Peer Bearing Co. v. Roller Bearing Co. of Am.

Decision Date19 December 2012
Docket NumberMISCELLANIOUS CASE NO. 12-216
PartiesPEER BEARING CO., Plaintiff, v. ROLLER BEARING CO. OF AM., INC., Defendant.
CourtU.S. District Court — Eastern District of Pennsylvania


Baylson, J.

I. Introduction

Respondent Roller Bearing Company of America, Inc. ("RBC" or "Respondent") seeks discovery in support of its petition to disqualify Peer Bearing Co.'s ("Peer") counsel (the "Petition to Disqualify") from Peer's opposition (the "Peer Opposition") to RBC's trademark application that is currently pending before the United States Patent and Trademark Office (the "USPTO") through two sets of subpoenas served on third parties pursuant to 35 U.S.C. § 24:

1. The first set of subpoenas seeks discovery from Movants Pepper Hamilton LLP and two Pepper Hamilton LLP attorneys, David Richman and Matthew D. Janssen; and
2. The second set of subpoenas seeks discovery from SKF USA Inc. and SKF's President and Chief Operation Officer, Poul Jeppesen (collectively "Movants").

Movants filed Motions to Quash the Subpoenas (ECF Nos. 1 and 10) (the "Motions").

The initial and threshold question presented by the Motions is whether 35 U.S.C. § 24 provides courts with the power to issue subpoenas in support of petitions to disqualify attorneys from proceedings before the USPTO Trade Mark Trial and Appeals Board (the "TTAB"). This is apparently a case of first impression. For the reasons below, the Court finds that § 24 does notprovide a federal district court with authority to issue RBC's subpoenas, and, therefore, Movants' Motions to Quash are GRANTED.

II. Background

The Court provides only a short summary of the events leading up to RBC serving the subpoenas on Movants, because detailed facts are not germane to the question of whether 35 U.S.C. § 24 authorizes this Court to issue subpoenas in support of petitions to qualify.

RBC, SKF and Peer, a wholly owned subsidiary of SKF, are ball bearing manufacturers embroiled in a lengthy dispute regarding RBC's application to trademark certain names for ball bearings (the "Ball Bearing Names"). A number of ball bearing manufacturers, including SKF and Peer, opposed RBC's trademark application, claiming that the Ball Bearing Names cannot be trademarked because they are standard industry names.

RBC challenged SKF's and Peer's rights to oppose its trademark application based on a prior deal between RBC and SKF in which SKF sold part of its business to RBC. The dispute went to arbitration, and the panel rendered an interim award and a final award that:

1. Enjoined SKF from opposing RBC's trademark application because SKF had sold its interest in using the Ball Bearing Names to RBC, but
2. Declined to enjoin Peer from opposing RBC's trademark application, because SKF had acquired Peer after its deal with RBC, and Peer has an independent interest in using the Ball Bearing Names.

SKF subsequently withdrew its opposition; Peer continues to pursue its opposition.

RBC subsequently filed its Petition to Disqualify in the Peer Opposition, and served two sets of subpoenas requesting discovery (both documents and depositions) from Movants in support of its petition. Movants request that the Court quash RBC's subpoenas.

III. Procedural History

Movants1 initially believed that RBC's subpoenas were for discovery in the Peer Opposition and argued that RBC's subpoenas should be quashed pursuant to the USPTO's rules for discovery in opposition proceedings, as set forth in the TTAB Manual of Procedure (the "TBMP"), (3d ed., Rev. 1, June 2012), trademarks /process/appeal/tbmp_3rd_ed_rev_1.pdf.2

RBC responded (ECF 5) that it was not seeking discovery in the Peer Opposition, but in support of its Petition to Disqualify.3 (Resp't's Resp. at 9.) RBC's Response:

1. Failed to marshal any authority expressly authorizing the discovery it seeks; and
2. Is internally inconsistent as to whether RBC is, in fact, authorized to take discovery in support of its petition.

RBC's Response cites only one USPTO regulation as authorizing the discovery it seeks, 37 C.F.R. § 11.19(c), which grants the USPTO Director the authority to "handle[ petitions to disqualify] on a case-by-case basis under such conditions as [he] deems appropriate." (Resp't's Resp. at 9.) RBC initially described 37 C.F.R. § 11.19(c) as "not preclud[ing] discovery in support of" its petition and later stated that its "right to seek further evidence in support of its petition" is conditioned on "the USPTO Director deem[ing] it necessary." (Id. at 9, 14.) Nevertheless, RBC also declared - without further explanation or mention of a determination by the USPTO Director regarding the necessity of its discovery - that it is "entitled to . . . seek evidence through . . . subpoenas." (Id. at 14.)

Movants' Reply (ECF 12) reasserted their argument that the discovery RBC seeks is disallowed by the TBMP. According to the Movants' Reply, the TBMP interprets the discovery regulations that apply "generally to discovery in" proceedings before TTAB, including petitions to disqualify. (Movants' Rep. at 7-8 & n.3.) Movants failed to address that the TBMP provision they cited, section 403.01, interprets procedures found in 37 C.F.R. Part 2, while, as discussed in Sections III.B. and IV.A., infra, the procedures for petitions to disqualify are governed by 37 C.F.R. Part 11, specifically § 11.19(c). Movants also argued that 37 C.F.R. § 11.19(c) bars RBC's discovery, because it permits discovery only upon the USPTO Director's authorization, and RBC has no such authorization.

RBC submitted a Sur-Response (ECF 13) summarily stating that discovery under 37 C.F.R. § 11.19(c) does not require the USPTO Director's prior authorization, and that 35 U.S.C. § 24 authorizes this Court to issue subpoenas in support of petitions to disqualify.

On November 9, 2012, the Court held oral argument on the Motions. Prior to the hearing, the Court sent letters to counsel for both sides questioning whether § 24 does, in fact, authorize the Court to issue subpoenas in support of petitions to disqualify, and asking that counsel be prepared to address this issue. At the hearing, RBC abandoned its argument that 37 C.F.R. § 11.19(c) authorizes the discovery it seeks, arguing instead that its petition to disqualify should be considered merely a feature of the Peer Opposition, and, therefore that its petition should be subject to the procedures for oppositions found in 37 C.F.R. Part 2. According to RBC, this would permit the discovery it seeks, including the use of subpoenas issued by this Court. RBC brought a written summary of its new position to the hearing and subsequently filed it at the request of the Court (ECF 21).

Movants also changed their tune, arguing that because RBC's Petition to Disqualify resulted in an automatic stay of the Peer Opposition, the discovery rules for oppositions found in 37 C.F.R. Part 2 should not apply. Instead, Movants argued that discovery in support of RBC's petition should be governed by 37 C.F.R. Part 11, specifically § 11.19(c), pursuant to which RBC may not obtain any discovery without prior authorization from the USPTO Director, which RBC had not obtained. (Hr'g Audio File 33:09-35:56 (ECF 19).)

III. Discovery in USPTO Proceedings

According to 35 U.S.C. § 2(b)(2)(A), Congress granted the USPTO the power to "establish regulations . . . which shall govern the conduct of proceedings in the [USPTO]." Although the Court is aware of no Third Circuit case addressing the scope of the USPTO's authority under this provision, the Federal Circuit has held that § 2(b)(2)(A) "is 'the broadest of the [USPTO's] rulemaking powers' and, '[b]y this grant of power we understand Congress to have delegated plenary authority over [USPTO] practice . . . to the [USPTO]." Cooper Techs. Co. v. Dudas, 536 F.3d 1330, 1335 (Fed. Cir. 2008) (second and fourth alterations in original) (quoting Stevens v. Tamai, 366 F.3d 1325, 1333 (Fed. Cir. 2004)). Congress has also granted the USPTO the power to "establish rules for taking affidavits and depositions required in cases in the [USPTO]." 35 U.S.C. § 23.

Under the authority granted to it by Congress, the USPTO has promulgated a number of regulations governing the conduct of proceedings before it, including regulations for:

1. Trademark proceedings before the TTAB, 37 C.F.R. Part 2; and
2. Investigations and disciplinary proceedings, which include petitions to disqualify practitioners, 37 C.F.R. Part 11.

A. Trademark Opposition Proceedings

37 C.F.R. Part 2 sets forth the "Rules for Practice in Trademark Cases." According to 37 C.F.R. § 2.116(a), "[e]xcept as otherwise provided, and wherever applicable and appropriate, procedure and practice in inter partes proceedings shall be governed by the Federal Rules of Civil Procedure." For trademark oppositions, 37 C.F.R. § 2.120(a)(1) specifically provides that discovery will be governed by the Federal Rules of Civil Procedure "except as otherwise provided." According to the TBMP, the USPTO "will presume the parties will comply with their obligation to make all required disclosures and will utilize traditional discovery devices, as permitted by the Trademark Rules and Federal Rules of Civil Procedure." § 401 (emphasis added). Although not explicitly stated in its regulations, the TBMP makes clear that the USPTO intends for 37 C.F.R. § 2.120 to authorize use of the federal district courts' subpoena powers, even with respect to non-parties. E.g., TBMP § 404.03(a)(2) ("If the proposed deponent is not willing to appear voluntarily, the deposing party must secure the deponent's attendance by subpoena" issued in accordance with the Federal Rules of Civil Procedure); id. § 406.01 ("if a discovery deposition deponent is a nonparty witness residing in the United States, production of designated documents by the witness at the deposition may be obtained by means of a subpoena duces tecum" issued in accordance with the Federal Rules of Civil Procedure).


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