CAFC Affirms TTAB Default Judgment Cancelling Registration Due to Failure to Comply with Discovery Orders

In a precedential opinion, the U.S. Court of Appeals affirmed the TTAB's decision in Super Bakery, Incorporated v. Ward E. Benedict, 96 USPQ2d 1134 (TTAB 2010) [precedential]. [TTABlogged here]. The Board, on remand from an earlier CAFC appeal, ruled that Rule 2.127(d) does not provide an automatic stay of a proceeding when a party files a motion for summary judgment. "Rather, only an order of the Board formally suspending proceedings has such effect." As a consequence, the Board again granted Super Bakery's petition for cancellation as a sanction against Respondent Benedict for failure to comply with a Board discovery orders. The CAFC here disagreed with the Board's interpretation of the Rule, but nonetheless affirmed the Board's entry of judgment by default. Ward E. Benedict v. Super Bakery, Incorporated, 101 USPQ2d 1089 (Fed. Cir. 2011) [precedential].


In the first CAFC appeal, the court remanded the case [here] with a directive that the Board consider the impact of Rule 2.127(d) on its decision to grant judgment by default. Benedict claimed that under the Rule, the proceeding was stayed automatically when he filed his motion for summary judgment, and therefore that he did not have to respond to discovery by the date set in the Board's order compelling discovery (the day after Benedict filed his summary judgment motion).

On remand, the Board took the view that despite the language of the Rule that "the case will be suspended," the suspension did not occur until the Board actually issued a suspension order. In this second appeal, the CAFC ruled that the Board had misinterpreted the Rule, and that the proceeding was automatically stayed on the day the summary judgment motion was filed. [TTABlog note: see the first comment to this post, which makes an excellent point, urging that the CAFC did not say the Board's interpretation of the Rule was wrong, but rather that the Rule was not clear enough for purposes of the imposition of the sanction of default].

In any event, the CAFC ruled that the entry of judgment by default was "well supported without this event."

There had been two years of failure to comply with discovery requests and orders. The Board discussed Mr. Benedict’s repeated non-compliance with Super Bakery’s discovery requests, as well as his non-compliance with the Board’s orders concerning discovery. Although the Board criticized the "meritless" motion for summary judgment as "an effort to further obstruct petitioner's rights to obtain discovery under the Board's rules, the Board's order compelling discovery, and the Board's order granting discovery sanctions," 96 USPQ2d at 1136, the Board’s finding that "[t]here is no reason to assume that, given additional opportunities, petitioner will fulfill his obligations as a party to the proceeding," id., is supported by the entire experience of this case.

The question was whether the Board abused its discretion by entering default judgment. The CAFC said no. "On the entirety of the record, the Board’s orders were reasonable, and within its authority in seeking to advance the proceedings. The remedy of default judgment was within the Board’s discretion in view of Mr. Benedict’s repeated failures to comply."

TTABlog comment: So the CAFC remanded in order that the Board might apply Rule 2.127(d), and then when the Board applied the Rule, the CAFC said the Board got it wrong. But the CAFC affirmed anyway. So what was the point of the remand?

Text Copyright John L. Welch 2011.