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The media is buzzing about Katie Holmes and Tom Cruise’s impending divorce and what role Scientology may have played in the breakup (which was, incidentally, denied by the parties’ attorneys). While maybe not as juicy as a celebrity divorce, there’s been a mountain of fascinating trademark, trade secret and copyright litigation involving the Church of Scientology (“COS”) and its affiliates (usually as plaintiffs).

One of the more interesting cases involved David Mayo (a former member of COS) and others connected with The Church of the New Civilization, a splinter group of COS.  COS’ affiliate, The Religious Technology Center (“RTC”) alleged that Mayo and the others had infringed its trademarks and misappropriated alleged trade secrets pertaining to RTC’s counseling and training program.  Mayo counterclaimed for, among other claims, libel and unfair competition.  Although filed in 1985, nine years later the case was still in the pre-trial phase due, in part, to the large number of pretrial motions and skirmishes during the discovery phase of the case.

The discovery phase was so contentious that the presiding Judge, Judge Ideman, filed a declaration with the Ninth Circuit Court of Appeals on appeal of the case (which is somewhat unusual in appeal cases). In it, Judge Ideman stated that “[t]he scope of plaintiff’s [COS/RTC] efforts [to frustrate the discovery process] have to be seen to be believed.” He also attached exhibits, which included “a photo of clerk with filings”, and a”copy of clerk’s docket with 81 pages and 1,737 filings” to show the massive amount of paper and documents that COS/RTC had foisted upon the Court.

Unfortunately for COS/RTC, Federal Rule 37 gives a court discretion to dismiss a party’s claims as a sanction for non-cooperation in discovery matters. The Court eventually used Rule 37 to throw out COS’ and RTC’s claims.  The Court also deemed the case “exceptional”, which, in IP litigation doesn’t mean that you are special and is only a good thing for the opposing side. “Exceptional” is a legal term meaning that, in essence, one party in the case was an unbelievable pain in the *ss.  Ultimately,  COS/RTC’s antics cost it $2.9 million, which was awarded to Mayo and the other defendants towards their attorneys fees.  The majority of these fees were awarded under the Lanham Act (aka the Trademark Act) and the Copyright Act, which provides for such awards in exceptional cases.

Although, COS/RTC appealed the ruling, the Ninth Circuit Court of Appeals upheld the $2.9 million award.  See Religious Technology Center v. Scott, 82 F.3d 423, 1996 WL 171443 (Table) (9th Cir. 1996)(unpublished disposition).

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