Thursday, July 22, 2021

TTAB Denies Motion for Relief From Default Judgment Issued in December 2018

In this cancellation proceeding targeting two registrations for the mark BLEU ICE for clothing, the Board entered judgment by default on December 19, 2018, after Respondent Davoudzadeh failed to file an answer or respond to the notice of default. Two applications owned by Petitioner that had been blocked by the registrations then proceeded to registration on June 14, 2019. On February 4, 2020, Davoudzadeh filed a motion for relief from the default judgment, but it was denied as untimely because it was not filed within one year of the entry of judgment, as required by FRCP 60(c)(1). On March 14, 2020, Davoudazdeh moved for reconsideration, asserting that his motion was based on FRCP 60(b)(6), which has no time limit. The Board has now denied that motion for reconsideration. Blue Ice Mountain Works SA v. Massoud Davoudzadeh, Cancellation No. 92069506 (July 19, 2021) [not precedential].

Whether the time of filing a motion under FRCP 60(b) is "reasonable" depends on the facts of the case, including "the length and circumstances of delay in filing, any prejudice to the opposing party by reason of the delay, and the circumstances warranting equitable relief." Since Davoudzadeh's Rule 60(b)(6) motion was filed 13-and-one-half months from entry of default, the Board deemed the motion timely.

As to the merits of the motion, the Board noted that relief from a final judgment is an extraordinary remedy, but default judgments based on a failure to timely answer are generally treated more liberally than motions for relief from other types of judgments.
Factors to be considered in a motion to vacate a default judgment for failure to answer are 1) whether the plaintiff will be prejudiced, 2) whether the default was willful, and 3) whether the defendant has a meritorious defense to the action.

Davoudzadeh asserted that he never received the petition for cancellation, nor the "notice of cancellation." He claimed limited facility with the English language, and he "may have assumed it was related to the renewal process rather than a petition to cancel." The Board noted that the institution order was never returned as undeliverable, and Davoudzadeh did not say that the Board had the wrong address. So, presumably, he received the petition.

As to the language issue, Davoudzadeh was on notice that proceedings are conducted in English. He signed and submitted his trademark application for one of the registrations, in English. Many of the documents he submitted are in English, and he executed his affidavit in English. Moreover, he has operated his business in this country for more than 30 years, which suggests that he has some proficiency in English. 

The Board concluded that the evidence does not support his claim that he could not understand trademark documents. "In sum, while the record does not show a willful disregard for this proceeding, Respondent's explanations are either ill-supported or are not of such a nature that they demonstrate extraordinary circumstances."

As to the meritorious defense factor, Davoudzadeh indicated in his motion papers that he "wishes and is able to address and defend against Petitioner's allegations" (abandonment and fraud).

Finally, as to prejudice to the petitioner, the Board observed that Davoudzadeh's delay resulted not only in the cancellation of his two registrations, but also the issuance of two registrations to the petitioner, the benefits of which the petitioner has enjoyed for more than two years. "A change in economic position can be presumed under these circumstances." Thus, this factor weighed in favor of the petitioner.

The Board found that Respondent Davoudzadeh failed to demonstrated extraordinary circumstances that warrant granting him relief from judgment under FRCP 60(b)(6).

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TTABlogger comment: Hat Tip to FOB Pamela Chestek.

Text Copyright John L. Welch 2021.


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