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

In this consolidated proceeding concerning the mark LEHMAN BROTHERS, Applicant Tiger Lily Ventures Ltd. moved to strike certain testimony and evidence submitted by Opposer 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 final hearing. Barclays Capital Inc. v. Tiger Lily Ventures Ltd., 124 USPQ2d 1160 (TTAB 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 by Barclays because they did not qualify as printed publications in general circulation under Rule 2.122(e).  But the Board declined to strike several financial reports downloaded from the LexisNexis online database and showing the date and source of each report. The Board noted, 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 TTAB pointed out that such substantive objections are ordinarily considered only at final hearing. Tiger Lily contended that the reference to “ordinarily” leaves open a window for its challenge. It argued that the declarations of Barclays’ in-house counsel and of a paralegal at its outside counsel’s firm should be stricken immediately because of bias and lack of credibility. Tiger Lily contended that the testimony was inappropriate under 37 CFR Section 10.63 (now Section 11.307) which states that an attorney must withdraw from representation of a party if it appears that he is likely to appear as a witness or becomes a witness for that party.

Tiger Lily argued that the issue should be decided now because, under Rule 2.123(a) (implemented in January 2017), a “cost-shifting burden” has been imposed on the party that wishes to cross-examine the testimony declarant. The amended Rule provides that the offering party must make the witness available for cross-examination, but the adverse party must “bear the expense of oral cross-examination of that witness.” In light of clear precedent against an attorney giving evidence, Tiger Lily contended that it would be unnecessarily burdened by the inflated costs of cross-examination, costs that could be saved by an early ruling.

The TTAB was unmoved. It noted that even when testimony is taken orally, the cross-examining party must pay its own attorney fees and its travel expenses to attend the deposition. Thus the added expenses to the cross-examining party are the cost of the court reporter and the cost of arranging for the venue. The Board, in promulgating the Rule change, determined that this minor cost-shifting would "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, the TTAB pointed out that Tiger Lily need not cross-examine the declarants in order to lodge its objections. It could forego cross-examination and still raise the issue in its final brief. “Thus there is not necessarily a cost-shifting burden incurred solely for raising substantive objections.”

And so the Board concluded that Tiger Lily was not entitled to an earlier ruling on its substantive objections, and it deferred until final hearing consideration of Tiger Lily’s motion to strike Barclay’s testimony 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.