Thursday, October 12, 2017

Precedential No. 32: TTAB Defers Decision on Motion to Strike Testimony Declaration

In this consolidated proceeding concerning the mark LEHMAN BROTHERS, Tiger Lily Ventures Ltd. moved to strike certain testimony and evidence submitted by Barclays Capital Inc. during the latter's case-in-chief, on both procedural and substantive grounds. The Board struck some of Barclays' evidence but refused to rule regarding the admissibility of two testimonial declarations, deferring that question until trial.  Barclays Capital Inc. v. Tiger Lily Ventures Ltd., Oppositions Nos. 91219477, 91219478, and 91219549 (September 20, 2017) [precedential].


The Board found that Tiger Lily's procedural objections were timely, since they were promptly raised after the close of Barclays' initial testimony period, while there was still an opportunity to cure. Tiger Lily objected to the descriptions of the evidence included in four notices of reliance. Rule 2.122(g) requires that a notice of reliance indicate generally the relevance of the evidence and associate it with one or more of the issues in the proceeding. 

The Board found two of Barclays' notices of reliance to be acceptable, but the other two to be inadequate in part because they failed to indicate which pages of certain exhibits related to which du Pont factor, or which element of Barclays' dilution claim, or which element of its false association claim, or which defense to a particular claim made by Tiger Lily. And so the motion to strike was granted in part, but with leave to amend the notices of reliance within 20 days.

The Board also granted Tiger Lily's motion to strike from the record certain press releases of Barclays (not publications in general circulation), but denied a motion to strike several financial reports downloaded from the LEXIS/NEXIS online database, noting however that such reports have limited probative value and cannot be used to prove the truth of facts stated therein.

Substantive Ruling: Tiger Lily objected to the admissibility of two testimonial declarations, but the Board pointed out that such objections are considered by the Board only at final hearing. In particular, Tiger Lily contended that the declarations of Barclays' in-house counsel and of a paralegal at its outside counsel's firm should be stricken because of bias and lack of credibility. Tiger Lily suggested that the testimony is inappropriate under 37 C.F.R. Section 10.63 (now Section 11.307) which states that an attorney must withdraw from representation of a party if it appears that the attorney is likely to appear as a witness or becomes a witness for that party.

Tiger Lily maintained that the issue should be decided now because, under Rule 2.123(c), a "cost-shifting burden" has been imposed on the party who wishes to cross-examine the declarant. In the face of clear precedent against an attorney giving evidence, Tiger Lily argued, it would unnecessarily burden the cross-examining party by inflating the costs of the deposition process, costs that could be saved by an early ruling.

The Board was unmoved. It noted that even with oral testimony, the cross-examining party must pay its own travel expense and attorney fees. Thus the new costs to the cross-examining party are the court reporter and the cost of the venue. This minor cost-shifting was determined "to support the goal of the final rule to create litigation efficiencies by 'minimiz[ing] the ability of a party seeking cross-examination to thwart the other party's efforts to rein in the cost of litigation by opting for testimony by affidavit.'"

Moreover, Tiger Lily need not cross-examine the declarants in order to lodge its objections. It could forego cross examination and still raise the matter in its final brief. "Thus there is not necessarily a cost-shifting burden incurred solely for raising substantive objections."

The fact that a party may choose to submit its testimony by way of declaration or affidavit does not affect how evidence is presented to the Board: outside its presence followed by submission to a panel of judges for decision.

Rule 2.123(f) states that "[o]bjections to the competency of a witness or to the competency, relevancy, or materiality of testimony ... may not be considered until final hearing." Accordingly the Board deferred until final hearing the decision on the motion to strike the two declarations. 

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TTABlog comment: The cost-shifting of Rule 2.123(c) was also the subject of the recent precedential decision in United States Postal Service v. RPost Communication Limited, Opposition No. 91210479 (August 31, 2017) [TTABlogged here].

Text Copyright John L. Welch 2017.

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