Tuesday, December 22, 2015

Precedential No. 40: TTAB Refuses to Allow Witness to Change Testimony in HOLLYWOOD HOTEL Opposition

Concluding that a genuine dispute of material fact exists as to ownership of the opposed mark HOLLYWOOD HOTEL, the Board denied Opposer Hollywood Casino's motion for summary judgment. The attempt by Applicant Chateau Celeste's president to change his testimony regarding licensing and control of the mark was rejected by the Board. Nonetheless, opposer's evidence established only that Applicant was not the owner of the physical property known as the Hollywood Hotel at the time the subject application to register was filed.  Hollywood Casino LLC v. Chateau Celeste, Inc., 116 USPQ2d 1988 (TTAB 2015) [precedential].

Section 1 of the Trademark Act requires that the applicant for registration be the "owner of the mark sought to be registered." An application filed by one who is not the owner is void ab initio. Opposer maintained that the deposition testimony of applicant's president proved that someone other than applicant - namely, Zarco Hotels, Inc. - controls that nature and quality of the services rendered at the Hollywood Hotel, and therefore that Chateau Celeste was not the owner of the mark.

Errata Sheet: Applicant's president testified that Zarco Hotels owns the property, that Zarco controls the nature and quality of the services provided there, and that Chateau Celeste is the management company and has a license from Zarco to use trademarks. After opposer filed it summary judgment motion, the witness submitted an errata sheet changing certain portions of his deposition transcript to state that Chateau Celeste controls the nature and quality of the services at the property and that Zarco has a license from Chateau Celeste to use trademarks. Opposer objected to these proposed "clarifications," and likewise objected to a declaration of the same witness submitted in opposition to the summary judgment motion, because it likewise contradicted his original testimony.

Applying FRCP 30(e) with regard to the errata sheet, the Board observed that a party should not be allowed to make an unexplained "about face" with respect to damaging deposition testimony. To do otherwise would "eviscerate the purpose of sworn depositions, and would severely prejudice the deposing party's ability to rely upon or strategize based on the responses given by a deponent."

Because the proposed changes were substantive in nature and relate to a potentially dispositive issue, the Board applied "heightened scrutiny." Although the errata sheet was timely served - i.e., within 30 days of the transcript being made available - the explanation for the changes was unconvincing. The witness identified the cast of entities and had multiple opportunities to correctly identify them. The changes were made only after applicant was alerted to the damaging nature of the original testimony, and would serve to "recreate Applicant's testimony, presumably to defeat Opposer's newly added nonownership claim." Allowing a re-opening of the deposition would likely result only in the witness hewing to the amended answers. Balancing the relevant factors, the Board concluded that consideration of the errata sheet would be inappropriate.

Declaration: The declaration of the witness included the same "clarifications" as the errata sheet. He claimed that opposer's attorney did not explain the meaning of  the phrase "controls the nature and quality of the services that are provided at the property," which caused the original inaccurate answers. Opposer called the declaration a "sham affidavit" because the question was simple and straightforward and the answer did not reflect any confusion. The Board agreed with opposer, and it refused to consider the declaration.

Conclusion: Notwithstanding these evidentiary rulings, the Board ruled that opposer had failed to carry its burden to show the absence of any genuine issue of fact.

In particular, the deposition testimony does not make clear that Applicant was not, in fact, the owner of the trademark HOLLYWOOD HOTEL at the time the application was filed. The testimony Opposer cites as supporting its claim that Applicant was not the owner merely establishes that Applicant was not the owner of the physical property known as the Hollywood Hotel, located at 1160 North Vermont Avenue in Hollywood, California at the time the application was filed. [Emphasis in original].

The Board therefore denied the summary judgment motion and set a new schedule for resumption of the proceeding.

Read comments and post your comment here.

TTABlog comment: If Chateau Celeste is not the owner of the mark, the application is void. If it is the owner of the mark but it doesn't control the nature and quality of the services, what would that mean? Is Chateau Celeste caught between a rock and a hard place?

Practice pointer: Witness preparation should be conducted before the deposition, not after.

Text Copyright John L. Welch 2015.


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