What Is Forum Shopping? Can Be Vulnerable

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jurisdiction because of reduced travel costs scope of this overview. It is, nevertheless, Jan-Peter Ewert and the potential for the fact-finder to be worthwhile to note briefly the different sources Unverzagt von Have, Hamburg, Germany sympathetic to a local plaintiff. Sometimes of registered trademarks in Europe, namely the laws, procedures or tendencies are more national trademark registrations in individual David Weslow favorable in one jurisdiction than another, so European countries, Community trade mark Wiley Rein LLP, Washington, D.C., USA a party will choose the jurisdiction that will ap- (CTM) registrations valid for the entire EU and ply the more favorable law or protocols to the international extensions of existing trademarks case. Remedies differ between jurisdictions, via the Madrid System. A trademark practitioner charged with obtaining so a party may choose a forum that offers the legal protection beyond national boundaries largest damage awards or the potential for For entities based in the United States, by far often is in a more comfortable situation injunctive relief or monetary damages, which, the most common way of obtaining trademark than colleagues in many other fields of the law. for example, are not available from the Trade- protection in Europe is registering a CTM. This A system of international treaties and organiza- mark Trial and Appeal Board of the U.S. Patent is in most cases a sensible choice, given that tions supports the practitioner in transferring and Trademark Office (USPTO). Courts also the associated costs are a fraction of those the client’s rights from its home jurisdiction deal with their cases at varying speeds, and involved in obtaining individual national regis- to others and in enforcing such rights. a plaintiff may prefer one court over another trations in all European nations. because cases proceed faster in that court, This support may, however, inspire a false while a defendant may try the opposite tactic Registering a new CTM also provides the option sense of security and simplicity. Intellectual in order to stall proceedings. of obtaining more extensive protection property rights may bear the same name than extending an existing U.S. registration to across jurisdictions and yet have fundamentally Whatever the specific reason, the goal of Europe by way of the Madrid System. For one different legal requirements, scopes of forum shopping is always the same: to gain a thing, the list of goods and services acceptable protection, and means and procedures for perceived or actual advantage in litigation by for CTMs and national trademarks in EU enforcement. These differences present both benefiting from the differences in the laws, countries can include general terms that would challenges in providing best practices advice rules and tendencies of the courts with poten- likely be refused by the USPTO, such as “busi- and significant opportunities for obtaining favor- tial jurisdiction over the litigation. ness consulting.” In addition, European trade- able results by playing the different involved mark law does not require a declaration of a jurisdictions to one’s advantage. The foundation for successful forum shopping “bona fide intent to use.” Instead, the descrip- in trademark matters, however, is laid long tion of goods and services may be generously This article provides an overview of some before litigation or opposition proceedings be- expanded to cover any products for which the issues to bear in mind when one is faced with gin. It results from the limitation of trademark applicant has even a remote interest. a case potentially involving both Europe and rights to territories in which protection has the United States and how forum shopping can been obtained by formal registration or other Some situations can, however, make reliance benefit the trademark owner. means (for jurisdictions that do not require on a CTM a less-than-optimal choice for registration for trademark rights). trademark protection in Europe, because CTMs What Is Forum Shopping? can be vulnerable. An opposition from even Laying the Foundation: the smallest EU member state may stall the registration for years and possibly bring down Forum shopping refers to the practice of Important Differences in choosing the court or jurisdiction that has the the entire trademark for all of the Community, most favorable rules or laws for the position Trademark Prosecution even if the older right has been registered or being advocated. A party can forum shop used only in a single EU country, such as Malta. The conglomerated nature of the European when more than one court has jurisdiction In such cases, the CTM may be converted over the dispute, choosing the court that gives Union provides for significantly more routes for into individual national trademark applications it an advantage over the opposing party. The obtaining trademark protection than do the in the other member states, but this is a costly forum most favorable to the party’s case is not laws of more unitary territories, such as the and complex process. always the forum that is most relevant to the United States. dispute. Registering a national trademark in a European The numerous different methods for obtaining country in addition to an identical CTM Parties forum shop for a variety of reasons. the equivalent of a common law trademark is comparatively cheap and simple. While this Often a plaintiff will choose to file in his home within the European states are beyond the may seem redundant, the advantages are clear: A national trademark may be opposed as well. Under U.S. law, defendants may under unthinkable in most European jurisdictions. only based on rights valid in its country of regis- certain circumstances choose between a state At the same time, German law is unusual in tration, not just any EU country. Also, several court in which the plaintiff filed the action and providing automatic compensation for statutory national registers publish the trademark for a federal court to which the defendant has the attorneys’ fees to the winning party in opposition only after it has been fully registered option to remove the action. Would-be defendants litigation and even for the preparation of a and come into force. For instance, while that have received a cease and desist warning letter. French relief has an advantage a CTM enjoys no protection during opposition letter may also have the option of initiating a over German relief in that where an existing proceedings, a German national trademark is declaratory judgment action in a jurisdiction of injunction has been violated, the resulting fine fully protected for all the years that an opposition their choosing. may be ordered paid not to the state but to the proceeding may be pending. plaintiff. Similar choices exist for defendants in certain In practice, this means that once a CTM EU countries. In Germany, for instance, a Thinking Outside the Box: Obtaining applied for in conjunction with a German trade- defendant sued before a general civil section mark is opposed, the applicant may analyze in of a Regional Court (Landgericht) may have Relief Without Trademarks which EU countries the opponent owns rights the case removed to a section of the court that and extend the German trademark’s protection is competent to hear commercial matters. This Where trademark protection is lacking, good to other countries, thereby achieving full is a particularly interesting option if the civil trademark counsel goes beyond trademark law protection for the duration of the opposition in at section has already expressed its legal opinion and considers all types of intellectual property least some countries of interest. When in favor of the plaintiff. rights that may be involved in an opponent’s weighing the added protection provided by actions and may lead to relief for the plaintiff, an additional “backup” national registration That is not the end of a defendant’s options, even more so as one country’s law may against the expense of in-depth research and however. Not only do certain European jurisdic- provide for intellectual property rights that do prosecution, the costs of applying for a backup tions allow the recipient of a warning letter to not exist (or do not exist anymore) in another national trademark are rather low, being regularly sue the sender for a declaratory judgment, but jurisdiction. less than EUR 1,000. the court chosen in such a declaratory action may indeed take precedence over the court For example, works that are in the public domain according to U.S. copyright law may still Taking Action: Forum Shopping chosen by the owner of the actual claim in the corresponding suit for forbearance, disclosure be protected in many European jurisdictions. in Trademark Litigation or damages. This includes, without limitation, works by U.S. government employees, as well as practically Most jurisdictions provide legal venue in the This strategic move on the part of prospective every movie in the public domain in the United place in which a trademark right has been defendants obtained infamy under the States, ranging from Buster Keaton classics to violated. As long as the trademark proprietor name “torpedo suit” or “Italian torpedo.” The the original Dawn of the Dead. has properly prepared the playing field, this will reference to Italy derives from the classic regularly provide him with a choice of numerous constellation in which a prospective defendant Other intellectual property rights do not merely jurisdictions. in a jurisdiction with comparatively swift relief face different term limitations but in fact simply (e.g., Germany) would file a suit for declaratory may not exist in other jurisdictions. A well-known Within the United States, the differences judgment in a jurisdiction with comparatively slow example is the unregistered Community design between the laws of the various states are relief (e.g., Italy) to stall the proceedings right, which may be used as a basis for claims comparably minor for trademark cases, but against him and therefore extend the time in in the EU in cases in which there is neither even this will not keep plaintiffs from seeking which to exploit the other party’s intellectual trademark nor registered design protection for a courts with a perceived or actual history of rulings property, sometimes by several years. The tor- product shape. in their favor. There are even specialized pedo suit tactic has also been used in recent service providers that analyze the percentages years by domain name owners that have lost Conclusion by which individual judges in U.S. federal UDRP proceedings and then initiated litigation courts rule in favor of plaintiffs or defendants in countries such as India for the apparent pur- While the involvement of attorneys from and rule in favor of or against efforts to obtain pose of delaying implementation of the UDRP several jurisdictions may increase the cost of injunctive relief. Experienced trademark litigators panel’s order that the domain name(s) in ques- initial legal counsel, forum shopping often will may also have a sense of which judges tion be transferred to the trademark owner. provide strategic opportunities beyond what are more likely to, for example, issue ex parte is possible in the trademark owner’s home seizure orders and/or allow proceedings to be These days, courts are increasingly aware of jurisdiction. sealed for a limited time or purpose. this issue, and adequate action on the part of the trademark owner may foil a defendant’s Whether the merits outweigh the costs of forum By comparison, procedural and material torpedo suit. However, this requires the trade- shopping must be assessed in each individual law differ much more significantly between mark owner to be aware of the issue, aware of case. Given the potential for significant individual EU member states, not to mention the solution and able to make quick decisions. substantive and strategic advantages, between EU countries and the United States. as highlighted above, this is a question that The remedies issued by courts in different needs to be asked in any case that may poten- In this context, it should be noted that while jurisdictions will vary substantially as well. For tially involve several jurisdictions. ■ forum shopping is most commonly associated example, U.S. federal and state laws may provide with the role of the plaintiff, defendants occasion- for monetary damages awards in amounts ally have the opportunity to forum shop