Trademark Trial and Appeal Board Electronic Filing System. http://estta.uspto.

gov ESTTA Tracking number: Filing date:

ESTTA315206 11/04/2009

Proceeding Party Correspondence Address

IN THE UNITED STATES PATENT AND TRADEMARK OFFICE BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD 91178758 Plaintiff McDonald's Corporation Robert E. Browne Neal Gerber & Eisenberg 2 North LaSalle Street Suite 2200 Chicago, IL 60605 UNITED STATES rbrowne@ngelaw.com, mkelber@ngelaw.com, jcullis@ngelaw.com, ljames@ngelaw.com, ipdocket@ngelaw.com Reply in Support of Motion Lawrence E. James, Jr. rbrowne@ngelaw.com, mkelber@ngelaw.com, jcullis@ngelaw.com, ljames@ngelaw.com, mturner@ngelaw.com, lbailey@ngelaw.com /Lawrence E. James, Jr./ 11/04/2009 Reply_in_Support_of_Rule_56_f__Motion.pdf ( 17 pages )(232649 bytes )

Submission Filer's Name Filer's e-mail Signature Date Attachments

IN THE UNITED STATES PATENT AND TRADEMARK OFFICE BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD McDONALD’S CORPORATION, Opposer, v. McSWEET, LLC, Applicant. ) ) ) ) ) ) ) ) )

Opposition No. 91178758

Mark: Application S/N: Filed: Published:

McSWEET 78/947,247 August 8, 2006 April 10, 2007

OPPOSER'S REPLY IN SUPPORT OF ITS RULE 56(F) MOTION FOR DISCOVERY Applicant’s Response to Opposer’s Motion for Discovery (“Response”) unjustifiably attempts to deny Opposer the discovery necessary for Opposer to fully and fairly respond to Applicant’s Cross Motion for Summary Judgment on fraud (“Cross Motion”). Applicant’s argument that the discovery sought by Opposer “can be found in materials already provided” is demonstrably false, and its argument that Opposer and the Board should simply be forced to rely on the limited, conclusory statements made by Applicant’s counsel is contrary to the Federal Rules of Civil Procedure and the Rules of the Board. I. Opposer’s Motion Meets the Requirements for 56(f) Discovery Opposer is entitled to the discovery necessary to respond to Applicant’s Cross Motion. Pursuant to Federal Rule 56(f)(2), “[i]f a party opposing the motion shows by affidavit that, for specified reasons, it cannot present facts essential to justify its opposition, the court may . . . (2) order a continuance to enable affidavits to be obtained, depositions to be taken, or other discovery to be undertaken.” Opryland USA v. The Great Am. Music Show, 970 F.2d 847, 852-53 (Fed. Cir. 1992)(“if a party has demonstrated a need for discovery which is reasonably directed to facts essential to its opposition to the motion for summary judgment, discovery will be permitted, especially if the information sought is largely within the control of the party moving for summary judgment”). As set forth in Opposer’s Motion and the Declaration of John Cullis, Opposer needs additional discovery specifically directed to the actions and intent of Applicant’s counsel’s in the filing of and delay in correcting the faulty designation of goods, facts which are predominantly within the control of Applicant and its counsel, to respond to the Cross Motion.

Applicant’s vague assertion that Opposer “has had many months to conduct discovery” related to the fraud claim is disingenuous in light of the fact that this proceeding has been suspended for various reasons for much of the time period since Opposer discovered the events that gave rise to the fraud claim. From March 26, 2009, when Opposer confirmed the falsity of the identification of goods during the 30(b)(6) deposition of Applicant, to April 10, 2009, when Opposer filed its Motion for Summary Judgment (“MSJ”), effectively suspending the proceeding, discovery was only open for fifteen days. Similarly, the proceeding was suspended for much of 2008 due to a Motion to Compel filed by Applicant. Opposer has not had any opportunity to take discovery on Ms. Hendricks’s Affidavit attesting to her lack of deceptive intent and the Firm’s billing invoices attached thereto, which were filed after Opposer had filed its MSJ and the proceeding had been suspended and were never produced to Opposer. Applicant’s cite to Ron Cauldwell Jewelry v. Clothestime Clothes, 63 USPQ2d 2009 n.8 (TTAB 2002) fails to support its claim that Opposer’s filing of its motion for summary judgment should preclude it from 56(f) discovery. In that case, discovery was denied where the party responding to a motion for summary judgment filed both a substantive response on the merits and a request for 56(f) discovery—a tactic that is prohibited. Id. Unlike the party in Cauldwell, Opposer has not filed a response to the Cross Motion on the merits, but has only filed its Motion for 56(f) discovery. Thus, Cauldwell is inapposite. Furthermore, Opposer’s filing of its MSJ does not preclude it from seeking additional discovery to respond to Applicant’s Cross Motion. Opposer is entitled to respond to and rebut the evidence presented by Applicant’s Cross Motion and is not limited to the evidence in its own prior MSJ. Applicant’s reliance on Ms. Hendricks’ Affidavit and the records attached thereto, which were never produced to Opposer, as a basis for its Cross Motion, has created a need for Opposer to take discovery on the issues raised by those documents. While circumstances where a party that initially moved for summary judgment would need additional discovery to respond to a cross motion for summary judgment are likely to be rare, such a circumstance is presented here, where intent is at issue and where the In re Bose decision changed the evidentiary standard for proving fraud after Opposer filed its motion for summary judgment. Therefore, given the change in the evidentiary standard for proving fraud and that

2

Applicant is asking the Board to find no fraud occurred, Opposer should be granted additional discovery. Applicant also misconstrues the effect of the In re Bose decision on the evidentiary standard for proving fraud, claiming that “the requirement to establish intent is not new” and that “the Board has consistently and correctly acknowledged that there is a material legal distinction between a false representation and a fraudulent one.” (Response, p. 5) While those statements are correct, it is incorrect deny that prior to In re Bose, a party’s deceptive intent was presumed if a party knew or should have known that its statement was false or that In re Bose removed that presumption. The change in the law, upon which Opposer had reasonably relied, entitles Opposer to take discovery on Applicant’s counsel’s intent in amending its identification of goods and its failure to correct the misidentification of goods, as does Applicant’s offering of its counsel’s testimony in its Cross Motion. II. Opposer Has Specifically Identified Topics for which it Needs Additional Discovery In addition to having demonstrated a need for additional discovery regarding Applicant’s counsel’s intent, Opposer’s Motion for 56(f) Discovery and Declaration identified fourteen specific topics (a)-(m) for additional discovery. A copy of the Declaration listing topics (a)-(m) is attached hereto as Exhibit A. Applicant does not dispute that Opposer has sufficiently identified these topics. Instead, Applicant argues in a conclusory manner that its amendment to include two items that were not actually used as of the filing date occurred “mistakenly” as an “unintentional oversight.” Apparently, Applicant expects Opposer and the Board to simply accept this conclusory statement of Applicant’s counsel. However, the facts tend to show that the First Amendment was not merely an “unintentional oversight,” specifically: (1) Applicant’s counsel filed the Amendment without having its client sign a new declaration; (2) Applicant and its counsel knew that two of the items in the identification were not actually in use as of the filing date of the Application; (3) Applicant’s counsel failed to amend the identification of goods for over a year; and (4) Applicant’s counsel only moved to correct the improper identification of goods the same day that Opposer confronted Applicant about the issue during the 30(b)(6) deposition. Such facts tend to show that the First Amendment was hardly an “oversight.” Whether the First Amendment was “unintentional” or intentional is exactly the factual issue in dispute.

3

Neither the Board nor Opposer is required to simply rely on Applicant’s counsel’s conclusory statement. Opposer should be entitled to take discovery on this matter.1 III. Opposer Does Not Already Have Access to the Information that it Seeks Applicant next argues that the discovery sought by Opposer “can be found in materials already provided.” That assertion is simply false. An examination of Applicant’s failed attempt to map the “materials already provided” to the specific information sought by Opposer shows its falsity. A. Applicant does not Claim that Opposer Has Information for Topics (c) and (d)

Despite Applicant’s blanket claim that the information sought by Opposer can be found in materials already provided, Applicant does not explain where the prior materials provide the information sought by topic (c) or topic (d). Similarly, Applicant does not dispute the relevance of topics (c) and (d), which relate to whether the improper inclusion of certain goods in the First Amendment was intentional. Thus, Applicant concedes that these are proper areas for additional discovery. B. Applicant’s First Amendment does not Provide the Information for Topic (a)

Contrary to Applicant’s claim that the information responsive to topic (a) (the circumstances surrounding the creation of the First Amendment), can be found in Applicant’s First Amendment, which alleges that “McSweet . . . timely moves to amend its application for registration . . . to raise the affirmative defense . . . that defendant is at least entitled to a registration with a particular restriction,” that statement does not satisfy the scope of Opposer’s inquiry. The “circumstances surrounding” include at least who suggested drafting it; who actually drafted it; when Applicant’s counsel drafted it; what Applicant’s counsel did, if anything, to verify the use of the goods identified in the amendment; whether Applicant’s counsel conferred with Applicant prior to drafting and filing the First Amendment; and whether there were any other reasons for drafting it aside from the reason stated in Applicant’s First Amendment. None of this information is in Applicant’s First Amendment.

Applicant also argues that its Second Motion to Amend somehow cured its fraud or gives rise to a presumption of a lack of fraudulent intent—an argument rehashed from its Response to Opposer’s MSJ. That argument is only tangentially related to the present motion, and appears designed to distract rather than inform the Board on the pending issue. This issue is fully briefed in Opposer’s MSJ and reply brief in support thereof.

1

4

C.

Ms. Hendricks’ Affidavit does not Provide the Information for Topics (b), (e), and (f)

Contrary to Applicant’s assertion, Ms. Hendricks’ Affidavit does not provide the information sought by topics (b), (e) and (f). Ms. Hendricks’ Affidavit only vaguely refers to when Ms. Hendricks became aware that “the MCSWEET application, as amended, had not addressed dates of first use . . . [and] [a]s [she] assembled information, it became apparent that an additional amendment of the application was needed.” (Hendricks Decl. ¶5) It does not disclose who first identified that the description was improper (topic (e)), but only when Ms. Hendricks became aware that it was improper. Indeed, at least three current or former attorneys at Hendricks & Lewis PLLC, Ms. Hendricks, Lori Benavides and Stacia Lay, have been identified as having worked on this matter for Applicant and Yale Lewis of that firm has represented that he was aware of the facts of this case. Similarly, Ms. Hendricks’ Affidavit only vaguely identifies when Ms. Hendricks became aware that the description was improper, not when any of Applicant’s counsel became aware of it. Likewise, Ms. Hendricks’ Affidavit only identifies that “[a]s [she] assembled information, it became apparent that an additional amendment of the application was needed” but does not specify when any of Applicant’s other attorneys first considered correcting the description of goods in the First Amendment (topic (f)). Moreover, Ms. Hendricks’ Affidavit does not specify whether that was the first time that she considered correcting the description of goods. D. Ms. Hendricks’ Affidavit does not provide the Information for Topics (g) and (h)

Contrary to Applicant’s assertion, Ms. Hendricks’ Affidavit does not provide the information sought by topics (g) and (h). First, Ms. Hendricks’ Affidavit does not indicate whether she or any of Applicant’s other counsel conferred with Applicant regarding the Second Amendment prior to filing it, but only states that Ms. Hendricks did not speak with Applicant on the day of Applicant’s 30(b)(6) deposition. Second, Ms. Hendricks’ Affidavit only states that she did not confer with “Mr. McCaslin or Ms. Benavides regarding the questions in the deposition during the deposition taking place on March 26, 2009, prior to filing Applicant’s Second Motion to Amend,” but it fails to specify whether any of Applicant’s other attorneys spoke with Mr. McCaslin or Ms. Benavides. It also fails to state whether Ms. Hendricks spoke with Ms. Benavides or Mr. McCaslin regarding matters other than “the questions in the

5

deposition,” for example, it fails to foreclose the possibility that Ms. Hendricks spoke with Ms. Benavides regarding the need to file the Second Motion to Amend. E. Ms. Hendricks’ Affidavit does not provide the Information for Topics (j) or (n)

Ms. Hendricks’ Affidavit also does not provide information for topic (j)(the length of time between when Applicant's counsel first became aware of the falsity of the description of goods in the First Amendment and when Applicant filed the Second Amendment) because it only discloses when Ms. Hendricks purportedly first became aware of the falsity of the description of goods, not when any of Applicant’s attorneys became so aware. Ms. Hendricks’ Affidavit is entirely silent on topic (n)(why Applicant's counsel did not correct the false identification of goods until after the 30(b)(6) deposition of Applicant). Applicant asserts that the requested information can be found in the portions of Ms. Hendricks’ Affidavit that state when Ms. Hendricks met with Stacia Lay, when she requested that Ms. Lay prepare the Second Motion to Amend, when it was prepared and when it was filed. However, those statements only identify the time frame when Applicant’s counsel prepared the Second Motion to Amend, not why it was prepared or why it was filed at the times that it was, which is the focus of topic (n). F. The Second Motion to Amend does not Address Topics (k), (l) or (m)

Applicant claims that the portions of its Second Motion to Amend, which state that the First Amendment was an “inadvertent oversight” and that Applicant included giardiniera and green beans in the First Amendment “mistakenly,” provides the information sought by topic (k)(why Applicant’s counsel included giardiniera and green beans in the description of goods in the First Amendment.) However, the two conclusory statements by Applicant’s counsel fail to provide sufficient information on this topic, including who made the purported “mistake” or “oversight,” whether Applicant’s counsel and/or Applicant understood the applicable law when it filed the First Amendment, whether Applicant’s counsel and/or Applicant were aware of whether the mark had not been used with giardiniera and green beans prior to the Application filing date, who was responsible for verifying that information, and whether there were any other reasons why the goods not in use were included in the First Amendment. Applicant also claims that information responsive to topics (l) and (m) has been provided but fails

6

to identify any such information. Instead, Applicant states in its Response Brief to Opposer’s 56(f) Motion that “[a]n application subject to an opposition may be amended in substance with the consent of the other party to the proceeding and approval by the Board or upon motion granted by the Board” and that it “did not need to submit an amendment signed by applicant or seek Opposer’s consent to amend.” While that may be true, it fails to provide the information sought, namely why did Applicant file the motion without seeking consent (topic (m)) and why did Applicant rely on documents signed solely by Ms. Hendricks—a decision which placed the responsibility for verifying the amendment on Applicant’s counsel—rather than have Applicant sign a declaration verifying the amended identification of goods. G. The “Materials Already Provided” are Conclusory, Limited and One-Sided

Applicant’s argument that Opposer already has access to the information in the “materials already provided” also fails because such materials consist of the limited, conclusory statements of Applicant’s counsel and documents hand-picked by Applicant’s counsel in support of its filings. Under the Federal Rules and the Rules of Board, Opposer is entitled to more than just a limited offering of facts hand-picked by Applicant. Neither Opposer nor the Board is required to rely solely on the statements of Applicant’s counsel without further inquiry into the facts. IV. The Dates Sought by Opposer Are Relevant to Show Applicant’s Counsel’s Intent Applicant also opposes providing the dates sought by Opposer, erroneously claiming that “there are no relevant issues” about the dates pertaining to the timing of Applicant’s filing of the First Amendment and Second Motion to Amend “[b]ecause Applicant timely amended the application during the inter partes proceeding.” The dates sought by Opposer will show when Applicant knew that its First Amendment identified goods that had not been used as of the filing date, when Applicant became aware of the need to correct the First Amendment, when Applicant first took actions to correct the First Amendment, and when Applicant filed the Second Amendment—all of which are relevant to Applicant’s counsel’s intent. For example, if Applicant was aware that the First Amendment contained goods that were not in use as of the application filing date and/or if Applicant knew that the identification of goods needed to be corrected, but failed to act for over a year, it would show deceptive intent.

7

V.

Opposer is Entitled to Take the Depositions of Applicant’s Counsel Federal Rule of Civil Procedure 26(b)(3) clearly contemplates discovery from attorneys. United

Phosphorus v. Midland Fumigants, 164 F.R.D. 245, 248 (D. Kan. 1995). Generally, when determining whether an attorney may be deposed, courts consider the need to depose the lawyer, the lawyer’s role in connection with the matter on which discovery is sought and in relation to the pending litigation, the risk of encountering privilege and work-product issues, and the extent of discovery already connected. In re Friedman, 350 F.3d 65, 72 (2d Cir. 2003). The Eighth Circuit’s test in Shelton v. Am. Motors Corp., 805 F.2d 1323 (8th Cir. 1986), which requires a party to make a multi-part showing before deposing opposing counsel, has been rejected in other circuits in favor of a “flexible approach” more consistent with Rule 26. See Friedman, at 71-72; Younger Mfg. Co. v. Kaenon, Inc., 247 F.R.D. 586, 588 (D.C.Cal. 2007). Regardless of the circuit split, in cases such as this one, where the attorney’s conduct itself is the basis of a claim or defense—and in this case the Cross Motion—the opposing party has a right to the attorney’s testimony. Johnston Dev. Group, Inc. v. Carpenters Local Union No. 1578, 130 F.R.D. 348, 352 (D.N.J. 1990); Cascone v. The Niles Home for Children, 897 F.Supp. 1263, 1267 (W.D. Mo. 1995). Here, the conduct of Applicant’s counsel is at issue. Counsel signed and filed the First Amendment containing the incorrect identification of goods; waited over a year to correct the false identification of goods; and drafted, signed and filed the Second Motion to Amend, purportedly without discussing it with her client. Coincidentally, counsel must have decided to file the Second Motion to Amend on the same day as the 30(b)(6) deposition of Applicant during which Opposer confronted Applicant on the falsity of the identification of goods in the First Amendment. Thus, the fraudulent acts were all committed by Applicant’s counsel, which entitles Opposer to take the depositions of Applicant’s counsel.2 However, even under the Shelton test, Opposer should be permitted to take the depositions of Applicant’s counsel. First, as described above and stated in the Declaration of John Cullis at para. 8, Opposer does not have access to the information that it seeks because that information is predominantly in

2

Anticipating that the reliance on counsel’s testimony would violate 37 C.F.R. 10.63, Opposer filed a Petition to Disqualify. The Board denied that Petition as premature because it might opt to ignore the Hendricks Affidavit.

8

the possession of Applicant’s counsel, and therefore, there is no other witness who could provide that information. Indeed, Applicant has not identified any other witness who could provide the information. Applicant’s suggestion that written interrogatories would be more “cost effective” is unlikely to provide the information sought due to the nature of the interrogatory process. Unlike a deposition, which enables the party taking the deposition to respond to a witnesses answers and ask follow-up questions, written interrogatories do not permit such further probing examination. See In re Friedman, 350 F.3d at 69, citing Mill-Run Tours, Inc. v. Khashoggi, 124 F.R.D. 547, 549-50 (S.D.N.Y. 1989)(listing “several reasons why oral deposition should not be routinely replaced by written questions,” including the need for follow-up, observation of a prospective witness’s demeanor, and avoidance of receiving pre-prepared answers so carefully tailored that they are likely to generate additional discovery disputes.) Indeed, since Applicant has already argued that the minimal information that it has provided in the Hendricks Affidavit provides sufficient information, Opposer has reason to believe that it would receive only limited, incomplete answers to written interrogatories, resulting in prolonged motion practice further delaying this proceeding. Thus, written interrogatories are unlikely to provide the requested discovery in a cost effective manner. Second, all of the information sought by Opposer is relevant, certain information is nonprivileged and Opposer is entitled to the privileged information because privilege has been waived or the crimefraud exception applies. As discussed above, all of the information sought by Opposer is relevant to Applicant’s counsel’s intent in filing the First Amendment and/or its intent in waiting over a year and until it was confronted by Opposer to file the Second Motion to Amend. Some of that information relates to the dates when Applicant’s counsel took certain actions or was aware of certain facts and what knowledge Applicant had regarding the law and facts relating to Applicant’s use of the mark on certain goods. Such information does not disclose the mental impressions of the attorney, nor would it disclose the subject matter of attorney-client communications, and therefore it is not privileged as attorney-client communications or under the work product doctrine. Thus, Opposer is entitled to that information. Opposer also seeks information concerning why Applicant’s counsel took certain actions. While certain information may have been privileged, Applicant has waived privilege by relying on its counsel’s

9

testimony that the filing of the First Amendment was an “unintentional oversight.” Privilege may not be used as both a sword and a shield. Privilege is waived “where a party injects into litigation an issue that requires testimony from its attorneys or testimony concerning the reasonableness of its attorneys’ conduct.” GAB Bus. Servs., Inc. v. Syndicate, 809 F.2d 755, 762 (11th Cir. 1987); see also, In re Bairnco Corp. Sec. Litig., 148 F.R.D. 91, 101 (S.D.N.Y. 1993)(“To permit [defendant] to offer the fact of counsel’s conclusions where such conclusions serve [defendant’s] purposes without permitting plaintiffs access to all the communications between counsel and [defendant] would prejudice plaintiffs.”) Thus, here, where Applicant has sought to rely on the testimony of its attorneys regarding their intent in filing the First Amendment, Applicant has waived its right to assert privilege on such matters. In addition, Opposer is entitled to such information under the crime-fraud exception which permits access to information that would otherwise be privileged where there is reasonable basis to suspect the perpetration of a fraud and the materials sought were used to commit the fraud. In re Sealed Case, 676 F.2d 793, 812 (D.C. Cir. 1982)(“an attorney’s opinion work product cannot be privileged if the work was performed in furtherance of a crime, fraud, or other type of misconduct fundamentally inconsistent with the basic premises of the adversary system.”); Bairnco, at 100. Here, the information about Applicant’s counsel’s intent directly relates to its fraud and therefore is not protected by privilege. Third, for the reasons set forth in Opposer’s Motion and the Declaration of John Cullis, the information related to Applicant’s counsel’s intent is crucial to the development of its fraud claim. Thus, even under the Shelton test, Opposer is entitled to take the depositions of Applicant’s counsel. WHEREFORE, the Board should grant Opposer’s Motion or deny Applicant’s Cross Motion. Respectfully submitted, Date: November 4, 2009 McDONALD’S CORPORATION By: NEAL, GERBER & EISENBERG, LLP 2 N. LaSalle Street, Suite 1700 Chicago, IL 60602 (312)269-8000 /Lawrence E. James, Jr./ One of the Attorneys for Opposer Robert E. Browne Michael G. Kelber John A. Cullis Lawrence E. James, Jr. Michael R. Turner

10

CERTIFICATE OF SERVICE I, Lawrence E. James, Jr., an attorney state that I served a copy of the foregoing Opposer’s Reply In Support of Its Rule 56(f) Motion for Discovery To Respond To Applicant’s Cross Motion For Summary Judgment, via email and First Class U.S. mail, postage pre-paid, upon: Katherine Hendricks, Esq. HENDRICKS & LEWIS PLLC 901 Fifth Ave., Ste 4100 Seattle, WA 98164 on this 4th day of November, 2009.

/Lawrence E. James, Jr./ Lawrence E. James, Jr.
NGEDOCS: 1666775.2

11

Sign up to vote on this title
UsefulNot useful