In this Sections 2(d) and 43(c) opposition to registration of the mark ENTREPRENEURESS for educational and entertainment services relating to women entrepreneurs and business professionals, the Board entered judgment in favor of opposer on the ground of claim preclusion. Opposer had sued the applicants for trademark infringement and, after Dushawn Thomas was dismissed as a defendant, the federal court entered a default judgment against D. Nicole Enterprises LLC. The Ninth Circuit affirmed. The Board ruled that Ms. Thomas was in privity with the LLC and that claim preclusion applied to her. Entrepreneur Media, Inc. v. D. Nicole Enterprises, LLC and DuShawn Thomas, Opposition No. 91212882 (May 11, 2017) [not precedential].
The district court enjoined the LLC and its officers from applying to register the mark ENTREPRENEURESS. When the LLC assigned the subject service mark application to Ms. Thomas, its CEO, the court ordered her to appear before it and show cause why she should not be held in contempt of the court's injunction as a result of the assignment.
Meanwhile in the opposition proceeding, the LLC moved to join Ms. Thomas as a defendant, and the Board granted the motion over Opposer's objection. See Western Worldwide Enterprises Group, Inc. v. Qindao Brewery, 17 USPW2d 1127, 1138 n. 4 (TTAB 1990).
Opposer did not specifically raise the doctrine of res judicata as the basis for judgment, but the Board took up the issue anyway.
A default judgment is a judgment "on the merits" and so may have claim preclusive effect. See, e.g., Lawlor v. Nat'l Screen Service Corp., 349 US 311 (1955). For claim preclusion to apply, the following elements must be present:
(1) the parties (or their privies) must be identical; (2) there must be an earlier final judgment on the merits of the claim; and (3) the second claim must be based on the same set of transactional facts as the first.
The Board found that all three element were satisfied here.
Identity (or Privity) of Parties: Applicant argued that the district court's judgment is inapplicable to Ms. Thomas because she was dismissed as a party defendant. The Board, however, found the LLC and Ms. Thomas to be legally identical since she is the assignee of the opposed mark and CEO of the LLC. An assignee stands in the shoes of the assignor. And as CEO of the LLC, Ms. Thomas and the LLC are in privity for purposes of claim preclusion. See The John W. Carson Foundation v. Toilets.com, Inc., 94 USPQ2d 1942 (TTAB 2010). In addition, the district court's injunction applied not only to the LLC but to its "officers."
Final Judgment on the Merits: As indicated, a default judgment is a final judgment on the merits.
Same Transactional Facts: "The marks and claims at issue in this proceeding were also at issue in the Civil Action."
And so the Board entered judgment in favor of opposer, and it denied applicant's motion to suspend this proceeding pending a resolution o the district court's contempt proceeding.