute distinctions.

The final DuPont factor reviewed by the Federal Circuit was purchaser sophistication, a factor which it found mitigated in favor of finding a likelihood of confusion. The Federal Circuit agreed with the TTAB that general consumers, not just connoisseurs, purchase champagne or sparkling wines on celebratory occasions or as holiday presents for friends and colleagues, with little care or prior knowledge. In fact, the Court noted that even more sophisticated purchasers who may be aware that champagne houses offer both types of products under similar marks, could easily conclude that VEUVE ROYALE was VCP’s sparkling wine.

As to the mark THE WIDOW, the Federal Circuit first noted that the doctrine of foreign equivalents is not an absolute rule and merely a guideline. The doctrine should be applied only when it is likely that the ordinary American purchaser would “stop and translate into its English equivalent.” Here, the Federal Circuit found that the TTAB erred in finding that the doctrine applies because an American buyer will not likely translate “VEUVE” into “widow.”

Trademarks / Trade Dress Infringement

Specific Description of Trade Dress Required for Injunction [Tumblebus Sent Tumbling over a Trade Dress Injunction]
Jennifer M. Mikulina

The U.S. Court of Appeals for the Sixth Circuit vacated in part a preliminary injunction issued by the district court, finding a failure to provide specific detail regarding the trade dress at issue. Tumblebus Inc. v. Meredith Cramer d/b/a Tumblebus of Louisville , Case No. 04-5060 (Sixth Cir., Jan. 13, 2005).

The plaintiff, Tumblebus, uses several school buses retrofitted with athletic equipment to provide children’s physical education activities at various locations (daycare centers, birthday parties, etc.) in the greater Louisville, Kentucky, area. Tumblebus also sells its “mobile gyms on wheels” to third parties and allows these third parties to use the “Tumblebus” name to market their services. Although Tumblebus does not have written contracts with all purchasers, it enters oral agreements with each purchaser limiting the geographic area in which it can offer Tumblebus services. In 2002, Cranmer purchased a Tumblebus bus from another third party and began to operate in Louisville under the name “Tumblebus.” Efforts by the plaintiff to restrict Cranmer’s use of the TUMBLEBUS mark in the Louisville area were fruitless, and, by the time plaintiff filed suit against Cranmer in 2003, it had evidence of consumer confusion based on Cranmer’s operation in the Louisville area.

Tumblebus’ complaint accused Cranmer of trademark infringement, trade dress infringement and false advertising. The district court issued a preliminary injunction restricting Cranmer’s use of the TUMBLEBUS trademark and related trade dress in the Louisville area while the action was pending. Although the Sixth Circuit affirmed the district court’s preliminary injunction order preventing Cranmer’s use of the TUMBLEBUS trademark, it vacated the lower court’s holding regarding the Tumblebus trade dress.

The Sixth Circuit explained that it is appropriate to issue a preliminary injunction prohibiting use of particular trade dress, as long as the court describes in detail the specific acts it is restraining. According to the appellate court, “a party must first identify what particular elements or attributes comprise the protectable trade dress” to recover for trade dress infringement. After establishing these specific elements, the party must “show by a preponderance of the evidence that its trade dress is distinctive in the marketplace, that its trade dress is primarily nonfunctional and that the defendant’s trade dress is confusingly similar to the party’s protected trade dress.” The appellate court could not assess Tumblebus Inc.’s likelihood of success on the merits of its trade dress infringement claim because the lower court did not identify which “particular aspects of Tumblebus Inc.’s vehicular design qualify as distinctive trade dress that is primarily nonfunctional and confusingly similar to Cranmer’s vehicle design.”

Practice Note
Plaintiffs in a trade dress infringement action must provide specific information regarding the protectable elements of their nonfunctional and distinctive trade dress.

Trademarks / Litigation / Procedure

No 120 Day Requirement for Completion of Service Outside United States
By Farah Bhatti

Addressing the issue of service in foreign jurisdictions, the U.S. Court of Appeals for the Seventh Circuit found that the 120-day rule under Federal Rules of Civil Procedure (Fed. R. Civ. P.) 4(m) does not apply to service in foreign countries. Nylok Corporation v. Fastener World Incorporation , Case No. 30 C 8238 (Seventh Cir. Jan. 25, 2005).

Nylok, the owner of a registered trademark, brought an action against four Taiwanese companies and one Korean company for infringement of its registered trademark. Nylok served the foreign corporations in their home countries through use of a professional service agent, who was hired two days after the complaint was filed. The service agent prepared the necessary documents and forwarded them to the governments of the respective defendants 41 days after the complaint was filed. Less than two months after the filing of the complaint, the district court notified Nylok that service on the foreign companies needed to be completed within 120 days from the filing of the complaint pursuant to Rule 4(m). Nylok responded by filing a motion arguing that Rule 4(m) does not apply to foreign service. Upon the expiry of 120 days from filing, the district court dismissed Nylok’s complaint. Nylok appealed.

Fed. R. Civ. P. 4(m) specifically states that it “does not apply to service in a foreign country.” The Seventh Circuit found that the rule recognizes that service in some foreign countries may take longer than 120 days. While the Court recognized that foreign service may take longer than service in the United States and is out of the hands of the plaintiff, it also recognized that the amount of time for completion of service is not unlimited. Rather, the Seventh Circuit found that individual district courts should be able to control their own dockets and implied that a district court may dismiss an action in appropriate cases, e.g. , if the plaintiff has made no attempt to begin process within the 120 day period.

Here, because Nylok made all reasonable efforts to serve the defendants within the 120 day period and instructed the service agent to begin preparation of the service of documents within days of filing the complaint, the Court found that Nylok was entitled to continue to litigate its infringement claim and that the dismissal had been improper.

Trademarks

No Likely Confusion in The Ritz
By:John L. Welch and Irene Lee

Five trademark applications filed by The Ritz Hotel, Ltd. 20 years ago have finally cleared the opposition hurdle. In a precedential opinion, the U.S. Court of Appeals for the Federal Circuit reversed the part of the Trademark Trial and Appeal Board’s (TTAB’s) decision that had refused registration of two marks, and affirmed the part that had dismissed Shen’s opposition as to the other three. Shen Mfg. Co. v. The Ritz Hotel, Ltd ., Appeals Nos. 04-1063, -1076 (Fed. Cir., Dec. 17, 2004).

Twenty years ago, The Ritz sought to register a number of marks:

• PUTTING ON THE RITZ for shower curtains
• RITZ PARIS RITZ HOTEL and Design for dinnerware
• The same RITZ PARIS RITZ Hotel and Design mark for various floor and wall coverings
• RITZ for cooking and wine selection classes
• THE RITZ KIDS for clothing.

The Board dismissed Shen’s opposition as to the first three as the marks in question are sufficiently dissimilar to prevent any likelihood of confusion. However, the Board sustained Shen’s opposition as to the last two marks, relying on Shen’s use of the mark RITZ since 1892 for various textile items, including dish towels, potholders, aprons, bathroom towels and ironing board covers.

Presented with a task of determining likelihood of confusion, the Federal Circuit analyzed three of the 13 duPont factors: the alleged fame of Shen’s RITZ mark, the similarity of the marks and the relatedness of the goods. The Federal Circuit first considered Shen’s assertion that its RITZ mark is famous and entitled to enhanced protection under §2(d) of the Lanham Act. Agreeing with the TTAB, the Court found inadequate Shen’s evidence of $5 million in annual sales, use of its mark for more than a century and hundreds of thousands of dollars in annual advertising expenditures. The Federal Circuit found Shen’s evidence “does not compare in terms of sales, advertising or media interest” with that in other cases in which the Federal Circuit has found fame.

Analyzing the second and third factors, the Federal Circuit agreed with the Board that PUTTING ON THE RITZ is sufficiently different from RITZ to avoid a likelihood of confusion. The Court condemned Shen’s dissection of the phrase PUTTING ON THE RITZ into “PUTTING ON THE” and “RITZ” to overemphasize “RITZ.” It reached the same conclusion as to the two RITZ PARIS RITZ HOTEL and Design marks.

As to the mark RITZ for cooking and wine selection classes, the Federal Circuit disagreed with the TTAB that those services are related to Shen’s kitchen textiles. The Board had reasoned that “in providing cooking courses ... it would be necessary that one make use of kitchen towels, dish clothes, aprons, barbeque mitts and potholders.” The Federal Circuit rejected the Board reasoning and noted that the fact that “[t]wo goods are used together does not, in itself, justify a finding of relatedness.” Instead, it emphasized the lack of evidence that the consuming public would perceive these goods and services as originating from the same source. It ruled that “[a]lthough the marks are identical, the differences in the products as well as the weakness of Shen’s mark” required dismissal of Shen’s opposition to this mark.

Finally, as to the mark THE RITZ KIDS, the Federal Circuit rejected the Board’s finding that the goods are related, because the hotel’s goods included gloves and Shen’s barbecue mitts are a kind of glove. Further, the Court found the hotel’s mark THE RITZ KIDS and Shen’s mark RITZ dissimilar. It found “THE” has elevated significance because of the well-known manner in which people refer to the hotel as “The Ritz” or “The Ritz Hotel”, but not as “Ritz” or “Ritz Hotel.” The Federal Circuit further found significance in the word “KIDS” as it indicates that the goods are geared toward children. Accordingly, Shen’s opposition was dismissed.

Practice Note
Interestingly enough, despite over the century of simultaneous use of the RITZ marks by the parties, there was no mention in either the Board’s opinion or that of the Federal Circuit about actual confusion or the lack thereof. The Ritz Hotel was opened in 1898 and Shen Manufacturing Co., Inc. started its kitchen textiles business in 1892.

The article entitled, "No Confusion Likely at the Ritz," which appeared in the December 2004/January 2005 issue of the IP Update, inadvertently failed to identify as co-author, John L. Welch, a well-published author and frequent lecturer on trademark topics and especially the jurisprudence of the TTAB. Mr. Welch reports, comments and analyzes current events regarding trademarks in his informative web blog called "The TTABlog" at www.thettablog.blogspot.com .

Trademarks / Infringement

Tenth Circuit Finds Trademark Infringement Possible Where Mark Used on Related But Non-Competing Goods
By Arlyn L. Alonzo

The U.S. Court of Appeals for the Tenth Circuit has reversed a district court’s grant of summary judgment of no infringement, holding that the use of a mark on related but non-competing goods can constitute infringement under the Lanham Act. Team Tires Plus Ltd. v. Tires Plus Inc ., Case No. 03-2300 (Tenth Cir Jan. 6, 2005) (McConnell, J.).

In 1983, Team Tires Plus Ltd. registered the TIRES PLUS mark for “rendering technical aid and assistance in the establishment of automobile tire stores and automobile maintenance centers.” In 1986, the defendant, Tires Plus, opened its first retail tire store named Tires Plus in Albuquerque, New Mexico. Though it objected to the use of the mark in letters in 1994 and 1995, the plaintiff (which operated its business primarily in the Minneapolis-St. Paul metropolitan area) took no legal action until 2001, after it had decided to expand its operation to New Mexico and neighboring states. The district court dismissed the plaintiff’s claims on summary judgment on the grounds that consulting services and tire sales were not competing businesses. The plaintiff appealed.

Quoting from the Supreme Court’s 1992 Two Pesos decision, the Court of Appeals held the district court erred by assuming that a trademark provides protection only when the defendant uses the mark on directly competing goods. It reiterated that the key inquiry is whether the consumer is ‘likely to be deceived or confused by the similarity of the marks.’”

The district court also erred when it held that the plaintiff’s mark “cannot reasonably be considered to cover franchising.” The Court of Appeals looked to the exchange between the plaintiff and the U.S. Patent and Trademark Office (USPTO) and held that the USPTO was aware that the plaintiff was engaged in franchising and understood the mark description to cover franchising. Accordingly, the Court of Appeals remanded for a new likelihood-of-confusion analysis.