## United States Court of Appeals for the Federal Circuit

2006-1148 (Opposition No. 91124847)

FIRSTHEALTH OF THE CAROLINAS, INC., Appellant,

v.
CAREFIRST OF MARYLAND, INC., Appellee.

Anthony J. Biller , Coats & Bennett, P.L.L.C., of Ca ry, North Carolina, argued for appellant. Of counsel was David E. Bennett

. Barth X. DeRosa , Stevens Davis Miller Mosher LLP, of Washington, DC, argued for appellee. Appealed from: United States Patent and Trademark Office, Trademark Trial and Appeal Board

## United States Court of Appeals for the Federal Circuit

2006-1148 (Opposition No. 91124847)

FIRSTHEALTH OF THE CAROLINAS, INC., Appellant,

v.
CAREFIRST OF MARYLAND, INC., Appellee.

__________________________

DECIDED: February 27, 2007

__________________________ Before BRYSON, GAJARSA, and LINN, Circuit Judges

. LINN, Circuit Judge

. FirstHealth of the Carolinas, Inc. (“Fir stHealth”) appeals from a dismissal by the Trademark Trial and Appeal Boar d (“Board”) of its countercl aim to cancel trademarks registered by CareFirst of Maryland, Inc. (“C areFirst”). CareFirst of Md., Inc. v. FirstHealth of the Carolinas, Inc. , Opposition Nos. 91116355, 91124847 (T.T.A.B. Dec. 2, 2005) (“Dismissal ”). Because the Board’s finding s are supported by substantial evidence, we affirm. I. BACKGROUND In 1998 and 2001, FirstHealth filed intent -to-use trademark ap plications—Serial Nos. 75/455,343 and 76/ 222,230, respectively—for t he FIRSTCAROLINACARE markused in c onjunction with healthcare ins u rance claims administration and health maintenance organiz a tions (“HMO s”). In each instance, CareFirst filed a notice of opposition alleging a likelihood of conf usion with and dilut i on of its registered CAREFIRST mark. The two proceedings we re consolidated on March 7, 2003. FirstHealth counterclaimed against Ca reFirst, seeking ca nc ellation of the CAREFIRST trademark registrations bas ed on abandonment due to uncontrolled licens ing of the mark and failure to use the mark in connection with services other than HMO services. In accordance with 37 C. F.R. § 2.121, the par ties ent ered into a stipulation that provi ded a two-month extension of Firs tH ealth’s c a se-in-chief testimony period until January 31, 2004. On February 26, 2004, FirstHealth filed a motion to reopen its testimony period for the purpose of filing notices of relianc e to introduce into evidence the discov e ry deposition of David Wolf (and related exhi bits), certain dis c overy responses, and certified copies of thir d-party r egistrations. FirstHealth attribut ed its late filing to the birth of counsel’s son, the signif icant amount of testimony that was taken, counsel’s time conflicts with unrelated matters, and a docke ting error made by a new paralegal. The Board found that FirstHealth failed to demonstrate excus able neglect and denied FirstHealth’s motion to reopen t he testimony period. Dismissal , slip op. at 13. Noting that FirstHealt h ’s counter claim ar guments relied princi pally on the Wolf deposition—which was not of record—the B oard found that FirstHealth had failed t o prove uncontrolled licensing of the mark or failure to us e the mark by a preponderanc e of the evidence. Id. , slip op. at 29-33. Accordingly, FirstHealth’s counterclaims for cancellation were dis m issed. Id. , slip op. at 33. The Board also dismissed CareFirst’s

2006-1148 2oppositions , finding that there was no lik elihood of confusio n with or dilution of its registered mark. Id. , slip op. at 75. Although both parties initially appealed t he Board’s decision, Care First eventually moved to dismiss its appeal. That motion was granted on February 28, 2006. T h is case therefore concerns FirstHealth’s appeal from the Board’s denial of its motion to reopen the testimony period and the Board’s dismissal of its count erclaim for cancellation of CareF i rst’s regist ered trademar ks. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(4)(B). II. DISCUSSION A. Jurisdiction As a threshold matter, CareFirst argues t hat this appeal is moot and that we lack appellate j u risdiction. Spec ifically, CareFirs t argues that by having dismissed its appeal from the opposition decision, t he Board’s rulings on the likelihood of confusion with an d dilution of the CAREFI RST mark have a preclusi ve effect against CareFirst in any future proceedings against F i rstHealth for use of the FIRSTCAROLINACARE mark. CareFirst argues that, as a result, the CAREFIRST m a rk cannot be asserted against FirstHealth and thus there is no potent ial “damage” as contemplat ed by 15 U.S.C. § 1064 to support FirstHealth’s cancel lation counterclaim. CareFirst overstates the impact of the Board’s findings. As the Board’s regulations correctly recogniz e : “The Board is empowered to determine only the right to register. The Board is not authorized to de termine the right to use, nor may it decid e broader questions of infringement or unfair competition.” T.B.M. P. § 102.01. The Board’s decision does not bar CareFirst from using the CAREFIRST mark or from

2006-1148 3asserting that mark in subsequent claims against FirstHealth for trademark infringement or unfair competition. See 15 U.S.C. § 1114(1) (registr ant may bring infringement action against those using or reproducing m a r ks for certain purpos es when “s uch use is likely to cause confus ion, or to c ause mist ake, or to deceive”). Although the Board’s findings may preclude CareFirst from re-lit igating the narrow issues addressed by the Board in the opposition proceeding, 1 the CA REFIRS T mark may still be us e d to cause “damage” by means that do not involv e inquiries into like lihood of confusion or dilutio n

. Accordingly, the appeal is not moot, and we turn to the merits of the case. B. Excusable Neglect The primar y issue on appeal is whether the Board erred in deny ing FirstHealth’s motion to reopen the testimony period for f a ilu re to show excus a ble neglect, which we review for an abuse of discretion. See Hewlett-Packard Co. v. Olympus Corp. , 931 F.2d 1551, 1552 (Fed. Cir. 1991). Firs tHealth argues that the Boar d abused its discretion in apply i ng the factors identified by the Supreme Court in Pionee r Investment Services Co. v. Brunswick Associates Ltd. , 507 U.S. 380 (1993), because each factor weighs in favor of accepting FirstHealth’s late filin g. The Board’s regulations allow a t e stim ony period to be reopened u p on a showing of “excusable neglect , ” but do not specif y what is meant by that term. See 37 C.F.R. § 2.116(a) (inter partes proc eedings before the Board are gener ally governed by the

1 We do not decide whether the Board’ s likelihood of conf usion and dilution findings would have a preclusive effect on the same iss ues in some hypothetical future litigation; indeed, they may not. See J i m Beam Bra nds Co. v. Beamis h & Cra w ford, Ltd. , 937 F.2d 729, 734-36 (2d Cir. 1991) (holding that t he issue of lik elihood of confusion in a prior cancellation proceeding was sufficiently different from the issue o f likelihood of confusion present ed in subsequent lit igation such that the Boar d’s finding did not have preclusiv e effect).

2006-1148 4Federal Rules of Civ il Procedure); Fed. R. Civ. P. 6(b)(2). In Pioneer , the Supreme Court addr essed the meaning of “exc usable neglect” in the co ntext of the Federal Rules of Bankruptcy Procedure. According to the Court, the determination of whether a party’s neglect is excusable is: at bottom an equitable one, taking account of all relevant circumstances surrounding the party’s omission. T hese 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 t he r easonable control of the movant, and [4] whether the movant acted in good faith. 507 U.S. at 395. The Board adopted these factors for dete rminin g excus able neglect in Pumpkin Ltd. v. The Seed Corps , 43 USPQ 2d 1582 (T .T.A.B. 1997), and has found the third factor—the reason for the delay and whether it was withi n the movant’s control—to be of paramount importance. Old Nutfield Brewing Co., v. Hudson Valley Brewing Co. , 65 USPQ2d 1701 (T.T.A.B. 2002) (citing Pumpkin , 43 USPQ2d at 1586 n.7). The Board has discretion to reasonably interpret the meaning of “excus able neglect” in the context of its own regulations . See Thomas Jefferson Univ. v

. Shalala , 512 U.S. 504, 512 (1994) (an agency’s interpre tation of its own regulation is given “controlling weight un less it is plain l y err oneous or inconsistent with the regulation” (quoting Bowles v. Seminole Rock & Sand Co. , 325 U.S. 410, 414 (1 945) )). Although the Board was not required to adopt the interp retation of “excusable neglect” articulated in Pioneer , doing so was reasonable, and we defer to that interpretation. See Custom Computer Servs., Inc. v. Paychex Props., Inc. , 337 F.3d 1334, 1336 (Fed. Cir. 2003) (deferring to the Board’s interpretation of “mistake” in the context of 37 C.F.R. § 2.102(b)).

2006-1148 5The Board’s decis ion in Pumpk i n is on point. In that case, a party in an opposition proceeding filed a motion to reopen its testimony period, arguing that its failure to submit evidence during the a ssigned tes t imony period was the result of

excus able neglect. 43 USPQ2d at 1583. T he Board f ound that t here was no danger of prejudice t o the non-moving party and no evidenc e of bad faith. Id. at 1587-88. The Board nev ertheless denied the motion based on the second and third Pioneer factors. Id. In doing so, the Board noted that because the reas on for delay—a docketing error— was “wholly within the reasonable cont rol of [the m o vant], the third Pioneer factor weighs heavily against a finding of excusable neglect.” Id. at 1587. The Board also noted that its interest in deterring delay due to “sloppy practice or inattention to deadlines” was relevant to the second Pioneer factor and also “weighs heavily against a finding of excusable neglect.” Id. at 1588. Here, the reasons giv en for delay were wholly within FirstHealth’s reasonable control. 2 Indeed, two of the reasons for delay wer e account ed for in FirstHealth’s Stipulated Motion for Enlargement of Te stimony and Briefing Pe riods, whic h extended the testimony period to Januar y 31, 2004 “to accommodate [Fir stHealth’s] witness’ [sic] schedules and conflicts with counsels ’ schedul es.” FirstHealth’s complaint of a docketing error is belied by its reference to the January 31, 2004 deadline in a motion it filed before the deadline had expi red. Finally, to the extent an attorney’s family matters caused delay, FirstHealth provides no explanation as to why other authorized

2 On appeal, FirstHealt h als o points to the hospitalizati on of counsel’s son as a reason for delay. That hospitalization did not occur until after the testimony period closed and was not raised in FirstHealth’s motion to reopen the testimony period. Although unfortunate, there is no explanation as to how this event resulted in FirstHealth’s failure to submit its notices of relianc e before the testi m ony period expired. We therefore do not consider it on appeal.

2006-1148 6indiv i duals in the sam e firm could not have assumed responsibility for the case. See HKG Indus., Inc. v. P e rma-Pipe, Inc. , 49 U SPQ2d 1156 (T.T.A.B. 1998) (fi nding that a failure to explain why other authorized individuals could not have assumed responsib i lit y after counsel’s death weighed against findi ng excus able neglect). As in Pumpkin , substantial evidenc e supports a finding that the second and third factors weigh ag ainst

excus able neglect. Accordingly, the Board’s fi nding in this case is consistent with its prior practice, and it did not abuse its di s c retion in denying FirstHealth’s motion to reopen the testimony period. FirstHealth argues that the undisputed fa cts of record prove its cancellation counterclaims even without the excluded ev idence. We find that argument unpersuasive. Abandonment is a question of fact, and the Board’s findings ar e sustained if supported by subst antial evidence. On-Line Care line, Inc. v. Am. Online, Inc. , 229 F.3d 1080, 1087 (Fed. Cir. 2000) . Firs tHealth bears the bur den of proving abandonment by a preponderance of the evidence. Rivard v. Linville , 133 F.3d 1446, 1449 (Fed. Cir. 1999). Without the properly exc l uded t e stimony evidence, the Board’s finding that FirstHealth failed to prove uncont rolled licensing or failure to use by a preponderance of the evidenc e is suppor ted by substantial evidenc e. III. CONCLUSION Because the Board did not abus e its discretion in denying FirstHealth’s motio n to reopen the testimony period, and becaus e s ubstantial evidence su pports the Board’s finding that FirstHealth failed to prove its cancellat i on counterclaims, the Board’s decision is AFFIRMED

.

2006-1148 7COSTS No costs.

2006-1148 8