On Reconsideration, TTAB Says Settlement Agreement Calling for Abandonment of Opposed Application Is not Consent to Dismissal Without Prejudice

In a rare granting of a motion for reconsideration, the Board vacated its order of December 28, 2018, that had dismissed this opposition without prejudice, and instead entered judgment against Applicant Debbie Macomber, Inc. Applicant had successfully moved to dismiss the proceeding without prejudice based on opposer's purported consent, but the Board found that opposer's signing a settlement agreement with a provision for abandonment of the application was not equivalent to written consent to abandonment for the purpose of avoiding entry of judgment. Kathy Michael d/b/a Cedar Cove Inn v. Debbie Macomber, Inc., Opposition No. 91239859 (May 24, 2019) [not precedential].

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Trademark Rule 2.135 provides that "[a]fter the commencement of an opposition, concurrent use, or interference proceeding, if the applicant files a written abandonment of the application or of the mark without the written consent of every adverse party to the proceeding, judgment shall be entered against the applicant."

The settlement agreement provided for continued use by each party with no opposition or challenge to each other's trademark rights. Applicant agreed to expressly withdraw its pending application and to not oppose or challenge Opposer’s application or registration for the mark CEDAR COVE for use with bed and breakfast inn services. With regard to withdrawal of the opposed application, the agreement specifies: "Express Withdrawal of Application. [Applicant] shall, by December 14, 2018, expressly withdraw pending U.S. Trademark Application No. 87586893."

The Board had accepted applicant's assertion that the settlement agreement must be construed as written consent to the withdrawal of the application. Opposer, however, argued that its "negotiated expectation" of the parties’ settlement was that "Applicant’s withdrawal of its application would result in a judgment against Applicant, acting as res judicata against any future effort by Applicant or its successor to pursue registration of the mark."
 
On reconsideration, the Board sided with opposer. It saw no consent to dismissal of the opposition rather than entry of judgment.

Applicant is unpersuasive in its argument that signing the settlement agreement with a provision for abandonment of the application is equivalent to written consent to abandonment of the application for the purpose of avoiding entry of judgment. If this was the case, a settlement agreement could never provide for entry of judgment based on abandonment of the application, because execution of the agreement would operate to require dismissal in every instance.

Because the agreement stated only that Applicant would expressly abandon its application, and because Opposer’s written consent was not of record for that abandonment, the Board found that Trademark Rule 2.135 required entry of judgment against Applicant.

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TTABlog comment: So get it in writing, right? If you can.

Text Copyright John L. Welch 2019.