Australian Therapeutic Supplies Pty Ltd.v.Naked TM, LLC

Trademark Trial and Appeal Board

Mar 3, 2015

No. 92056381 (T.T.A.B. Mar. 3, 2015)

coggins Mailed: March 3, 2015 Cancellation No. 92056381 Australian Therapeutic Supplies Pty Ltd. v. Naked TM, LLC By the Board: Now before the Board are petitioner’s motion (filed September 9, 2014) to amend the petition for cancellation and to reopen discovery, respondent’s motion (filed September 22, 2014) for an extension of time to file a brief in opposition to petitioner’s motion, respondent’s motion (filed September 29, 2014) to withdraw and amend admissions, respondent’s motion (filed September 29, 2014) to reopen time to respond to discovery, respondent’s motion (filed October 7, 2014) to quash a notice of deposition, and petitioner’s cross-motion (filed October 21, 2014) to compel attendance at a deposition. Motion to Extend Time for Brief In support of its motion for a twelve-day extension of time to file a brief in opposition to the motion to amend, respondent states that its primary UNITED STATES PATENT AND TRADEMARK OFFICE Trademark Trial and Appeal Board P.O. Box 1451 Alexandria, VA 22313-1451 General Contact Number: 571-272-8500 Cancellation No. 92056381 2 counsel was out of the country for approximately two weeks beginning September 5, 2014, without regular or reliable access to email, and that its secondary counsel was also traveling abroad around the same time. The standard for allowing an extension of a prescribed period prior to the expiration of that period is good cause. See Fed. R. Civ. P. 6(b)(1) and TBMP § 509.01 (2014). Ordinarily, the Board is liberal in granting extensions of time before the period to act has elapsed, so long as the moving party has not been guilty of negligence or bad faith and the privilege of extensions is not abused. American Vitamin Products Inc. v. DowBrands Inc., 22 USPQ2d 1312, 1314 (TTAB 1992). Given this liberal standard, the parties’ full briefing on the issue of the short extension request with a combined total of nineteen pages of argument and petitioner’s additional thirty-five pages of exhibits seems excessive. There is no evidence of record of respondent’s negligence or bad faith; and this being the first contested motion for an extension, it cannot be said that respondent has abused the privilege of extension. Respondent has stated in detail and with clarity the reasons for which the extension is sought, and respondent’s explanation about the travel of its counsel appears reasonable and relatable to the extension request. Accordingly, respondent’s motion to extend is granted, and respondent’s brief (filed October 6, 2014) in opposition to the motion to amend will be considered. Cancellation No. 92056381 3 Motion to Amend Petition and Reopen Discovery Petitioner moves to amend the petition for cancellation to withdraw its ground of fraud and to add a ground that respondent did not have a bona fide intent to use the mark in connection with the identified goods as of the filing date of the application under Trademark Act § 1(b),1 and to reopen discovery for a period of thirty days to allow for discovery on the new ground. Fraud Trademark Rule 2.114(c) provides that, after an answer is filed, a petition for cancellation may not be withdrawn without prejudice except with the written consent of respondent. Inasmuch as the ground of fraud was joined by way of respondent’s answer (filed January 24, 2013) at the time petitioner filed the motion to amend which seeks, inter alia, to withdraw the ground of fraud, and the withdrawal is made without respondent’s written consent, the motion to amend is granted, in part, to the extent that the original petition for cancellation on the fraud ground is hereby denied with prejudice.2 Trademark Rule 2.114(c). 1 Inasmuch as neither party addressed the issue of standing or the grounds of priority and likelihood of confusion, and false suggestion of a connection, which were pleaded in the original petition and are again pleaded in the amended petition, the Board will not address those issues in this order. 2 Indeed, petitioner “consents to the withdrawal of its claim for fraud ... with prejudice.” Reply, para. 16. Cancellation No. 92056381 4 No bona fide intent It is well settled that amendment to pleadings should be allowed with great liberality at any stage of the proceeding where entry of the amendment would serve to further the end of justice, unless entry of the proposed amendments would violate settled law, would be prejudicial to the rights of the adverse party, or would be futile. See Fed. R. Civ. P. 15(a). See also TBMP § 507.02 and cases cited therein at notes 4 and 5. The timing of a motion for leave to amend under Rule 15(a) plays a large role in the Board’s determination of whether an adverse party would be prejudiced by allowance of the proposed amendment. See Caron Corp. v. Helena Rubenstein, Inc., 193 USPQ 113 (TTAB 1976) (neither party had as yet taken testimony). As respondent correctly points out, the motion uses “extremely brief, vague and conclusory terms” in seeking the amendment and “does not provide any facts to support” opposer’s position that there are any newly discovered facts that were not known to opposer which might support the amendment to add a ground that respondent did not have a bona fide intent to use the mark in connection with the identified goods as of the filing date of the application under § 1(b). However, in the reply brief in support of the motion, petitioner provided detailed information related to the circumstances that led to the motion to amend, specifically discussing the August 21, 2014, deposition of Jud Ireland, which included testimony about the circumstances Cancellation No. 92056381 5 of respondent’s predecessor-in-interest’s filing fifteen applications under § 1(b), including the application which matured into the subject registration. Here, respondent will not be prejudiced by allowance of the new ground since the motion was filed prior to the deadline for petitioner’s pretrial disclosures, neither party has yet taken testimony, and all of the information and documents relating to respondent’s bona fide intent should be within respondent’s custody and control. The amendment does not adversely affect respondent’s ability to defend against the petition. The motion was filed within a reasonable time as petitioner’s explanation that the amendment is based on respondent’s July 28, 2014 discovery responses and the deposition of Jud Ireland, respondent’s founder and managing member, conducted on August 21, 2014, is reasonable and believable. Respondent’s arguments of bad faith are not persuasive; they go to the entire cancellation controversy between the parties, not merely to amendment now at issue, and otherwise suggest that petitioner will not ultimately be able to prove the new claim. Respondent’s arguments that petitioner was, prior to filing the motion to amend, in possession of various documents that might, in respondent’s opinion, defeat the new ground go to the merits of the new ground, not merely the sufficiency of the amended pleading. Respondent’s argument that the new ground is time-barred is not well- taken. The filing of the petition for cancellation within five years after Cancellation No. 92056381 6 registration (here, on the day before the fifth anniversary) tolled the five-year period with regard to additional grounds for cancellation of the subject registration under § 14, since petitioner was either allegedly unaware of the existence of the basis for the additional § 1(b) ground when it filed the petition to cancel, or was aware of the possibility of the additional ground when it filed the petition to cancel but could not, in good faith and pursuant to the requirements Fed. R. Civ. P. 11, plead the additional § 1(b) ground at that time. See, Sealite Bldg. Fasteners v. Joseph, 2002 WL 1453606, *4 (TTAB July 01, 2002; Cancellation No. 92026016) (non-precedential) (extending the principle of tolling time for a defendant to file a counterclaim to cancel a plaintiff’s pleaded registration when the plaintiff files a notice of opposition or a petition to cancel before the five-year anniversary of the plaintiff’s pleaded registration). Petitioner’s statement in the reply brief that the August 21, 2014 deposition of Jud Ireland was the first time petitioner became aware of the specific facts and circumstances regarding the filing of the application which matured into the subject registration is, as noted above, reasonable and believable. With regard to the legal sufficiency of the amended petition, the Board finds that the amended pleading sufficiently alleges a ground that respondent did not have a bona fide intent to use the mark in connection with the identified goods as of the filing date of the application under § 1(b). Paragraphs 12-14 of the amended petition explain petitioner’s theory that Cancellation No. 92056381 7 respondent (or, respondent’s predecessor-in-interest which was the original applicant) did not market, plan to use, or otherwise take concrete steps toward using the subject mark in connection with the goods originally recited in application, and this lack of action or meaningful investment in the subject mark prior to the filing date suggests that respondent only intended to reserve a right in the mark. Such allegations are sufficient to allege the ground. See Commodore Electronics Ltd. v. CBM Kabushiki Kaisha, 26 USPQ2d 1503, 1506 n.7 (TTAB 1993) (An applicant’s bona fide intent to use a mark must reflect an intention that is firm, though it may be contingent on the outcome of an event such as market research or product testing, and must reflect an intention to use the mark in the ordinary course of trade, and not merely to reserve a right in a mark). Inasmuch as the proposed amendment is timely, sufficiently pleaded, and not prejudicial to the rights of respondent or made in bad faith, the motion to amend is granted, in part, to the extent that the amended petition to cancel, concurrently filed with the motion to amend, is now petitioner’s operative pleading. Respondent is allowed until March 25, 2015, in which to file an answer to the amended petition. Reopening of discovery The Board has reviewed the multiple allegations and exhibits related to discovery - including the deposition of Jud Ireland - that the parties have provided with all of the outstanding motions. After careful review, the Board Cancellation No. 92056381 8 reopens discovery, with limitation, for a period of thirty days. Discovery will reopen April 1, 2015, and close April 30, 2015. Any new written discovery must be limited to the newly added ground, namely, that respondent did not have a bona fide intent to use the mark in connection with the identified goods as of the filing date of the application under § 1(b). In addition, should petitioner wish to depose Jud Ireland, Mr. Ireland’s discovery deposition must be limited to three hours and must take place at a location convenient to respondent, and at a time that is convenient for both parties; however, the deposition of Mr. Ireland is not limited to the newly added ground or limited to conduct by telephone. Any other deposition must be limited to the newly added ground but is similarly not limited to conduct by telephone. Motion to Withdraw Admissions Respondent’s motion to withdraw and amend its response to petitioner’s second set of requests for admission is granted as conceded. Trademark Rule 2.127(a). Accordingly, respondent’s September 1, 2014 response will stand as respondent’s operative response to these requests. Motion to Reopen Time to Respond to Discovery Respondent’s motion to reopen the time to respond to petitioner’s second set of interrogatories, second set of requests for production, and third set of requests for production is granted as conceded. Trademark Rule 2.127(a). Respondent’s September 2 and 27, 2014 responses will stand as respondent’s operative responses to those discovery requests. Cancellation No. 92056381 9 Motions to Quash and to Compel In view of the reopening of discovery, supra, respondent’s motion to quash petitioner’s second amended 30(b)(6) notice of deposition, and petitioner’s cross-motion to compel Jud Ireland’s attendance at an in-person deposition are moot. As noted above, any discovery by oral deposition of Mr. Ireland must be limited to three hours and must take place at a location convenient to respondent, at a time that is convenient for both parties, and may be conducted in-person. Schedule Proceedings are resumed. Dates are reset on the following schedule. Answer to Amended Petition Due 3/25/2015 Discovery Reopens 4/1/2015 Discovery Closes 4/30/2015 Plaintiff's Pretrial Disclosures 6/14/2015 Plaintiff's 30-day Trial Period Ends 7/29/2015 Defendant's Pretrial Disclosures 8/13/2015 Defendant's 30-day Trial Period Ends 9/27/2015 Plaintiff's Rebuttal Disclosures 10/12/2015 Plaintiff's 15-day Rebuttal Period Ends 11/11/2015 In each instance, a copy of the transcript of testimony, together with copies of documentary exhibits, must be served on the adverse party within thirty days after completion of the taking of testimony. Trademark Rule 2.125. Briefs shall be filed in accordance with Trademark Rules 2.128(a) and (b). An oral hearing will be set only upon request filed as provided by Trademark Rule 2.129.