[00:00:00] Speaker 02:
Cases number 18, 2016, NextGen Biologics Incorporated against Axolotl Biologics Incorporated.

[00:00:09] Speaker 02:
Mr. Benson.

[00:00:10] Speaker 04:
Thank you, Your Honor.

[00:00:11] Speaker 04:
If you may please the court.

[00:00:14] Speaker 04:
In approximately November 2017, I as counsel for NextGen read a rule in a particular fashion as being permissive for a response to a motion to dismiss.

[00:00:30] Speaker 04:
Naturally, if I were to do this all again, I would do it differently, but that's not the matter at hand here.

[00:00:38] Speaker 04:
What transpired was that the TTAB subsequently dismissed the opposition with prejudice.

[00:00:46] Speaker 04:
And I've looked high and low and have not found any statutory regulatory basis for dismissal with prejudice under these circumstances.

[00:00:59] Speaker 04:
I have found case law from this court in response to a PTAB decision in a similar situation, where the dismissal with prejudice was vacated.

[00:01:16] Speaker 04:
So essentially, the issue, I think, that is before the court here and that I'm asking the court to review is whether or not the TTAB, as a matter of essentially a per se rule,

[00:01:27] Speaker 04:
when a motion to dismiss is filed and not responded to, that the opposition is then dismissed with prejudice.

[00:01:37] Speaker 04:
I think this is particularly important as a matter of practice.

[00:01:42] Speaker 04:
I'm probably not the first attorney to have read the rule a certain way.

[00:01:45] Speaker 04:
And given that the case law from this court indicates that there are circumstances under which

[00:01:54] Speaker 04:
A dismissed opposition will subsequently bar a cancellation proceeding.

[00:02:01] Speaker 04:
Essentially, what I have is a situation where my client is being punished for perhaps a misreading of the rules by its attorney.

[00:02:10] Speaker 02:
So is your understanding that if the motion to dismiss had instead been labeled opposition brief, that that would have eliminated this dismissal?

[00:02:24] Speaker 04:
I'm not sure I quite understand your question, Your Honor.

[00:02:27] Speaker 04:
If you could please just restate it.

[00:02:30] Speaker 02:
Just trying to understand, because there was an opposition file.

[00:02:34] Speaker 02:
Correct.

[00:02:35] Speaker 02:
And then there was an objection.

[00:02:37] Speaker 01:
Correct.

[00:02:38] Speaker 02:
Which was filed in the form of a motion.

[00:02:40] Speaker 02:
Correct.

[00:02:43] Speaker 02:
And no further response.

[00:02:45] Speaker 04:
That's correct.

[00:02:47] Speaker 04:
I did not respond to that motion to dismiss.

[00:02:50] Speaker 04:
I'm willing to go through for the court

[00:02:53] Speaker 04:
the reason why I didn't respond in my reading of the rules.

[00:02:57] Speaker 04:
And I think there are several rules that are at play here, all of which seem to indicate to me that under the circumstances, it was permissive to not file a response to the motion to dismiss it again.

[00:03:10] Speaker 01:
Of course, the board's decision is subject to an abuse of discretion standard.

[00:03:16] Speaker 04:
That is my understanding, Your Honor.

[00:03:18] Speaker 01:
Now, if the dismissal hadn't been with prejudice, would you be disputing that?

[00:03:27] Speaker 04:
No.

[00:03:27] Speaker 04:
Actually, I think the rules are permissive for the opposition to have been dismissed.

[00:03:34] Speaker 04:
Under those circumstances, had it not been with prejudice, we could have either elected to file a subsequent opposition or waited to a much later date to file a cancellation proceedings.

[00:03:46] Speaker 04:
Under the present circumstances,

[00:03:48] Speaker 04:
Let's assume I had correctly responded to the motion to dismiss.

[00:03:52] Speaker 04:
And for some reason, the court had then found lack of standing.

[00:03:58] Speaker 04:
Under the rules, as far as I can tell, that would not have attracted a dismissal with prejudice.

[00:04:06] Speaker 04:
That would have gotten us further than this case has even seen.

[00:04:09] Speaker 04:
There's been no discussion at all of whether there was actually standing.

[00:04:14] Speaker 04:
There's no discussion about whether any of the other reasons that were provided for the opposition being filed as to why this would be a not good thing to go to registration.

[00:04:25] Speaker 04:
None of that has been litigated.

[00:04:26] Speaker 04:
So none of the merits of the case have been decided here.

[00:04:29] Speaker 01:
Well, what are the criteria for determining whether it should be with prejudice or without?

[00:04:36] Speaker 04:
I think you put your finger on the issue, Your Honor, because I've looked for

[00:04:43] Speaker 04:
those criteria and I've not found them.

[00:04:48] Speaker 04:
I have some cases that I can cite where there was a dismissal without prejudice and there were dismissals with prejudice, but in terms of a clear defining line as to when the TTAB is going to dismiss with prejudice or without, it looks like they're applying a per se rule, which is really the basis for me.

[00:05:08] Speaker 01:
Is that also subject to an abuse of discretion?

[00:05:12] Speaker 01:
My contention, Your Honor, is that if the TTAB... In other words, their rule is, when a party fails to file a brief in response to a motion, the board may treat the motion as conceded.

[00:05:25] Speaker 01:
Well, that's on the merits, isn't it?

[00:05:27] Speaker 01:
And isn't that without prejudice, with prejudice concerned?

[00:05:32] Speaker 01:
It's decided on the merits.

[00:05:34] Speaker 04:
I understand the point you're making.

[00:05:36] Speaker 04:
First of all, the rule is permissive.

[00:05:39] Speaker 04:
So it may do that.

[00:05:41] Speaker 04:
There's no requirement that it do that.

[00:05:43] Speaker 04:
So it's really a matter of practice at the TTAB that seems to be that they issue dismissals with prejudice as a per se rule, which is the point at hand here, is I feel that that is an abuse of discretion.

[00:05:58] Speaker 04:
When I look at the additional rules that came into play in rule 50302, it essentially says that,

[00:06:10] Speaker 04:
had I filed a response to the motion to dismiss, it's clearly instructed that one is not to put on the record proofs at that point.

[00:06:19] Speaker 04:
So essentially, all of the issues that were raised in the original opposition were disputed by the opponent, by the registrant or the applicant.

[00:06:35] Speaker 04:
The rules further indicate that actually the TTAB

[00:06:38] Speaker 04:
has an obligation in order to do justice to decide whether or not on the pleadings the motion should be granted or not.

[00:06:47] Speaker 04:
And I didn't see any of that happening.

[00:06:49] Speaker 04:
All I received was the motion is granted and the opposition is dismissed with prejudice.

[00:06:55] Speaker 04:
So literally under the circumstances, I feel that there's a lack of clarity in the rules, such that someone as myself could have misunderstood and misread it, and then

[00:07:07] Speaker 04:
compounded with that and this is really one of the what I'm asking the court to provide here is an indication of the need to clarify those rules and in addition under the current circumstances whether or not under the present circumstances a subsequent cancellation proceeding would be barred.

[00:07:31] Speaker 02:
If the same issues had been presented not in a motion but in a brief

[00:07:36] Speaker 02:
And when I responded to, they would still be deemed conceded, would they not?

[00:07:43] Speaker 04:
Again, I believe it is permissive for the TTAB to have treated the matter as conceded.

[00:07:53] Speaker 04:
But it's not obligatory.

[00:07:55] Speaker 04:
And when I look at the situation in the PTAB area, it was clearly held by this court that

[00:08:05] Speaker 04:
issuing a dismissal with prejudice, when none of the matters had been litigated, would not be with prejudice.

[00:08:14] Speaker 02:
If they're conceded, you're concerned that the prejudice would carry over to any subsequent cancellation proceeding?

[00:08:24] Speaker 04:
That's my concern.

[00:08:27] Speaker 00:
Well, we really can't answer that, can we?

[00:08:29] Speaker 00:
That'd be advisory.

[00:08:31] Speaker 04:
Well, it would impact on

[00:08:36] Speaker 04:
the merits of what my client can do in the future.

[00:08:42] Speaker 04:
So it's a decision currently that would have a later effect.

[00:08:47] Speaker 04:
I don't think that makes it advisory.

[00:08:49] Speaker 04:
It forecloses a direction that, under the law, my client would otherwise have had had I filed a response to the motion to dismiss.

[00:09:03] Speaker 02:
You're asking for advice.

[00:09:06] Speaker 04:
Not so much advice.

[00:09:07] Speaker 04:
I'm asking for clear indication whether under the circumstances, whether the rules properly construed, one, required the dismissal with prejudice, and two, whether under those circumstances there would be a foreclosure of the subsequent cancellation proceedings.

[00:09:28] Speaker 04:
And the case law at the moment does not seem to be 100% clear on that.

[00:09:42] Speaker 02:
Okay, we'll save the rest of your time for rebuttal.

[00:09:51] Speaker 02:
Thank you.

[00:09:51] Speaker 02:
Mr. Udermorlin.

[00:09:52] Speaker 03:
Good morning, Your Honors.

[00:09:53] Speaker 03:
William Udermorlin on behalf of the Appellee axolotl.

[00:09:58] Speaker 03:
The issue in this case is whether the TTAB had power to enforce its rule requiring the filing of an opposition brief.

[00:10:06] Speaker 02:
It's permissive.

[00:10:07] Speaker 02:
It says may.

[00:10:09] Speaker 03:
The rule that I'm referring to was clear and unconditional.

[00:10:15] Speaker 03:
A brief in response to motion shall be filed within 20 days.

[00:10:19] Speaker 03:
So there isn't any conditional aspect about the requirement to file a brief.

[00:10:24] Speaker 03:
The may comes in later when it says, and if you don't file the brief, they may treat the motion as conceded.

[00:10:33] Speaker 03:
That's what happened here, and that's what they normally do.

[00:10:36] Speaker 03:
They'll treat motions as conceded if there's not an opposition filed to them.

[00:10:41] Speaker 02:
The motion itself was a response to what could have been provided by a brief, in which case this interesting question might not have arisen.

[00:11:00] Speaker 03:
The motion was a motion to dismiss.

[00:11:02] Speaker 03:
And so obviously, you make a motion to dismiss because you don't think the claim that's pled in the complaint is adequate to stand up to scrutiny.

[00:11:12] Speaker 03:
You make a motion to dismiss.

[00:11:14] Speaker 03:
You want to get the case resolved then.

[00:11:16] Speaker 03:
You don't want to have it postponed.

[00:11:18] Speaker 02:
Wasn't there a response?

[00:11:19] Speaker 02:
They filed an opposition.

[00:11:20] Speaker 02:
So wasn't the motion a response to the opposition?

[00:11:23] Speaker 03:
No, there was no opposition filed.

[00:11:25] Speaker 03:
We filed the motion to dismiss.

[00:11:28] Speaker 03:
And nothing was filed.

[00:11:30] Speaker 03:
After the time had passed, the TTAB then entered an order dismissing the case with prejudice.

[00:11:36] Speaker 02:
And at that point... Sorry, you said no opposition was filed?

[00:11:39] Speaker 03:
No opposition was filed.

[00:11:42] Speaker 02:
Then how could you move to dismiss the opposition?

[00:11:45] Speaker 03:
We didn't move to dismiss the opposition.

[00:11:47] Speaker 03:
I'm sorry, maybe the terminology is wrong.

[00:11:49] Speaker 03:
An opposition proceeding was filed with a complaint.

[00:11:54] Speaker 02:
Yes.

[00:11:55] Speaker 03:
And we moved to dismiss that.

[00:11:58] Speaker 03:
There was no response filed to the motion.

[00:12:03] Speaker 03:
And so the TTAB then, pursuant to its rule, dismissed the proceeding, treating the motion as conceded.

[00:12:12] Speaker 01:
But how about the prejudice?

[00:12:14] Speaker 01:
The rule doesn't say with prejudice.

[00:12:17] Speaker 03:
The motion was a motion to dismiss the proceeding altogether.

[00:12:24] Speaker 03:
So it was inherent in the motion that that was a dismissal with prejudice.

[00:12:28] Speaker 03:
We weren't seeking to postpone the issue down the road to a cancellation proceeding.

[00:12:33] Speaker 03:
We felt that we wanted to test the case right at the outset.

[00:12:37] Speaker 01:
So you're saying the concession is on the merits, justifying the dismissal of prejudice?

[00:12:45] Speaker 03:
Yes.

[00:12:46] Speaker 03:
We were seeking to dismiss the matter on the merits as not being properly pledged.

[00:12:53] Speaker 03:
And I think you're right that the response that's being asked for is an advisory opinion, but we feel that it's the same cause of action in a cancellation proceeding as an opposition.

[00:13:06] Speaker 03:
The same issues would be raised, and we think that's dispositive on those grounds.

[00:13:11] Speaker 01:
And that's not before us.

[00:13:13] Speaker 03:
I agree that it's probably not before you, but it's been argued.

[00:13:18] Speaker 03:
And as your honor.

[00:13:19] Speaker 00:
Do you see that they are?

[00:13:23] Speaker 00:
that the board had an obligation to explain why it was with prejudice as opposed to without?

[00:13:30] Speaker 03:
I don't think so, Your Honor.

[00:13:33] Speaker 03:
I think when a motion was made to dismiss, their practice is to dismiss with prejudice.

[00:13:39] Speaker 03:
There's a number of cases cited in our brief, and that's exactly what they do, because that's what the motion seeks.

[00:13:47] Speaker 03:
So that resolves it.

[00:13:49] Speaker 03:
If it had been without prejudice,

[00:13:52] Speaker 03:
There would have been hardly any point in making the motion, because then you're just going to have to litigate the issues at a later stage.

[00:14:01] Speaker 03:
And Your Honor pointed out that the standard review here is abuse of discretion.

[00:14:05] Speaker 03:
I don't think there's been any effort really to show an abuse of discretion.

[00:14:10] Speaker 03:
The contention is that they were applying a per se rule.

[00:14:13] Speaker 03:
It was perfectly clear from reading the rules.

[00:14:16] Speaker 03:
that they had the option and frequently did treat the motions as conceded if there was no opposition brief filed.

[00:14:24] Speaker 03:
And so that was the TTAB's prerogative to set up a motion procedure and then insist on people participating in it.

[00:14:33] Speaker 03:
They made clear in their cases that they don't want to act as an advocate for the party.

[00:14:39] Speaker 03:
They do want the party to tell them what's wrong with the motion if the party doesn't want it conceded.

[00:14:46] Speaker 03:
Most importantly, they want the party to participate by opposing motions that they don't want to be resolved.

[00:14:53] Speaker 03:
Otherwise, the TTAB has to consider those motions on the merits, even though there hasn't been any opposition filed.

[00:15:04] Speaker 03:
And we suggest that accordingly, there's no abuse of this discretion that the court had and which followed its rules the way it normally does.

[00:15:14] Speaker 03:
So unless Your Honors have further questions.

[00:15:18] Speaker 02:
Any more questions?

[00:15:19] Speaker 02:
Any more questions?

[00:15:20] Speaker 02:
OK.

[00:15:21] Speaker 02:
Thank you.

[00:15:21] Speaker 02:
Thank you, Your Honor.

[00:15:24] Speaker 02:
Let's see.

[00:15:24] Speaker 02:
Mr. Benson, you have a few minutes to rebuttal.

[00:15:27] Speaker 04:
Thank you, Your Honor.

[00:15:31] Speaker 04:
I'd like to point out to the court that there's another rule in the TBMP 50303, which essentially says that in response to a motion dismissed, if no amended complaint is filed after a motion to dismiss,

[00:15:45] Speaker 04:
the board generally will permit the opponent to file an amendment.

[00:15:52] Speaker 01:
Is that a rebuttal, or is that a revision?

[00:15:55] Speaker 04:
It's a rebuttal in the sense that I had indicated in my initial argument that there are a number of inconsistencies between the rules.

[00:16:06] Speaker 04:
And essentially, what the learned counsel on the other side has indicated is that there should be a concession on the merits

[00:16:14] Speaker 04:
If that's the case, then why do the rules permit for a situation where if there is no amended complaint after a motion to dismiss, the board generally allows the opponent to file an amended pleading, which didn't occur in this case.

[00:16:35] Speaker 04:
I think that's it.

[00:16:39] Speaker 02:
Thank you.

[00:16:41] Speaker 02:
OK.

[00:16:41] Speaker 02:
Thank you.

[00:16:41] Speaker 02:
Thank you both.

[00:16:42] Speaker 02:
The case is taken under submission.

[00:16:44] Speaker 02:
and then