9022-5814 Québec Inc.v.LOC Enterprises, LLC v. SORA Technologies, LLC

Trademark Trial and Appeal Board

Mar 18, 2021

94002861 (T.T.A.B. Mar. 18, 2021)

mbm March 18, 2021 Concurrent Use No. 94002861 9022-5814 Québec Inc. v. SORA Technologies, LLC v. LOC Enterprises, LLC Before Mermelstein, Heasley, and Johnson, Administrative Trademark Judges. By the Board: This proceeding now comes before the Board for consideration of SORA Technologies, LLC’s (“Sora”) motion for judgment under Trademark Rule 2.132(a) for 9022-5814 Québec Inc.’s (“Québec”) failure to submit evidence or take testimony during its assigned testimony period. The motion is fully briefed. In support of its motion, Sora contends that Québec’s testimony period, as last set by the Board’s December 14, 2019 order, closed on August 31, 2020 and that, during its designated testimony period, Québec submitted no evidence of any type and did not seek any extension of its testimony period. 9 TTABVUE 3. In view thereof, Sora 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 General Email: TTABInfo@uspto.gov THIS OPINION IS NOT A PRECEDENT OF THE TTAB Concurrent Use No. 94002861 2 seeks to dismiss this proceeding based on Québec’s failure to prosecute its case under Trademark Rule 2.132(a), 37 C.F.R. § 2.132(a). In response, Québec argues that it was in settlement negotiations with Sora and did not take any action during its testimony period because it believed that Sora was going to file a motion to reset trial dates. 13 TTABVUE 4-5. Québec argues that any delay in the proceeding was the result of Sora’s own actions and requests that the Board reopen its deadline for pretrial disclosures and testimony period. Id. at 9. As an initial matter, pursuant to Trademark Rule 2.132(c), 37 C.F.R. § 2.132(c), a motion to dismiss for failure to take testimony “must be filed before the opening of the testimony period of the moving party, except that the Trademark Trial and Appeal Board may in its discretion grant a motion under [2.132(a)] even if the motion was filed after the opening of the testimony period of the moving party.” Here, Sora’s testimony period opened on September 30, 2020 and Respondent filed its motion for dismissal on October 16, 2020, only a little over two weeks later. The Board exercises its discretion to consider Sora’s motion on the merits. See Hewlett-Packard Co. v. Olympus Corp., 931 F.2d 1551, 18 USPQ2d 1710, 1712 (Fed. Cir. 1991) (Board has discretion under Trademark Rule 2.132(c) to grant a motion under 2.132(a) after the opening of the moving party’s testimony period). Where the time for taking a required action has expired, a party that wishes to take such action must move to reopen its time to do so, setting forth with particularity detailed facts demonstrating that its failure to timely act was the result of excusable neglect. See Fed. R. Civ. P. 6(b)(1)(B); Gaylord Entm’t Co. v. Calvin Gilmore Prods. Concurrent Use No. 94002861 3 Inc., 59 USPQ2d 1369, 1371-72 (TTAB 2000). The same showing must be made by a plaintiff when a defendant moves for involuntary dismissal under Trademark Rule 2.132(a), 37 C.F.R. § 2.132(a), which provides the following: If the time for taking testimony by any party in the position of plaintiff has expired and it is clear to the Board from the proceeding record that such party has not taken testimony or offered any other evidence, the Board may grant judgment for the defendant. Also, any party in the position of defendant may, without waiving the right to offer evidence in the event the motion is denied, move for dismissal on the ground of the failure of the plaintiff to prosecute. The party in the position of plaintiff shall have twenty days from the date of service of the motion to show cause why judgment should not be rendered dismissing the case. In the absence of a showing of excusable neglect, judgment may be rendered against the party in the position of plaintiff. If the motion is denied, testimony periods will be reset for the party in the position of defendant and for rebuttal. Accordingly, a plaintiff must establish excusable neglect for its failure to take testimony or introduce other evidence during its assigned trial period. The Board’s “excusable neglect” standard was discussed in Pumpkin Ltd. v. The Seed Corps, 43 USPQ2d 1582 (TTAB 1997), which followed the test set out by the Supreme Court in Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd. P’ship, 507 U.S. 380 (1993). In Pioneer, the Court stated that a determination of excusable neglect is at bottom an equitable one, taking account of all relevant circumstances surrounding the party’s omission, including “(1) the danger of prejudice to the [non-moving party], (2) the length of the delay and its potential impact on judicial proceedings, (3) the reason for the delay, including whether it was within the reasonable control of the movant, and (4) whether the movant acted in good faith.” Id. at 395. Concurrent Use No. 94002861 4 With respect to the first and fourth factors, there is no evidence of prejudice to Sora or bad faith on the part of Québec and these factors therefore favor Québec.1 Turning to the second Pioneer factor, Québec’s testimony period closed nearly seven months ago. See Atlanta-Fulton County Zoo Inc. v. DePalma, 45 USPQ2d 1858, 1860 (TTAB 1998) (resulting delay “is detrimental to the orderly administration of the opposition process.”); Pumpkin Ltd., 43 USPQ2d at 1588 (“[T]he calculation of the length of the delay … must take into account the additional, unavoidable delay arising from the time required for briefing and deciding the motion to reopen.”). In this case, Québec also failed to file a timely response to Sora’s motion, which necessitated Québec’s construed motion to reopen Québec’s time to respond to the motion to dismiss. Accordingly, we find that the delay in this proceeding has not been insignificant and that this factor favors Sora. The third Pioneer factor is often the most significant, and in this case, we find this factor to be determinative. See Pumpkin Ltd., 43 USPQ2d at 1587 n.7 (“[S]everal of the Circuit Courts of Appeals have stated that this third Pioneer factor may be deemed to be the most important of the Pioneer factors in a particular case.”). Upon careful consideration of the circumstances of this case, we find that Québec’s failure 1 Both parties appear to misunderstand the standard for demonstrating excusable neglect under Trademark Rule 2.132(a). For example, both parties address prejudice to Québec in the event the Board grants Sora’s motion. See 9 TTABVUE 3 and 13 TTABVUE 7. The appropriate inquiry is whether Sora would be prejudiced by a reopening of Québec’s testimony period. See generally Grobet File Co. of Am. Inc., 12 USPQ2d at 1651. As the party seeking to reopen its testimony period, the burden is on Québec to demonstrate that its failure to offer evidence or take testimony was the result of excusable neglect. See id. Concurrent Use No. 94002861 5 to take testimony or submit evidence during its assigned testimony period was wholly within its control and establishes that its neglect of this proceeding is not excusable. Québec argues that its failure to file evidence or take testimony was excusable because the parties were engaged in settlement negotiations and Québec was reasonably awaiting a response from Sora after its latest settlement offer. 13 TTABVUE 4-6. To the contrary, “it is well established that the mere existence of settlement negotiations alone does not justify a party’s inaction or delay.” Atlanta- Fulton County Zoo Inc., 45 USPQ2d at 1859 (denying plaintiff’s motion to reopen its testimony period and granting defendant’s motion to dismiss under Trademark Rule 2.132(a)). See also Vital Pharms. Inc. v. Kronholm, 99 USPQ2d 1708, 1711 (TTAB 2011) (“[W]hile attempts at settlement are favored, they do not excuse an opposer’s failure to act within the prescribed times.”); Fairline Boats plc v. New Howmar Boats Corp., 59 USPQ2d 1479, 1480 (TTAB 2000) (“[E]ven if the parties had been discussing settlement, the mere existence of such negotiations or proposals, without more, would not justify petitioner’s delay in proceeding with testimony.”). Québec also argues that it expected Sora to file a motion to reset calendar dates in this proceeding based on a May 28, 2020 email from Sora’s counsel. 13 TTABVUE 4-6. Québec did not submit a copy of the email upon which it purportedly relied; however, Sora attached a copy of the email to its reply brief. 14 TTABVUE 6. In the email, Sora’s counsel responds to Québec’s counsel by stating “I fear that we may not be able to resolve this amicably at this point” and that “you should anticipate asking the Board to reset deadlines and to defend a dispositive motion given the Concurrent Use No. 94002861 6 developments in the TTAB proceedings since this began.” Id. The email did not state, as Québec suggests, that Sora would file a motion to reset dates. Rather, the email clearly stated that settlement was not likely and that Québec should be prepared to file its own motion to reset deadlines with the Board and be prepared to defend a dispositive motion. Rather than misleading Québec, Sora’s counsel specifically warned Québec that it intended to file a potentially dispositive motion in this proceeding, as Sora ultimately did. Even assuming, however, that Québec misunderstood the May 28, 2020 email, Québec took no action for over five months when it filed its untimely motion to “extend” time to respond to Sora’s motion under Trademark Rule 2.132(a). Had Québec believed Sora would file a motion to extend or reset dates, it was incumbent on Québec to confirm that such a motion was, in fact, filed. Instead, Québec sat on its hands and allowed discovery and its testimony period to close, without once even attempting to contact Sora. See id. at 5. Québec previously filed a consented motion to suspend for settlement discussions and was clearly aware of the procedure for doing so. It was entirely within Québec’s control for Québec to request an extension from Sora or even to file an unconsented motion to extend. Québec’s argument that it was Sora’s responsibility to file a motion to extend is not well taken. Québec, as plaintiff in this proceeding, bears the burden of establishing its entitlement to a concurrent use registration and proceeding upon the schedule set forth by the Board. See Atlanta-Fulton County Zoo, 45 USPQ2d at 1860. The Board’s December 14, 2019 order warned the parties that in the event there was Concurrent Use No. 94002861 7 no further word from the parties, proceedings would resume without further notice from the Board upon the schedule set forth in the order. 8 TTABVUE. In the absence of a motion to extend or suspend, it was Québec’s responsibility to comply with the deadlines set forth in the Board’s order. Finally, it was not reasonable for Québec to rely solely on perceived representations from Sora in this proceeding. The Board instituted this concurrent use proceeding with respect to two excepted users, Sora and LOC Enterprises, LLC (“LOC”). As the owners of registrations, neither defendant in this proceeding was required to file an answer. Trademark Rule 2.99, 37 C.F.R. § 2.99. Although Sora chose to do so, the fact that LOC did not file an answer did not in any manner eliminate Québec’s burden of establishing its entitlement to a concurrent registration with respect to both named excepted users. Therefore, even assuming that Québec misconstrued Sora’s email, Québec’s reliance on it would not be reasonable in light of its clear lack of consent from LOC to any further extensions or suspensions of time. In view of the foregoing, we find that Québec has failed to demonstrate excusable neglect and Québec’s request to reopen its testimony period is denied. As the plaintiff, Québec bears the burden of proving its entitlement to a concurrent use registration. Québec did not introduce any evidence and Sora did not make any salient admissions in its answer. Since Québec failed to timely take testimony or to offer any evidence during its assigned testimony period and has not demonstrated excusable neglect to entitle it to a reopening, Québec cannot meet its burden of establishing its entitlement to a concurrent use registration. Accordingly, Sora’s Concurrent Use No. 94002861 8 motion to dismiss under Trademark Rule 2.132(a) is granted, the concurrent use proceeding is dissolved, and registration to Québec is refused.