Monday, August 08, 2011

On Rehearing, 7th Circuit Rules that Wisconsin Waived Sovereign Immunity by Seeking 1071(b) Review of TTAB Decision

Reversing its prior ruling [TTABlogged here], the U.S. Court of Appeals for the Seventh Circuit held that Defendant Phoenix Software's compulsory counterclaims for trademark infringement are not barred by sovereign immunity in a civil action brought by the University of Wisconsin seeking review of the TTAB's cancellation of a registration owned by Wisconsin for the mark PHOENIX for computer software. Board of Regents of the University of Wisconsin System v. Phoenix International Software, Inc., 99 USPQ2d 1571 (7th Cir. 2011).

In its 63-page opinion, the appellate court maintained its position that genuine issues of material fact precluded the entry of summary judgment on the substantive trademark issues, as it did in its original decision of December 28, 2010.

However, it reversed itself on the issue of sovereign immunity, ruling that Wisconsin had waived its sovereign immunity vis-a-vis Phoenix's compulsory counterclaims when Wisconsin brought a civil action in the federal district court, under 15 U.S.C. 1071(b), for review of the TTAB's decision.

To maximize its chances of reversing the agency’s decision, the state availed itself of the advantages of a fresh lawsuit, choosing that path over a number of others available. It would be anomalous if, after invoking federal jurisdiction, the state could declare that the federal court has no authority to consider related aspects of the case. Cf. Lapides, 535 U.S. at 619. Phoenix’s counterclaims are compulsory in nature and thus lie well within the scope of Wisconsin’s waiver of immunity. Accordingly, we reverse the district court’s grant of summary judgment, reinstate Phoenix’s federal counterclaims, and remand for further proceedings.

TTABlog comment: Apparently Wisconsin wanted a home-court advantage in its appeal from the TTAB's decision. As it turns out, not such a great idea. I can hear the strains of the "On Wisconsin" fight song fading meekly into silence.

Text Copyright John L. Welch 2011.


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