Trademark Trial and Appeal Board Electronic Filing System. http://estta.uspto.gov
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`ESTTA Tracking number:
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`ESTTA962882
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`Filing date:
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`03/26/2019
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`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
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`Proceeding
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`Party
`
`Correspondence
`Address
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`Submission
`
`Filer's Name
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`Filer's email
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`Signature
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`Date
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`Attachments
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`92069842
`
`Defendant
`Zohar Paz
`
`MATTHEW D ASBELL
`LADAS & PARRY LLP
`1040 AVENUE OF THE AMERICAS
`NEW YORK, NY 10018-3738
`UNITED STATES
`nyustmp@ladas.com
`212-708-3463
`
`Other Motions/Papers
`
`Jeffrey Katz
`
`jeffrey.katz@kesherlawgroup.com
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`/Jeffrey Katz/
`
`03/26/2019
`
`19-03-26 - Reply Memo ISO Motion to Set Aside Default.pdf(259714 bytes )
`Declaration of Matthew D. Asbell 03-26-19 - Executed.pdf(109894 bytes )
`Supplemental Dec. of Zohar Paz.pdf(2849868 bytes )
`Exh C to Paz Supp Dec. - Founders Agreement (1).pdf(3318121 bytes )
`Exh D to Paz Supp Dec. - Service Agreement.pdf(348199 bytes )
`
`

`

`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`__________________________
`
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`__________________________
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`
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`PAI-SHAU LLC
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`Petitioner
`
`
`
`v.
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`
`
`ZOHAR PAZ
`
`Registrant
`
`__________________________
`
`
`
`Case No.: 92069842
`Registration No. 4,883,623
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`REGISTRANT’S REPLY MEMORANDUM IN SUPPORT OF ITS MOTION TO SET ASIDE
`DEFAULT JUDGMENT AND
`MOTION FOR LEAVE TO FILE A LATE ANSWER
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`Request for Telephonic Conference Pursuant to 502.06(a) of the
`Trademark Trial and Appeal Board Manual of Procedure
`
`
`United States Patent and Trademark Office
`Trademark Trial and Appeal Board
`P.O. Box 1451
`Alexandria, VA 22313-1451
`General Contract Number: 571-272-8500
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`
`
`
`
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`1
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`

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`I.
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`INTRODUCTION
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`
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`In support of this Reply Memorandum, Paz submit the Declaration of Matthew Asbell of
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`Ladas & Parry – a law firm which regularly practices before the Board. As a result, the law firm
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`has strict policies and procedures regarding the service of pleadings by the Board to ensure that
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`all matters receive the appropriate attention.
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`Mr. Asbell attests, under oath, that his law firm has no record of receiving the Petition for
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`Cancellation or the Notice of Default. In addition, there is no record that the law firm was served
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`with the Notice of Cancellation, putatively served on February 11, 2019; or Petitioner’s
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`Opposition. Yet, the address on file with the Board is accurate. There is a problem which
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`counsel has been unable to identify.
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`Certainly, to enforce a default under these circumstances would be inequitable. Whatever
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`the cause, the fact remains, Paz never receive notice of the pendency of the Petition or the Notice
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`of Default. This, under the law, constitutes excusable neglect. He promptly moved the Board to
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`set aside the default permit the filing of a late answer. This Reply Memorandum elaborates, with
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`significant details and legal authorities, on the defenses presented in the moving papers. It will
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`appear to this Board that Paz should prevail on the Petition and maintain the registration of the
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`PAU-SHAU mark.
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`
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`
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`II.
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`PAZ PROMPTLY MOVED FOR RELIEF FROM JUDGMENT.
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`Paz brought his motion to set aside the default 25 days after he first learned of the
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`existence of the Petition for Cancellation. This amount of time is not inordinate. See Bateman v.
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`United States Postal Serv., 231 F.3d 1220, 1222, 1224-25 (9th Cir. 2000) (holding that in the
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`context of Federal Rules of Civil Procedure, Rule 60((b)(1) a failure to contact the court for 24
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`2
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`

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`days did not constitute a significant delay; the length of the delay and its potential impact on the
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`judicial proceedings was negligible).
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`
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`The Petitioner, however, offers three cases indicating that one month does constitute an
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`excessive delay. Why the discrepancy? The Opposition does not appreciate that the amount of
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`time is never analyzed in the abstract. That is, there is no magic number of days at which the
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`lapse constitutes an unreasonable delay. Rather, delay must always be evaluated in the context
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`of the facts. All three cases presented scenarios where the moving party failed to show a
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`legitimate excuse for the delay – at all.
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`The Supreme Court has ruled that in order to determine whether such negligence is
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`excusable, an equitable analysis would take into account all relevant circumstances surrounding
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`the party's omission. Pioneer Investment Services Co. v. Brunswick Associates Ltd. Partnership,
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`507 U.S. 380, 395, 113 S.Ct. 1489, 123 L.Ed.2d 74 (1993). The Court stated that such an
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`analysis should include the following factors: (1) the danger of prejudice to the opposing party;
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`(2) "the length of the delay and its potential impact on judicial proceedings;" (3) "the reason for
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`the delay, including whether it was within the reasonable control of the movant;"3 and (4)
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`"whether the movant acted in good faith." Id. The factors recited in Pioneer were not exclusive,
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`but that they provide a framework with which to determine whether missing a filing deadline
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`constitutes `excusable' neglect. Briones v. Riviera Hotel & Casino, 116 F.3d 379 (9th Cir.1997)
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`
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`Thus, the courts, in the three cases cited by Petition in its Opposition, were unforgiving of
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`the period of time because the moving parties failed to provide any legitimate excuse for failing
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`to respond in a timely fashion. In Sloss Indus. v. Eurison, 488 F.3d 922 (11th Cir. 2007), the
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`defendant “did not show a good reason for failing to respond to [the] complaint.” `In Speiser,
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`Krause & Madole, P.C. v. Ortiz, 271 F.3d 884, 886 (9th Cir. 2001), the moving party’s attorney
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`3
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`

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`argued excuse based on “his neglect to read and understand the pellucid command of Rule 81(c)
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`regarding the time to answer the complaint.” In United States v. Topeka Livestock Exchange,
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`392 F.Supp. 944, 950 (N.D. Ind. 1975), the court observed that “no excuse which is legally
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`sufficient is even claimed with any specificity in the record now before the court.”
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`In contrast, it is undisputed that here, prior to the entry of default, Paz did not have any
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`awareness of either the Petition for Cancellation or the Notice of Default. The defendant’s
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`unawareness of the pendency of an action – even where “there is doubt” about the defendant’s
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`knowledge – is deemed a legitimate excuse justifying relief from a default. Schwab v. Bullock's
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`Inc., 508 F.2d 353, 355 (9th Cir. 1974). Indeed, the TMEP support this at Section 1712.02(b)(ii):
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`“The failure to receive an Office action is considered an extraordinary situation that
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`justifies a waiver of a rule. Therefore, if the registrant did not receive an Office action
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`refusing to accept an affidavit or renewal application, but the registrant does not have
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`proof that non-receipt was due to USPTO error (see TMEP §1712.02(a), paragraph 9),
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`the registrant may file a formal petition under 37 C.F.R. §2.146.”
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`See also Smart Inventions Inc. v. TMB Products LLC, 81 USPQ2d 1383, 1384 (TTAB
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`2006) (cancellation respondent’s motion to set aside default judgment on ground that it never
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`received actual or constructive notice of proceeding granted under Fed. R. Civ. P. 60(b)(4) where
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`assignment of mark to respondent recorded before proceeding instituted but notification of
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`proceeding sent to prior owner); 10A C. WRIGHT, A. MILLER & M. KANE, FEDERAL
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`PRACTICE AND PROCEDURE Civil § 2693 (4th ed. 2018).
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`Moreover, the Trademark Trial and Appeal Board Manual Procedure (TBMP) states:
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`“Because default judgments for failure to timely answer the complaint are not favored by the
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`law, a motion under Fed. R. Civ. P. 55(c) and Fed. R. Civ. P. 60(b) seeking relief from such a
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`
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`4
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`

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`judgment is generally treated with more liberality by the Board than are motions under Fed. R.
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`Civ. P. 60(b) for relief from other types of judgments.” TBMP §544.
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`Further, the consequence of the “delay” should be diminished in light of the fact that
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`Paz’s counsel promptly approached Petitioner’s counsel, Mr. Nussbaum, with the facts that
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`constitute the excusable neglect – that attorney Mathew Asbell, the attorney on the file for Paz,
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`never received the Petition for Cancellation or the Notice of Default. (Declaration of Jeffrey
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`Katz, dated February 15, 2019, ¶¶ 12-15 and Exhibit B.) However, for what appears to be
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`tactical reasons, Mr. Nussbaum dawdled five business days and ignored Mr. Katz’s reminder
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`before communicating that Petition would not graciously agree to set aside the default.
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`III.
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`PAZ’S DELAY WAS EXCUSABLE AND NOT WILFULL.
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`
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`Petitioner argues that Paz’s failure to respond was not excusable because it was “wilfull.”
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`(Pet. Oppo., at 5.) This characterization of Paz’s conduct is not supported by any evidence in the
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`Opposition. Indeed, attorney Asbell was the designated domestic agent for service. Petitioner’s
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`citation to cases requiring the Registrant to maintain accurate information with the Board is
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`irrelevant; Mr. Asbell’s physical address and email address were accurate at the time of the
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`putative service of the Petition and the Notice of Cancellation. (Katz Dec., at Exhibit A.)
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`Indeed, Petitioner acknowledges in its own Opposition that Mr. Asbell confirmed to Mr. Katz
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`that the email address on record with the Board was correct. (Pet. Oppo., at 7.)
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`
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`Paz fulfilled his obligation to ensure that the Board could properly serve him with any
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`actions. Paz’s failure to receive notice1 of the pendency of the action, as set forth in the section
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`above, is excusable neglect.
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`1 Petitioner makes much of the absence of a declaration from Mr. Asbell. Paz has satisfied
`Petitioner’s concern. Concurrent with the filing of this Reply Memorandum, Paz filed the
`Declaration of Matthew Asbell wherein he declares, under oath, that after searching the law firm
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`
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`5
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`

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`Petitioner finds it incredible that Mr. Asbell did not receive “both the Petition and the
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`Notice of Default.” (Pet. Oppo., at 7; emphasis in the original.) Yet more incredible is that Paz
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`would timely respond to (1) the New Jersey Action; (2) the Delaware Dissolution Action; and (3)
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`the Cross-Complaint in the Canadian Action, but completely ignore the Petition for Cancellation.
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`
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`
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`IV.
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`PAZ’S MOTION IS SUPPORTED BY MERITORIOUS DEFENSES.
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`
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`In his Motion, Paz met his burden of identifying the existence of defenses to the Petition for
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`Cancellation. (Motion, at 10.) Herein, Paz will go beyond the burden in a motion for relief and
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`provide facts and law to support his defenses.
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`The Petition asserts two bases to justify cancellation of the registration of the PAI-SHAU
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`mark in Paz’s name: (1) Count I – Paz was not the owner of the mark at the time of the
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`application or at the time the registration issued; nor is he currently the owner; and (2) Count II –
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`Paz was not using the PAI-SHAU mark at the time he filed the Statement of Use.
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`
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`A. Paz Was and Continues to be the Owner the Mark; Paz Never Assigned the PAI-
`SHAU Mark to Pai-Shau LLC.
`Petitioner introduces an allegation made by Paz’s counsel in the Canadian Action: “the
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`trademark was at all times supposed to eventually be transferred to PAI-SHAU (LLC) and the
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`
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`general trademark address – the one on file with the Board – and his email address, there is no
`evidence that the Petition or the Notice of Default were ever received by his office. Regardless,
`the critical question is whether Paz, himself, had notice of the pendency of the action – not the
`registered agent. Second, Mr. Asbell’s February 1, 2019 email to Mr. Katz wherein he writes: “I
`… confirm upon checking our records that we have no knowledge of receiving the notice of the
`cancellation or notice of default at [NYUSTMP@ladas.com] or any other address.” (Katz Decl.,
`at Exhibit A.) Mr. Nussbaum was provided with this email within days of Mr. Katz’s receipt of
`it and, thus, given the opportunity to confirm its contents with Mr. Asbell, a fellow trademark
`attorney. Mr. Nussbaum chose to disregard the opportunity.
`
`
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`6
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`failure to do so was a mere oversight.” (Pet. Oppo., at 3 citing Reply and Defence of
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`Counterclaim; emphasis added.
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`In citing to this language, Petitioner actually concedes that Paz, the individual, owned and
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`owns the mark. The terms and conditions of the transfer are not made clear in this limited
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`citation. However, what is clear from this passage is that, whatever the intention the parties, the
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`mark was not transferred from Paz to Pai-Shau, LLC. At best, this evidences an intention (not
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`even an agreement) to assign at some undefined future date. Moreover, while marks may be
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`assigned by the registrant, “[a]ssignments shall be by instruments in writing duly executed.” 5
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`U.S.C. §1060(a). This assignment never occurred as evidenced by the records with the USPTO
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`and Paz’s declaration. Paz Supp. Decl. at ¶ 21. Thus, Paz, and not Pai-Shau,LLC owned and
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`continues to own the Pa-Shai mark. This is not a ground for cancellation.
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`The facts of this case are similar to Arachnid, Inc. v. Merit Industries, Inc., 939 F.2d
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`1574, 19 USPQ2d 1513 (Fed.Cir., 1991). In Arachnid, IDEA and Arachnid entered into a 1980
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`agreement whereby IDEA was to provide consulting services to Arachnid. The agreement
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`provided that any inventions conceived by IDEA would be the property of Arachnid and that all
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`rights would be assigned by IDEA to Arachnid. After the agreement was terminated, several
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`IDEA employees filed a patent application and assigned the application to IDEA. The
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`application matured into a patent that accordingly issued to IDEA. On May 6, 1985, IDEA
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`granted a non-exclusive license to Merit to practice the invention of the patent, and Merit sold
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`devices covered by the patent during 1985 and 1986. Arachnid then sued Merit for infringement
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`of the patent during that time period. Id. at 1576-77, 19 USPQ2d at 1514-15.
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`On appeal to this court, Merit argued that Arachnid was not the owner of the patent at
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`issue and thus lacked standing to bring the patent infringement action. Arachnid contended that it
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`7
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`held legal title to the patent based on the 1980 consulting agreement between IDEA and
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`Arachnid. Id. at 1577-78, 19 USPQ2d at 1516. This court flatly rejected Arachnid's argument,
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`stating:
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`“the fact remains that the Arachnid/IDEA consulting agreement was an agreement to
`assign, not an assignment. Its provision that all rights to inventions developed during the
`consulting period "will be assigned" by IDEA to Arachnid does not rise to the level of a
`present assignment of an existing invention, effective to transfer all legal and equitable
`rights therein to Arachnid and extinguish any rights of IDEA.”
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`Id. at 1580, 19 USPQ2d at 1518.
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`
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`See also Gaia Technologies v. Reconversion Tech., 93 F. 3d 774 (Fed.Cir. 1996) where
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`the claimant relied on board minutes to establish that the intellectual property had been
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`transferred. The Court of Appeals concluded that: “Like the situation in Arachnid, these
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`minutes, at most, are a memorialization of an agreement to sell all assets of Banstar to Gaia at
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`some time in the future. Such an agreement to assign is not an assignment and thus did not vest
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`legal title in Gaia ….” Id., at 779.
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`Petitioner’s case is even weaker here. It does not rely on an agreement. In fact, there was no
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`such written agreement.2 It relies on an unfulfilled intention of Paz which is not supported by any
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`
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`2 Section 14 of the Founder’s Agreement obligated Paz to transfer “ownership of all formulas for
`hair care products that he has developed at his own expense together with general and
`commercial know-how ….” This provision recognizes that Paz had already personally taken
`steps to develop valuable know-how and technology for this new product line.
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`Significantly, there could have been but there is no corollary obligation in this agreement for Paz
`to transfer ownership of trademarks (or other IP) that he developed at his own expense. In fact,
`Paz filed the PAI SHAU trademark application in his own name on September 3, 2014 – 16 days
`before Paz signed the Founders Agreement. So, if the parties wanted to bargain for a trademark
`transfer to the new company as well, they certainly could have and should have put it section 14
`of the agreement.
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`
`
`
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`8
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`contemporaneous documentation. Accordingly, Paz was and continues to be the owner of the
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`PAI-SHAU mark.
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`B. Under the Law, Pai-Shau, LLC’s Use of the Mark, under Paz’s Control, Inures to
`the Benefit of Paz.
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`On September 3, 2014, Paz filed an intent-to-use based trademark application. On
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`August 5, 2015, Paz filed the Statement of Use reflect a first-use date of May 11, 2015. The
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`registration certificate was issued on September 29, 2015, to Paz, individually.
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`Petitioner makes much of the fact that Pai-Shau, LLC – not Paz –used the mark in
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`commerce. (Pet. Oppo., at 10; “Paz has never used the PAI-SHAU mark in commerce with any
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`of the goods identified in the application.”) Petitioner misses the mark. Under the law and the
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`facts of this case, Pai-Shau, LLC’s use of the mark inured to the benefit Paz and his application.
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`The Lanham Act §5, provides: “Where a registered mark or a mark sought to be
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`registered is or may be used legitimately by related companies, such use shall inure to the
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`benefit of the registrant or applicant for registration, and such use shall not affect the validity of
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`such mark or of its registration, provided such mark is not used in such manner as to deceive the
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`public. If first use of a mark by a person is controlled by the registrant or applicant for
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`registration of the mark with respect to the nature and quality of the goods or services, such first
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`use shall inure to the benefit of the registrant or applicant, as the case may be.” 15 U.S.C. §1055
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`(emphasis added).
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`The TMEP expounds: “If an individual applicant is not the sole owner of the corporation
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`that is using the mark, the question of whether the corporation is a "related company" depends on
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`whether the applicant maintains control over the nature and quality of the goods or services such
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`that use of the mark inures to the applicant’s benefit. A formal written licensing agreement
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`between the parties is not necessary, nor is its existence sufficient to establish ownership
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`9
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`rights. The critical question is whether the applicant sufficiently controls the nature and
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`quality of the goods or services with which the mark is used. See Pneutek, Inc. v. Scherr, 211
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`USPQ 824, 833 (TTAB 1981).” TMEP 1201.03(c); emphasis added.
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`In Pneutek, the TTAB held that the applicant, an individual, exercised sufficient control
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`over the nature and quality of the goods sold under the mark by the licensee that the license
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`agreement vested ownership of the mark in the applicant. “The control that is exercised by Dr.
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`Scherr over the use of the ‘P’ design mark by Pathotox Publishers, Inc. is, under the facts of this
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`case, as rigorous as could be reasonably required. The physical quality of the publications is
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`under his direct surveillance and the quality of the contents is assured by the numerous editors
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`and advisors whose names are published. Accordingly, we conclude that the license is valid and
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`that the use of the ‘P’ design mark pursuant to the agreement and the conduct of the parties has
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`vested ownership of the mark, for which a registration should issue, in Dr. Scherr, the applicant.”
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`Pneutek, Inc. v. Scherr, supra, 211 USPQ at 833-834.
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`1. Paz sufficiently controlled the nature and quality of the goods or services with
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`which the mark was used by Pai-Shau LLC.
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`Paz exercised inexhaustible control over the PAI-SHAU mark and the products. Prior to
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`the creation of Pai-Shau, LLC, Paz, worked hands-on with a chemist (whom Paz paid out of his
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`personal funds) and developed the formulation for the hair care products.
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`Paz determined to monetize his concept through a limited liability company. An
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`individual named Moshe Greenwald connected him with Eve Kolakowski who represented she
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`would invest $6 million in a company that manufactured and marketed Paz’s formulation.
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`(Supplemental Declaration of Zohar Paz (Paz Supp. Decl.”), dated March 26, 2019, at ¶ 6.)
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`
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`10
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`

`Paz and Kolakowski entered into Founders Agreement, on September 19, 2014, outlining
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`the terms governing the parties’ establishing a company that will “engage in the manufacture,
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`marketing and sale of hair care products in such global framework as determine by them during
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`the company’s establishments and development.” (Id., at ¶ 7; and Exhibit C.) It was the intent of
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`the parties at the commencement of the relationship that Kolakowski would be a silent
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`investment partner. Since Paz had the experience of running an international hair care company
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`(developed when he was the C.E.O. of MorroconOil, at $500,000 million company ranked in the
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`top 5 of international hair products) and he had developed the new formulation, it was agreed
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`that he would oversee the management of the company. Id., at ¶¶ 2 & 8.
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`Accordingly, the Founders Agreement provides, at section 5.1, that “The company’s
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`routine management shall be undertaken Zohar [Paz].” Id., at Exhibit C.
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`Section 5.2 provides: “The Company shall make a contract of employment with Zohar
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`[Paz] in the market’s common form, on such terms and conditions as separately agreed between
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`the company and Zohar [Paz].”
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`In that role, Paz controlled every aspect of the nature and quality of the hair care
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`products. He continued to work on the formulation; he oversaw internal and outsourced
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`production of the products; he designed the packaging; he implemented the marketing strategy;
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`and more. Id., at ¶¶ 11-15; Exhibit D.
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`This evidence and more evidence which can be introduced at the proceeding should
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`Board provide Paz relief from the default and the cancellation will overwhelmingly demonstrate
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`that the first use of the PAI-SHAU mark was controlled by Paz, the applicant for registration of
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`the mark, with respect to the nature and quality of the goods or services, such first use should
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`inure to the benefit of Paz.
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`2. Pai-Shau LLC Was a “Related Company” at the Time of the First Use.
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`
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`11
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`

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`Based upon the Founders Agreement described above, Pai-Shau LLC was ultimately
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`created. Kolakowski and Paz were and continue to be the only members of the company, each
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`with 50% ownership. Paz was and is a director and the C.E.O. of the company. Paz gave his
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`permission to the company to use the mark. Id., at ¶21. Thus, Pai-Shau’s use of the mark inured
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`to the benefit of Paz and his effort to get the mark registered.
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`C. Pai-Shau, LLC Had No Authority to File Either the Instant Notice of Cancellation
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`or New Applications for the Registration of the PAI-SHAU Mark.
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`In October 2018, Pai-Shau petitioned the Board to cancel Paz’s registration. However,
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`no officer of Pai-Shau, LLC ever authorized Mr. Nussbaum to move forward with Petition.
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`Certainly, Paz, the C.E.O., of the company did not authorize the Petition. Paz Supp. Decl. at ¶
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`19. Nor did the quorum of the company’s board vote to authorize the Petition in the name of the
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`company. Thus, Pai-Shau’s initiation of the proceeding was an unauthorized and defective
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`corporate act which cannot be ratified because Paz was and is a 50% owner of the company and
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`one director on a two-member board. The underlying cancellation proceeding should be
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`dismissed for this reason alone.
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`
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`V.
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`PETITIONER’S CLAIM OF PREJUDICE IS A SHAM DESIGNED TO
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`MISLEAD THE BOARD.
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`Petitioner Pai-Shau claims it will suffer prejudice should the default be set aside because
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`“new applications directed to the mark that have been filed3 by Petitioner … will be suspended or
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`3 Moreover, this statement made by Pai-Shau in its pleading dated March 6, 2019 was patently
`false. At the time of the statement, there were no U.S. trademark applications pending for the
`Pai-Shau mark. Rather, these new applications were filed by Petitioner after the opposition was
`filed: U.S. application serial No. 88/335,835 was filed on March 12, 2019; and applications
`
`
`
`12
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`

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`refused while the proceeding is litigated.” (Pet. Oppo., at 10.) (emphasis added.) But Petitioner
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`fails to articulate any actual prejudice it will suffer from suspensions of these application.
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`Moreover, to the extent such an argument can be made (and Paz denies that it can), such
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`prejudice would be all manufactured by Petitioner.
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`The subject registered mark was cancelled on Feb. 11, 2019. Yet Petitioner waited to file
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`these applications until March 12 and 13; five weeks after Registrant’s counsel spoke with Mr.
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`Nussbaum, the same attorney representing Pai-Shau on these new applications, and advised him
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`that Paz was never served with the Petition for Cancellation or the Notice of Default; four weeks
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`after Registrant filed his Motion for Relief from Entry of Default; and most significantly, one
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`week after the Petitioner filed its Opposition. Thus, Petitioner manufactured a prejudice
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`argument in order to advance it in its Opposition.
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`Pai-Shau, LLC would suffer no prejudice for another reason: Paz has and will continue
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`to license the Pai-Shau mark owned by Registrant throughout the resolution of the Petition on its
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`merits and throughout the resolution of the ongoing Canadian and Delaware Actions. Indeed,
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`Paz owns 50% of Pai-Shau; so, it is in his interest to honor the license. Pai-Shau will not suffer
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`any prejudice during the course of this proceeding.
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`The Petition for Cancellation should be called out for what it is: a bad faith, strategic play
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`by Paz’ co-owner, of Pai-Shau, LLC, Eve K to grab rights doesn’t have and to gain a tactical
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`advantage in the Canadian and Delaware Actions. Petitioner was conferred a procedural gift --
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`no service on Paz of its Petition or the Notice of Default. It has taken full advantage of the gift to
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`orchestrate the miscarriage justice.
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`having serial nos. 88/335,844, 88/335,936, 88/335,942, 88/335,953, 88/335,968 and 88/337,800
`were filed on March 13, 2019.
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`13
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`VI.
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`THE PETITIONER’S CONDUCT MAY BE CONSIDERED BY THE BOARD IN
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`DECIDING PAZ’S MOTION.
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`Petitioner argues that its attorneys currently engaged in other lawsuits with Paz had no
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`obligation to provide Paz with notice of the pendency of this action. Perhaps not. But its lack of
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`candor with Paz should be a factor in the Board’s decision whether to grant the set aside motion.
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`In Hutton v. Fisher, 359 F.2d 913 (3d Cir. 1966), the junior member of a plaintiff's law
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`firm sought entry of a default despite discussions between a senior member of the firm and
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`opposing counsel. The court granted the set aside motion because the default would have been
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`avoided or quickly challenged if not for the failure of communication within the firm. Id., at 915;
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`accord, United States v. An Undetermined Quantity of an Article of Drug Labeled as Benylin
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`Cough Syrup, 583 F.2d 942, 948-50 (7th Cir. 1978) (per curiam) (court weighed misconduct of
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`both parties).
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`The conduct of Petitioner and its counsel should be considered here. Paz is the C.E.O.,
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`co-owner, and director of Pai-Shau. Petitioner’s advance notice to Paz of the Petition for
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`Cancellation and the imminence of a default judgment should have been communicated to Paz.
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`Petitioner’s counsel in the Canadian Action and the Delaware Action have had ongoing
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`and regular contact with Paz’s counsel. They too chose to remain silent as default loomed.
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`Finally, Petitioner’s counsel here engaged in duplicitous conduct when asked by Paz’s
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`counsel to set aside the default. Instead of providing counsel with an immediate answer, Mr.
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`Nussbaum delayed responding for five days. No doubt, Mr. Nussbaum was hoping that the
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`default judgment would ripen into cancellation during the pendency of Mr. Katz’s request.
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`14
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`As outlined above, Paz’s defenses to the Petition are solid. The Petitioners only hope for
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`prevailing is through default. This conduct is not rewarded in the courts.
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`As section 544 of the TBMP provides: “Because default judgments for failure to timely
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`answer the complaint are not favored by the law, a motion under Fed. R. Civ. P. 55(c) and Fed.
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`R. Civ. P. 60(b) seeking relief from such a judgment is generally treated with more liberality by
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`the Board than are motions under Fed. R. Civ. P. 60(b) for relief from other types of judgment.”
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`VI. CONCLUSION
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`For the foregoing reasons, Registrant respectfully requests that the default entered in this
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`matter be set aside, that leave be granted to file a late Answer, and that Petitioner’s motion for a
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`Default Judgment be denied.
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`DATED: March 26, 2019
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`KESHER LAW GROUP, P.C.
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`/s
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`By: Jeffrey Katz, Esq.
`Attorney for Registrant Zohar Paz
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`15
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`CERTIFICATE OF SERVICE
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`It is hereby certified that true and correct copies of:
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`• REGISTRANT’S REPLY MEMORANDUM IN SUPPORT OF ITS MOTION TO SET
`ASIDE DEFAULT JUDGMENT AND MOTION FOR LEAVE TO FILE A LATE
`ANSWER
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`• SUPPLEMENTAL DECLARATION OF ZOHAR PAZ
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`• DECLARATION OF MATTHEW D. ASBELL
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`was served via email on Peter Nussbaum, at pnussbaum@csglaw.com.
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`DATED: March 26, 2019
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`KESHER LAW GROUP, P.C.
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`/s
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`By: Jeffrey Katz, Esq.
`Attorney for Registrant Zohar Paz
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`16
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`Cancellation No.: 92069842
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`Reg. No.: 4823663
`Mark: PAI-SHAU
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`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
`---------------------------------------------------------------
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`PAI-SHAU LLC
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`Petitioner,
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`ZOHAR PAZ,
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`)
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`Registrant.
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`---------------------------------------------------------------
`DECLARATION OF MATTHEW D. ASBELL, ESQ.
`IN SUPPORT OF REGISTRANT’S REPLY MEMORANDUM IN SUPPORT OF THE
`MOTION TO SET ASIDE DEFAULT JUDGMENT AND
`MOTION FOR LEAVE TO FILE A LATE ANSWER
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`I, Matthew D. Asbell, Esq., an attorney duly admitted to practice law in the courts of the State of New
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`York, hereby affirm the following under penalty of perjury:
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`1. I am a partner with Ladas & Parry LLP and I practice at its New York office located at 1040 Avenue of
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`the Americas, New York, NY 10018-3738. My direct telephone number is (212) 708-3463. My
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`facsimile number is (212) 246-8959. Our office’s dedicated email address for U.S. trademark
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`matters is nyustmp@ladas.com.
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`2. I submit this affirmation in support of the Registrant’s Reply Memorandum in Support of the Motion to
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`Set Aside Default Judgment and Motion for Leave to File a Late Answer based upon my knowledge
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`of the case and the case file from my work on prosecution of the corresponding registration.
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`3. Pursuant to a Power of Attorney signed by the Registrant on February 20, 2015 and at the instruction of
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`the Registrant’s Canadian counsel, my firm and I took over representation in relation to U.S.
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`application number 86384795 on February 22, 2015 shortly after the application was published in
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`the Official Gazette.
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`4. As part of the Revocation and Appointment of Attorney, I provided to the USPTO our firm’s correct
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`address, telephone number, facsimile number, email address with authorization to correspond via
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`1
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`email, and our firm’s reference number, 2T15666926. I also designated our firm and myself as the
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`domestic representative and provided all the same contact information.
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`5. Prior to the initiation of the subject cancellation, my last correspondence with the Registrant via his
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`Canadian counsel in relation to this registration was on November 12, 2015 after the issuance of
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`Reg. No. 4823663.
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`6. On February 1, 2019, I received a phone call from Jeffrey Katz, attorney for Zohar Paz in the above-
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`referenced proceeding. He advised me that (1) the subject Petition for Cancellation had been
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`brought; (2) Zohar was unaware of the Petition and thus did now answer the Petition; and (3) on
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`December 10, 2018, the Board