Recently, the Seventh Circuit answered the following question
in the negative: Is the Trademark Remedy Clarification Act (TRCA) a valid
exercise of Congress's Fourteenth Amendment power to regulate state behavior?
In Bd. of Regents
of the Univ. of Wis. Sys. v. Phoenix Int'l Software, Inc., 2010 U.S. App.
LEXIS 26269 (7th Cir. Wis. Dec. 28, 2010) [enhanced version available to lexis.com subscribers / unenhanced version available from lexisONE Free Case Law], the
University of Wisconsin (Wisconsin) sought to overturn the Trademark Trial and
Appeal Board's (TTAB) cancellation of Wisconsin's registration of the mark CONDOR.
Phoenix International Software counterclaimed, seeking damages from Wisconsin for
trademark infringement and false designation of origin under the Lanham Act (15
U.S.C. §§ 1114 and 1125). In answering the aforementioned question, the
Seventh Circuit relied on Fla. Prepaid
Postsecondary Educ. Expense Bd. v. College Sav. Bank, 527 U.S. 627 (U.S.
1999) [enhanced version / unenhanced version], which found the TRCA's
sister statute, the Patent and Plant Variety Protection Remedy Clarification
Act, unconstitutional in establishing state liability for patent infringement.
Specifically, the Seventh Circuit stated:
As for whether trademarks
are different than patents, Phoenix argues that trademarks are of permanent
duration and that the creation of trademarks protects the public from confusion
and thus they must be analyzed under a separate rubric than patents. We agree
that the two rights are different, but the Supreme Court in Florida Prepaid treated patents as a
serious property right and its holding in that case did not turn on the nature
of the property right, but on the insufficiently narrow tailoring of Congress's
remedy to the harms it sought to remedy and the insufficient findings that a
national remedy was necessary. Given the similarity between the laws here, we
are compelled to find that Florida
Prepaid controls the outcome of this issue. Unless Wisconsin waived its
immunity from suit, it is protected from Phoenix's counterclaims.
The Seventh Circuit went on to reject Phoenix's
contentions that Wisconsin had waived its sovereign immunity by: (1) choosing
to participate in the federally regulated trademark process; and (2) invoking
the jurisdiction of the district court pursuant to 15
USCS § 1071(b) rather than appealing the TTAB's decision to the
Federal Circuit pursuant to § 1071(a).