In a case filed under the Lanham Act for trademark infringement, Fourth Circuit holds that a foreign corporation can be compelled to present a designee to testify, even in the absence of any employees, activities, or business locations within the United States, if the corporation has applied for trademark registration with a U.S. government office
Defendant Rosenruist Gestao E Servicos LDA ("Rosenruist") is a Portuguese company that seeks to obtain a United States trademark registration and enjoy the benefits that accompany ownership of a registered mark under the Lanham Act. Virgin Enterprises Ltd. ("VEL"), a British conglomerate that owns numerous United States registrations, opposes the registration of Rosenruist's mark and commenced an administrative proceeding before the Trademark Trial and Appeal Board ("TTAB") against Rosenruist to prevent the registration. When Rosenruist refused to appear voluntarily for a Rule 30(b)(6) deposition under the procedural rules promulgated by the Patent and Trademark Office ("PTO"), see 37 C.F.R. Section 2.123 (2006), the district court issued a subpoena under 35 U.S.C.A. Section 24, directing Rosenruist to produce a designee to testify on behalf of the corporation at a deposition in Virginia. The district court refused Rosenruist's request to quash the subpoena and then subsequently imposed sanctions against Rosenruist when it failed to attend the deposition. Seeking to ensure Rosenruist's cooperation, VEL filed a motion to compel Rosenruist, on pain of contempt sanctions, to designate its Rule 30(b)(6) representative and appear for the corporate deposition as directed by the subpoena.
Notwithstanding its earlier ruling that Rosenruist had been properly served with a valid subpoena for a Rule 30(b)(6) deposition, the court determined that it could not require Rosenruist to produce a corporate designee for the deposition unless that designee personally resided within the district of the issuing court. Because there are no individuals residing within the Eastern District of Virginia who Rosenruist could designate as its witness under Rule 30(b)(6), the court denied VEL's request to compel an appearance." [¶¶ 18 19]
Pursuant to Rule 30(b)(6) of the Federal Rules of Civil Procedure, Plaintiff sought to conduct a testimonial deposition of Defendant. Defendant refused to appear, and pursuant to the PTO's rules of procedure Plaintiff compelled Defendant to identify a Rule 30(b)(6) representative and produce that person to testify for the corporation at an oral deposition in Portugal. The TTAB denied Plaintiff's motion to compel, noting that, according to its manual of procedure, a party residing in a foreign country may be compelled to appear for an oral testimonial deposition only through the procedures provided in The Hague Convention or the issuance of letters rogatory to the appropriate Portuguese legal authority.
Subsequently, however, the District Court for the Eastern District of Virginia did issue a subpoena on Plaintiff's request, and the Plaintiff served it on Defendant's American counsel. Defendant moved pursuant to Rule 45(c)(3)(A) to quash the subpoena, arguing that the district court lacked the authority to subpoena a foreign resident to appear in the United States for a deposition, and that Plaintiff was attempting to circumvent the proper procedure for compelling Rosenruist's testimonial deposition as outlined by the TTAB in its order denying the Plaintiff's initial motion to compel, and that service of the subpoena on counsel for Defendant was ineffective even if the subpoena was valid. [¶ 31]. The district court found in part for Plaintiff and in part for Defendant, holding that while the subpoena had been validly issued, Defendant could not be compelled to appoint a designee under it. The decision of the district court rested on the conclusion that the term "witness" as used in the PTO statute applied only to natural persons, and because Defendants had no employee in the district who could address the questions in the subpoena, Defendant would not be compelled to produce a designee. Plaintiff appealed
The U.S. Court of Appeals for the Fourth Circuit reverses the district court. Agreeing with Plaintiff, the Court holds that (1) for purposes of the TTAP, that the term "witness" is not limited only to natural persons. The PTO regulations expressly contemplate the use of Rule 30(b)(6) depositions in which the corporation is the "person" named in the subpoena as the deponent. (2) there is nothing in the TTAP statute indicating that Congress wished to tie the court's power to subpoena corporate testimony under Rule 30(b)(6) to the personal residence of the individuals ultimately designated by the corporation to testify on its behalf. Foreign corporations that are subject to the personal jurisdiction of a district court can be and often are required to produce officers, directors, or managing agents, regardless of where such witnesses personally reside, in the United States for a Rule 30(b)(6) deposition.
The implications of the majority's opinion are significant. Under the rules set forth in the opinion, "a foreign company that has no United States employees, locations, or business activities must produce a designee to testify at a deposition in the Eastern District of Virginia so long as it has applied for trademark registration with a government office located there. As a result, foreign witnesses can be compelled to travel to the United States and give in person deposition testimony at the behest of any litigant in a trademark dispute, "˜for use in any contested case in the Patent and Trademark Office' though the PTO's own procedures call for obtaining testimony from foreign companies through other means." [¶ 76]
Importantly, the Fourth Circuit's ruling, in effect, creates a national standard. The PTO is located in the Eastern District of Virginia. Applications for trademark registration are filed there, and subpoena enforcement will also frequently be sought there. For any foreign corporation without a pre existing United States presence, the majority's decision will be controlling.
In an extensive dissent, Judge Wilkinson lays out the flaws he sees in the majority's reasoning. The decision touches on comity concerns, and risks interference with comity by enabling litigants to compel in person depositions from foreign companies with the most minimal U.S. contacts, as a condition of those companies obtaining a legal protection that is critical to international commerce. "The majority's holding that this subpoena is enforceable is problematic for many reasons. It fails to properly apply the statute, 35 U.S.C. Section 24, that is directly relevant to its decision, and it reaches a result that is bound to embroil foreign trademark applicants in lengthy, procedurally complex proceedings. It inverts longstanding canons of construction that seek to protect against international discord, and it disregards the views of the PTO whose proceedings 35 U.S.C. Section 24 is designed to aid. In view of the statutory text, interpretive canons, international relationships, and separation of powers concerns, and the PTO's own framework, I firmly believe this subpoena must be quashed." [¶ 77]
Citation: Rosenruist Gestao E Servicos LDA v. Virgin Enterprises Ltd., No. 06 1588 (4th Cir. December 27, 2007).
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