T hi s di s pos i t i on i s notappr opr i a t e f orpubl i c a t i on a nd i s notpr e c e de nt * e xc e pta s pr ovi de d by 9th C i r . R . 36- 3. NOT F OR P UB L I CAT I ON UN I TE D STATE S C OU RT OF APPE ALS FOR T HE NI NTH CI RC UI T NEUROV I SI ON M EDI CAL P RODU CT S I N C ., P la in tif

f - c o u n te r - d e f

e n d a n t - A pp el l ee , v. N U V A S I V E , I N C ., D e f

e n d a n t- c o u n te r - c la im a n t - A p p e lla n t. N o. 11- 55120 D. C. No . 2 : 0 9 - c v - 0 6 9 8 8 - R- J EM ME MOR AN DU M *

NEUROV I SI ON M EDI CAL P RODU CT S I N C ., P la in tif

f - c o u n te r - d e f

e n d a n t - A pp el l ee , v. N U V A S I V E , I N C ., D e f

e n d a n t- c o u n te r - c la im a n t - A p p e lla n t. N o. 11- 55756 D. C. No . 2 : 0 9 - c v - 0 6 9 8 8 - R- J EM



# FI LED SEP 10 2012 M OLLY C. DW Y ER, CLERK U . S. C O U R T OF APPE ALSW e not e tha te a c h of the s e or de r s s tr ongl y f

a vor i ng N M P w a s pr e pa r e d by 1 c ouns e l f orN M P , a nd tha tthe di s tr i c tc our te nga ge d i n the “ r e gr e tt abl e pr a c t i c e ” of s ig n in g e a c h o n e w ith o u t a lte r in g a s in g le lin e . See L i vi ngD es i gn s, Inc. v. E . I. D upont de N e m our s & C o. , 43 1 F . 3d 35 3, 37 3 (9th C i r. 20 05 ).

2 A pp ea l fr om the U ni t ed S t at es D i stri ctC ou rt f o rth e C e n tr a l D is tr ic t o f C a lif o rn ia M a nue l L . R e a l , D i s tr i c tJ udge , P r e s i di ng A r gue d a nd S ubm i tt e d J une 5, 2012 P a s a d e n a , C a lif

o rn ia B efo re: B . F L E T C H E R , W A R D L A W , an d B Y B E E , C i rcu i tJu d g es. F ol l ow i ng a f

i ve - da y j ury tr i a l t o de t e r m i ne the pa r t i e s ’ r i ght s i n the tr a de m a r k “ N E U R O V I S I O N , ” the j ury a w a r de d $60 m i l l i on t o N e ur ovi s i on M edi ca l P rodu ct s ( “ N M P ”) . T he j ury f ou nd thatN uV as i ve, Inc. (“ N uV as i ve”) c o m m itte d f

r a u d in p r o c u r in g its tr a d e m a r k r e g is tr a tio n s , th a t N M P h a d p r io rr ig h ts i n th e N E U R O V IS IO N m ark , an d th atN u V asi v e w i l fu l l y i n fri n g ed N M P ’ s ri g h t s. 1 T he di s tr i c tc our te nt e r e d j udgm e ntf orN M P , i s s ue d a pe r m a ne nti nj unc t i on b arri n g N u V asi v e fro m u si n g th e N E U R O V IS IO N m ark , aw ard ed N M P att o rn eys’ f e e s a n d c o s ts , a n d o r d e r e d c a n c e lla tio n o f N u V a s iv e ’s tr a d e m a r k r e g is tr a tio n s . W e h a v e ju r is d ic tio n o v e rN u V a s iv e ’s ap p e a l p u r s u a n t to 2 8 U .S .C . § 1 2 9 1 . W e va c a t e the di s tr i c tc our t ’ s j udgm e nt , the i nj unc t i on, a nd the a w a r ds of f e e s a nd c o s ts , a n d w e r e m a n d f

o ra n e w tr ia l. I.3

T he j ury’ s ver di ctthatN uV as i ve fr audu l ent l y procured tra dem ark re gi stra t i on s f

or the N E U R O V IS IO N m ark m ustbe vacat ed because the di stri ct c our te rr one ous l y i ns truc t e d the j ury a s t o the e l e m e nt s r e qui r e d t o pr ove f r a ud on the U ni t e d S t a t e s P a t e nta nd T r a de m a r k O f f i c e ( “ U S P T O ” ) . “ [ T ] he bur de n of prov i ng thata party f

raud ul ent l y procure d a tra dem ark regi stra t i on i s hea vy. ” R obi v. F i ve P lat t er

s, Inc. , 91 8 F . 2d 14 39 , 14 44 (9th C i r. 19 90 ). “ [T ] o p rove fr aud that w ou l d res ul ti n the ca ncel l at i on of [a ] m ark, there w ou l d h ave t o b e am at er i al m i sr epre se nt at i on i n the af fi davi ton the basi s of w hi ch the m ark w as re gi st er ed. ” P ony E xpre ss C ou ri erC orp. of A m . v. P ony E

xp. D el i ve ry Serv . , 872 F . 2d 317, 319 (9th C i r. 19 89 ). T he r e i s no r e qui r e m e nttha ta n appl i c a ntf ora tr a de m a r k r e gi s tr a t i on di s c l os e a l l pr i orus e of

a m a r k, c ontr a ry t o the di s tr i c tc our t ’ s i ns truc t i on. I ns t e a d, a n appl i c a ntm us tdi s c l os e onl y thos e pr i orus e r s tha tthe appl i c a ntbe l i e ve s ha ve a c q u ir e d s u p e r io rr ig h ts to th e m a r k in th e c la s s if ic a tio n f o rw h ic h r e g is tr a tio n is s o u g h t. Se e Q ui k

s i lv e r, I nc . v . K y m s ta C or

p. , 46 6 F . 3d 74 9, 75 5 (9th C i r. 20 06 ) ( c i t i ng Y oc um v . C ov i ngton , 216 U . S . P . Q . 210, 216–17 ( T . T . A . B . 1982) ( “ [ T ] he st at em entof an appl i ca ntthatno other per son ‘ t o the bestof hi s kno w l edge’ has the r i ghtt o us e the m a r k doe s notr e qui r e the appl i c a ntt o di s c l os e thos e pe r s ons w ho m he m ay have heard ar e usi ng the m ark i f he f ee l s tha t the ri gh t s of suchI f

N u V a s iv e ’s tr a d e m a r k r e g is tr a tio n s a r e p r o p e r ly c a n c e lle d , it m a y s till 2 m a i nt a i n c om m on l a w r i ght s i n the N E U R O V I S I O N m a r k, buti t s r i ght s i n the m a r k w ill n o lo n g e rb e in c o n te s tab le u n d e r§ 1 0 6 5 . See Far O utP rods. , Inc. v. O s kar , 2 4 7 F .3 d 9 8 6 , 9 9 6 ( 9 th C ir . 2 0 0 1 ) . 4 o th e rs a r e n o t s u

p e r io rto h is .” ) ) . T h e d is tr ic t c o u r t e rr e d b y in s tru c tin g th e ju ry to de t e r m i ne onl y w he the rN uV a s i ve om i tt e d know l e dge of N M P ’ s pr i orus e of

the N E U R O V IS IO N m ark; the prop eri nq ui ry i s w hether N uV as i ve w i l ful l y om i tt ed kn ow l edge of a s up er i or ri gh thel d b y N M P . M oreover, the di stri ctcourt e rr one ous l y om i tt e d f

r om the j ury i ns truc t i ons a ke y e l e m e ntof pr ovi ng f

r a ud on the U S P T O : tha ta tr a de m a r k appl i c a nti nt e nd t o i nduc e r e l i a nc e on a m is r e p r e s e n ta tio n . See R obi , 9 1 8 F .2 d a t 1 4 4 4 . I I . A n e w tr ia l is a ls o r e q u ir e d b e c a u s e th e d is tr ic t c o u r t f a ile d to p r o p e r ly in s tru c t th e ju ry a s to th e s h o w in g r e q u ir e d to c h a lle n g e a n “in c o n te s tab le ” m a r k . U nl es s N uV as i ve’ s tra dem ark regi stra t i on s a re ca ncel l ed fol l ow i ng a proper verdi ct o f f r a u d i n th e i rp r o c u r e me n t , th e r e g i s tr a t i o n s a r e i n c o n t e s t ab l e u n d e r1 5 U . S. C. 2 § 1065. C ons e que nt l y , N M P m a y notc ha l l e nge N uV a s i ve ’ s us e of the N E U R O V IS IO N m ark u nl es s i tca n p rove thati t s ow n u se of the m ark w as

“ m ai nt ai ned w i tho uti nt errupt i on . ” C as ual C or ne rA s s oc s . , I

nc . v . C as ual

Stor e s of N ev . , Inc. , 493 F . 2d 709, 712 ( 9th C i r . 1974) . T he j udgm e ntbe l ow m us tbe5

v a c a t e d b e c a u s e th e d i s tr i c tc o u r ti n s tru c t e d th e j u ry t o a n s w e ro n l y w h e th e rN MP

“ e s t abl i s h[ e d] tr a de m a r k r i ght s i n the m a r k ‘ N E U R O V I S I O N ’ thr ough pr i orus e of the m a r k i n c om m e r c e , ” a nd f a i l e d t o r e qui r e tha tthe j ury de t e r m i ne both the ge ogr aphi c s c ope of

N M P ’ s r i ght s a nd w he the rN M P m a i nt a i ne d c ont i nuous us e of th e m a r k f

o llo w in g th e a c q u is itio n o f a n y s ta te la w r ig h ts in th e m a r k . See 15 U .S .C . § 1 0 6 5 . III. T he di stri ctcourtabused i t s di sc re t i on by excl ud i ng re l evantevi dence base d on i t s l egal l y e rr on eous det erm i nat i on thatany di ff er ence s i n the funct i on s a nd user ba s e s of the N M P a nd N uV a s i ve de vi c e s w e r e i rr e l e va ntt o the l i ke l i hood of confusi on anal ys i s. T he di stri ctcourtshou l d h ave a dm i tt ed N uV as i ve’ s proff er ed e vi de nc e , w hi c h w a s hi ghl y pr oba t i ve of the que s t i on of

the “ pr oxi m i ty of

the g o o d s ,” A M

F v . S le e kc r a

ft B o a ts , 599 F . 2d 341, 348–349 ( 9th C i r . 1979) , a f a c t or tha t“ i s m e a s ur e d by w he the rthe pr oduc t s a r e : ( 1) c om pl e m e nt a ry ; ( 2) s ol d t o the sa m e c l as s of purchas er s; and (3) si m i l ari n u se and fun ct i on . ” N etw o rk A ut om at i on , Inc. v. A dvan ce d S ys . C on ce

pt s, Inc. , 63 8 F . 3d 11 37 , 11 50 (9th C i r. 2 0 1 1 ) . T h e i m p r o p e r l y e x c l u d e d e v i d e n c e w e n tt o w h e th e rN u V a s i v e a n d N MP d ir e c tly c o m p e te d f

o rc u s to m e r s f

o rth e ird e v ic e s , a f

a c to rth a t is “a lw a y s . . . im p o r ta n t” in tr a d e m a r k d is p u te s . B rookf i eld C om m c’ ns, Inc. v. W . C oa st E ntm ’t6

C or p. , 1 7 4 F .3 d 1 0 3 6 , 1 0 5 4 ( 9 th C ir . 1 9 9 9 ) . B e c a u s e th e d is tr ic t c o u r t n o t o n ly excl ud ed the proffer ed evi dence, bu tal so i nform ed the j ury thatthe evi dence w as i rr e l e va ntt o the tr a de m a r k i nf r i nge m e nti nqui ry , w e c a nnotc onc l ude tha t“ the j ury’ s ver di cti s m ore probabl y than n otun t ai nt ed by the error. ” G ilc h r is t v . J im Sl em on s I

m ps. , Inc. , 803 F . 2d 1488, 1500 ( 9th C i r . 1986) ( quot i ng H adda d v. L oc khe e d C al . C or

p. , 72 0 F . 2d 14 54 , 14 59 (9th C i r. 19 83 )) .

I V. W e f i nd thatre as si gn m enti s w arra nt ed on re m and b ec ause the di stri ctcourt i gnor e d ourpr e c e de nt , pe r s i s t e nt l y c utof f ore xc l ude d r e l e va ntt e s t i m ony , a nd r e p e a te d ly in s tru c te d th e ju ry in c o rr e c tly . See U . S. v . Se ars , R oe buc k

& C o. , 785 F . 2d 777, 780 ( 9th C i r . 1986) ( “ A di s tr i c tj udge ’ s a da m a nc e i n m a ki ng e rr one ous ru li n g s m ay ju stify r em an d to a d iffe re n t j u d g e.”) . In li g h t o f th e d istrict co u rt’s a d h e r e n c e to a v ie w o f

tr a d e m a r k la w th a t is a t o d d s w ith c le a rN in th C ir c u it prec edent , there i s r ea son t o b el i eve thatthe di stri ctj ud ge m ay “ have subst ant i al di f f i c ul ty i n putt i ng outof

hi s . . . m i nd pr e vi ous l y e xpr e s s e d vi e w s orf i ndi ngs det erm i ned t o b e e rr on eous. ” U ni t e d N at ’ l I ns . C o. v . R & D L at ex C or p. , 242 F . 3d 1102, 1118 ( 9th C i r . 2001) ( quot i ng Se ars , R oe buc k & C o. , 7 8 5 F .2 d a t 7 8 0 ) . W e the r e f or e di r e c tthe c l e r k of

the U . S . D i s tr i c tC our tf orthe C e ntr a l D i s tr i c tof C a l i f orni a t o a s s i gn thi s c a s e t o a di f f e r e ntdi s tr i c tc our tj udge upon r e m a nd.7

VA C A TED A N D R EM A N D ED