Trademark registrations and patents are issued by the United States Patent and Trademark Office ("PTO"). In both instances, there are procedures for contesting before the PTO the grant of such rights. The PTO offers, in effect, a sometimes less costly, if preliminary, forum in which parties may challenge their respective rights.

There are primarily two proceedings that may be instituted in the PTO in order to attack a party's claim of rights to a trademark (or service mark). First, an application to register a mark may be opposed by the filing of a Notice of Opposition within 30 days after publication of the application in the U.S. Official Gazette. Alternatively, within 5 years after an application has issued to registration, a petition to cancel that registration may be filed. After 5 years, such a petition may be filed only on certain grounds, e.g., the mark is generic or has been abandoned, suggests a false connection with persons (living or dead) or consists of a flag or insignia of the United States or any foreign nation or the registration was fraudulently obtained. These inter partes proceedings before the PTO are limited to determining registration rights only, and do not result in any finding as to whether a party may use the mark in dispute.

Like a Complaint in district court, the Notice of Opposition and the Petition for Cancellation need only consist of a short statement, which provides notice of the party's grounds for opposing the application or seeking to cancel the registration. The pleading must allege the "standing" of the party in the position of plaintiff, i.e., must demonstrate that this party has sufficient interest in contesting the defending party's rights. The pleading must also allege the grounds for the opposition or cancellation petition, e.g., the party in the position of plaintiff has priority of use and there is likelihood of confusion between the parties' respective marks or the defending party's mark is generic or dilutes the distinctiveness of plaintiff's mark which is famous. Once the initial pleading is filed, the PTO, through the Trademark Trial and Appeal Board ("Board"), will send to the defending party a notice that the pleading has been filed. In the case of a foreign party, service is made upon the person designated as the domestic representative at the time that the application was filed. The defending party then has forty days from the date of that notice to answer the pleading or, as in district court, serve a Rule 12 motion, such as a motion to dismiss the pleading on the ground that a legally cognizable claim has not been alleged. The answer may include a petition seeking to cancel any registration, which has been pleaded in the Notice of Opposition or Petition for Cancellation. Once the answer has been filed, the proceeding may not be dismissed "without prejudice," unless both parties stipulate to such a dismissal. In the absence of such a stipulation, an adverse judgment will be entered against the party who has sought the dismissal without the other party's consent.

With completion of the pleading stage, the Board issues a discovery and trial schedule that sets forth a closing date for discovery and dates by which trial evidence must be submitted. Typically, discovery closes within ninety days after the issuance of that schedule, although the Board is liberal in extending that deadline, particularly where the parties stipulate to extensions. Indeed, if the parties indicate to the Board that they are seeking to negotiate a settlement of the proceeding, the Board will readily suspend all proceedings for 6 months to allow such negotiations to continue.

As in district court discovery, discovery before the Board consists of both written discovery, such as interrogatories, requests for production of documents and requests for admissions, and depositions upon oral examination. No more than seventy-five interrogatories (including subparts) may be served without permission from the Board. A party may decline to answer all interrogatories if it believes that the number of interrogatories served exceeds seventy-five and, instead, may file a motion for a protective order. In contrast to district court litigation, the Board's rules do not permit the taking of depositions upon oral examination in a foreign country, unless a showing is first made to the Board that such oral depositions are necessary. Instead, foreign parties are generally deposed upon written questions. Thus, in a contest between a foreign party and a U.S. party, the foreign party is in a favored position, since it may, through its counsel, take depositions upon oral examination of the U.S. party but the U.S. party must make a special showing to take oral depositions of the foreign party. Depositions upon written questions, in contrast, are often quite cumbersome, in part because this procedure effectively permits answers to be formulated in advance by counsel to the foreign party and, as such, is normally not particularly productive in discovering information.

The scope of discovery before the Board is limited in comparison to district court discovery. The Board and courts have often stated that the Board must limit its decision to the mark as applied for or registered and to the goods as specified in the application or registration at issue. Discovery is limited accordingly, and inquiries which would normally be permissible in district court are often viewed with disfavor by the Board. Moreover, activities outside the United States are generally not discoverable.

In addition, the Board lacks authority either to award monetary relief or to hold a party in contempt. The lack of such remedies "with teeth" further limits the scope of discovery before the Board. For example, the Board's relief in the event of a breach of a stipulated "protective order" governing the exchange of commercially sensitive information is limited to a discovery sanction or the entry of a default judgment. (A breach of contract claim may also lie but would require the filing of a separate lawsuit in the appropriate court.) Plainly, this may be less than satisfactory given the damage caused by the unauthorized disclosure of commercially sensitive information. Accordingly, the parties will normally arrange to disclose less than complete information. For example, the Board has permitted as adequate approximate sales figures and general descriptions about the channels of trade, as opposed to exact figures and a complete listing of customers. Moreover, the Board's rulings are on occasion rather arcane. For example, if one party inquires into a particular subject matter, then that inquiring party must answer the same inquiry if posed of it, regardless of how irrelevant the inquiry may be to the proceeding generally or of the inquiring party, in particular.

Opposition and cancellation actions proceed slowly, given the volume of cases before the Board, the limited staffing of the Board and the Board's absence of authority to award any monetary relief. Discovery motions may readily proliferate and, in any event, it takes many months before decisions are issued. Moreover, a motion to dismiss or for summary judgment under the Board's rules automatically suspends all further proceedings, including pending discovery. The filing of a civil lawsuit (or arbitration) on the same or a related subject matter will almost automatically result in a complete suspension of proceedings, pending the outcome of that civil lawsuit. Thus, it is possible for a case to proceed for several years before the Board and then, when one party files suit in district court for a declaration of non-infringement, to have a complete suspension of the Board's proceedings.

In contrast to district court litigation, the trial before the Board is limited to the submission of a "cold" record consisting of answers to interrogatories, depositions and the like. There is no presentation of live testimony by witnesses. Rather, the party in the position of plaintiff has 30 days to take "trial depositions" and submit its evidence. The defending party likewise then has 30 days to do so. Thereafter, the plaintiff submits any rebuttal evidence. Motions to strike evidence are, therefore, treated by the Board as part of the entire submission of the record. The sole opportunity for parties to appear before the Board is after the submission of all evidence when the parties appear through their counsel for oral argument. A written decision from the Board then issues.

A decision by the Board may be appealed in two ways. First, the losing party may appeal to the Court of Appeals for the Federal Circuit. The Federal Circuit considers only evidence which was before the Board and must affirm the Board's decision unless the Board's decision was arbitrary, capricious, an abuse of discretion or unsupported by substantial evidence. Second, either party has the right to appeal to a district court, assuming jurisdiction and venue are proper. Where one of the parties to an appeal in district court resides in a foreign country, the District Court for the District of Columbia (in Washington, D.C.) has jurisdiction to hear the appeal. The Summons against the foreign party may be served by publication (rather than by personal or substituted service as is ordinarily the case) or otherwise as the court may direct. In contrast to an appeal to the Federal Circuit, an appeal to district court is considered a de novo proceeding such that additional evidence may be submitted on any legal issue previously great raised before the Board. While, the district court must treat with deference the Board's decision, nevertheless, the district court has broad discretion in determining whether to admit new evidence and may also broaden the scope of the trial when a party adds a claim, such as unfair competition, which could not have been raised before the Board. Thus, after several years of pleading, discovery and trial before the Board, a party may find itself in a de novo case in which those earlier proceedings before the Board may be given, practically speaking, relatively little weight.

The United States, unlike the vast majority of patent-issuing countries, employs a "first to invent", as opposed to "first to file", system of priority. Thus, ownership of patent rights as between two or more competing parties is not determined by reference to a readily discernible "date of filing". Instead, even after a patent is issued, the patentee may find himself in a priority contest with another who claims an earlier "date of invention". This type of inter partes contest over priority is known as a patent interference. Patent interferences are litigated either in the PTO or in district court and may involve two or more competing applications, issued patents or a combination of both. However, where at least one application is involved, the matter must be heard initially by the PTO.

In the case of a pending application, the Primary Examiner, before whom the application is being prosecuted, will determine that the applicant's invention is patentable but for the possible priority of another application or an issued patent for the same subject matter. In order for an interference to be declared between an application and an issued patent, the application must, no later than one year after the date of grant of the patent, contain a claim which is the same as, or for the same or substantially the same subject matter as, a claim of the issued patent. An applicant is permitted to copy a patent claim outside the year period only if he or she has been claiming substantially the same subject matter within the year limit. Thus, for example, if a patent issues on January 1, 1996, it can later be subject to an interference with an application only if the application claims substantially the same subject matter on or before December 31, 1996. However, an interference proceeding involving an application claiming substantially the same subject matter within this one-year period may not be declared for several years, by which time the previously issued and allegedly interfering patent will have been in existence for that same several year period.

In some cases, the Primary Examiner may suggest that the applicant copy certain claims from another application or patent in order to provoke an interference to settle the issue of ownership priority. The Primary Examiner will then forward his file to the Board of Patent Appeals and Interferences ("Board"), which decides whether an interference will be declared.

If an interference is declared, the involved parties are notified and an Administrative Patent Judge is assigned by the Board to manage the proceeding. The determination of the substantive issues, however, is ultimately made by the Board. Moreover, the Board has authority to determine questions of patentability as well as priority of invention, and its rulings are binding upon the Primary Examiner. Thus, where certain claims in an application or issued patent are found by the Board to be unpatentable or where another party is found to have priority, the claims will be stricken. While the Board seeks to conclude all interference proceedings within two years after declaration of the interference, this is not always possible, particularly in more complex, multi-party interference proceedings.

The so-called "rule" of interference practice is simple. The party who first conceived and reduced to practice the alleged invention is entitled to the patent. The simplicity of the rule belies the difficulties in application, particularly where two or more parties have independently conceived and developed the same concept over nearly the same period of time. Generally, the party who first conceived the idea will prevail even if he was not the first to reduce to practice, provided he was "diligent" throughout the period from conception to reduction to practice. For example, if Inventor A conceived his novel idea in January 1996 but did not reduce it to practice, despite diligent efforts, until June 1996, he will nevertheless prevail over Inventor B, who did not conceive the idea until February 1996 but succeeded through continuous diligence in reducing it to practice in May 1996. If, on the other hand, Inventor A did not exhibit continuous diligence until March 1996, Inventor B will be granted the patent, notwithstanding Inventor A's earlier date of conception.

Once declared, the interference is conducted in a manner similar to other litigation with pre-trial and trial phases. The pre-trial phase is commenced with the filing by each party of a preliminary statement. Each party to the interference sets forth in its preliminary statement the dates of its (i) first drawing (if any) of the invention; (ii) first written description; (iii) first disclosure to others; (iv) first conception; and (v) actual reduction to practice.

Thereafter, the parties may make preliminary motions. The parties may move on a variety of grounds, including to modify the scope of the interference proceeding, to be accorded the benefit of an earlier application or to attack an adversary's reliance on such an earlier application. The parties may also make preliminary motions for judgment on the grounds that there is no interference-in-fact or that the claims at issue are unpatentable to one or more adversaries. Preliminary motions are heard by the Administrative Patent Judge, rather than the Board. However, matters not raised by preliminary motion may not later be raised at the final hearing before the Board. The parties will also have an opportunity during the pre-trial phase to take discovery of one another and of third-party witnesses through interrogatories and document requests, requests for admissions and depositions upon oral examination.

During the trial phase, testimony may be offered either through oral depositions or by written affidavit, provided in the latter case that adversaries are given an opportunity for cross-examination. As in trademark oppositions and cancellations, testimony is offered during a designated "testimony period", rather than at the final hearing, which is limited to an oral argument before the Board. Prior to the final hearing, the parties are required to submit briefs setting forth proposed findings of fact and conclusions of law. The Board will then render its decision based on the record created by the parties. The Board's decision will constitute a final determination by the PTO, and any disputed claims will be stricken from the losing party's (or parties') applications and/or issued patents.

As with trademark oppositions and cancellations, an appeal from the Board's decision may be taken either to the Court of Appeals for the Federal Circuit or, at the election of either party, to a district court which has jurisdiction over the parties. Where one of the parties to an appeal resides in a foreign country, the U.S. District Court for the District of Columbia has jurisdiction to hear the appeal. Also as with trademarks, an appeal by the commencement of a civil action differs in kind from an appeal to the Federal Circuit. Thus, while new matter may not be raised which could have been asserted during the interference, the district court may permit the taking of additional testimony as well as further examination of witnesses previously called during proceedings before the Board.

The observance of a "first to invent" system of priority and the resultant need for patent interference proceedings arguably makes patent ownership expensive and uncertain in outcome. Some applications are held up for years, some over a decade, by multiple interference proceedings. One patent covering an electronic digital computer, for example, issued in 1964 on an application that was filed nearly twenty years earlier in 1947. During its seventeen year prosecution odyssey, the application was party to eleven interference proceedings. Nevertheless, patent interferences will remain a part of the intellectual property landscape so long as there is continued disdain of a "race" to file system, which accords priority to the first-to-file, and a belief in granting rights to the first-to-invent.