S.D. Ohio District Court, Despite Default, Stays Infringement Action in Favor of Pending TTAB Proceeding

The U.S. District Court for the Southern District of Ohio stayed this trademark infringement action even though Defendant Goatlift had defaulted by not filing an answer to the complaint. The court had serious doubts that Goatlift's mark posed a likelihood of confusion, and therefore whether Plaintiff 1661 was entitled to judgment. Instead of deciding that issue, the court chose to stay the lawsuit in favor of an opposition pending between the parties (Opposition No.91264548). 1661, Inc. d/b/a GOAT v. Goatlift, LLC, Case No. 2:24-cv-78 (S.D. Ohio, March 27, 2024).

The court noted that it has discretion to stay an action pending the resolution of an administrative proceeding. In making that ruling, it should consider if any prejudice would result from the stay, whether it would simplify the issues, and whether a stay is convenient at the particular stage of the litigation.

The court first found that a stay would not harm Plaintiff 1661:

Unlike here, the TTAB docket demonstrates that both parties have been actively involved in the opposition proceedings, with briefing on each application to be completed within approximately one month. Yet, Plaintiff waited until January of this year - over three years - to file its civil suit in this Court. Given that Plaintiff proceeded before the TTAB for three years before filing suit, Plaintiff will not be prejudiced by waiting for a conclusion of those proceedings.

Second, the stay will simplify the issues because issue preclusion may apply in the civil action pursuant to B&B Hardware. If the Board finds confusion likely, and if that decision is not appealed or is affirmed on appeal, Plaintiff 1661 will be entitled to judgment in this civil action. If a Board finding that confusion is unlikely is upheld, 1661 will not be entitled to judgment. "Either way, a final TTAB decision will be binding on this Court."

Third, a stay is convenient at this stage of the litigation. Since plaintiff's success on the merits is not "guaranteed," the court would need to perform a full likelihood of confusion analysis (a test Plaintiff did not even cite in its motion for default judgment).

Thus, although the civil action is at the default judgment stage, this is one of the rare instances where it is more convenient to stay the litigation in favor of the administrative proceeding.

All three factors favored a stay, and so the court directed the clerk of the court to stay the case.

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TTABlogger comment: If Defendant Goatlift is actively contesting the opposition proceeding, why did it default in the civil action?

Text Copyright John L. Welch 2024.