In an important ruling for trademark owners facing infringements by foreign entities, the Ninth Circuit recently held that trademark plaintiffs in district court litigation can effect process on foreign defendants by serving the Director of the U.S. Patent and Trademark Office (PTO). This opens up a faster and simpler method of service than under the prevailing Hague Convention.
Background
The Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents is an international treaty that, since 1969, has governed service of process for foreign defendants. It provides standardized, relatively inexpensive service procedures for civil and commercial matters, and currently has over 70 signatory countries. But for all its advantages, the process is more lengthy than domestic service, often taking several months to complete, and more complicated than domestic service, with seemingly minor errors halting and sometimes restarting the process. It therefore remains a far from perfect method for trademark owners who are trying to stop infringing use of their marks as quickly as possible.
In the context of trademark litigation, however, a relatively obscure provision of the Lanham Act may provide a faster, more efficient route. Under 15 U.S.C. § 1051(e), “notices or process” may be served on the Director of the PTO for foreign defendants in “proceedings affecting the mark.” But district courts across the county had split on whether “proceedings” should be read narrowly, limited to proceedings before the PTO, or broadly, to include federal court proceedings.
San Antonio Winery
The case before the Ninth Circuit, San Antonio Winery, Inc. v. Jiaxing Micarose Trade Co., Ltd., Case No. 21-56036 (9th Cir. Nov. 14, 2022), involves San Antonio, a historic Los Angeles winery that has for decades marketed its wine under the mark RIBOLI, after its owners and operators, the Riboli family.
Defendant Jiaxing Micarose Trade Co., Ltd. (Jiaxing) is a Chinese company that has sold a variety of products, such as clothing and shoes, under a RIBOLI mark, which Jiaxing registered with the PTO. In recent years, Jiaxing expanded its offerings to include products that overlap with those of San Antonio, such as wine pourers, bottle stands, and cocktail shakers. Jiaxing sells these products in the United States through online retailers, such as Amazon.com, and sought to expand its registered rights.
San Antonio filed a trademark lawsuit against Jiaxing in the Central District of California, but immediately ran into service issues. Because Jiaxing is a Chinese company, service is governed by Federal Rule of Civil Procedure 4(f), which allows foreign parties to be served by “any internationally agreed means of service that is reasonably calculated to give notice.” Plaintiffs in this situation generally avail themselves of the service procedures of the Hague Convention, to which both the United States and China are parties. But because service through the Hague Convention can be complicated and take months, the winery wanted a more efficient option.
It found one in Section 1051(e) of the Lanham Act, which provides that if a trademark applicant is “not domiciled in the United States,” it may be served through an individual previously designated by the applicant to accept process. But if such designee cannot be found, or if the applicant never designated anyone in the first place, “such notices or process may be served on the Director [of the PTO].” This procedure applies to all “proceedings affecting the [trade]mark.”
San Antonio filed proof that it had served Jiaxing through the Director of the PTO, and, when Jiaxing failed to appear in district court, San Antonio filed for default judgment. But the district court denied this request, on grounds that the defendant had not been property served. The district court based its denial on a 2005 decision, E. & J. Gallo Winery v. Cantine Rallo, S.p.A., 430 F. Supp. 2d 1064 (E.D. Cal. 2005), which found that Section 1051(e) only applies to proceedings before the PTO. San Antonio’s reliance on Section 1051(e) to serve process for a federal district court case was therefore improper.
The Ninth Circuit disagreed. Noting a lack of settled law on this issue, the court applied a text-focused statutory interpretation, finding that district court proceedings for trademark claims are certainly “proceedings affecting the trademark,” and therefore that the plain meaning of Section 1051(e)’s text allows for serving process in federal court.
In so holding, the Ninth Circuit departed from the Eastern District of California’s prior decision in E & J Gallo Winery, which had held the Section 1051(e) should only apply to proceedings before the PTO (such as opposition and cancellation proceedings). The Ninth Circuit rejected the notion that the placement of the provision among other PTO-centric provisions, or mentions of PTO proceedings in pre-enactment versions of the provision, could override the plain text of the statute. It therefore held that San Antonio properly served Jiaxing and remanded the case to the district court to consider San Antonio’s motion for default judgment on the merits.
Implications
The upshot for trademark holders across the country is that, in the trademark context, there is now a viable method for serving process in federal court more quickly and efficiently than via the Hague Convention. This method is particularly desirable for trademark owners who want to move quickly towards injunctive relief, to remove infringing products and services from the market as swiftly as possible.
It remains to be seen, however, exactly how far-reaching the Ninth Circuit’s ruling will be. Section 1051(e) only explicitly applies to trademark applicants or registrants. The Ninth Circuit did not have reason to address whether this faster service method would be available in trademark cases where the plaintiff has not accompanied an infringement claim with a claim to cancel a registration (the type of claim that most directly “affect[s] the mark”), or where the infringer has not sought or obtained a registration with the PTO at all.
If you have any questions concerning the material discussed in this client alert, please contact the members of our Copyright and Trademark Litigation practice.
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