adidas America, Inc. et al v. TRB Acquisitions LLC

Filing 385

Opinion and Order (PUBLIC VERSION; REDACTED) - The Court finds the crime-fraud exception applies to documents concerning the 2012 Section 8 filing relating to the RBK mark. All documents relating to that filing, including documents relating to whethe r Reebok could file at the sixth-year anniversary, the sticker program, the e-commerce backup plan, and the ultimate filing at the close of the six-month grace period are not privileged and must be promptly produced. Plaintiffs, however, may elect to designate these documents as Confidential, but not Attorneys Eyes Only, under the First Amended Protective Order (ECF 98 ). Signed on 9/25/2018 by Judge Michael H. Simon. (mja)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON

ADIDAS AMERICA, INC., et al.,
Plaintiffs,

Case No. 3:15-cv-2113-SI
OPINION AND ORDER
(PUBLIC VERSION; REDACTED)

v.
TRB ACQUISITIONS LLC, et al.,
Defendants.
Stephen M. Feldman, PERKINS COIE LLP, 1120 NW Couch Street, Tenth Floor, Portland, OR
97209; R. Charles Henn Jr., Charles H. Hooker III, and Nichole D. Chollet, KILPATRICK
TOWNSEND & STOCKTON LLP, 1100 Peachtree Street, Suite 2800, Atlanta, GA 30309.
Of Attorneys for Plaintiffs.
Kenneth R. Davis II, LANE POWELL PC, 601 SW Second Avenue, Suite 2100, Portland, OR
97204; Michelle Mancino Marsh, Allen G. Reiter, Lindsay Korotkin, Alissa F. Bard, and Phaik
Lin Goh, ARENT FOX LLP, 1301 Avenue of the Americas, Floor 42, New York, NY 10019. Of
Attorneys for Defendants.
Michael H. Simon, District Judge.
The Court is filing two versions of this Opinion and Order. In the public version,
Defendants’ attorney-client communications are redacted. An unredacted version will be filed
under seal, but will be available to Plaintiffs and Defendants and their counsel as “Confidential”
under the terms of the First Amended Protective Order entered in this case (ECF 98).

PAGE 1 – OPINION AND ORDER (PUBLIC VERSION; REDACTED)

Defendants requested that the Court review in camera 134 documents withheld from
production by Plaintiffs as either privileged or subject to the work-product doctrine. The Court
ordered that Plaintiffs provide a sample of 26 documents (20 percent of the total number
requested by Defendants) for in camera review. After reviewing the documents in camera, the
Court submitted questions to Plaintiffs, because the Court’s in camera review raised concerns
regarding the crime-fraud exception to privilege and the veracity of the answers given at
depositions by Plaintiffs’ corporate-representative witnesses designated under Rule 30(b)(6) of
the Federal Rules of Civil Procedure.
Plaintiffs filed a response to the Court’s questions, and Defendants requested the
opportunity to file a brief in response to Plaintiff’s filing, which the Court allowed. Plaintiffs’
then filed a reply to Defendants’ filing. In total, the parties filed 258 pages on this issue (in
addition to the documents submitted in camera), and incorporated by reference numerous other
filings in the record. Thus, the Court has a significant record on which to make its findings. For
the reasons discussed below, the Court finds that the crime-fraud exception applies to certain
documents withheld on the basis of privilege and thus those documents are not privileged and
must be disclosed to Defendants.
STANDARDS
A. Crime-Fraud Exception
Under the crime-fraud exception, documents subject to the attorney-client privilege “are
not privileged when the client consults an attorney for advice that will serve him in the
commission of a fraud or crime.” In re Grand Jury Investig., 810 F.3d 1110, 1113 (9th
Cir. 2016) (quotation marks omitted); see also United States v. Zolin, 491 U.S. 554, 563 (1989)
(“It is the purpose of the crime-fraud exception to the attorney-client privilege to assure that the
‘seal of secrecy’ between lawyer and client does not extend to communications made for the
PAGE 2 – OPINION AND ORDER (PUBLIC VERSION; REDACTED)

purpose of getting advice for the commission of a fraud or crime.” (citation and quotation marks
omitted)).
A party asserting the crime-fraud exception first must establish “a factual basis adequate
to support a good faith belief by a reasonable person that in camera review of the materials may
reveal evidence to establish the claim that the crime-fraud exception applies.” Zolin, 491 U.S.
at 572. Only a “minimal showing” is needed to satisfy this threshold step. United States v.
Christensen, 828 F.3d 763, 800 (9th Cir. 2015).
A party invoking the crime-fraud exception must then satisfy a two-part test to make a
prima facie case that the crime-fraud exception applies:
First, the party must show that the client was engaged in or
planning a criminal or fraudulent scheme when it sought the advice
of counsel to further the scheme. Second, it must demonstrate that
the attorney-client communications for which production is sought
are sufficiently related to and were made in furtherance of [the]
intended, or present, continuing illegality.
In re Grand Jury, 810 F.3d at 1113 (quotation marks omitted) (emphasis and alteration in
original); see also In re Napster, Inc. Copyright Litig., 479 F.3d 1078, 1090 (9th Cir. 2007),
abrogated on other grounds by Mohawk Indus. v. Carpenter, 558 U.S. 100 (2009). “The attorney
need not have been aware that the client harbored an improper purpose,” nor must the planned
crime or fraud “have succeeded for the exception to apply.” In re Napster, 479 F.3d at 1090. The
burden of proof by a party in a civil case seeking disclosure under the crime-fraud exception of
documents protected by attorney-client privilege or the work-product doctrine is preponderance
of the evidence. Id. at 1094-95.
B. Trademark Renewal
Renewal of a trademark is governed by §§ 1058 and 1059 of the Lanham Act (the “Act”).
15 U.S.C. §§ 1501, et seq. Renewal requires the submission of an affidavit that must assert,

PAGE 3 – OPINION AND ORDER (PUBLIC VERSION; REDACTED)

among other things, that the mark is “in use in commerce” and describe the goods and services in
connection with which the mark is in use in commerce. 15 U.S.C. § 1058(b)(1)(A)-(B). The term
“use in commerce” is defined by the Act as:
The term “use in commerce” means the bona fide use of a mark in
the ordinary course of trade, and not made merely to reserve a right
in a mark. For purposes of this chapter, a mark shall be deemed to
be in use in commerce-(1) on goods when-(A) it is placed in any manner on the goods or their containers or
the displays associated therewith or on the tags or labels affixed
thereto, or if the nature of the goods makes such placement
impracticable, then on documents associated with the goods or
their sale, and
(B) the goods are sold or transported in commerce.
15 U.S.C. § 1127
Although the terms “bona fide” and “ordinary course of trade” are not defined in the Act,
the Ninth Circuit, in the context of the considering the term “bona fide” under § 1127, has noted
the dictionary definitions of “made in good faith; without fraud or deceit” and “sincere;
genuine.” Electro Source, LLC v. Brandess-Kalt-Aena Grp., Inc., 458 F.3d 931, 936 n.3 (2006)
(quoting Black’s Law Dictionary at 186 (8th ed. 2004)). Thus, the Ninth Circuit has focused on
the good faith of the use, in addition to the use being in the ordinary course of trade. See id.
at 938-39 (quoting Carter-Wallace, Inc. v. Procter & Gamble Co., 434 F.2d 794, 804 (9th
Cir. 1970)). The Ninth Circuit has also noted, however, that use simply to maintain a trademark
is insufficient because otherwise “the requirement of good faith commercial use would be read
out of the trademark law altogether.” Id. at 939 n.6 (quoting La Societe Anonyme des Parfums le
Galion v. Jean Patou, Inc., 495 F.2d 1265, 1273 n.10 (2d Cir. 1974) (discussing a “trademark
maintenance program” in the context of “minimal sales effort”); see also id. at 940 (noting that a

PAGE 4 – OPINION AND ORDER (PUBLIC VERSION; REDACTED)

court can consider, among other factors, the “genuineness” of the use (quoting Chance v. PacTel Teletrac Inc., 242 F.3d 1151, 1159 (9th Cir. 2001)).
C. Fraud on the PTO
“Fraud in procuring a trademark registration or renewal occurs when an applicant
knowingly makes false, material representations of fact in connection with his application.” In re
Bose Corp., 580 F.3d 1240, 1243 (Fed. Cir. 2009) (quoting Torres v. Cantine Torresella
S.r.l., 808 F.2d 46, 48 (Fed. Cir.1986)). There must be intent to mislead the U.S. Patent and
Trademark Office (“PTO”) , and even a material misrepresentation will not constitute fraud if it
is made based on a misunderstanding, a mistake, a negligent omission, an inadvertence, and the
like. Id. Thus, there is a difference between a “fraudulent misrepresentation,” which involves an
intent to deceive, and a “false representation,” which may not have the requisite scienter. Id. “In
other words, deception must be willful to constitute fraud.” Id.
“A party seeking cancellation of a trademark registration for fraudulent procurement
bears a heavy burden of proof.” Id. The party must prove fraud “to the hilt with clear and
convincing evidence. There is no room for speculation, inference or surmise and, obviously, any
doubt must be resolved against the charging party.” Id. (quotation marks omitted).
BACKGROUND
An owner of a trademark is periodically required to file with the PTO affidavits or
declarations of use with the PTO. One of these is due between the fifth- and sixth-year
anniversaries of the registration of the trademark. 15 U.S.C. § 1058(a)(1) (“Section 8
Declaration”). The owner is, however, given a six-month grace period after the sixth-year
anniversary. 15 U.S.C. § 1058(a)(3).
Reebok registered the RBK mark at issue in this case on March 28, 2006. Thus, Reebok’s
Section 8 Declaration timeframe for that mark ran from March 28, 2011 (the fifth-year
PAGE 5 – OPINION AND ORDER (PUBLIC VERSION; REDACTED)

anniversary) to March 28, 2012 (the sixth-year anniversary). On March 10, 2012, Angelo Notaro,
outside counsel for Reebok, emailed May Rodal, an in-house paralegal at adidas B.V., copying
Dana Barmagen, an attorney at adidas B.V., Erica Han, Reebok’s Trademark Counsel, and an
“NMPC Mailbox.”1 Mr. Notaro reminded Ms. Rodal that the RBK Section 8 Declaration normal
expiration date was March 28, 2012, and noted that he had not received any instructions for the
mark. On March 22, 2012, Ms. Han, who as Reebok’s Trademark Counsel was responsible for
trademark applications and renewals of existing applications, responded to all, stating: “We will
not be able to prove use of RBK at this time. However, will you please docket the 6-month grace
period? The business may decide to use RBK as part of a ‘heritage’ line of products prior to that
time.” Reebok had not used the RBK mark physically on any product since about 2010.
In May 2012, Reebok employees sent emails with the subject line “RBK trademark
issue.” These emails discussed resurrecting an old RBK logo, using the graphics team to create a
“tight” version of the logo, noting that the logo must be approved by the legal department, and
noting the plan that the logo would be placed on stickers and the stickers would be applied to the
inside lid of some product boxes. One employee expressed concern that there needed to be a
“binding theme we can use to make the graphic look like there is some logic to it and we didn’t
do it for legal reasons.” The logo was designed and approved sometime in May or June 2012.
Reebok employee Richard Dilando asked Trademark Counsel Erica Han on June 13, 2012,
whether “putting the RBK logo on the box in the way attached in the picture [would] be
sufficient to maintain the RBK trademark?” Reebok was strategic with what product boxes on
which it would place the stickers, deciding to place the stickers on the boxes of “retro products.”

1

The Court is not aware of what “NMPC” stands for.

PAGE 6 – OPINION AND ORDER (PUBLIC VERSION; REDACTED)

The plan that was put in place to meet the requirement for a Section 8 Declaration was to
use an RBK sticker on footwear, apparel (t-shirts), and accessories (hats). If the stickers were not
able to be placed on any given product, then Reebok would implement “Plan B,” which would be
to “create the ecom site and have product available for purchase through that.” This plan was
confirmed in a July 13, 2012 email, which described the plan for the “RBK renewal for
Sept. 28th.”
Reebok employees wanted to ensure that they met the necessary requirements for the
Section 8 Declaration, including that they “hit the legal requirements of ‘interstate commerce.’”
The email correspondence included subject lines such as “POs needed for Trademarks,” “RBK
Trademark,” “Important-POs needed for Trademarks,” and “Invoices for RBK Trademark
Products Jimmy Jazz 62925.” Reebok’s plan was implemented very quickly to meet the
Section 8 Declaration grace period deadline. Indeed, it was done so quickly that costs were not
able to be captured as done in the normal course of business. Rob Foster, a Reebok employee,
requested general ledger codes to charge the first sticker production run, noting that “because
this was done quickly for the first pos in production the spec change cost wasn’t captured.”
Other problems arose because of the rushed timeline. Reebok ran into particular difficulty
with the hats. In a July 25, 2012 email, Tim Whalen noted that because of “rushed production”
Reebok could not retroactively add RBK stickers to hats. Hats apparently fell through the cracks,
and, as noted in a September 21, 2012 email from Jen Maitland, this “caused a few issues in that
now we have to quickly create an ecom site to sell the product in order to not lose the trademark.
Adam Michaels is now working to make sure it all gets done in time so hopefully we will be fine
to renew by next week.” Thus, for hats, at the last minute Reebok had to use its “Plan B” of an
“ecom” site.

PAGE 7 – OPINION AND ORDER (PUBLIC VERSION; REDACTED)

No contemporaneous emails or other documents that the Court reviewed in camera, that
were provided by Reebok, or that were cited from previously-filed documents in the record,
discuss goodwill in the RBK mark, brand equity, future planned use of the RBK mark, or any
similar topic. The only discussion among Reebok and adidas employees in the contemporaneous
documents in the record related to the trademark and how to meet the legal requirements
necessary not to lose the trademark.
DISCUSSION
A. Crime-Fraud Exception
1. Threshold Step of the Crime-Fraud Exception
Plaintiffs first argue that Defendants do not meet the first step of the crime-fraud
exception, raising sufficient factual evidence to warrant an in camera review. The Court
disagrees. First, the Court notes that it was already conducting an in camera review when the
Court became concerned about the crime-fraud exception. Defendants previously had raised the
crime-fraud exception and although the Court resolved Defendants’ motion on other grounds, the
Court stated: “If, however, during the Court’s limited in camera review of the documents
ordered for in camera review, it appears to the Court that the crime-fraud exception may apply,
the Court may revisit this portion of Defendants’ motion.” Plaintiffs offer no authority for the
position that a court should overlook evidence of fraud or other crimes uncovered during a later
in camera review or even during an in camera review conducted for other purposes.
Second, even if Defendants were required to establish a sufficient basis before the Court
could conduct an in camera review, the Court finds Defendants have met this burden. When
arguing the crime-fraud exception applied, Defendants incorporated by reference earlier briefing
and arguments relating to the “sticker” program. This is the program put in place in mid-2012 to
allow Reebok to file its Section 8 Declaration, and is the program the Court finds is not a good
PAGE 8 – OPINION AND ORDER (PUBLIC VERSION; REDACTED)

faith, bona fide, commercial use of the RBK mark. Defendants’ argument and evidence relating
to the sticker program demonstrate the “good faith belief by a reasonable person that an in
camera review of the materials may reveal evidence” to establish the crime-fraud exception.
Zolin, 491 U.S. at 572. Thus, Defendants have met the “minimal showing” required to satisfy the
threshold step. Christensen, 828 F.3d at 800.
2. Bona-Fide Use in the Ordinary Course of Trade
Plaintiffs next argue that the crime-fraud exception does not apply because the 2012
sticker program constituted good faith, bona fide commercial use of the RBK mark. Plaintiffs
assert that the sticker program (and the Plan B “ecom” site) were not implemented “merely” to
reserve a right in the RBK mark, but to leverage the goodwill of the mark and to identify certain
goods from the Classic line as associated with the mark to benefit from the brand equity in the
mark. These arguments are unavailing.
Plaintiffs rely solely on current deposition testimony to support these arguments, and
offer not a single contemporaneous document discussing these purported purposes of using the
mark. All of the contemporaneous documents focus solely on meeting the legal requirements so
as not to lose the trademark. There is not a single discussion or hint that Reebok is interested in
anything other than maintaining the mark.
Further, much of the deposition testimony relied on by Reebok is not specific or is
unclear as to timeframe and could easily have been referring to a period after the 2012 renewal.
For example, Plaintiffs rely on the testimony of Todd Krinsky. Mr. Krinsky testified that RBK
stickers are currently on some product box lids, such as Iverson shoes. ECF 180-14 at 2-3.
Mr. Krinsky is then asked:
Q:
Earlier you testified that the RBK logo appears on some
shoe boxes.

PAGE 9 – OPINION AND ORDER (PUBLIC VERSION; REDACTED)

A:

Uh huh.

Q:

Is that correct?

A:

Yes.

Q:

And what was the purpose in putting it there?

A:
I think we felt there certainly is still equity with the RBK
mark and we wanted to attach it to some of our—in association to
some of our products, namely the products that kind of we felt the
consumer buying those products knew about RBK, so things like
Iverson, Pump, things like that.
Id. at 5-6. Plaintiffs contend that this testimony relates to 2012, but the questioning appears to
relate to Mr. Krinsky’s earlier testimony regarding current use of RBK stickers on product
boxes. The testimony is unclear because both the questions and answers switch between past and
present tense.
Regardless, the fact that when Reebok decided to place stickers on the inside of product
box lids to ensure it did not lose its trademark Reebok was strategic about what products to place
those stickers on, does not make the sticker program bona fide use. Placing the stickers on the
products where it made the most sense from a marketing perspective is not evidence that Reebok
designed or implemented the program for a bona fide commercial use. Doing the “least harm”
commercially while meeting the legal requirements of trademark use is not bona fide use in the
ordinary course of trade. If Reebok truly intended to “leverage the goodwill” and “benefit from
the brand equity” of the mark, then why were the stickers placed on the inside of the lid of the
box instead of the outside of the box where potential buyers could readily see the mark?
Reebok’s argument that its use of the RBK mark is a classic use of a mark to identify
goods is unpersuasive. Customers were not purchasing RBK goods, and the goods were not
identified as RBK goods. Customers were purchasing, for example, Iverson shoes. These shoes
were advertised as Iverson shoes, sold as Iverson shoes, invoiced as Iverson shoes, packaged as
PAGE 10 – OPINION AND ORDER (PUBLIC VERSION; REDACTED)

Iverson shoes, marked as Iverson shoes on the product itself, and then happened to have an RBK
sticker put on the inside of the lid of the product box. The sales, thus, did not depend on the RBK
mark for identification of source. This is not brand identification, even for a mark with
significant goodwill and brand equity. Exxon Corp. v. Humble Expl. Co., 695 F.2d 96, 100-02
(5th Cir. 1983) (noting that “[n]o sales were made that depended upon the HUMBLE mark for
identification of source. . . . That is, the HUMBLE mark did not with these sales play the role of
a mark” because the products were Exxon products on which the HUMBLE mark was placed on
select invoices or products, and concluding that, even though the mark had goodwill of
“immense value,” the sales were not bona fide use).
Other testimony relied on by Plaintiffs is general testimony regarding the importance of
the RBK mark, its general brand equity, general statements regarding whether Reebok intended
to “abandon” the mark, and vague intentions around the possible future use of the RBK mark.
But this type of testimony is again not date specific and is not specific as to the purpose of
the 2012 sticker program at the time it was created and implemented. Additionally, regarding
whether Reebok “abandoned” the mark, it is clear from Ms. Han’s investigation and conclusion
at the six-year anniversary of the RBK registration that Reebok had not engaged in use of the
mark sufficient to file a Section 8 Declaration. Thus, regardless of Reebok officials’ subjective
intent or belief regarding the equity of the mark, Reebok had not been using the mark in
commerce for some period of time.
The Court provided Reebok the opportunity to respond to the Court’s concern regarding
the crime-fraud exception. Reebok did not provide any contemporaneous documents with its
response. Defendants filed a reply to Plaintiffs’ filing and argued, among other things, that
Plaintiffs offered no contemporaneous documents supporting Plaintiffs’ theories of additional

PAGE 11 – OPINION AND ORDER (PUBLIC VERSION; REDACTED)

purposes for the sticker program. Plaintiffs’ were permitted a response to that filing. Plaintiffs
again did not file any contemporaneous documents from 2012. Plaintiffs pointed only to the fact
that Reebok was strategic in the products on which it placed its stickers.
Erica Han, Reebok’s former Trademark Counsel, submitted a declaration in response to
the Court’s concern regarding the crime-fraud exception. Ms. Han noted that she did not review
any documents and that her declaration was based on her recollection of events from 2012.2
Ms. Han testifies that she recalls that Reebok employees believed the RBK mark was important
to their business plan and wanted to have a section of the “e-commerce” site branded with the
RBK mark. Ms. Han’s recollection is not consistent with the contemporaneous documents,
which indicate that use of the e-commerce site was “Plan B” to the sticker program to preserve
the trademark. Further, the emails discussing having to use the e-commerce site at the last minute
in September 2012 because stickering was not done on the hats express frustration and
displeasure, not that it was an intentional decision made because the RBK mark was important to
the business plan.3
Ms. Han also recalls that the sticker program was a “running change,” meaning that it
would continue beyond the 2012 renewal. She further states that based on her standard practice,
she would not have authorized the submission if trademark preservation was the “sole” purpose

2

Ms. Han expressed concern regarding potential privilege waiver based on the Court’s
earlier ruling relating to privilege waiver for documents provided to a witness designated under
Rule 30(b)(6) of the Federal Rules of Civil Procedure to prepare that witness to testify on
designated topics at a deposition under Rule 30(b)(6). The Court notes that Ms. Han would not
have been reviewing documents as a Rule 30(b)(6) witness.
3

The Court’s recitation is not intended to impugn Ms. Han’s veracity. The Court
understands that Ms. Han is testifying regarding events of six years ago, without the benefit of
reviewing documents to refresh her recollection.

PAGE 12 – OPINION AND ORDER (PUBLIC VERSION; REDACTED)

of the use of the mark on the packaging. Finally, she states that she would have confirmed that
the stickers were on a sufficient quantity to constitute bona fide use.
The Court does not question the sales volume. This is not a case where only token sales
were made to ensure trademark preservation or renewal. The Court acknowledges that the
stickers were placed on products boxes having significant sales. The issue here is whether the
sticker program (with the back-up plan of the e-commerce website) was put in place only to
preserve the trademark or for other additional good faith, bona fide, commercial reasons.
The contemporaneous documents reviewed by the Court are clear and convincing. At the
sixth-year anniversary, Reebok’s trademark counsel unequivocally concluded that Reebok could
not file a Section 8 Declaration relating to use of the RBK mark. Reebok then used the six-month
grace period to design and implement a program to place stickers on the inside of certain product
boxes to ensure that Reebok could meet the legal requirements to file a Section 8 Declaration.
When the sticker program was erroneously not implemented on hats, Reebok had to resort to its
“Plan B” program of an “ecom” internet sales site at the last minute. The Court finds that the
program was not designed and implemented for any purpose other than to try to ensure that the
trademark would not be lost. This is not good faith, bona fide use in the ordinary course of
trade.4 See Electro Source., 458 F.3d at 938-40, n.6; see also Grocery Outlet Inc. v. Albertsons,
Inc., 2008 WL 5245962, at *7 (N.D. Cal. Dec. 17, 2008) (“However, the evidence is persuasive
that such signage was erected solely on the advice of counsel for the purpose of maintaining an
active registration in the mark. Such usage is not considered active use in the ordinary course of
trade.”).

4

The Court makes no finding relating to any later statement of use, or whether Reebok’s
plans for the RBK mark changed after the 2012 Section 8 Declaration.

PAGE 13 – OPINION AND ORDER (PUBLIC VERSION; REDACTED)

Although Ms. Han testifies in her current declaration that she would not have authorized
the submission of the Section 8 Declaration if trademark preservation was the sole purpose, the
contemporaneous correspondence with Ms. Han and among other Reebok employees indicates
that trademark renewal was the sole purpose. There is no evidence that Ms. Han made any effort
or investigation to confirm that trademark renewal was not the sole purpose. For example,
Reebok did not submit any email or other documentation from 2012 provided to Ms. Han
explaining to her any commercial purpose for the sticker program other than trademark
preservation. Ms. Han’s testimony in her declaration is about her general practice with respect to
trademark filings. She does not provide specific evidence relating to the purposes of
Reebok’s 2012 sticker program. For example, she does not testify as to what the purported bona
fide commercial use was, what investigation she conducted to learn of the bona fide use, how she
learned of that use, or what evidence supports that use. The Court finds the specific
documentation of the 2012 program clear and convincing and that it outweighs the statements of
Ms. Han regarding her general practice relating to trademark filings.
3. Fraud on the PTO
Plaintiffs argue that even if the 2012 sticker program was not bona fide use, the 2012
Section 8 Declaration submitted relating to the RBK mark did not constitute fraud on the PTO
for two reasons. First, Plaintiffs argue that because it was submitted by outside counsel, and
outside counsel believed it was true, the high bar to prove fraud on the PTO is not met. Second,
Plaintiffs argue that because Ms. Han is the person who directed outside counsel to file the
Section 8 Declaration, and Ms. Han believed it to be true, there was no fraud. Both arguments
fail for the same reason—it is not merely the subjective knowledge and intent of counsel that the
Court considers.

PAGE 14 – OPINION AND ORDER (PUBLIC VERSION; REDACTED)

The Court has no reason to believe that outside counsel had any knowledge relating to
Reebok’s sticker program. Regarding Ms. Han’s knowledge, in her recently-filed declaration,
she makes general statements regarding her understanding of trademark law, her ethical
standards, and the fact that she would not submit or cause to be submitted a declaration to the
PTO that was false or contained false statements. She further states that she believed all of the
statements in the 2012 Section 8 Declaration submitted to the PTO relating to the RBK mark
were true and that she did not intend to deceive the PTO with any statements contained in that
declaration. As noted above, there is no evidence before the Court that Ms. Han conducted any
reasonable investigation into whether Reebok’s 2012 sticker program was done for the sole
purpose of retaining the trademark or for good faith, bona fide, commercial purposes. Thus, the
Court does not conclude that Ms. Han had specific knowledge that the 2012 sticker program was
done for the sole purpose of meeting the legal requirements of the Section 8 Declaration.
Whether Ms. Han was willfully ignorant, however, is not a question that the Court needs to
resolve, because Reebok is the registrant and Reebok had the requisite knowledge.
Plaintiffs argue that the Court should only consider the intent of the declarant (outside
counsel), or possibly the person responsible for the filing and who directed outside counsel,
Ms. Han. Plaintiffs primarily rely on In re Bose for this proposition. That case, however, states
that “we hold that a trademark is obtained fraudulently under the Lanham Act only if the
applicant or registrant knowingly makes a false, material representation with the intent to
deceive the PTO.” 580 F.3d at 1245 (emphasis added). Moreover, the Ninth Circuit has
described the elements for fraud on the PTO as:
1) a false representation regarding a material fact; 2) the
registrant’s knowledge or belief that the representation is false;
3) the registrant’s intent to induce reliance upon the
misrepresentation; 4) actual, reasonable reliance on the

PAGE 15 – OPINION AND ORDER (PUBLIC VERSION; REDACTED)

misrepresentation; and 5) damages proximately caused by that
reliance.
OTR Wheel Eng’g, Inc. v. W. Worldwide Servs., Inc., 897 F.3d 1008, 1019 (9th Cir. 2018)
(emphasis added). As stated above, the “registrant” here is Reebok. Further, from a policy
standpoint, it makes little sense to consider only the signatory’s knowledge and intent. Under
Plaintiffs’ approach, a registrant could engage in fraudulent conduct but keep outside counsel in
the dark, and would then be able to engage in fraud on the PTO with impunity. The Court thus
considers Reebok’s knowledge and intent, not just outside counsel’s or Ms. Han’s.
The Court also rejects Plaintiffs’ argument that the Court must identify a specific Reebok
employee that had fraudulent intent. See Meckatzer Lowenbrau Benedikt Weib Kg, 95
U.S.P.Q.2d 1185 (T.T.A.B. May 13, 2010) (“We do not read In re Bose as requiring that a party
identify a ‘specific individual’ who ‘knew of the withheld material information or of the falsity
of the material misrepresentation, and withheld or misrepresented this information with a
specific intent to deceive the PTO,’ as respondent argues.”). All of the Reebok employees
involved in the 2012 sticker program knew it was for purposes of preserving the RBK mark
instead of a good faith, bona fide use in the ordinary course of trade. Those employees
implemented the program to meet the legal requirements to file a Section 8 Declaration.
Despite the fact that the sticker program was not bona fide use, the Section 8 Declaration
states that Reebok’s use of the RBK mark was bona fide use. That statement was material, it was
false, it was knowingly false, it was made with the intent that the PTO would rely on it and
continue the registration of the RBK mark, and it was made with the intent to deceive the PTO
because Reebok knew that if the PTO was aware that the use was not bona fide, the PTO would
not allow the registration to continue. Thus, by clear and convincing evidence, the Court finds
fraud on the PTO relating to the 2012 Section 8 Declaration submitted by Reebok for the RBK

PAGE 16 – OPINION AND ORDER (PUBLIC VERSION; REDACTED)

trademark, for purposes of the Court’s crime-fraud exception analysis.5 Accordingly, all
documents withheld for privilege relating to the renewal of the mark, the sticker program, and
other related issues are found to be not privileged and thus must be promptly produced.
B. Plaintiffs’ Witnesses Designated Under Rule 30(b)(6)
In addition to expressing concern regarding the crime-fraud exception, the Court
expressed concern regarding whether certain testimony of witnesses designated under
Rule 30(b)(6) of the Federal Rules of Civil Procedure comported with documents the Court
reviewed in camera, or whether Reebok would want to supplement or change any testimony.
Plaintiffs responded that Reebok would not supplement or change any testimony, but adidas did
clarify one point in testimony relating to TRB’s watch notices. Plaintiffs also offered to allow
Defendants to add the watch notice topics to already-scheduled re-opened depositions.
Defendants may do so if they wish.
The Court, however, has some concern with Plaintiffs’ response regarding the
Rule 30(b)(6) testimony relating to abandonment. Reebok’s Rule 30(b)(6) witness testified with
respect to the RBK mark that “we have not identified any gaps in time when that mark wouldn’t
have been in the marketplace in one form or another.” ECF 363-2 at 4. This testimony conflicts
with the March 2012 email from Ms. Han. As then-Trademark Counsel, presumably Ms. Han
made a good-faith investigation whether the RBK was in the marketplace such that Reebok could
file the Section 8 Declaration. Ms. Han concluded in March 2012 that Reebok could not file the

5

The Court does not intend this finding to have any preclusive affect. This finding is not
critical or necessary to any judgment the Court may ultimately render in this case. For issue
preclusion (also known as collateral estoppel), three factors must be considered: “(1) the issue at
stake must be identical to the one alleged in the prior litigation; (2) the issue must have been
actually litigated [by the party against whom preclusion is asserted] in the prior litigation; and
(3) the determination of the issue in the prior litigation must have been a critical and necessary
part of the judgment in the earlier action.” Trevino v. Gates, 99 F.3d 911, 923 (9th Cir. 1996).

PAGE 17 – OPINION AND ORDER (PUBLIC VERSION; REDACTED)

Section 8 Declaration, meaning that the RBK mark was not in use. Because, however, the Court
has found that document not to be privileged, Defendants will have full use of the document,
consistent with the First Amended Protective Order, including to impeach the Rule 30(b)(6)
testimony. The Court, thus, makes no further order regarding this issue.
CONCLUSION
The Court finds the crime-fraud exception applies to documents concerning the 2012
Section 8 filing relating to the RBK mark. All documents relating to that filing, including
documents relating to whether Reebok could file at the sixth-year anniversary, the sticker
program, the e-commerce backup plan, and the ultimate filing at the close of the six-month grace
period are not privileged and must be promptly produced. Plaintiffs, however, may elect to
designate these documents as “Confidential,” but not “Attorneys’ Eyes Only,” under the First
Amended Protective Order (ECF 98).
IT IS SO ORDERED.
DATED this 25th day of September, 2018.
/s/ Michael H. Simon
Michael H. Simon
United States District Judge

PAGE 18 – OPINION AND ORDER (PUBLIC VERSION; REDACTED)