Monday, January 31, 2011

TTAB Decides Fred Beverage's Motion to Amend, But Says It May Require Fee Before Deciding

Further to our posting of ten days ago [here], the TTAB has now taken up the motion of Fred Beverages, Inc. to amend its petition for cancellation to add four classes. In May 2010, the CAFC [here] reversed the Board's decision that had denied the motion to amend because it "was not accompanied by any payment or authorization to charge respondent's [sic] deposit account for any of the additional classes sought to be cancelled." The CAFC held the Board's ruling to be arbitrary and capricious.

On January 27, 2010, the Board granted [here] Petitioner Fred Beverage's motion to add four classes to the petition for cancellation (which originally had only one class), finding that Petitioner had adequately pleaded a claim for abandonment against those four classes. The Board, however, struck from that amended Petition, a request that the involved registration be cancelled in its entirety (12 classes) due to fraud as to the class 32 goods. The Board pointed out that Respondent had voluntarily surrendered its registration as to class 32, and that any fraud as to that one class of goods would not affect the other classes.

As the Board has recently noted, "each class of goods ... in a multiple class registration must be considered separately when reviewing the issue of fraud, and judgment on the ground of fraud as to one class does not in itself require cancellation of all classes in a registration." G&W Laboratories Inc. v. GW Pharma Ltd., 89 USPQ2d 1571, 1574 (TTAB 2009). In view thereof, the relief sought by petitioner in paragraph 21 is unavailable and legally insufficient.

Petitioner was allowed until February 14, 2011 to pay the additional fee of $1,200 for the four added classes.

The Board asserted that the CAFC's decision did not prevent it from requiring the cancellation fee before deciding the motion. Here, however, it exercised its discretion not to require the fee first.

Petitioner's request for action states that the Board should consider the motion to amend "without regard to the fee issue." (Request, p. 1.) However, consistent with the court's comments, the Board maintains discretion to either grant or defer ruling on the motion to amend and set a subsequent deadline for payment of the underlying fee. See Fred Beverages Inc., supra, 94 USPQ2d at 1960. Because of the posture of this case, we exercise our discretion to take up the motion before requiring payment.

TTABlog comment: Is the Board correct in its interpretation of the CAFC's comments? The CAFC did not directly decide that issue, but only whether the Board could deny the motion because the fee was not paid when the motion was filed. But the CAFC did say this:

It therefore appears that the TTAB has no stated rule and no established practice of requiring that a supplemental cancellation fee be included with a motion for leave to amend a petition for cancellation. *** There is no basis on which to distinguish the circumstances of the present case from those in which the TTAB granted or deferred ruling on motions for leave and set a subsequent deadline for the payment of the underlying fee. (slip op., page 6).

The CAFC also pointed out (slip op., pp. 4-5) that "There is also no rule that such a fee, if tendered, would be refunded in the event that the motion for leave were denied." So even if the Board has discretion to require the fee first, before deciding the motion, does it make any practical sense? How would a party get its money back if the motion is denied? Doesn't it make sense to decide the motion first and, if granted, then require the fee for the amendment?

Text Copyright John L. Welch 2011.


At 3:46 PM, Anonymous Rob said...

It sure looks like the Board, once again, acted arbitrarily and capriciously in deciding the fee issue, albeit with less draconian results this time. There also seems to be personal rivalry between the Board Interlocutory and Attorney for Petitioner, hence the "decorum" portion of the decision.


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