Alexander Hage-Boutrosv.Ethika, Inc.

Trademark Trial and Appeal Board

Aug 14, 2019

92070267 (T.T.A.B. Aug. 14, 2019)

Baxley
August 14, 2019

Cancellation No. 92070267

Alexander Hage-Boutros

v.
Ethika, Inc.

Before Wolfson, Kuczma and Lynch,
Administrative Trademark Judges.

By the Board:

This case now comes up for consideration of Respondent Ethika, Inc.’s (“Ethika”)
motion (filed June 27, 2019) to dismiss the above-captioned proceeding on the grounds
that it is an untimely compulsory counterclaim in Cancellation No. 92063682 and
that it fails to state a fraud claim with particularity, as required by Fed. R. Civ. P.
9(b). Petitioner Alexander Hage-Boutros (“Hage-Boutros”) filed a brief in opposition
thereto.
I. Background
On May 3, 2016, Ethika commenced Cancellation No. 92063682, styled Ethika,
Inc. v. Hage-Boutros, wherein it seeks cancellation of Hage-Boutros’s Registration No.
4834883 for the mark ETHIK CLOTHING CO. and design in the following form,
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 decision is not a
precedent of the Trademark
Trial and Appeal Board.
Cancellation No. 92070267

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, for “Athletic apparel, namely, shirts, pants, jackets, footwear, hats
and caps, athletic uniforms; Graphic T-shirts; Short-sleeved or long-sleeved t-shirts;
T-shirts” in International Class 25.1 In the original petition to cancel in that
proceeding, 1 TTABVUE, Ethika alleges likelihood of confusion under Trademark Act
Section 2(d), 15 U.S.C. § 1052(d), based on its two registered marks (1) ETHIKA in
standard characters for “Clothing, namely, boxer shorts, underwear, and headwear”
in International Class 252 (“the word mark”) and (2) ETHIKA and design in the
following form, , for “Clothing, namely, t-shirts, boxer shorts, underwear,
and headwear” in International Class 253 (“the design mark”).1 In an amended
petition to cancel filed April 2, 2018, Ethika added a claim that Hage-Boutros did not
own the mark at issue when the underlying application for that registration was filed.
Cancellation No. 92063682 was suspended in a January 2, 2019 order, after the
deadline closed for Ethika’s rebuttal disclosures (as plaintiff in that case).
The parties are also involved in Opposition No. 91236032 and Cancellation No.
92066599, styled Ethika, Inc. v. Hage-Boutros, wherein Ethika also relies on the

1 Hage-Boutros’s registration was issued October 20, 2015, and alleging October 18, 2010 as
the date of first use anywhere and January 15, 2011 as the date of first use in commerce. The
registration includes a disclaimer of CLOTHING CO.
2 Registration No. 3313394, issued October 16, 2007, renewed, and alleging March 1, 2007 as
the date of first use anywhere and of first use in commerce.
3 Registration No. 3618319, issued May 12, 2009, renewed and alleging March 1, 2007 as the
date of first use anywhere and of first use in commerce.
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aforementioned registered marks in support of its Section 2(d) claims. Answers have
yet to be filed in those proceedings, which have been suspended since August 23, 2017
and are currently suspended pending final determination of Cancellation No.
92063682.
On December 28, 2018, more than two and a half years after the commencement
of Cancellation No. 92063682 and more than four months after the August 12, 2018
commencement of trial in that proceeding, Hage-Boutros commenced the above-
captioned proceeding, wherein it seeks cancellation of the registrations that Ethika
pleaded in Opposition No. 91236032 and Cancellation Nos. 92063682 and 92066599
on the ground of fraud based on allegedly false averments of use Ethika made in
statements of use and declarations of use filed in connection with its registrations.4
On January 2, 2019, Hage-Boutros filed a motion to consolidate Cancellation Nos.
92063682 and 92070267, which the Board denied in a May 22, 2019 decision, 6
TTABVUE. Ethika filed its motion to dismiss in lieu of an answer.

4 Hage-Boutros’s fraud claim is based in part on an assertion that Ethika falsely “declared
that the [involved marks were] in use in commerce in connection with all of the goods
identified in the registration[s] at least as early as March 1, 2007” in its “Combined
Declaration of Use and Incontestability” and the “Combined Declaration of Use and
Application for Renewal.” 1 TTABVUE 6, paragraphs 14-15. In addition, Hage-Boutros’s
fraud claim is based on the assertion, made on information and belief, that, because
registration of Ethika’s design mark was initially refused based on an ornamentation refusal
in view of specimens showing the design mark on headwear, any use of Ethika’s involved
marks on headwear and t-shirts was purely ornamental and did not function as marks. Hage-
Boutros asserts that, in view of that refusal, Ethika committed fraud by falsely averring to
use of the word mark on headwear and the design mark on headwear and t-shirts with intent
to deceive the USPTO. 1 TTABVUE 4-5 and 7, paragraphs 6-7 and 17-18.
Cancellation No. 92070267

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II. Motion to dismiss granted based on untimeliness
Leave to add a counterclaim is governed by Federal Rule of Civil Procedure 15(a),
made applicable to Board proceedings under Trademark Rule 2.116(a), which
mandates that leave to amend pleadings shall be freely given when justice so
requires. See Jive Software, Inc. v. Jive Communications, Inc., 125 USPQ2d 1175,
1180 (TTAB 2017). Consistent therewith, the Board liberally grants leave to amend
pleadings at any stage of the proceeding when justice requires, unless entry of the
proposed amendment would violate settled law or be prejudicial to the rights of the
adverse party or parties. See, e.g., Commodore Electronics Ltd. v. CBM Kabushiki
Kaisha, 26 USPQ2d 1503 (TTAB 1993); U.S. Olympic Committee v. O-M Bread Inc.,
26 USPQ2d 1221 (TTAB 1993). Thus, any party who delays filing a motion for leave
to amend its pleading and, in so delaying, causes prejudice to its adversary, is acting
contrary to the spirit of Rule 15(a) and risks denial of that motion. See Media Online
Inc. v. El Clasificado Inc., 88 USPQ2d 1285, 1286 (TTAB 2008).
Under Trademark Rule 2.114(b)(3)(i),
A defense attacking the validity of any one or more of the registrations
pleaded in the petition shall be a compulsory counterclaim if grounds for
such counterclaim exist at the time when the answer is filed. If grounds
for a counterclaim are known to respondent when the answer to the
petition is filed, the counterclaim shall be pleaded with or as part of the
answer. If grounds for a counterclaim are learned during the course of
the cancellation proceeding, the counterclaim shall be pleaded promptly
after the grounds therefor are learned.

Accordingly, a defendant who fails to timely plead a compulsory counterclaim cannot
avoid the effect of its failure by thereafter asserting the counterclaim grounds in a
separate petition to cancel. In such a case, the separate petition will be dismissed, on
Cancellation No. 92070267

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motion, on the ground that the substance of the petition constitutes a compulsory
counterclaim in another proceeding, and that it was not timely asserted. See Vitaline
Corp. v. General Mills Inc., 891 F.2d 273, 13 USPQ2d 1172, 1174 (Fed. Cir. 1989);
Consolidated Foods Corp. v. Big Red, Inc., 231 USPQ 744, 746 (TTAB 1986);
Trademark Board Manual of Procedure (TBMP) § 313.04 (June 2019).
Hage-Boutros’s original answer in Cancellation No. 92063682 indicates that,
when he filed that answer on June 20, 2016, he was aware of a factual basis for his
assertion in this proceeding that Ethika committed fraud. In the “NINETEENTH
DEFENSE” set forth in Hage-Boutros’s answer, Hage-Boutros alleges that Ethika
has misrepresented its use of its mark[s] on [sic] the Petition of
Cancellation ... as being larger in scope than actually practiced by
[Ethika]. [Ethika’s] mark[s are] used in connection with an underwear
brand. There [sic] online social media and marketing presence uses the
tagline “Quality underwear driven by personal identity,” and its online
biography reads, “Ethika is a leading underwear brand....” Further,
searches of the product online yields results exclusively containing
underwear.

Cancellation No. 92063682, 4 TTABVUE 5. In the “TWENTIETH DEFENSE” in that
answer, Hage-Boutros alleges that Ethika “has abandoned use of its mark in any
other market aside from underwear. [Ethika] has failed to use its mark for any other
purpose than the production of underwear for the entirety of its fifteen years of
business.” Cancellation No. 92063682, 4 TTABVUE 5. In the “TWENTY-SECOND
DEFENSE” set forth in that answer, Hage-Boutros seeks to restrict the identification
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of Ethika’s involved registrations to “underwear” under Trademark Act Section 18,
15 U.S.C. § 1068.5 Cancellation No. 92063682, 4 TTABVUE 6-7.
Through these defenses, Hage-Boutros, in his answer in Cancellation No.
92063682, essentially raises the allegations that he later set forth in the petition to
cancel in this proceeding that Ethika falsely averred to use of the word mark on
“headwear” and the design mark on “t-shirts” and “headwear” in the statement of use
(filed May 17, 2007) and the “Combined Declaration of Use and Incontestability” (filed
October 2, 2013) in connection with the registration for the word mark and the use-
based application (filed March 11, 2008) and the “Combined Declaration of Use and
Incontestability” (filed May 3, 2015) in connection with the registration for the design
mark. Compare Cancellation No. 92063682, 4 TTABVUE 5-7, nineteenth, twentieth,
and twenty-second defenses with Cancellation No. 92070267, 1 TTABVUE 6,
paragraphs 14-15.
The petition to cancel in this proceeding is based on a review of the prosecution
history of the underlying applications and post-registration submissions in support
of Ethika’s pleaded registrations, without additional factual detail. Thus, at least
with regard to the statement of use and the “Combined Declaration of Use and
Incontestability” in connection with the registration for the word mark and the use-
based application and the “Combined Declaration of Use and Incontestability” in
connection with the registration for the design mark, the facts upon which the fraud

5 Hage-Boutros repeated these defenses in its answer, filed July 2, 2018, to Ethika’s amended
petition to cancel in Cancellation No. 92063682, its operative responsive pleading in that
case. 26 TTABVUE 5-7.
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claim set forth in the petition to cancel herein were within Hage-Boutros’s knowledge
when he filed his original answer in Cancellation No. 92063682. Any potential bases
for a counterclaim should have been fully considered prior to the filing of that answer.
See ChaCha Search, Inc. v. Grape Technology Group, Inc., 105 USPQ2d 1298, 1301
(TTAB 2012) (motion to amend to add ground to counterclaim denied as untimely;
“any potential bases for the counterclaim should have been fully considered prior to
the filing of the counterclaim, i.e., long before [applicant] filed its motion for leave to
file an amended counterclaim.”); cf. Great Seats Inc. v. Great Seats Ltd., 100 USPQ2d
1323, 1328 (TTAB 2011) (“opposer should have been cognizant of what evidence it
would need to establish its claims and how it would obtain that evidence long before
settlement discussions were terminated”). Accordingly, Hage-Boutros could have
pleaded the fraud claim set forth in the petition to cancel as a counterclaim in his
answer in Cancellation No. 92063682.
Likewise, to the extent that Hage-Boutros bases his fraud claim on the “Combined
Declaration of Use and Application for Renewal” (filed September 14, 2017) that
Ethika filed in connection with the registration for the word mark, that combined
declaration was filed more than nine months before he filed an answer to the
amended petition to cancel in Cancellation No. 92063682 on July 2, 2018. Given that
the facts upon which Hage-Boutros bases the fraud claim set forth in the petition to
cancel with regard to the “Combined Declaration of Use and Application for Renewal”
were within his knowledge when he filed his answer to the amended petition to cancel
in Cancellation No. 92063682, Hage-Boutros’s delay of nearly six months, until
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December 28, 2018, to file commence this proceeding is inexcusable.6 See id. Further,
Hage-Boutros, in his brief in response to the motion to dismiss, offered no explanation
why he waited two-and-one-half years after the filing of the answer to the original
petition to cancel in Cancellation No. 92063682 and nearly six months after the filing
of the answer to the amended petition to cancel to seek cancellation of Ethika’s
pleaded registrations. See Trek Bicycle Corp. v. StyleTrek Ltd., 64 USPQ2d 1540, 1541
(TTAB 2001) (motion to amend opposition denied where it was filed eight months
after filing of notice of opposition, with no explanation for the delay, and appeared to
be based on facts within opposer’s knowledge when opposition was filed).
In his brief in response to the motion to dismiss, Hage-Boutros asserts that Ethika
will not be prejudiced because Hage-Boutros raised the invalidity of Ethika’s involved
registrations as defenses in Cancellation No. 92063682. 12 TTABVUE 6. Although
Hage-Boutros correctly notes that the Board, in Jive Software, Inc., 125 USPQ2d at
1180-81, allowed a defendant to seek cancellation of a plaintiff’s pleaded registrations
two and a half years into that case, there was a suspension in that case of more than
two years for settlement negotiations, and that case was still in the discovery phase.
By contrast, Cancellation No. 92063682 has advanced well into trial.
Because this proceeding is essentially a compulsory counterclaim in Cancellation
No. 92063682 (see Trademark Rule 2.114(b)(3)(i)), allowing this proceeding to go
forward would warrant consolidation of the two proceedings that would require a

6 The nineteenth, twentieth and twenty-second defenses set forth in Hage-Boutros’s answer
to the amended petition to cancel merely repeat those defenses as set forth in his answer to
the original petition to cancel.
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reopening of discovery and new testimony periods one year after the August 12, 2018
commencement of trial in that proceeding. See Fed. R. Civ. P. 42(a); Regatta Sport
Ltd. v. Telux-Pioneer Inc., 20 USPQ2d 1154 (TTAB 1991); Estate of Biro v. Bic Corp.,
18 USPQ2d 1382 (TTAB 1991); TBMP § 511. Notwithstanding Hage-Boutros’s attack
on the validity of Ethika’s registrations through affirmative defenses, allowing Hage-
Boutros to commence a counterclaim after the completion of both parties’ main
testimony periods in Cancellation No. 92063682 would flout judicial economy and
would unfairly prejudice Ethika by increasing the time, effort, and expense that it
would be required to devote to this case. See Media Online Inc., 88 USPQ2d at 1287.
Accordingly, we find that Hage-Boutros unreasonably delayed in commencing the
above-captioned proceeding and that denial of the petition to cancel with prejudice
based on untimeliness is warranted. See Vitaline Corp., 13 USPQ2d at 1174
(affirming dismissal of petition to cancel filed three years after answer in earlier
proceeding based on determination that appellant could have raised allegations in
petition to cancel as a counterclaim when it filed answer in earlier proceeding).
Based on the foregoing, Ethika’s motion to dismiss is hereby granted.7 The
petition to cancel in this proceeding is denied with prejudice. Proceedings in
Cancellation No. 92063682 have been resumed in an accompanying order.

7 Because our determination that the petition to cancel is untimely is dispositive of this case,
we decline to reach the alleged insufficiency of the pleaded fraud claim set forth in the
petition to cancel. See TBMP § 102.01.