The US Court of Appeals for the 10th Circuit clarified the proper discovery procedures for a Rule 45 subpoena to compel a nonparty to produce documents in a trademark dispute before the US Patent and Trademark Office (PTO) Trademark Trial and Appeal Board (TTAB). In doing so, it reversed the district court’s grant of a nonparty’s motion to quash a subpoena. El Encanto, Inc. v. Hatch Chile Co., Case No. 15-2012 (10th Cir., June 17, 2016) (Gorsuch, J).

The original trademark dispute before the TTAB pertained to the Hatch chile, a chile pepper that is grown in the Hatch Valley region of northern New Mexico. After the Hatch Chile Company sought to register the trademark HATCH for chile peppers, rival chile producer El Encanto objected to registration of the mark because it refers to a geographical place, and because El Encanto claimed that the Hatch Chile Company used the term in a misleading manner since its products regularly include chiles that do not come from the Hatch Valley.

To demonstrate misleading use of the HATCH name, during discovery El Encanto asked Hatch Chile to disclose the origin of its chiles. Hatch Chile responded that it did not know the source of the chiles and indicated that El Encanto would have to ask its co-packers and suppliers for that information. El Encanto immediately issued a subpoena under Fed. R. Civ. P. 45 to Hatch Chile supplier Mizkan Americas, seeking documents revealing the geographic source of Hatch Chile’s peppers. In response, Hatch Chile filed a motion for a protective order, and Mizkan filed its own motion to quash the subpoena. Arguing in support of their motions, Hatch Chile and Mizkan propounded what the 10th Circuit called a “rather paradoxical argument” and claimed that the Rule 45 subpoena failed because a deposition is a necessary precondition to any document demand. In other words, the Rule 45 subpoena faltered because it compelled only the production of documents, instead of the production of documents at deposition. The district court agreed and granted the motion to quash.

On appeal, the 10th Circuit looked at whether the district court read the law correctly with regard to the Rule 45 subpoena and concluded that “nothing in the federal rules, the relevant statute, or the applicable regulations . . . commands the pointless process that Hatch Chile and Mizkan insist upon.” First and foremost, the Court focused on the underlying purpose of the Federal Rules of Civil Procedure, which are intended to ensure the speedy and inexpensive resolution of all cases, and noted that the requirement of a deposition only to secure relevant documents defeats the purpose of the rules.

Next, the 10th Circuit examined 35 USC § 24, which authorizes parties before the TTAB to invoke federal discovery processes, and found that the statutory language itself expressly affords parties the power to compel nonparties to produce documents without also convening a deposition. The Court also examined past PTO practice and found that in at least two patent proceedings the PTO expressly stated that parties may seek and obtain subpoenas for nonparty documents without a deposition. Finally, the Court reviewed the relevant portion of the TTAB Manual of Procedure (TBMP), regarding which the parties argued entirely disparate interpretations of the rule pertaining to nonparty document subpoenas. The Court concluded that it owed no deference to the TBMP since the TBMP itself states that it does not bind the TTAB and does not “have the force and effect of law.”

Thus, on the narrow issue of the application of Rule 45 subpoenas in TTAB matters, the 10th Circuit concluded that “a party to a TTAB proceeding can obtain nonparty documents without wasting everyone’s time and money with a deposition no one really wants.”