It is not unusual that someone filing a trademark application does not want to be engaged in a lawsuit and prefers to walk away from its application. Sometimes the applicant or registrant simply fails to answer the complaint. The vehicle for seeking default judgment in that situation is Fed. R. Civ. P. 55(c) and TMBP Sec. 508. If the answer was not filed in a timely manner, the TTAB may issue a notice of default on its own initiative. More often the plaintiff moves for default judgment. An applicant/registrant can overcome a notice of default by showing good cause for the delay. Good cause is found if: 1) the delay was not the result of willful conduct or gross neglect; 2) the delay will not result in substantial prejudice to the opposing party; and 3) the applicant/registrant has a meritorious defense. Most often the dispute is over the issue of prejudice, but the mere passage of time does not constitute prejudice to the plaintiff.
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