Precedential No. 27: TTAB Excludes Evidence Due to Spoliation, But Declines to Enter Judgment as a Sanction

In yet another ruling regarding the spoliation of evidence, the Board refused to consider certain of Petitioner Busy Beauty's Instagram photographs and data, finding that it had failed to preserve the corresponding electronically stored information (ESI). Although Petitioner  was "at least careless" in its data preservation, there was no proof that it intended to deprive Respondent of this information, and so the Board declined to enter the severe sanctions of an adverse inference or adverse judgment. Busy Beauty, Inc. v. JPB Group, LLC,  2019 USPQ2d 338392 (TTAB 2019) [precedential].

Busy Beauty petitioned to cancel Respondent JPB Group's registration for the mark BUSY BEAUTIES for hair care and skin care preparations, claiming priority of use of, and likelihood of confusion with, its alleged prior common law rights in the mark BUSY BEAUTY since 2016 for women's shaving gel. During discovery, Petitioner admitted that it had deleted from its Instagram account all posts prior to October 1, 2018, when it overhauled the account.

Respondent JPB Group sought sanctions under FRCP 37, claiming that Petitioner had "knowingly and willfully" deleted the Instagram posts. FRCP 37(e) governs the issue of spoliation of ESI and provides for the issuance of an array of possible sanctions, but "no greater than necessary to cure the prejudice" to the party seeking the information. Only upon clear and convincing proof of intent to deprive another party of the information are the sanctions of adverse inference or adverse judgment appropriate.

A party that moves for spoliation sanctions must establish the following:

(1) the ESI should have been preserved; (2) the ESI was lost; (3) the loss was due to a party’s failure to take reasonable steps to preserve the ESI; and (4) the ESI cannot be restored or replaced through additional discovery. Fed. R. Civ. P. 37(e); see also Steves & Sons, Inc., 327 F.R.D. at 104.

The Board found that Petitioner should have preserved the Instagram posts in question because "evidence of use of a mark in social media, in connection with testimony and other evidence showing the context of use and the extent of consumer exposure and advertising expenditures, may be relevant to prove or rebut priority, the relatedness of goods, or the strength of the mark, for example."

Neither party disputed that the Instagram posts were "lost," and there was nothing in the record to show that Petitioner took reasonable steps to preserve the information at the outset: for example, by implementing a litigation hold.

Finally, although Petitioner provided copies of the photos appearing in the lost posts as well as content data (code listing comments, user names, and timestamps), this material did not provide the full context of the posts, including captions, hashtags, dates of posting, and geo-tags, nor did it show which comments and captions were associated with each photo. The Board therefore concluded that the lost ESI could not be restored or replaced through additional discovery.

Thus Respondent met the threshold requirements of FRCP 37, the question then being what sanction was appropriate.

Respondent sought the entry of judgment or, alternatively, an adverse inference regarding the content of the lost Instagram posts. However, these "very severe sanctions" are available only when "the party that lost the information acted with the intent to deprive another party of the information's use in the litigation." Fed. R. Civ. P. 37(e)(2) Advisory Committee Notes (2015 Amendment). Negligence or gross negligence does not suffice.

Petitioner asserted that the picture posts were removed as part of an overhaul and update of its Instagram account to coincide with its launch of new products. It also pointed to its efforts to provide Respondent with the deleted material. Respondent offered no evidence to support its claim of willfulness. The Board concluded that Respondent had failed to prove by clear and convincing evidence that Petitioner deleted the posts with the intent to deprive Respondent of this information.

Nonetheless, if a party has been prejudiced by the loss of information, the Board may award "appropriate sanctions" that are "reasonable and just." Here, the Board found the prejudice to Respondent to be "minimal." Respondent did not explain why information regarding the strength of Petitioner's mark, its channels of trade, and the conditions of sale could not be derived from Petitioner's marketing materials, products, e-commerce website and Amazon.com product pages.

Moreover, because Respondent's registration contained no limitation on channels of trade or classes of consumers, information regarding Petitioner's channels of trade or customers "may ultimately be of minimal importance" and any additional benefit to Respondent from the lost information "is purely speculative."

The Board therefore granted Respondent's motion only to the extent that Petitioner was precluded from relying on the pre-October 2018 Instagram photos and data for any purpose.

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TTABlog comment: Petitioner argued that Respondent was required to make a good faith effort to resolve the dispute before filing its motion for sanctions, but the Board disagreed. This was not a motion to compel that would be subject to the requirements of Trademark Rule 2.120(f)(1).

Text Copyright John L. Welch 2019.