Could Marvel and DC Save Their ‘Super Heroes’ Trademark by Setting Aside the Default Judgment?

Last week, this blog discussed a recent decision of the USPTO’s Trademark Trial & Appeal Board (TTAB) wherein the TTAB entered default judgment in favor of a party challenging Marvel and DC Comics’ co-owned trademark registrations for several SUPER HERO marks. Given the size of these parties and their reputations, some are wondering: Can DC and Marvel get these trademark rights back? The answer depends in large part on how the TTAB handles motions to set aside default judgments.

The Significance of Default Judgment

In TTAB proceedings, failing to file a timely answer can result in default judgment. A default judgment is a loss for the respondent/applicant(i.e., defendant) before the parties ever argue the merits of their cases. Marvel and DC’s counsel requested an extension of the deadline to file an answer and later chose not to respond to the petitioner, Superbabies Limited’s petition to cancel four SUPER HERO trademark registrations.

If and when the answer deadline is missed, the petitioner (or opposer in the case of opposition proceedings) can notify the board of the missed deadline. Or the TTAB will sua sponte (i.e., on its own initiative) enter default. Sometimes the TTAB gives the respondent (i.e., defendant) an opportunity to explain why default should not be entered.

In a cancellation proceeding, the respondent loses its trademark registration(s) (i.e., the registration(s) is “cancelled”). In an opposition proceeding, the relevant application(s) owned by the respondent (i.e., applicant) is defeated and the application(s) fails.

The Legal Standard: Rule 60(b)

Default judgments are disfavored. Both the Federal Rules of Civil Procedure and the TTAB rules allow parties to set aside default judgments. That said, parties should not assume that the Board will necessarily vacate a default judgment simply because the losing party asks. The party seeking relief must meet the strict standards of Federal Rule of Civil Procedure 60(b), which governs relief from final judgments. This standard reflects a public policy favoring finality of judgments and ending litigation.

Three Key Factors for Relief

The TTAB considers three primary factors when evaluating a motion to set aside a default judgment:

1. Whether the petitioner/opposer (i.e., plaintiff) would be prejudiced by setting aside the judgment

2. Whether the default was willful on the part of the respondent/applicant (i.e., defendant)

3. Whether the respondent/applicant have a meritorious defense to the cancellation action

In the SUPER HEREO proceeding, the first question is whether Superbabies would suffer prejudice if the default judgment were set aside. This question might focus on whether the delay has resulted in:

• Loss of evidence

• Increased difficulties in discovery

• Substantial reliance on the judgment

In this case, the delay has been relatively short—a few weeks since the default judgment was entered in September 2024. This might work in Marvel and DC’s favor, as Superbabies would have difficulty demonstrating significant prejudice in such a brief period. However, if Marvel and DC wait too long to seek relief, Superbabies could argue that it has already begun using the term “SUPER HEROES” in reliance on the judgment and would be harmed by reversal. What if key witnesses became ill or passed away? Those facts would speak to “loss of evidence” and “increased difficulties in discovery.”

2. Willfulness of the Default

This factor could pose the biggest challenge for Marvel and DC. Several facts suggest the default might be viewed as willful:

• Both companies are sophisticated businesses with substantial IP portfolios

• They had competent counsel who entered an appearance

• They successfully requested one extension, showing awareness of the proceedings

• They have significant resources and experience in trademark matters

• No apparent extraordinary circumstances explain their failure to respond

To overcome this factor, Marvel and DC would need to provide a compelling explanation for their failure to answer. The Board might find lack of willfulness where there were breakdowns in communication, staff transitions, or legitimate confusion about deadlines. However, given the companies’ sophistication in trademark matters, this could be an uphill battle.

3. Meritorious Defense

This factor requires Marvel and DC to show they have a potentially meritorious defense—not that they would definitely win, but that they have a plausible argument worth hearing. They would likely focus on (to the extent there is supporting evidence):

• Long-standing trademark rights dating back to the 1960s and 1970s

• Substantial investment in policing and protecting the marks

• Arguments against genericness, possibly including:

o   Consumer recognition of the term as their mark

o   Successful enforcement actions

o   Limited evidence of generic use by others

• Defenses to abandonment claims, such as:

o   Explaining their joint ownership arrangement

o   Demonstrating active trademark use

o   Showing efforts to maintain the marks’ significance

This might be Marvel and DC’s strongest factor. Given their decades of trademark use and enforcement, they likely have substantial evidence and arguments to present against cancellation. Courts generally prefer to decide cases on their merits rather than through default, especially when the substantive arguments appear strong.

Balancing the Factors

While the willfulness factor presents challenges, the lack of prejudice (if they act quickly) and potentially strong merits of their defense might tip the scales in Marvel and DC’s favor. The TTAB generally prefers to decide cases on their merits, particularly where valuable trademark rights are at stake.

However, timing is crucial. The longer Marvel and DC wait to seek relief, the harder it becomes to overcome the willfulness factor and the more likely Superbabies can demonstrate prejudice.

Strategic Considerations

If Marvel and DC decide to seek relief from the default judgment, they should act quickly and present compelling evidence that their failure to respond was not willful. They would also need to preview their defenses to show the TTAB that the case deserves to be heard on its merits.

Lessons for Trademark Owners

This situation offers important lessons for all trademark owners:

1. Never ignore filing deadlines, even if you are working toward settlement

2. If you need more time, request extensions before deadlines expire

3. Maintain current contact information with the USPTO. The trademark owner and attorney of record should both keep their contact information current. Under current rules, petitioners/opposers are not required to serve petitions to cancel and notices of opposition on respondents/applicants. The TTAB serves pleadings on all parties and relies on contact information on record with the USPTO in connection with the relevant application/registration.

4. Have backup systems in place to track important deadlines

Looking Forward

Whether Marvel and DC will seek relief from this default judgment remains to be seen. However, their experience serves as a stark reminder that even the biggest companies with the most valuable trademarks can lose significant intellectual property rights through default judgment. In the SUPER HERO case, I suspect that the default was a strategic decision, but a procedural misstep is certainly possible.

If you would like to discuss a TTAB proceeding with an experienced trademark lawyer, please schedule a consultation here.