Playing Hide-and-SeekRemember all those fun times playing games like tag and hide-and-seek when you were a kid? Well, games have their time and place, but playing hide-and-seek during a trademark cancellation proceeding is not a wise move. Ultimately, game playing cost this trademark owner his trademark registration—just one week after he’d renewed it. Ouch.

Benedict v. Super Bakery, Inc., No. 2011-1131 (Fed. Cir. Dec. 28, 2011) (Judges Newman, Lourie, and Moore)

Over three years of litigation and two trips to the Federal Circuit . . . and a lot of time and money spent just to avoid discovery requests related to a trademark cancellation proceeding. There is a lot of background to this case, so I’ll catch you up first.

Mr. Benedict has trademark registrations for G THE GOODYMAN for pepperoni sticks (International Class 29) and for bakery goods like cupcakes, cookies, and donuts (International Class 30). (Those aren’t two food groups I would immediately associate with one another, but I guess some people like to combine their sweet and savory.) Super Bakery (SB) applied for a trademark registration for GOODY MAN for the same bakery goods.

The examining attorney rejected SB’s application, stating that the proposed mark is likely to be confused with Benedict’s mark. In July 2007, after this rejection, SB asked the PTO to cancel Benedict’s mark, arguing that Benedict had abandoned it and committed fraud. In January and February 2008, SB gave Benedict its discovery requests.

The First Appeal

Then Benedict started playing hide-and-seek—but he forgot to tell SB about the game. He went missing in action in mid-February 2008, and didn’t respond to discovery requests, a motion to compel, or a Trademark Trial and Appeal Board (TTAB) order. In August 2008, SB asked the TTAB for a default judgment—a ruling that SB should win based on Benedict’s failure to respond. Benedict then returned to the battlefield, claiming he hadn’t received the TTAB order until his time to comply was almost up. The TTAB wasn’t happy, but it gave Benedict another chance and again ordered him to respond to the discovery requests within 30 days, by March 13, 2009.

On March 12, 2009 (day 29), Benedict filed a motion for summary judgment (on somewhat dubious grounds), but he still didn’t respond to the discovery requests. He invoked Trademark Rule 2.127(d), which says:

When any party files . . . a motion for summary judgment, or any other motion which is potentially dispositive of a proceeding, the case will be suspended by the Trademark Trial and Appeal Board with respect to all matters not germane to the motion and no party should file any paper which is not germane to the motion except as otherwise specified in the Board’s suspension order. If the case is not disposed of as a result of the motion, proceedings will be resumed pursuant to an order of the Board when the motion is decided.

Put simply, no one is allowed to file anything that isn’t related to summary judgment once the case has been suspended. The TTAB issued its order suspending the case on March 30, 2009.

Two weeks later, SB asked the TTAB for sanctions, default judgment, and cancellation of Benedict’s mark. The TTAB agreed, stating that the case wasn’t actually suspended until after the suspension order issued, so Benedict was still required to meet the March 13 discovery deadline after he filed his summary judgment brief. The TTAB entered default judgment and cancelled the mark.

Benedict appealed that decision to the Federal Circuit, who sent the case back the TTAB because the TTAB hadn’t clearly explained how Rule 2.127(d) applied to the facts of this case.

The Second Appeal

In response to the Federal Circuit’s opinion, the TTAB elaborated on when a case’s suspension will start under Rule 2.127(d). The TTAB referred to a comment received during the notice-and-comment process that occurred when the rule was proposed. (When PTO rules are being considered, the PTO posts the proposed rule and allows public comments for a set time period before it adopts the rule.) The comment made clear that a case doesn’t get suspended the moment a summary judgment motion is filed. The case keeps moving until the TTAB issues a suspension order.

The TTAB also noted that “there was ‘a strong showing of willful evasion’ of discovery” on Benedict’s part, and said that his summary judgment motion was “without merit.”

Benedict appealed the TTAB’s second decision, arguing that the TTAB’s interpretation of the rule is not what the plain language of the rule actually says. Benedict claimed that he followed the rule as it’s written.

The Federal Circuit agreed with Benedict that the TTAB’s interpretation of Rule 2.127(d) isn’t clear from the plain language of the rule. On this point, the court concluded, “This ambiguity [in the language of the rule] does not support the extreme sanction of default judgment.”

But the court affirmed the TTAB’s decision anyway because of Benedict’s behavior. Benedict clearly broke the trademark rules that said, “You have to respond to discovery requests and comply with TTAB orders.” And another Trademark Rule (2.120(g), for those keeping track) states, in crystal clear language, “if a party fails to comply with an order of the Trademark Trial and Appeal Board relating to disclosure or discovery…the Board may make any appropriate order….”

The court concluded that Benedict’s long history of ignoring his obligations in this case justified the TTAB’s order entering default judgment and cancelling Benedict’s mark.

Feel free to read the Benedict case, if you’d like.