Weekly IP Takeaways

Prepared by Cislo & Thomas LLP Attorney Mark D. Nielsen, Ph.D.

1. As a passionate Los Angeles Kings hockey fan, it pains me to highlight a win by the Anaheim Ducks’ affiliate, the San Diego Gulls. But, hockey and IP are among a few of my favorite things, so it is necessary. In 2015, the ECHL (formerly the “East Coast Hockey League”) assigned the rights to several SAN DIEGO GULLS trademarks and logos to the San Diego Gulls Hockey Club. The ECHL is a mid-level professional hockey league. At the time, the Gulls were moving to the American Hockey League (AHL) to serve as the Duck’s AHL affiliate, and the ECHL purportedly transferred the trademark rights to the Gulls club. In 2016, the Gulls were sued by a third party for infringement of a logo purportedly transferred to the Gulls by the ECHL. The Gulls incurred approximately $750,000 in fees defending the suit, and paid over $300,000 to resolve the suit. The Gulls then sued the ECHL in the Central District of California for breach of contract and intentional misrepresentation to recoup its fees and payments, asserting that the ECHL knew that it did not own all of the trademark rights assigned and/or that the third party held rights to one or more of the marks assigned. The ECHL moved to dismiss arguing that the allegations in the complaint were not pled with sufficient specificity as required under Fed.R.Civ.P. 9(b) for fraud allegations. The district court denied the ECHL’s motion finding that the pleading was sufficiently specific to place the ECHL on notice of the claims against it. The takeaway here is that the necessary due diligence must be done to ensure one owns the rights being assigned, and/or that there are no competing rights to the rights being assigned.

2. In an effort to increase cooperation between the U.S. Patent and Trademark Office (USPTO) and the Mexican Institute of Industrial Property (IMPI), and streamline examination in IMPI in particular when there is a parallel U.S. application, leaders of the IP offices in the U.S. and Mexico reported an agreement to make such cooperation and streamlining possible. For entities using the same technology, and applying for the same patents on both sides of the border, this may be a very advantageous opportunity of which to take advantage.

3. In a non-precedential decision (Trimble v. PerDiemCo) on a motion to disqualify appellate counsel, the Federal Circuit disqualified a firm that performed patent work for a subsidiary of a party to a Federal Circuit appeal where the firm appeared in the appeal on behalf of the adversary to the parent. Because the Federal Circuit decides disqualification issues largely under the law of the regional circuit, it decided this motion under Ninth Circuit law, which itself looks to the law of the relevant state, which in this case was California. The interesting issue in this appeal was the fact that the concurrent representation was of a subsidiary of the party to the lawsuit and the adverse party to the lawsuit. To determine whether the parent and subsidiary could be treated as one, the Federal Circuit, following case law from district courts within the Ninth Circuit, California Courts, and the Second Circuit Court of Appeals, looked at whether there was operational interdependence and financial interdependence between the parent and subsidiary. The Court concluded that there was substantial operational interdependence (legal, phone system, HR, payroll, office space), and also financial interdependence, and thus, concluded that the parent and the subsidiary were to be treated as one entity. As such, the law firm was disqualified from representing the party adverse to the parent on appeal. The takeaway here is to be careful if you think you can avoid a conflict because you do not represent exact adverse parties where there may be a parent-subsidiary or other affiliate situation.