TTAB Reluctant to Grant Summary Judgment Based Solely on Default Admissions

In its recent precedential ruling in SARL Corexco v. Webid Consulting Ltd., the TTAB offered insight into the Board’s position on granting summary judgment based solely on admissions obtained by default under FRCP 36(a)(3).

Petitioner SARL moved for summary judgment in its cancellation action against UK registrant Webid’s registration on the dual grounds of likelihood of confusion and that the registration was void ab initio. With respect to its likelihood of confusion claim, SARL’s motion for summary judgment was based entirely on default admissions resulting from Webid’s failure to timely respond to discovery. In opposing the summary judgment motion, Webid cross moved to withdraw its default admissions in favor of the substantive responses it served on SARL four days after its original discovery deadline. Webid blamed its delay on the parties’ ongoing settlement discussions.

Rule 30(b) of the FRCP affords a tribunal significant discretion in permitting the withdrawal or amendment of admissions where: (1) the presentation of the merits of the action would be served thereby; and (2) the party who obtained the admission fails to demonstrate that the withdrawal or amendment would cause prejudice.

Noting that the default admissions formed the sole factual and legal basis for petitioner’s summary judgment motion and that, under all the circumstances, their maintenance would result not in a judgment on the merits but rather an unduly harsh result, the Board found the first prong of the Rule 30(b) test satisfied. As for the second prong, the Board explained that “prejudice” does not result from being forced to prove your case on the merits. Rather, prejudice relates to the special difficulties a party might face from the sudden need to obtain evidence upon the withdrawal or amendment of admissions. In this case, the Board concluded that any potential prejudice to SARL from the withdrawal of Webid’s default admissions could be mitigated by extending the discovery period. Accordingly, the Board granted Webid’s motion to withdraw its default admissions and denied SARL’s motion for summary judgment on its likelihood of confusion claim.

The Board reached a different result, however, on SARL’s void ab initio claim. Noting that SARL’s substitute admissions confirmed that the original applicant (Webid’s predecessor in interest) did not own the foreign registration on which the U.S. application was based either at the time of the predecessor applicant’s initial filing, or on the date the application was amended to assert 44(e), the Board concluded summary judgment was appropriate and granted same in SARL’s favor.