Trademark Trial and Appeal Board
Patent and Trademark Office (P.T.O.)
*1 JACK H. DJEREDJIAN
v.
KASHI COMPANY
Cancellation No. 19,384
October 1, 1991
J.E. Rice, E.J. Seeherman and T.J. Quinn
Members
This case now comes up on respondent's motion (filed July 26, 1991) [FN1] for relief from judgment under Fed.R.Civ.P. 60(b)(1). Both parties have filed briefs thereon.
The petition to cancel Registration No. 1,366,934 was filed by petitioner on October 19, 1990. The Board mailed notification of this proceeding on January 25, 1991, making respondent's answer due on March 3, 1991. (The return receipt post card indicates a date of delivery to defendant of February 11, 1991 and it was signed by "Tauber".) No answer was filed and a notice of default was mailed by the Board on May 31, 1991. No response to the notice of default was received, and default judgment was entered against respondent on July 11, 1991. Respondent's motion under Fed.R.Civ.P. 60(b) was filed fifteen days later.
In support of its motion respondent contends that since August 1990 it has been involved in several legal proceedings with petitioner and related parties, including two law suits in California State Court, this petition to cancel, and a second petition to cancel Registration No. 1,366,934 (Cancellation No. 19,363) [FN2]; that the civil actions in California were "hotly contested" with respondent obtaining a preliminary injunction against petitioner, and resolving matters with several other defendants including S & C Foods Company, Inc.; that Mr. Philip S. Tauber, respondent's president, [FN3] received a variety of information and numerous legal papers in rapid succession on these matters over many weeks leading to complicated negotiations involving all of the parties; that a release and settlement agreement dated January 16, 1991 (but not including Mr. Jack H. Djeredjian), and a withdrawal of a petition to cancel was filed with the Board; that Mr. Tauber then believed any issue challenging respondent's registration had been withdrawn; that a "cancellation of trademark petition, settlement agreement, and mutual release of all claims" (not including Mr. Djeredjian) dated January 22, 1991 was exchanged between the parties on February 4, 1991; that when Mr. Tauber (who is not an attorney) received a notice from the U.S. Patent and Trademark Office one week later (on February 11, 1991), he believed it related to the claim of S & C Foods Company, Inc., and he thought no action was required because the matter was resolved; that Mr. Tauber did not then understand that there were two separate proceedings at the Board; that Mr. Tauber did receive the original notice of this proceeding and the default judgment order, but he did not receive the notice of entry of default (mailed May 31, 1991); that respondent did not intend to lose its registration through default; that respondent would not have continued to pursue the civil actions while allowing its registration to be cancelled; that respondent's general counsel [FN4] handling the California litigations had no reason to act in the cancellation proceedings; that respondent's trademark counsel [FN5] received an informal courtesy copy of the petition to cancel from respondent, but it bore no indication that it had been filed in the U.S. Patent and Trademark Office; that trademark counsel checked the computer records of the U.S. Patent and Trademark Office on October 30, 1990 but that there was no such cancellation proceeding listed; and that trademark counsel never received any further correspondence until his client advised him of the default judgment order dated July 11, 1991.
*2 Petitioner contends in response thereto that respondent's explanation does not constitute excusable neglect to reopen this case, nor does it constitute the exceptional circumstances required under Fed.R.Civ.P. 60(b); that respondent learned informally of the petition to cancel in October 1990 and officially from the Board in December 1990 (in fact, the Board notification was mailed on January 25, 1991); that respondent sent its trademark counsel the informal petition to cancel in October 1990, but trademark counsel received no authorization for further follow up; that respondent had two law firms working on its legal matters and still failed to act; that respondent's motion is contradictory and fails to state adequate circumstances to support relief under Fed.R.Civ.P. 60(b); and that respondent has failed to show that it has a meritorious defense to the petition to cancel. [FN6]
Relief from judgment under Fed.R.Civ.P. 60(b) is an extraordinary remedy to be granted in the court's discretion only in exceptional circumstances. The determination of whether to grant a Fed.R.Civ.P. 60(b) motion is a matter largely within the discretion of the court, or in this instance, the Board. See Case v. BASF Wyandotte, 737 F.2d 1034, 222 USPQ 737 (Fed.Cir.1984).
Fed.R.Civ.P. 60(b) provides for relief from judgment in specified instances and requires that any motion for such relief be made within a "reasonable time", with a one year maximum limitation on motions made pursuant to the first three grounds for relief (mistake, inadvertence, surprise, excusable neglect; newly discovered evidence; or fraud).
In this case the motion under Fed.R.Civ.P. 60(b)(1) was filed fifteen days after the Board entered default judgment against respondent. Clearly the motion was filed within a reasonable time.
Among the factors to be considered in determining a Rule 60(b) motion to vacate a default judgement are the following: (1) whether the non-defaulting party will be prejudiced, (2) whether the default was willful, and (3) whether defendant has a meritorious defense. See United Coin Meter Co. Inc. v. Seaboard Coastline Railroad, 36 FR Serv2d 478, 705 F.2d 839 (6th Cir.1983); and Davis v. Musler, 36 FR Serv2d 1370, 713 F.2d 907 (2nd Cir.1983).
The circumstances outlined by respondent show that its failure to act in this case was not willful, but rather resulted from mistake and inadvertence. Specifically, respondent was involved simultaneously in multiple court actions, and what it mistakenly believed was only one cancellation proceeding at the Board. Respondent apparently innocently confused a settlement and withdrawal in one cancellation proceeding as resolving all claims against its involved registration (No. 1,366,934). Respondent did not instruct its trademark cousel to act in this case until it received the default judgment order. However, respondent believed the notice it received in February 1991 related to a matter already resolved, and it never received the notice of entry of default; and therefore respondent had no reason to instruct its attorney to act. Respondent acted promptly in instructing its attorney to act immediately upon receipt of the default judgment order.
*3 While petitioner vigorously complains of a reopening of this case, petitioner has not specifically alleged or demonstrated that he would be prejudiced by an order vacating the default judgment which resulted from respondent's failure to file an answer to the petition to cancel, especially in light of the California civil actions between the parties wherein petitioner has apparently been preliminarily enjoined.
Regarding the matter of respondent setting forth a meritorious defense to the petition to cancel, it is true that respondent has not done so on the record currently before the Board. Respondent is allowed until October 21, 1991 in which to file an answer to the petition to cancel. [FN7] If respondent is able to show that it has a meritorious defense to the petition to cancel, then the Board will grant respondent's motion for relief from judgment under Fed.R.Civ.P. 60(b).
Proceedings herein are otherwise suspended pending respondent's reply to the above.
J. E. Rice
E. J. Seeherman
T. J. Quinn
Members, Trademark Trial and Appeal Board
FN1. Correspondence on respondent's behalf will now be held with A. Yates Dowell, III, of Dowell & Dowell, 2001 Jefferson Davis Highway, Suite 705, Arlington, Virginia 22202 because he has entered an appearance on behalf of respondent by filing the motion. The Board notes that petitioner's response to the motion indicates proof of service of a copy thereof on respondent, not respondent's attorney. Petitioner is allowed until September 30, 1991 in which to serve a copy of its response to the motion on respondent's counsel.
FN2. Cancellation No. 19,363 was filed by S & C Foods Company, Inc. (one of the parties in the California State Court actions) on October 22, 1990. It was instituted by the Board on December 14, 1990; a withdrawal of the petition to cancel was filed on January 22, 1991; and the Board dismissed the petition to cancel with prejudice on February 4, 1991. (The case was terminated on March 30, 1991).
FN3. Mr. Tauber's affidavit accompanied the motion under Fed.R.Civ.P. 60(b).
FN4. The declaration of Dennis Golob, respondent's general counsel, accompanied the motion under Fed.R.Civ.P. 60(b).
FN5. The declaration of A. Yates Dowell, III, respondent's trademark counsel, accompanied the motion under Fed.R.Civ.P. 60(b).
FN6. The affidavit of Mr. Djeredjian, petitioner, accompanied his response to the motion under Fed.R.Civ.P. 60(b).
FN7. The better practice would have been for respondent to file an answer to the petition simultaneously with its motion for relief from judgment.