Opinion ID: 184616
Heading Depth: 2
Heading Rank: 1

Heading: MSI's Right to a Jury Trial

Text: 12 As noted above, the district court itself resolved MSI's challenge to the decision of the TTAB. At the close of evidence but before the case was submitted to the jury, the court upheld the TTAB's decision that Sunmatch owned the SUNTECH mark and informed the jury of its decision as follows: 13 I have decided the appeal affirming the decision of the TTAB ... which found in favor of the defendant in this case. From my decision two facts flow. One, Sunmatch is the owner of the trademark and, two, MSI, the plaintiff in this action, did not own the trademark at the time it filed its application for registration for the Suntech trademark. 14 While the jury was deliberating the court placed on the record its findings of fact and conclusions of law relevant to its decision affirming the TTAB. The court indicated that it found many of the witnesses for both sides to be less than truthful and that it closely scrutinized the manner and content of the testimony and applied what all jurors [331 U.S.App.D.C. 47] are required to use and that is common sense. The court found that Sunmatch was the first to use the SUNTECH mark and therefore it held that Sunmatch owned the mark. The court then outlined the consequences of that decision: 15 The factual issue[s] of ownership and first use have a presence of [sic] other aspects of this case as it proceeds to the jury in that the parties have brought jury triable claims that implicate this issue. But as in any case in which a decision for the court [has an] impact on what remains for the jury to decide, this court recognizes that pursuant to Rule 50, the determination of an issue against a party may re-configure what remains for the jury to decide. 16 Having determined the fact de novo that first use renders the defendant [Sunmatch] the owner and rightful registrant of the trademark in this case as a matter of law, this issue cannot be redetermined by the jury and consequently the plaintiff's claims are affected as we have already discussed on the record, dropping certain things out and eliminating certain things for the jury's decision-making. 17 MSI contends that the district court violated its right to a jury trial when the court decided that Sunmatch owned the trademark before submitting the parties' other claims to the jury. We agree. The Seventh Amendment to the Constitution of the United States provides: 18 In Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise reexamined in any Court of the United States, than according to the rules of the common law. 19 As a general matter the Seventh Amendment affords the right to a jury trial in those actions that are analogous to 'Suits at common law' --that is, suits brought in the English law courts--and not in actions analogous to 18th-century cases tried in courts of equity or admiralty. Tull v. United States, 481 U.S. 412, 417, 107 S.Ct. 1831, 95 L.Ed.2d 365 (1987) (emphasis in original). 20 Most important for this case, the Supreme Court has held that [w]hen legal and equitable claims are joined in the same action, 'the right to jury trial on the legal claim, including all issues common to both claims, remains intact.'  Lytle v. Household Mfg., Inc., 494 U.S. 545, 550, 110 S.Ct. 1331, 108 L.Ed.2d 504 (1990) (quoting Curtis v. Loether, 415 U.S. 189, 196 n. 11, 94 S.Ct. 1005, 39 L.Ed.2d 260 (1974)); see Dairy Queen, Inc. v. Wood, 369 U.S. 469, 472-73, 82 S.Ct. 894, 8 L.Ed.2d 44 (1962); Beacon Theatres, Inc. v. Westover, 359 U.S. 500, 510-11, 79 S.Ct. 948, 3 L.Ed.2d 988 (1959). In such a case the jury first must resolve any common issue of fact; the district court then can resolve those claims that are for it to determine. See Lytle, 494 U.S. at 556 n. 4, 110 S.Ct. 1331; Dairy Queen, 369 U.S. at 472-73, 82 S.Ct. 894. 21 In this case the parties do not dispute that the district court was correct in itself trying MSI's challenge to the decision of the TTAB and in submitting all of MSI's other claims and Sunmatch's counterclaims to the jury. See Dairy Queen, 369 U.S. at 476-77, 82 S.Ct. 894 (claims for damages based upon breach of contract and trademark infringement sound in law). The dispute is over the sequence in which the court and the jury should have proceeded, considering that MSI's challenge to the decision of the TTAB and all of Sunmatch's claims against MSI involved the common legal issue of which party owned the SUNTECH trademark, resolution of which in turn depended upon the common factual issue of which party first used the mark. The teaching of the Supreme Court cases cited in the preceding paragraph is that the district court should have let the jury first decide this common question of fact and then itself decided the TTAB appeal based upon the jury's resolution of that question. 22 Sunmatch contends nonetheless that because, in the event, the district court resolved MSI's challenge to the TTAB decision before submitting the case to the jury, MSI was barred by the doctrine of issue preclusion from re-litigating the factual question of first use. The Supreme Court rejected a [331 U.S.App.D.C. 48] similar contention in Lytle, stating that in cases involving a wrongful denial of a petitioner's right to a jury trial the Court has never accorded collateral-estoppel effect to the trial court's factual determinations. 494 U.S. at 552-53, 110 S.Ct. 1331. As the Court explained: 23 [T]he purposes served by collateral estoppel do not justify applying the doctrine in this case. Collateral estoppel protects parties from multiple lawsuits and the possibility of inconsistent decisions, and it conserves judicial resources. Application of collateral estoppel is unnecessary here to prevent multiple lawsuits because this case involves one suit in which the plaintiff properly joined his legal and equitable claims. 24 Id. at 553, 110 S.Ct. 1331 (citation omitted). 25 Next Sunmatch asserts that the district court's action must not violate the Seventh Amendment because otherwise courts could never dismiss claims based upon Rules 12, 50, or 56. Sunmatch misses the point. Of course the trial court may dismiss claims based upon those rules--but only if it can do so as a matter of law. In this case the court, acting as the finder of fact, evaluated the demeanor and determined the credibility of witnesses, balanced the evidence, and found that Sunmatch first used the mark. By resolving this factual issue common to the claims tried to the court and those tried to the jury, the court violated MSI's right to a jury trial. 26 Upon remand MSI is entitled to a jury trial of all causes of action that entail the question which party owned the SUNTECH trademark, namely, MSI's challenge to the TTAB decision, and its claims for trademark infringement and unfair competition under the Lanham Act and unfair competition under state law; and Sunmatch's claims for trademark infringement and unfair competition under the Lanham Act, fraud upon the PTO, and unfair competition under state law. Sunmatch's claim for breach of contract also must be retried because it too implicates the question of ownership. Sunmatch has offered two theories in support of this claim, both of which depend upon ownership of the mark: First, in its complaint Sunmatch alleged that [b]y claiming ownership of Sunmatch's trademark SUNTECH and filing a U.S. application therefor, [MSI] breached its duty under the sales agreement. Second, in its brief Sunmatch contends that when MSI began to purchase pneumatic tools from other suppliers and place the SUNTECH trademark on those products, it was clearly violating the Agreement. The issue of who owned the mark is relevant under either theory, and therefore the claim must be retried. 27 Finally, we note that MSI does not seek retrial based upon the Seventh Amendment for its claims for breach of fiduciary duty, breach of contract, and fraud upon MSI, the latter two of which the jury rejected. (During the trial MSI withdrew its claim of fraud upon the TTAB.) Accordingly, these claims will not be retried upon remand, and we need not consider whether they implicate the issue of ownership. We turn now to the arguments that the parties need to have resolved in order to retry the claims that we remand to the district court. 28