Dec 14 | 2011

Accelerate Your Trademark Disputes

Two of the biggest deterrents to litigation are the expense and the length of time it takes to resolve matters – often the two are intertwined.  Whether through the court system or some type of adjudicatory body, drawn out legal disputes can oftentimes place a huge strain on legal budgets.  In the area of trademark law, the Trademark Trial and Appeal Board (“TTAB”) of the U.S. Patent and Trademark Office (“PTO”) is taking measures to help facilitate more efficient resolutions to disputes.  These measures are encapsulated in Accelerated Case Review (“ACR”).

First, some background.  The TTAB is an administrative board that hears and decides adversarial proceedings relating to federal trademark applications or registrations.  The most common TTAB disputes are oppositions to prevent the registration of someone else’s trademark application and  petitions to cancel an existing trademark registration.  These TTAB disputes take the form of mini-litigations and loosely follow the model of the federal courts: pleadings, discovery conference, discovery (including disclosures), pretrial preparation of witnesses and testimony, briefs, and a final decision on the merits.  Sometimes parties will use a TTAB proceeding as an alternative to filing a federal lawsuit, and sometimes they will pursue both.  The TTAB only has authority to resolve matters related to federal trademark filings; it has no authority to address what a party may or may not be doing outside of the confines of the PTO.  Also, the TTAB cannot award monetary damages like the federal courts.

While TTAB proceedings generally cost less than what it would cost to pursue claims in federal court, TTAB proceedings can still cost  a hundred thousand dollars or more if the parties do not otherwise resolve their dispute earlier in the process.  Not only can these proceedings get expensive, but they can get drawn out for years: from beginning to end a TTAB proceeding typically takes at least 21 months, and final decisions have been issued on average 4.1 years after commencement of the proceeding.  Not the most enticing scenario for parties who seek an effective resolution to their trademark dispute.

Enter ACR.  The purpose of ACR is to facilitate a quicker resolution to TTAB disputes by encouraging the parties to stipulate to facts and agree to a limited record.  While the TTAB has issued a variety of recommended ACR schedules, the TTAB is flexible and will consider almost any alternative scheduling arrangements as long as the parties reach common ground on procedure and stipulate to facts.  The decision to choose ACR need not be made at a specific time, but the parties must at least discuss the possibility of ACR during the mandatory discovery conference held prior to discovery (where the bulk of expense typically occurs).  Sometimes, it is only after initial disclosures have been exchanged and some discovery taken when the parties realize that ACR may work for them.

Disputes decided through ACR result in final decisions in approximately half the time  of a regular proceeding – 2.1 years on average as opposed to 4.1 years.  Also, ACR presents the possibility for considerable cost savings because the process encourages the parties to agree upon facts or agree to limit the issues, thereby reducing the amount of time and resources spent proving those aspects of the case.

So how do you know whether your dispute is appropriate for ACR?  The decision to choose ACR is less about the types of claims involved and more about building the factual record.  If one or more of the following scenarios applies to your case, then ACR may be for you:  1) there is little need for discovery; 2) the parties agree to many of the pertinent facts; 3) neither party anticipates an extensive record nor the need for more than a few witnesses; 4) the parties are prepared to submit the issues for summary judgment and allow the TTAB to resolve additional issues of material fact; and/or 5) the parties agree on the admissibility of most of the record.

Despite its attributes, ACR is rarely chosen.  Some cases are simply too complicated to be a candidate for ACR; others are too contentious.  Many parties and their attorneys who are accustomed to longer timeframes may feel uncomfortable with shorter time frames and limitations on discovery because of the fear that ACR could adversely affect that party’s chance of success.  Regardless of the merits of that fear, it is clear that ACR presents some enticing attributes.  It would behoove all parties contemplating TTAB action to discuss with their attorney whether their dispute is an attractive ACR candidate.