In this brew-ha-ha over the mark COFFEE STUDIO, Respondent Reign LLC moved for dismissal after petitioner failed to submit any evidence or testimony during its testimony period. Petitioner Studio then moved (1) to strike Reign's dismissal motion due to improper service and (2) to re-open its testimony period on the ground that its evidentiary failure was excusable. The Board granted both of petitioner's motions. The Coffee Studio LLC v. Reign LLC dba Coffee Studio, Cancellation No. 92066245 (February 28, 2019) [precedential].
Improper Service Respondent Reign did not serve its motion for dismissal directly on Petitioner Studio, but instead relied on the email notice automatically generated by ESTTA that was sent to petitioner's counsel, with a link to the motion as it appears in TTABVUE. Reign argued that petitioner received actual notice of the motion via the Board's email, as evidenced by petitioner's filing a response to the motion.
The Board pointed out that Rule 2.119(a) requires that every submission filed in an inter partes proceeding, except for the petition to cancel or a notice of opposition, must be served upon the other party together with a certificate of service. In other words actual service is required, and it must be effected via e-mail, absent an agreement otherwise. See Rule 2.119(b). Respondent did not comply with the rules, and so the Board granted petitioner's motion to strike. [The Board noted that even if it accepted Reign's motion, under its inherent authority, it would have denied the motion in light of petitioner's showing of excusable neglect.]
Excusable Neglect: Because Petitioner Studio sought to re-open a time period that had passed, it was required to show "excusable neglect" under Fed. R. Civ. P. 6(b)(1)(B). The Supreme Court clarified the meaning and scope of "excusable neglect" in Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd. P'ship, 507 U.S. 380 (1993).
[The determination is] at bottom an equitable one, taking account of all relevant circumstances surrounding the party's omission. These include. . . [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. Pioneer, 507 U.S. at 395.
The third Pioneer factor - the reason for the delay and whether it was within the reasonable control of the movant - is generally considered the most important factor. See Pumpkin, 43 USPQ2d at 1587 n.7 and cases cited therein. See also Luster Prods., Inc. v. Van Zandt, 104 USPQ2d 1877, 1878 (TTAB 2012).
As to the first Pioneer factor, there was no evidence of prejudice to Respondent Reign, such as the unavailability of witnesses. See Pumpkin, 43 USPQ2d at 1587.8 As to the fourth factor, there was no evidence of bad faith by Petitioner Studio.
With regard to the second factor - the length of delay and its impact - the Board must consider "the total length of the delay, including the time for the Board to consider the pending motions." See Pumpkin, 43 USPQ2d at 1588. The Board found the delay caused by petitioner's failure to offer testimony or evidence during its testimony period, and the parties' motions arising therefrom, to be "minimal." [about eight and one-half months, seven of which occurred after the motion papers were filed - ed.]. The Board noted that Studio submitted its proposed testimonial affidavits and notices of reliance when it moved to reopen its testimony period. "This factor weighs in Petitioner's favor as it is a relatively short period of time and Petitioner attempted to mitigate any delay."
As to the critical third factor, counsel for Petitioner Studio asserted that "she was hospitalized with a serious medical condition on April 2, 2018, was intermittently hospitalized requiring medical leave since then, and that in her absence only an inexperienced first-year associate was available to take over her duties in this case." Respondent Reign questioned why a medical condition in April had any effect on a June date for filing trial evidence, and why the associate did not seek suspension or an extension of time based on the medical emergency. The Board sided with Petitioner Studio, but provided little explanation:
We find, taking into account the totality of the circumstances of this specific case discussed in Petitioner's motion to reopen, that Petitioner's failure to take appropriate action prior to the close of its testimony period was not within Petitioner's reasonable control.
The Board observed that it expects that petitioner's counsel "has made preparations for improved staff coverage in the event illness strikes again, and does not expect any delay to remaining trial periods or briefing."
Considering and balancing the four Pioneer factors, the Board found that Petitioner Studio's failure to act in timely fashion was the result of excusable neglect, and so the motion to reopen was granted.
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