Trademark Trial and Appeal Board
Patent and Trademark Office (P.T.O.)
*1 REGATTA SPORT, LTD.
v.
TELUX-PIONEER, INC.
Cancellation No. 18,142
April 4, 1991
Before Rice, Simms and Seeherman
Members
By the Board:
J.E. Rice, R.L. Simms and E.J. Seeherman
Members
This case now comes up on respondent's motion for relief from judgment filed under Fed.R.Civ.P. 60(b) on December 19, 1990.
A brief history of the prosecution of this proceeding will be helpful.
1. Petitioner filed, on July 21, 1989, a petition to cancel Registration No. 1,475,865 for the mark REGATTA for watches and clocks.
2. The Board, on September 29, 1989, mailed the notice instituting this proceeding to the parties. The Board mailed respondent's notice to respondent at 43-06 58th Street, Woodside, New York.
3. The Board entered a notice of default under Fed.R.Civ.P. 55(a) on November 29, 1989.
4. The Board entered judgment against respondent under Fed.R.Civ.P. 55(b) on January 26, 1990.
5. The Commissioner ordered the registration cancelled on February 15, 1990.
Respondent argues that it inadvertently failed to file an answer; that it failed to file an answer due to the misconduct of counsel for petitioner; and that respondent has a meritorious defense.
Respondent argues that because petitioner and respondent are parties in a related copending opposition, it did not realize that the petition for cancellation, notice of default and entry of judgment were not related to the opposition. Respondent submitted an affidavit of Richard C. Chiang, President of, respondent. Mr. Chiang asserts that he is a Chinese immigrant who came to the United States in 1976; that he is able to speak some English, but not well; that he spends at least 50% of his time away from the office, travelling on business; that respondent has approximately 7 employees, most of whom speak only, or mostly, Chinese; and that mail is sorted and routed by two employees who speak little or no English. Mr. Chiang maintains that during the week of November 12, 1990, the petition for cancellation, the notice of default and the entry of judgment were brought to his attention and that he had never seen them before that date. Mr. Chiang surmises that when these documents were received, the documents were mistaken for documents related to the opposition and were filed as copies of documents already sent to counsel for respondent.
Respondent argues that petitioner's conduct is partially responsible for respondent's failure to file an answer. Respondent points out that petitioner set forth in the petition for cancellation that the Board could send the notice instituting this proceeding to respondent or respondent's counsel. The notice instituting this proceeding was sent to respondent and not to respondent's counsel. The notice of default and the entry of judgment were also sent to respondent and not to respondent's counsel. Respondent claims that when petitioner realized that respondent was in default in this cancellation proceeding, petitioner lured respondent into settlement negotiations in a related copending opposition in order delay proceedings in the opposition until respondent's registration was cancelled. The cancellation of respondent's registration would then serve as the basis for petitioner's motion for summary judgment in the opposition. Respondent asserts that petitioner acted improperly by not notifying respondent that respondent was in default.
*2 Finally, respondent argues that it has a meritorious defense. Respondent maintains that the watches sold by respondent are not related to men's and women's high fashion sportswear sold by petitioner and that there will be no likelihood of confusion.
Petitioner filed, on February 5, 1991, a motion for leave to file a late brief in response to respondent's motion for relief from judgment and a brief in response to the motion. [FN1] Petitioner argues that the motion should be denied because respondent has not demonstrated that it was unaware of the petition for cancellation; that respondent admitted that it had received the petition for cancellation, the notice of default and the entry of judgment but took no action in the proceeding; and that respondent's attack on counsel for petitioner is irrelevant and improper. Petitioner maintains that respondent did not indicate whether Richard Chiang was away from the office when the petition for cancellation, the notice of default and the entry of judgment were received and that respondent did not submit any affidavits from the employees who sort and route mail to support Chiang's belief that they thought the papers belonged in the related opposition.
Petitioner filed, on February 22, 1991, a supplemental memorandum in opposition to respondent's motion for relief from judgment. Petitioner submitted the affidavits of Edward Albert, Vice-President of the Gitano Group of New York, and from Lile H. Deinard, petitioner's former counsel. Mr. Albert submitted a copy of a letter signed by Mr. Chiang, which petitioner argues shows that Mr. Chiang is capable of writing a sophisticated letter in English. Ms. Deinard asserts that on June 13, 1989, she sent counsel for respondent a courtesy copy of the petition for cancellation.
Respondent's motion for relief from judgment will be granted. Fed.R.Civ.P. 60(b) provides that "... upon such terms as are just, the court may relieve a party ... from final judgment ... for the following reasons: (1) mistake, inadvertence, surprise, or excusable neglect ..." In the instant case, respondent has demonstrated that its default was not willful and that it has a meritorious defense and petitioner has failed to show that it would be prejudiced if respondent's motion were granted.
Respondent has demonstrated that its failure to file an answer was the result of excusable neglect by its showing that respondent, as applicant in copending Opposition No. 80,908, was vigorously defending its right to register its application and by showing that respondent's employees are immigrants with limited command of English. See: Davis v. Musler, 713 F.2d 907, 36 Fed.Rules Serv2d (2d Cir.1983) [Where the court could not determine whether the defendants' failure to file an answer was willful or whether defendants mistakenly assumed that the complaint was related to supplementary proceedings in an ongoing suit, the court found the defendants' explanation that they did not realize they had been named defendants in a second action plausible.]; and McVicker v. Donnelly, 95 FRD 353 (EDPa.1982) [The court held that the confusion resulting from the time proximity and subject matter similarity of the two proceedings demonstrates that defendant's failure to file an answer was excusable neglect.].
*3 Respondent has made a sufficiently persuasive argument that respondent has a meritorious defense, namely that it can defend its registration by showing that respondent's watches and petitioner's wearing apparel are not related and that there will be no likelihood of confusion. Respondent has made a sufficient showing at this juncture to justify further proceedings.
Finally, petitioner does not contend that it would be substantially prejudiced if the judgment were vacated, and we see no basis upon which it could. Concededly, some delay will result if respondent's motion is granted. Yet, delay alone is not a sufficient basis for establishing prejudice. Davis v. Musler, supra.
In view thereof, respondent's motion for relief from judgment is granted. The Board's entry of judgment under Fed.R.Civ.P. 55(b), dated January 26, 1990, is set aside. Registration No. 1,475,865 will be reinstated in due course.
Respondent is allowed twenty days from the mailing date of this order to file an answer to the petition for cancellation.
At this point, the Board feels compelled to mention that respondent's allegations that the counsel for petitioner acted improperly are inappropriate. In the instant case, the Board sent the notice instituting this proceeding to respondent as required by Trademark Rule 2.113. Respondent's attempt to shift the blame to petitioner is a thinly veiled attempt to conceal problems in respondent's organization and counsel's failure to familiarize himself with the Board's rules of practice.
A review of the pleadings in Opposition No. 80,908 and Cancellation No. 18,142 indicates that the parties are the same and the proceedings involve substantially identical questions of fact and law. Upon receipt of respondent's answer, the Board may consolidate proceedings.
Petitioner is allowed twenty days from the mailing date of this order to file its objections, if any, to the consolidation of the proceedings.
IT IS HELD THAT
Respondent's motion for relief from judgment under Fed.R.Civ.P. 60(b) is granted.
Respondent is allowed twenty days from the mailing date of this order to file an answer to the petition for cancellation.
Petitioner is allowed twenty days from the mailing date of this order to file its objections, if any, to the consolidation of Opposition No. 80,908 and Cancellation No. 18,142.
J.E. Rice
R.L. Simms
E.J. Seeherman
Members, Trademark Trial and Appeal Board
FN1. In an order dated February 1, 1991, the Board required that respondent serve a copy of its motion for relief from judgment on petitioner's attorney of record and allowed petitioner's attorney of record twenty days thereafter to file a brief in response to the motion for relief from judgment. In view thereof, petitioner's brief in response is considered timely filed.