throbber
EXPRESS MAIL MAILING LABEL
`NUMBER EL (53) Iii’ Gig” l U5
`DATE OF DEPOSIT
`02.
`the United States Postal Service "EXPRESS MAIL POST OFFICE TO
`I hereby certify that this p per 0 fee is being deposited wit
`ADDRESSEE" service under 37 C.F.R. § 1.10 on October___, 2002 and is addressed to: Commissioner for Trademarks, 2900
`
`
`
`Crystal Drive,Arlington, VA22202-3513.
`
` @’Signaturei
`UNITED STATES PATENT AND TRADEMARK OFFICE O
`TRADEMARK TRIAL AND APPEAL BOARD
`‘g 22);},
`A f
`3
`Registration No. 1,664,665
`Mark: VILLA D’ESTE and designro
`Registered: November 19, 1991
`
`||||||||||||||||||||||mllllllllilllllllllllllll
`
`10-02-2002
`U.S. Patent 8: TMOfCITM Mail Flcpt D1. #77
`
`
`
`GIORGIO BORLENGHI,
`
`Petitioner,
`
`V.
`
`Cancellation No. 40,761
`
`VILLA D’ESTE, S.p.A.,
`
`
`
`Registrant.
`
`REPLY IN FURTHER SUPPORT OF REGISTRANT’S MOTION TO
`
`SUSPEND PROCEEDINGS PENDING OUTCOME OF FEDERAL COURT
`
`LITIGATION
`
`Registrant Villa d’Este S.p.A. (“Registrant”) hereby’ respectfully submits this
`
`reply in further support of its motion, pursuant to 37 C.F.R. § 2.117 (a) and TBMP
`
`§ 510.02, to suspend this cancellation proceeding, pending resolution of ongoing
`
`Federal court litigation between the parties concerning the registration at issue in this
`
`proceeding.
`
`H: 499084(@P3GO1!.DOC)
`
`

`
`
`
`ARGUMENT
`
`Petitioner’s Opposition Brief does not attempt to argue that the federal
`
`trademark action will not “have a bearing on [this] case.” See 37 C.F.R. § 2.117(a).
`
`Nor could Petitioner do so, in light of Petitioner’s failure to even attempt to refute any
`
`of the following facts:
`
`(1) that Petitioner and his company, Interfin Corporation (“Petitioner’s
`Company”), are involved in a trademark infringement lawsuit with
`Registrant in Federal Court;
`
`(2) that in the Federal trademark action Registrant claims that Petitioner and his
`company infringe and dilute the ’665 Registration;
`
`(3) that in its Answer to Registrant’s Counterclaims in the Federal trademark
`action, Petitioner’s Company has specifically asserted an affirmative defense
`that Registrant’s U.S. trademarks and service marks (including the ’665
`Registration) are void and unenforceable, and not otherwise protected by
`law;
`
`(4) that in the joint Disco72ery/Case Management Plan Under Rule 2669 Federal
`Rules of Civil Procedure filed by the parties in the Federal trademark action,
`Petitioner’s Company specifically told the Court that it anticipated filing
`dispositive motions “that the federally-registered trademarks of [Registrant]
`are subject to cancellation .
`.
`. because [Registrant] has not offered or sold
`goods and/or services in the United States under the alleged marks, as
`required by U.S. trademark law”; or
`
`(5) that Petitioner and Petitioner’s Company have requested virtually identical
`information, through similar discovery requests, designed to obtain evidence
`to support the same alleged invalidity issue, in both the Federal trademark
`action and this proceeding.
`
`Even more significantly, Petitioner fails to disclose to the Board that his
`
`company, since the filing of this motion to suspend, has taken additional steps to have
`
`the Federal District Court address the same alleged invalidity issue Petitioner asserts in this
`
`H: 499084(@P3G0l!.DOC)
`
`

`
`
`
`proceeding. Specifically, Petitioner’s Company has recently filed a motion to
`
`“bifurcate” discovery in the Federal trademark action. In that motion, Petitioner’s
`
`Company represented to the District Court that it plans to file a “dispositive motion”
`
`on its alleged non-use/validity defense— the same issue in this cancellation
`
`proceeding— before the end ofthis year (see Exh. A, Pl. Motion to Bifurcate Discovery
`
`at p. [11]), in order to seek a “speedy resolution of [the federal trademark] suit.” (Id. at
`
`[9].) Instead of forthrightly disclosing this recent additional step to have the Federal
`
`District Court rule on Petitioner’s alleged invalidity argument early in the case,
`
`Petitioner misleadingly suggests to the Board that the District Court will not address
`
`the issue of alleged invalidity and cancellation until sometime after November 2003.
`
`(See Pet. Opp. at 111] 9-11.)
`
`Petitioner further advances the novel argument that suspension is “premature”
`
`because Petitioner hasn’t yet specifically asked the Federal District Court in 4 pleading
`
`to cancel this registration “at this time.” (See id. at 2.) Significantly, Petitioner carefully
`
`avoids committing to not filing a pleading seeking cancellation in the Federal
`
`trademark action. Petitioner also carefully limits its statement to “pleadings,” in order
`
`to avoid having to disclose the other court filings in which Petitioner’s Company has
`
`asked the District Court for an early determination of its alleged non-use/invalidity
`
`defense.
`
`It is therefore apparent that what Petitioner Wants is to pursue cancellation in
`
`both the Federal district court and the TTAB, perhaps to see which tribunal will reach
`
`H: 499084(@P3G0l !.DOC)
`
`

`
`
`
`Petitioner’s invalidit ar ment first— and Petitioner admits as much in his o
`Y
`3“
`
`P
`
`osition
`
`(see Pet. Opp. at 1] 12)— or, more likely, to double its chances of a favorable ruling and
`
`to double the costs on Registrant. Such wasteful and expensive tactical ploys plainly
`
`are contrary to 37 C.F.R. § 2.117(a) and the Board’s rules and precedents applying that
`
`regulation.
`
`Indeed, none of the purported authorities cited by Petitioner even suggests that
`
`the Board should permit such gamesmanship. In Harod ‘:2. Sage Products, Inc., 188 F.
`
`Supp. 2d 1369 (S.D. Ga. 2002), the district court mentioned, without elaborating, that
`
`the TTAB had previously, in an unpublished opinion, denied a motion to suspend. See
`
`id. at 1373. Neither the decision nor Petitioner explains ‘why the Board denied
`
`suspension in that case and what, if anything, that decision has to do with the instant
`
`case. And in Sea-Roy Corp. 12. Parts R Parts, Inc., No. 1:94CVOOO59, 1997 WL 1046282
`
`(M.D.N.C. Dec. 2, 1997), the Court noted that the Board. load in fact suspended the
`
`related cancellation proceeding. That case, therefore, provides no support for
`
`Petitioner.‘
`
`Petitioner also cites the nonprecedential decision of the Board in E. G]. Gallo Winery v.
`1
`Kendall-]ac/eson lflnery, Ltd, Cancellation No. 25,965, 2000 TTAB Lexis 150 (March 16,
`2000). Citation of nonprecedential decisions of the Board is improper, even if a copy is
`provided, which Petitioner did not do. See, e.g., Trademark Board Manual of Procedure
`§ 101.03; General Mills Inc. '0. Health Valley Foods, 24 USPQ2d (BNA) 1270, 1275 n.9 (TTAB
`1992). If the Board wishes to consider nonprecedential opinions in this case, Registrant would
`request leave to file a supplemental brief citing unpublished Board decisions ordering
`suspension despite arguments that the issue before the TTAB was not squarely raised in a
`concurrent Federal district court action.
`
`H: 499084(@P3G01!.DOC)
`
`

`
`
`
`CONCLUSION
`
`It is undisputed that the legal basis for suspension— that the Federal trademark
`
`action “may have a bearing” on this case— is present in this case. Without an argument
`
`to the contrary, Petitioner’s efforts to try to rationalize "Why it should be able to
`
`litigate the same issue against the same party amount to transparent efforts to hide
`
`Petitioner’s attempt to double its odds of winning and double the costs on Registrant.
`
`For the reasons set forth above and in Registrant’s original motion, the Board should
`
`not countenance such unfair tactics at the expense of the Board’s valuable judicial
`
`resources. The motion to suspend should be granted.
`
`Respectfully submitted,
`
`Dated: October 2, 2002 . ogorzelski, Esq.
`
`. Brandon, Esq.
`HOWREY SIMON ARNOLD
`
`86 WHITE, LLP
`750 Bering Drive
`Houston, TX 77057
`(713) 787-1400
`
`Attorneysfor Registrant Villa a"Este S.p.A.
`
`H: 499<)84(@P3G0l LDOC)
`
`

`
`
`
`CERTIFICATE OF SERVICE
`
`I hereby certify that a true and correct copy of the foregoing REPLY IN
`
`FURTHER SUPPORT OF REGISTRANT’S MOTION TO SUSPEND
`
`PROCEEDINGS PENDING OUTCOME OF FEDERAL COURT LITIGATION
`
`has been served on October 2, 2002, by first class mail, postage prepaid, on:
`
`Margaret A. Boulware, Esq.
`Lisa H. Meyerhoff, Esq.
`JENKENS 8: GILCI-IRIST
`1100 Louisiana
`
`Suite 1800
`
`Houston, TX 77002
`
` It
`
`' Stfdflt
`'
`
`Villa d’Este S.p.A.
`
`or
`
`H: 499084(@P3G0) LDOC)
`
`

`
`
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE SOUTHERN DISTRICT OF TEXAS
`HOUSTON DIVISION
`
`CIVIL ACTION NO. H~0l-4130
`
`INTERFIN CORPORATION AND
`VILLA D’ESTE CONDOMINIUM
`
`OWNERS ASSOCIATION, INC.,
`
`Plaintiffs,
`
`V.
`
`VILLA D’ESTE S.P.A.,
`
`Defendant/Counterclaimant
`
`V.
`
`INTERFIN CORPORATION, VILLA
`D’ESTE CONDOMINIUM
`
`DEVELOPMENT L.P. (f/k/a VILLA
`D’ESTE LIMITED PARTNERSHIP and
`f/k/a VILLA D’ESTE DEVELOPMENT
`
`L.P.)_, VILLA D’ESTE CONDOMINIUM
`OWNERS ASSOCIATION, INC.,
`GIORGIO M. BORLENGHI, STAN
`DAUGHERTY, BARRY H. MARGOLIS,
`KYLE O. STILES, and JOHN DOES 1-10,
`
`Counterclaim Defendants
`
`<0'3OU300'-‘$03003<0J003¢OJ€03€0>UO3<0>¢0>€03t03@><0><02<0J<03t03<0><0>f03003€0J
`
`PLAINTIFFS’ MOTION TO BIFURCATE DISCOVERY
`
`Pursuant to Federal Rules 26 and 16, Plaintiffs Interfin Corporation (“Interfin”) and Villa
`
`d’Este Condominium Owners Association,
`
`Inc.
`
`(“Owners Association," and together with
`
`Interfin, “Plaintiffs”) jointly move the Court to bifurcate the issues of liability and damages in
`
`this trademark infringement case.
`
`

`
`
`
`I.
`
`OVERVIEW
`
`A. Nature and Stage of the Proceeding
`
`Plaintiffs filed this lawsuit in November 2001 seeking a declaratory judgment that their
`
`use of the name “Villa d’Este” in connection with a high-rise residential condominium located in
`
`Houston does not infringe any rights that the Defendant may have in the name “Villa d’Este” in
`
`connection with hotel services.
`
`In early June, Defendant answered the lawsuit and asserted
`
`various counterclaims against
`
`the Plaintiffs and several
`
`individuals.
`
`The Counterclaims
`
`included, inter alia, a federal law claim for trademark infringement of Defendant’s registered
`
`trademarks; federal and state law claims of dilution of Defendan.t’s registered trademarks; federal
`
`and state law claims of unfair competition; and a claim of unjust enrichment.
`
`The Owners Association and Third-Party Defendant Giorgio Borlenghi (who has not yet
`
`been served in this action) filed proceedings in the Trademark Trial and Appeal Board (“TTAB”)
`
`to cancel three federal registrations owned by the Defendant. The cancellation proceedings were
`instituted because it appears that Defendant only sells its goods and services in Italy. To
`
`maintain these registrations, there must be “use in commerce.” Defendant merely advertises
`
`those goods and services in the United States.
`
`In the parties’ Joint Discovery/Case Management Plan and the recent scheduling
`
`conference with the Court, Plaintiffs requested that discovery in this case be bifurcated.
`
`B. Standard of Review
`
`The Court has broad discretion over discovery matters. See Scroggins v. Air Cargo, Inc.,
`
`534 F.2d H24, 1133 (5th Cir. 1976). Rule 26(c) authorizes the Court to stay or limit discovery
`
`when justice requires. See Fed. R. Civ. P. 26(c)(4). Further, Rule 16(c)(6) provides that the
`
`HOUSTON 25998lv4 4l289—0O0l IUSTP
`
`

`
`
`
`Court may‘ take appropriate action in “the control and scheduling of discovery, including orders
`
`affecting disclosures and discovery pursuant to rule 26...” Fed. R. Civ. P. l6(c)(6).
`
`C. Summary of the Argument
`
`Plaintiffs and Counterclaim Defendants believe that Defendant’s federally registered
`
`marks are subject to cancellation because there has been no use “in commerce" of the marks
`
`required to maintain the registrations. Further, Defendant has no common-law rights in the name
`
`“Villa d’l3ste" because Defendant has not offered or sold goods and/or services in the United
`
`States or even in Texas under the alleged marks, as required by United States trademark law
`
`and Texas state trademark law. This case is unique because in most trademark infringement
`
`cases, actual use of the subj ect marks by the mark holder in the United States is not disputed.
`
`In
`
`this suit, however, the Defendant, an Italian company, has submitted specimens of alleged use td
`
`the U.S. Trademark Office that do not show on their face that Defendant has actually offered for
`
`sale or sold hotel services and related goods in the United States. Moreover, in its pleadings,
`
`Defendant has stated that it has only one location where it currently offers its hotel services and
`
`related goods, i.e., Lake Como, Italy. If Defendant has not used its marks in the United States, it
`
`cannot have any trademark rights in those marks, and, consequently,
`
`there can be no
`
`infringement, dilution, or unjust enrichment. Accordingly, two-phase discovery is appropriate to
`
`address the threshold issue of Defendant’s U.S. rights, if any, in the marks.
`
`Many courts bifurcate liability and damages issues in trademark infringement cases.
`
`Bifurcation of discovery is appropriate in this case because the dispositive question of actual use
`
`in the United States is factually distinct from other trial
`
`issues. Not
`
`only is bifurcation
`
`convenient,
`
`it also will conserve judicial and litigant resources by avoiding the expenses
`
`associated with damages during both discovery and trial, unless Plaintiffs are found liable (an
`
`HOUSTON 25998lv4 41289-0001 lUS'l'P
`
`

`
`
`
`unlikely event considering Defendant's lack of use of the marks in the United States).
`
`In
`
`addition, after conducting expeditious and focused discovery on this use issue, Plaintiffs and
`
`Counterclaim Defendants anticipate filing dispositive motions on liability.
`
`11.
`
`THE COURT SHOULD BIFURCATE DISCOVERY
`
`Because of the unique nature of this case, Plaintiffs propose a limited bifurcation of
`
`discovery. Plaintiffs maintain that Defendant has not used its alleged marks in the United States
`
`at all, even though actual use of a mark in the United States is a filndarnental requirement for
`
`ownership of a mark under U.S. trademark law. There is a strong likelihood that this dispute
`
`should end quickly if the Court determines that Defendant has no rights in its alleged marks.
`
`Bifurcation of discovery, as proposed, will help limit time and expenses involved in litigating
`
`liability.
`
`It is entirely appropriate for the Court to ‘‘limit early discovery to matters necessary to
`
`support a ruling on one or two early motions .
`
`.
`
`. [and to] fur a date for filing a relatively early
`
`motion for summary judgement .
`
`.
`
`.”
`
`3 Moore’s Federal Practi_c§ § 16.36[3][g][v] '(Matthew
`
`Bender 3d ed.).
`
`A. Legal Standard
`
`The Court’s broad discretion over discovery matters are reviewed under an abuse of
`
`discretion standard. Scroggins v. Air Cargo, Inc., 534 F.2d 1124, 1133 (5th Cir. 1976). Rule
`
`26(c) authorizes this Court to stay or limit discovery when justice requires. The rule provides in
`
`part:
`
`. may make any order which justice
`.
`. the court .
`.
`Upon motion by a party .
`requires to protect a party or person from annoyance, embarrassment, oppression,
`or undue burden or expense, including .
`.
`.
`
`(4) that certain matters not be inquired into, or that the scope of the
`disclosure or discovery be limited to certain matters .
`.
`.
`
`HOUSTON 25998] V4 41289-0001 l USTP
`
`

`
`
`
`Fed. R. Civ. P. 26(c)(4).
`
`In addition, Rule 16(c)(6) states that the Court can take appropriate
`
`action in “the control and scheduling of discovery, including orders affecting disclosures and
`
`discovery pursuant to mle 26”. Fed. R. Civ. P. 16(c)(6).
`
`B. As it Appears that Defendant Does Not Use its Mark in the United States, this
`Case is Suitable for Bifurcation
`
`This trademark suit
`
`is unusual because Plaintiffs maintain that Defendant does not
`
`provide goods or services in the United States in connection with its alleged marks. In order to
`
`prevail on its trademark infringement claim, Defendant must prove: (I) ownership of a
`
`protectable mark; and (2) another’s use of the same or similar mark that is likely to confuse
`
`consumers. See, e.g., Soweco, Inc. v. Shell Oil Co., 617 F.2d 1178, 1185 (5th Cir. 1980).
`
`It
`
`is a basic principle that “[o]wnership of a mark requires a combination of both
`
`appropriation and use in trade.” Blue Bell, Inc. v. Farah Mfg. Co., 508 F.2d 1260, 1264-65 (5th
`
`Cir. 1975) (citations omitted) (emphasis added).
`
`In this regard, “neither conception of the mark,
`
`9 nor advertising alone establishes trademark rights at. common’ law. Rather, ownership of a
`
`trademark accrues when goods bearing the mark are placed on the market.” Id. (intemal citations
`
`omitted).
`
`Perhaps most important to this suit is the concept that a trademark owner provide its
`
`goods or services in United States commerce before any rights ensue in the particular mark
`
`under U.S. trademark law. See, e.g., Buti v. Perosa, S.R.L., 139 F.3d 98, 102-104 (2d Cir. 1998)
`
`(holding that mere advertising of restaurant services in United States under “FASHION CAFE”
`
`mark did not satisfy “use in commerce” requirement under U.S. law where restaurant services
`
`were actually performed in Italy and no mark owner provided no services in U.S.). Advertising
`
`in the United States of services performed in a foreign country does not confer any trademark
`
`rights on the foreign entity providing such services. See id.
`
`HOUSTON 25998lv4 41289-000] IUSTP
`
`

`
`
`
`Accordingly, the threshold issue of Defendant’s trademark infringement claim is likely
`
`completely dispositive of this case: if there is no protectable mark under U.S. trademark law
`
`(because Defendant does not use the mark “in commerce” in the U.S.),
`
`there can be no
`
`infringement, and the Court will not need to consider the second element of a trademark
`
`infringement claim (likelihood of confusion). As such, the proposed two-phase discovery will
`
`not cause any overlap or waste any time; but,
`
`in fact, will focus on the critical
`
`issue of
`
`Defendant’s U.S.-based use of the subject marks in connection with Defendant’s hotel services
`
`and related goods.
`
`On the other hand, in order for the Defendant to prove its alleged damages, “the parties
`
`will need testimony on information such as gross sales, returns, net sales, cost of goods, net
`
`profits, and overhead from financial experts.” Giro Sport Design, Inc. v. Pro-Tec, Inc., 10'
`
`U.S.P.Q.2d 1863, 1864 (N.D.Cal. 1989) (copy provided). Accordingly, it would be an undue
`
`burden on the parties (and perhaps on the Court, as well)
`
`to deal with expensive and
`
`comprehensive discovery when the suit is likely to be resolved on one simple factual issue:
`
`whether Defendant provides any goods or services “in commerce” in the United States under the
`
`alleged marks.
`
`Defendant’s other causes of action will also fail if Defendant cannot establish that it owns
`
`a protectable mark in the United States. See, e.g., Marathon Mfg. Co. v. Enerlite Prods. Corp..
`
`767 F.2d 214, 217 (5th Cir. 1985)
`
`(generally, same facts that would support
`
`trademark
`
`infringement support action for unfair competition); Horseshoe Bay Resort Sales Co. v. Lake
`
`Lyndon B. Johnson Improvement Corp., 53 S.W.3d 799, 806 n.3 (Tex.App.—-Austin 2001, pet.
`
`ref'd), quoting Zapata Corp. v. Zapata Trading Int 'I., Inc., 841 S.W.2d 45, 47 (Tex.App.——
`
`Houston [14th Dist.] 1992, no writ) (“trademark infringement and unfair competition actions
`
`HOUSTON 25998lv4 4l289~000l IUSTP
`
`

`
`
`
`under Texas common law present essentially ‘no difference in issues than those under federal
`
`trademark infringement actions.”’). The elements of unfair competition under both federal and
`
`Texas law are indistinguishable from the elements necessary to prove trademark infringement
`
`under the Lanham Act. Thus, a decision on Defendant’s alleged marks will likely also resolve
`
`Defendant’s claims of unfair competition under both federal law and state law.
`
`Regarding its causes of action for trademark dilution under federal and Texas law,
`
`Defendant must show: (1) ownership of a famous mark under federal law or a distinctive mark
`
`under Texas law; and (2) a likelihood of dilution. See, e.g., 15 U.S.C. § l125(c); Pebble Beach
`
`Co. v. Tour 181, Ltd., 942 F. Supp. 1514, 1564 (S.D. Tex. 1996), aff’d as modified, 155 F.3d 526
`
`(5th Cir. 1998). As noted above,
`
`in order to “own” a mark, one must use the mark “in
`
`commerce.” Once again, evidence that Defendant does not use (and has not used) the subject
`
`marks in United States commerce will
`
`likely resolve liability in this suit.
`
`In any event,
`
`demonstration of liability for dilution, under either Texas or federal law, does not involve any
`
`discovery on damages.
`
`Finally, to establish liability on Defendant’s unjust enrichment cause of action, Defendant
`
`must demonstrate that Plaintiffs used the goodwill and reputation of the Defendant for the
`
`Plaintiffs’ own goods or services. See Texas Pig Stands, Inc. v. Hard Rock Café Int '1, Inc., 951
`
`F.2d 694-95 (5th Cir. 1992). As the factors for unjust enrichment almost completely overlap
`
`with the test for federal trademark infringement, courts typically find that non liability on federal
`
`trademark infringement also disposes of the trademark holder’s unjust enrichment claims. See.
`
`e.g., Cathey Assocs., Inc. v. Beougher, 95 F.Supp.2d 643, 656 (ND. Tex. 2000) (holding that
`
`because plaintiffs could not prove federal or common-law trademark infringement, plaintiffs’
`
`unjust enrichment claim also failed).
`
`HOUSTON 25998 l V4 4l289-0001 l USTP
`
`

`
`
`
`C. ‘This Court has Broad Discretion to Bifurcate Discovery
`
`It is well within this Court’s discretion to manage the scope and procedure of discovery
`
`pursuant to Fed. R. Civ. P. 16. See Acuna v. Brown & Root Inc, 200 F.3d 335, 340 (5th Cir.
`
`2000). Many courts have bifurcated the issues of liability and damages in trademark and trade
`
`dress disputes. See, e.g., Roulo v. Russ Berrie & Co., 886 F.2d 931 (7th Cir. 1989) (bifurcating
`
`trade dress trial); Hain Pure Food Co. v. Sona Food Products Co., 618 F.2d 521 (9th Cir. 1980);
`
`St. Charles Mfg.‘Co. v. Mercer, 737 F.2d 891 (11th Cir. 1983); Planet Hollywood (Region IV),
`
`Inc. v. Hollywood Casino Corp., 80 F. Supp. 2d 815 (N.D. Ill. 1999);
`
`Pharmaceutical
`
`Co. v. Gillette Co., 808 F. Supp. 1013 (S.D.N.Y. 1992); Selchow & Righter Co. v. Decipher,
`
`[nc., 598 F. Supp. 1489, (E.D. Va. 1984); Raco Car Wash Systems, Inc. v. Smith, 730 F. Supp.
`
`695 (D.S.C. 1989); Brooks Shoe Mfg. Co. v. Suave Shoe Corp., 533 F. Supp. 75 (S.D. Fla.’
`
`1981); Waples-Platter Cos. v. General Foods Corp, 439 F. Supp». 551 (N.D. Tex. 1977). .
`
`As the Fifth Circuit has stated, a trial court may properly exercise its discretion to stay
`
`discovery pending a decision on a dispositive motion, particularly when it “would be wasteful to
`
`allow discovery on all issues raised in a broad complaint...” Corwin v. Marney, Orton Inv., 843
`
`F.2d 194, 200 (5th Cir. 1988).
`
`In Corwin, the Fifth Circuit affirrned the district court’s order
`
`restricting discovery on issues relating to a motion to dismiss.
`
`Similarly, the Fifih Circuit found no abuse of discretion “in [an] order staying general
`
`discovery until the court could determine whether the case would be resolved at the summary
`
`judgement stage.” Scroggins, 534 F.2d at 1133 (affirming trial court’s protective order that
`
`limited discovery to matters raised in defendant’s motion for summary judgment). Plaintiffs
`
`seek a similar discovery limitation in this suit. Namely, Plaintiffs request a short period of
`
`HOUSTON 259931 v4 41289-0001 lUSTP
`
`

`
`
`
`concise discovery directed to protectability of Defendant’s marks and alleged liability in
`
`contemplation of a speedy resolution of this suit.
`
`D. Bifurcation Will Conserve Judicial and Litigant Resources and Promote
`
`Efficiency
`
`The Court and the parties can potentially save a tremendous amount of time and expense
`
`through the proposed bifurcation. For example, another court in this District made the following
`
`observation:
`
`The trial of the damages question in such a suit is oflen difficult and expensive,
`while being easily severed from the trial of the questions of validity and
`infringement of the patent. A preliminary finding on the question of liability may
`well make unnecessary the damages inquiry, and thus result in substantial saving
`of time of the Court and counsel and reduction of expense to the parties.
`Moreover, separate trial of the issue of liability may present counsel
`the
`opportunity to obtain final settlement of that issue on appeal without having
`reached the ofien time-consuming and difficult damages question.
`
`Swofford v. B&W. Inc., 34 F.R.D. 15, 20 (S.D. Tex. 1963), afl"'d, 336 F.2d 406 (5th Cir. 1964).
`
`‘Although the Swofford case dealt with patent litigation, the issues are similar to this suit.
`
`In either a patent or a trademark case, validity (i.e., use in a trademark suit) and
`
`infringement are often pointedly distinct from damages. Because of the two-tiered nature of
`
`many patent and trademark lawsuits, they are often bifurcated. The bifiircation fits smoothly
`
`with the natural flow of the case such that neither the court nor the parties lose anything through
`
`bifurcation. Plaintiffs are not requesting that the Court bifurcate the trial, because Plaintiffs
`
`recognize that this case, while complex, is not as involved as some patent infringement lawsuits.
`
`In this regard, Plaintiffs only seek a short period during which limited discovery can be
`
`conducted in anticipation of filing a dispositive motion. Any attendant risks associated with
`
`bifurcation (z'.e., delay) are only a fraction of what they would be in a bifurcated trial.
`
`HOUSTON 25998lv4 41289-0001 lUSTP
`
`

`
`
`
`E. Bifurcation Will Eliminate Prejudice Against Plaintiffs and Will Not Cause
`Prejudice Against Defendant
`
`Although Plaintiffs perceive the determination of liability will be straightforward on
`
`Defendant’s rights to the subject marks in the United States, the determination of alleged
`
`damages will be more complex and expensive. At this point, it would prejudice Plaintiffs to
`
`divulge financial information about their businesses to a company that has no justifiable interest
`
`in viewing such proprietary information (if, in fact, Defendant has no rights in its U.S. marks).
`
`Moreover, Defendant will not be prejudiced by two-phase discovery. First, Defendant
`
`has no need of Plaintiffs’ and Counter-Defendants’
`
`financial
`
`information because such
`
`infonnation has no relation to any liability detennination. Second, any delay that the bifurcation
`
`introduces to this suit will be minimal, if not non-existent. As discussed, Plaintiffs contemplate
`
`moving for summary judgment on liability afier limited discovery. If the Court enters summary
`
`judgment for Plaintiffs, the case will end;
`
`If the Court-denies Plaintiffs’ dispositive motion,
`
`-Plaintiffs anticipate that full discovery would then be. appropriate. Given that the Scheduling
`
`Order allows the parties to conduct discovery until August 2003, there is ample time to conduct
`
`initial discovery as Plaintiffs propose, file a dispositive motion on liability, and then,
`
`if
`
`necessary, carry out full discovery without deviating from the Court’s Scheduling Order.
`
`Finally, any potential minimal delay, which is clearly outweighed by the potential
`
`benefits, cannot prejudice Defendant because, as mentioned, Defendant has not taken any actions
`
`that demonstrate that it has been or would be harmed by Plaintiffs’ and Counter-Defendants‘
`
`activities. For example, Defendant did not
`
`file a lawsuit against Plaintiffs and Counter-
`
`Defendants when it learned of Plaintiffs’ and Counter-Defendants’ use of the name “Villa
`
`d’Este.” After Plaintiffs and Counter-Defendants filed their declaratory judgment
`
`lawsuit,
`
`HO USTON 25998 l V4 4 l 289-0001 l USTP
`
`

`
`
`
`Defendant chose to forgo a quick method of local service,’ instead requiring Plaintiffs to serve
`
`the ltalian Defendant
`
`in Italy, a process which added months to the litigation timetable.
`
`Moreover, once it finally answered the lawsuit and alleged counterclaims against Plaintiffs and
`
`Counter-Defendants, Defendant did not seek a temporary restraining order or a preliminary
`
`injunction against Plaintiffs and Counter-Defendants relating to their use of “Villa d’Este” in
`
`connection with a high—rise condominium.
`
`III.
`
`CONCLUSION
`
`Because the threshold issue of Defendants’ alleged use of the subject marks in the United
`
`States is likely to dispose of this case, Plaintiffs respectfully ask the Court to order that the
`
`parties conduct discovery in two phases in this case: (1) initial discovery on liability only; and
`
`(2) remaining discovery, only as necessary following the Court's ruling on Plaintiffs‘ summary’
`
`'
`
`judgment motion on liability. Plaintiffs anticipate that they will likely file a dispositive motion
`
`by the end of this year.
`
`‘ After requiring Plaintiffs to incur the expensive and timely process of international service, Defendant eventually
`capitulated, and advised Plaintiffs that it had changed its mind and would waive official service. Thereafter,
`Defendant filed its counterclaims without formal service of process.
`
`HOUSTON 25998 l V4 41289-0001 IUSTP
`
`

`
`
`
`Respectfully submitted,
`
`Respectfully submitted,
`
`EPSTEIN BECKER GREEN
`
`WICKLIFF & HALL, P.C.
`
`JENKENS & GILCHRIST,
`A Professional Corporation
`
`A. Martin Wickliff, Jr.
`
`2
`
`Attorney-in-Charge
`Federal ID 3466
`Texas Bar No. 21419900
`
`WICKLIFF & HALL, P.C.
`
`Wells Fargo Plaza
`1000 Louisiana, Suite 5400
`Houston, Texas 77002
`
`Telephone: 713/750-3100
`Facsimile: 713/750-3101
`
`;o%2~;
`
`Lisa H. Meyerhoff
`Attomey-in-Charge
`Federal ID 18693
`Texas Bar No. 14000255
`
`JENKENS & GILCHRIST,
`
`A Professional Corporation
`1100 Louisiana, Suite 1800
`Houston, Texas 77002
`
`Telephone: 713/951-3300
`Facsimile: 713/951-3314
`
`ATTORNEYS FOR VILLA D'ESTE
`CONDOMINIUM OWNERS
`
`ATTORNEYS FOR INTERF IN
`CORPORATION
`
`ASSOCIATION, INC.
`
`OF COUNSEL:
`
`Ruth M. Willars
`Texas Bar No. 24003175
`EPSTEIN BECKER GREEN
`
`WICKLIFF & HALL, P.C.
`
`Wells Fargo Plaza
`1000 Louisiana, Suite 5400
`Houston, Texas 77002
`
`Telephone: 713/750-3100
`Facsimile: 713/750-3101
`
`OF COUNSEL:
`
`Margaret A. Boulware
`Texas Bar No. 061 17700
`
`Joseph M. Beauchamp
`Texas Bar No. 24012266
`
`JENKENS & GILCHRIST,
`
`A Professional Corporation
`1100 Louisiana, Suite 1800
`Houston, Texas 77002
`
`Telephone: 71 3/95 1-3300
`Facsimile: 713/951-3314
`
`HOUSTON 25998lv4 41289-0001 IUSTP
`
`

`
`
`
`CERTIFICATE OF SERVICE
`
`049
`I hereby certify that, on the j l day of August 2002, a true and correct copy of the
`foregoing “P1aintiffs’ Motion to Bifurcate Discovery” was served by United States Mail, First
`Class, postage prepaid, on:
`
`Alessandro Saracino
`Pavia & Harcourt LLP
`600 Madison Avenue
`
`New York, New York 10022
`
`Thomas L. Casagrande
`Howrey, Simon, Arnold & White, LLP
`750 Bering Drive
`Houston, Texas 77057-2198
`
`/J
`
`HOUSTON 25998lv4 4l 289-0001 IUSTP

This document is available on Docket Alarm but you must sign up to view it.


Or .

Accessing this document will incur an additional charge of $.

After purchase, you can access this document again without charge.

Accept $ Charge
throbber

Still Working On It

This document is taking longer than usual to download. This can happen if we need to contact the court directly to obtain the document and their servers are running slowly.

Give it another minute or two to complete, and then try the refresh button.

throbber

A few More Minutes ... Still Working

It can take up to 5 minutes for us to download a document if the court servers are running slowly.

Thank you for your continued patience.

This document could not be displayed.

We could not find this document within its docket. Please go back to the docket page and check the link. If that does not work, go back to the docket and refresh it to pull the newest information.

Your account does not support viewing this document.

You need a Paid Account to view this document. Click here to change your account type.

Your account does not support viewing this document.

Set your membership status to view this document.

With a Docket Alarm membership, you'll get a whole lot more, including:

  • Up-to-date information for this case.
  • Email alerts whenever there is an update.
  • Full text search for other cases.
  • Get email alerts whenever a new case matches your search.

Become a Member

One Moment Please

The filing “” is large (MB) and is being downloaded.

Please refresh this page in a few minutes to see if the filing has been downloaded. The filing will also be emailed to you when the download completes.

Your document is on its way!

If you do not receive the document in five minutes, contact support at support@docketalarm.com.

Sealed Document

We are unable to display this document, it may be under a court ordered seal.

If you have proper credentials to access the file, you may proceed directly to the court's system using your government issued username and password.


Access Government Site

We are redirecting you
to a mobile optimized page.





Document Unreadable or Corrupt

Refresh this Document
Go to the Docket

We are unable to display this document.

Refresh this Document
Go to the Docket