Corcamore, LLC v. Sfm, LLC

Case: 19-1526   Document: 71    Page: 1     Filed: 10/27/2020




   United States Court of Appeals
       for the Federal Circuit
                 ______________________

                  CORCAMORE, LLC,
                      Appellant

                           v.

                       SFM, LLC,
                        Appellee
                 ______________________

                       2019-1526
                 ______________________

     Appeal from the United States Patent and Trademark
 Office, Trademark Trial and Appeal Board in No.
 92060308.
                  ______________________

                Decided: October 27, 2020
                 ______________________

      CHARLES L. THOMASON, Thomason Law Office, Louis-
 ville, KY, argued for appellant.

    JOHANNA WILBERT, Quarles & Brady LLP, Milwaukee,
 WI, argued for appellee. Also represented by NICOLE
 MURRAY, CHRISTIAN G. STAHL, Chicago, IL.
                ______________________

     Before REYNA, CHEN, and HUGHES, Circuit Judges.
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 2                               CORCAMORE, LLC   v. SFM, LLC



 REYNA, Circuit Judge.
      Corcamore LLC appeals an order of the United States
 Patent and Trademark Office, Trademark Trial and Ap-
 peal Board. The Board entered default judgment as a sanc-
 tion against Corcamore, which resulted in the cancellation
 of Corcamore’s trademark registration for SPROUT. On
 appeal, Corcamore contends that the Board erred in grant-
 ing default judgment, in particular because SFM LLC
 lacked standing to petition for cancellation of the trade-
 mark registration. We conclude that appellee SFM was en-
 titled to bring and maintain a petition under 

15 U.S.C. § 1064

, the statutory cause of action for cancellation of
 trademark registrations, and that the Board did not other-
 wise abuse its discretion in imposing default judgment as
 a sanction. We affirm.
                         BACKGROUND
                A. The Parties and Trademarks
     SFM LLC (“SFM”) owns the federal registration for
 SPROUTS and other SPROUTS nominative trademarks
 for use in connection with retail grocery store services.
 J.A. 121 ¶ 5. The SPROUTS mark was first used in com-
 merce at least as early as April 15, 2002. 

Id.

 The below
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 CORCAMORE, LLC   v. SFM, LLC                            3



 image illustrates the use of the SPROUTS mark in a
 Sprouts Farmers Market grocery store.




 J.A. 822.
     Corcamore LLC (“Corcamore”) owns a federal trade-
 mark registration for SPROUT for use in connection with
 vending machine services. The registration claims a first
 use date of May 1, 2008. J.A. 121 ¶ 4. Corcamore’s
 SPROUT mark is used by its affiliate, Sprout Retail, Inc.,
 in combination with a cashless payment card, the “Sprout
 OneCard,” and an associated SPROUT-branded loyalty
 program for consumers that buy food and beverages at cer-
 tain vending machines. J.A. 1222–23 ¶¶ 3–5; J.A. 643–48.
 Corcamore’s SPROUT mark is also used on a SPROUT-
 branded website where users of the Sprout OneCard can
 monitor their food purchases and loyalty points and view
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 4                                 CORCAMORE, LLC   v. SFM, LLC



 promotions offered to holders of the Sprout OneCard (pic-
 tured below). See J.A. 423–24; J.A. 643; J.A. 645; J.A. 648.




 J.A. 424, 643.
                    B. Procedural History
      SFM filed a petition with the United States Patent and
 Trademark Office’s Trademark Trial and Appeal Board
 (“TTAB” or “Board”) to cancel Corcamore’s registration for
 SPROUT. J.A. 98–104; J.A. 120–25 (First Amended Peti-
 tion for Cancellation). SFM claimed that its rights to the
 SPROUTS mark were superior to Corcamore’s rights be-
 cause the mark had been in use since “at least as early as
 2002,” and Corcamore “did not make use of the trademark
 SPROUT prior to May 1, 2008, the date of first use claimed
 in the registration.” J.A. 121–22 ¶¶ 3, 8. SFM alleged that
 it would be damaged by the continued registration of the
 SPROUT mark because use of the mark was “likely to
 cause confusion or mistake, or to deceive the purchasing
 public” with respect to the source of the goods it sold under
 its SPROUTS mark. J.A. 122–23 ¶¶ 9, 16.
     Corcamore moved to dismiss SFM’s petition for lack of
 standing under Rule 12(b)(6) of the Federal Rules of Civil
 Procedure. See J.A. 136–40. Corcamore argued that SFM
 lacked standing to bring a petition for cancellation of a reg-
 istered trademark, citing the analytical framework estab-
 lished by the Supreme Court in Lexmark International,
 Inc. v. Static Control Components, Inc., 

572 U.S. 118

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 CORCAMORE, LLC   v. SFM, LLC                              5



 (2014), for determining whether the requirements for
 maintaining a statutory cause of action have been satisfied.
 See J.A. 136–40. The Board determined that Lexmark was
 not applicable in this case, and denied Corcamore’s motion
 to dismiss for lack of standing and motion for reconsidera-
 tion.    J.A. 11–12, 30–32.    The Board reasoned that
 Lexmark was limited to civil actions involving false desig-
 nation of origin (referred to as false advertising) under 

15 U.S.C. § 1125

(a) and does not extend to cancellation of reg-
 istered marks under 

15 U.S.C. § 1064

. J.A. 11–12. The
 Board instead relied on the analysis adopted by this court
 in Empresa Cubana del Tabaco v. General Cigar Co., 

753 F.3d 1270

 (Fed. Cir. 2014), and concluded that SFM had
 standing because it sufficiently alleged a real interest in
 the cancellation proceeding and a reasonable belief of dam-
 age, as required under 

15 U.S.C. § 1064

. J.A. 11. As a re-
 sult, the Board found that SFM had standing to bring a
 petition to cancel Corcamore’s trademark registration.
 J.A. 11.
      After the Board denied its motion to dismiss, Corca-
 more sent a letter to SFM’s counsel indicating that it would
 bring “procedural maneuvers” against SFM and delay dis-
 covery. J.A. 891, ¶ 2; J.A. 894. Corcamore then embarked
 on a path of conduct that resulted in two separate sanctions
 and entry of default judgment in favor of SFM. First, Cor-
 camore filed four motions requesting affirmative relief, in-
 cluding a motion for reconsideration of the Board’s denial
 of its motion to dismiss, a motion for Rule 11 sanctions, a
 motion for summary judgment on the ground of collateral
 estoppel or issue preclusion, and a motion to strike. See
 J.A. 93. The Board deferred action on the motion for recon-
 sideration but denied the motions for summary judgment,
 Rule 11 sanctions, and to strike. J.A. 16–26. Second, the
 Board determined that Corcamore had filed an “inordinate
 number of motions (all of which were denied) at a very
 early stage in this proceeding.” J.A. 23. Accordingly, the
 Board sanctioned Corcamore, prohibiting it from filing any
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 6                                 CORCAMORE, LLC   v. SFM, LLC



 additional unconsented motions without first obtaining
 Board permission (the “First Sanction”). J.A. 23–25.
     At the opening of discovery, the Board stayed the First
 Sanction and SFM filed a motion to compel responses to its
 written discovery requests. See J.A. 40, 94. The Board or-
 dered the parties to suspend filing papers not related to
 SFM’s motion to compel. See J.A. 82–83. Despite this in-
 struction, Corcamore filed numerous motions unrelated to
 SFM’s motion to compel, including its own motion to com-
 pel discovery, a motion for a protective order to halt SFM’s
 Rule 30(b)(6) deposition of a Corcamore representative, a
 motion to reconsider the denial of its motion for a protective
 order, and a motion to consolidate the proceeding with an-
 other proceeding. See J.A. 94.
      The Board denied Corcamore’s motion for a protective
 order to halt the deposition, which was filed on the eve of
 the deposition, and ordered Corcamore’s witness to appear
 the following day as noticed. The Board cautioned that
 should Corcamore fail to comply, “the Board may entertain
 an appropriate motion for relief.” J.A. 87. Corcamore
 failed to appear and did not alert SFM or the Board that
 the witness would not appear at the deposition. See
 J.A. 901, ¶¶ 16–17, 20. When SFM attempted to resched-
 ule the deposition, Corcamore served objections and again
 refused to appear.
     On October 25, 2017, SFM filed a motion to compel sup-
 plemental responses to certain document requests and in-
 terrogatories. On February 27, 2018, the Board granted-
 in-part SFM’s motion and ordered Corcamore to comply
 with several enumerated instructions. J.A. 69–70. The
 Board instructed Corcamore that an evasive or incomplete
 response would be equivalent to a failure to disclose and
 advised SFM that the Board would entertain a motion for
 appropriate sanctions if Corcamore failed to comply with
 the order. J.A. 70. In the same order, the Board imposed
 another sanction (the “Second Sanction”), prohibiting
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 CORCAMORE, LLC   v. SFM, LLC                               7



 Corcamore from “filing any additional unconsented or un-
 stipulated motions without first obtaining prior Board per-
 mission.” 

Id. at 71

. Corcamore did not comply with the
 written-discovery order by, among other reasons, failing to
 serve timely supplemental responses, maintaining frivo-
 lous objections, and filing nonresponsive answers. See J.A.
 87–88.
     Unperturbed by the Second Sanction, Corcamore filed
 an “objection” to the Board’s February 27, 2018 order and
 made several requests to file a variety of different proce-
 durally impermissible motions. The Board denied Corca-
 more’s unapproved filings for failure to comply with the
 Second Sanction.
     At the close of discovery, SFM moved for default judg-
 ment as a sanction for Corcamore’s litigation misconduct.
 J.A. 95. The Board granted the order on two grounds.
 First, the Board pointed to its express authority to award
 judgment as a sanction under 

37 C.F.R. § 2.120

(h) and Fed.
 R. Civ. P. 37(b)(2). Relying on its express authority, the
 Board granted default judgment as a sanction against Cor-
 camore for its violations of the deposition order and numer-
 ous provisions of the written discovery order. J.A. 84–85;
 J.A. 87–88. Second, pointing to its inherent authority to
 control its cases and docket, the Board entered judgment
 as a sanction against Corcamore for litigation misconduct,
 including its refusal to cooperate with SFM’s counsel to re-
 solve discovery issues, violation of Board orders not to file
 non-germane papers, and violation of Board orders to
 properly serve documents. J.A. 85–86; J.A. 89–91.
     The Board concluded that a lesser sanction would be
 inappropriate because Corcamore had on numerous occa-
 sions already violated the First and Second Sanctions. J.A.
 89–90. The Board recognized that Corcamore engaged in
 willful, bad-faith tactics, consistent with its “procedural
 maneuvers” letter, frustrated SFM’s ability to advance its
 case, and taxed Board resources. J.A. 91. Consequently,
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 8                                CORCAMORE, LLC   v. SFM, LLC



 the Board entered default judgment against Corcamore
 and ordered that Corcamore’s registration “be cancelled in
 due course.” 

Id.

 Corcamore timely filed this appeal. We
 have jurisdiction under 

28 U.S.C. § 1295

 (a)(4)(B).
                         DISCUSSION
      Corcamore makes two arguments on appeal. First,
 Corcamore contends that SFM lacks standing to bring a pe-
 tition for cancellation of a registered trademark. Corca-
 more contends that the Board erred as a matter of law
 when it applied this court’s analysis in Empresa Cubana
 instead of the analytical framework established by the Su-
 preme Court in Lexmark. Second, Corcamore argues that
 the Board abused its discretion in granting default judg-
 ment as a sanction. We first address the standing issue.
     Whether a party is entitled to bring or maintain a stat-
 utory cause of action is a legal question that we review de
 novo. Empresa Cubana, 

753 F.3d at 1274

 (citing Lexmark,
 

572 U.S. at 129

). In this appeal, we review de novo whether
 SFM pleaded sufficient facts to establish entitlement to
 challenge Corcamore’s registered trademark under § 1064.
     We first observe that there exists confusion in the law
 stirred by the inconsistent use of the term “standing.” As
 Justice Scalia observed, certain issues often discussed in
 terms of “standing” are more appropriately viewed as re-
 quirements for establishing a statutory cause of action.
 Lexmark, 

572 U.S. at 128

 n.4. That is the case here. To be
 clear, this appeal does not involve the traditional legal no-
 tions of Article III standing. This appeal focuses instead
 on the requirements that a party must satisfy to bring or
 maintain a statutory cause of action, such as a petition to
 cancel a registered trademark under 

15 U.S.C. § 1064

.
                         A. Lexmark
     Corcamore contends that we should reverse the Board’s
 ruling because it applied the standard articulated by this
 court in Empresa Cubana instead of the analytical
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 CORCAMORE, LLC   v. SFM, LLC                                 9



 framework established in Lexmark. We hold that the
 Lexmark analytical framework is the applicable standard
 for determining whether a person is eligible under § 1064
 to bring a petition for the cancellation of a trademark reg-
 istration. However, because we discern no meaningful,
 substantive difference between the analytical frameworks
 expressed in Lexmark and Empresa Cubana, we do not
 agree that the Board reached the wrong result in this case.
     In Lexmark, the Supreme Court established two re-
 quirements for determining whether a party is entitled to
 bring or maintain a statutory cause of action: a party must
 demonstrate (i) an interest falling within the zone of inter-
 ests protected by the statute and (ii) proximate causation.
 572 U.S. at 129–34. The Court explained that those two
 requirements “suppl[y] the relevant limits on who may
 sue” under a statutory cause of action. Id. at 134. The
 Court made clear that the zone-of-interests requirement
 applies to all statutory causes of action, and that proximate
 causation generally applies to all statutory causes of ac-
 tion. Id. at 129, 133.
      In Lexmark, the Court addressed the cause of action for
 false advertising provided in 

15 U.S.C. § 1125

(a). 

Id.

 at
 129–37. The Court held that in order for a person to “come
 within a zone of interests in a suit for false advertising un-
 der § 1125(a), a plaintiff must allege an injury to a commer-
 cial interest in reputation or sales.” Id. at 131–32. The
 Court explained that the zone-of-interests test is “not espe-
 cially demanding,” and that “the benefit of any doubt goes
 to the plaintiff.” Id. at 130 (citation and internal quotation
 marks omitted). The Court further explained that the pur-
 pose of the zone-of-interests test is to “foreclose[] suit only
 when a plaintiff's interests are so marginally related to or
 inconsistent with the purposes implicit in the statute that
 it cannot reasonably be assumed that Congress authorized
 that plaintiff to sue.” Id. (citation and internal quotation
 marks omitted).
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 10                               CORCAMORE, LLC   v. SFM, LLC



      As to the second requirement, proximate causation, the
 Court noted that it is “generally presume[d]” that “a statu-
 tory cause of action is limited to plaintiffs whose injuries
 are proximately caused by violations of the statute.” Id. at
 132. The Court explained that “the proximate-cause re-
 quirement generally bars suits for alleged harm that is ‘too
 remote’ from the defendant’s unlawful conduct.” Id. at 133
 (citation omitted). Regarding false advertising, the Court
 held that “a plaintiff suing under § 1125(a) ordinarily must
 show economic or reputational injury flowing directly from
 the [alleged false advertising].” Id. The Court explained,
 however, that the proximate-causation requirement “is not
 easy to define,” has “taken various forms,” and “is con-
 trolled by the nature of the statutory cause of action.” Id.
 The relevant question, the Court explained, is “whether the
 harm alleged has a sufficiently close connection to the con-
 duct the statute prohibits.” Id.
     Empresa Cubana was this court’s first post-Lexmark
 appeal to address the requirements to bring a cancellation
 proceeding under § 1064. 753 F.3d at 1274–76. 1 We recog-
 nized Lexmark’s impact on the false advertising cause of
 action under § 1125(a), but we addressed Lexmark only in
 passing and, in particular, did not address whether the
 Lexmark framework applies to § 1064. Instead, we relied
 on our precedents in Ritchie v. Simpson, 

170 F.3d 1092

 (Fed. Cir. 1999) and Lipton Indus., Inc. v. Ralston Purina
 Co., 

670 F.2d 1024, 1029

 (CCPA 1982), and concluded that
 petitioner had a cause of action under § 1064 because it



      1  In Australian Therapeutic Supplies Pty. Ltd. v. Na-
 ked TM, LLC, we addressed § 1064 eligibility criteria and
 affirmed the Board’s reliance on the Empresa Cubana “real
 interest in the proceeding” and “reasonable belief in dam-
 age” approach. 

965 F.3d 1370, 1376

 (2020). In Australian
 Therapeutic Supplies, however, neither the parties nor the
 Board addressed the applicability of Lexmark.
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 CORCAMORE, LLC   v. SFM, LLC                               11



 demonstrated “a real interest in cancelling the [registered
 trademarks at issue] and a reasonable belief that the [reg-
 istered trademarks] are causing it damage.” Id. at 1274.
     Here, the Board determined that the Lexmark frame-
 work does not apply to § 1064 because Lexmark addresses
 § 1125(a), a different statutory provision. See J.A. 11–12
 (explaining that “Lexmark involved a case of false advertis-
 ing in a civil action arising under § 43(a) of the Lanham
 Act, 

15 U.S.C. § 1125

(a); that is not the statutory provi-
 sion(s) at issue in this Board cancellation”). The Board’s
 interpretation of Lexmark is unduly narrow.
     To be clear, § 1064, like § 1125(a), is a statutory cause
 of action provided in the Lanham Act. See Empresa
 Cubana, 753 F.3d at 1275–76 (holding that appellant
 demonstrated entitlement to a “statutory cause of action”
 under the Lanham Act). A “cause of action” consists of two
 elements: operative facts and the right or power to seek and
 obtain redress for infringement of a legal right which those
 facts show. See 1A C.J.S. Actions § 53; see also Cause of
 Action, Black’s Law Dictionary (11th ed. 2019) (“A group of
 operative facts giving rise to one or more bases for suing.”).
      Congress created in § 1064 a group of operative facts
 that grant to “any person” the right to petition for cancel-
 lation of a registered mark if that person “believes that he
 is or will be damaged . . . by the registration of a mark on
 the principal register.” 

15 U.S.C. § 1064

. Whether a spe-
 cific person alleging a specific injury meets these operative
 facts requires us to interpret § 1064. See Lexmark, 

572 U.S. at 128

. To that end, we apply the “traditional princi-
 ples of statutory interpretation” articulated in Lexmark:
 zone of interests and proximate causation. 

Id.

    The Lexmark analytical framework applies to § 1064
 and § 1125(a) because both are statutory causes of action.
 As Justice Scalia exhorted, the zone-of-interests require-
 ment “applies to all statutorily created causes of action”
 and it “applies unless it is expressly negated.” Lexmark,
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 12                                CORCAMORE, LLC   v. SFM, LLC



 

572 U.S. at 129

. The proximate-causation requirement
 generally applies to all statutory causes of action, even
 where a statute does not expressly recite a proximate-cau-
 sation requirement. See 

id. at 132

 (“generally presum[ing]”
 that the proximate-causation requirement applies to all
 statutory causes of action); see also 

id.

 (identifying three
 exemplary federal causes of action where the Supreme
 Court “incorporate[d] a requirement of proximate causa-
 tion”). In view of the Supreme Court’s instructions, we see
 no principled reason why the analytical framework articu-
 lated by the Court in Lexmark should not apply to § 1064.
     The Board’s conclusion to the contrary fails to recog-
 nize that Lexmark binds all lower courts not only regarding
 § 1125(a) but also with respect to the analytical framework
 the Court used to reach its decision. See, e.g., Seminole
 Tribe of Florida v. Florida, 

517 U.S. 44, 67

 (1996) (“When
 an opinion issues for the Court, it is not only the result but
 also those portions of the opinion necessary to that result
 by which we are bound.”); County of Allegheny v. Am. Civil
 Liberties Union, Greater Pittsburgh Chapter, 

492 U.S. 573, 668

 (1989) (Kennedy, J., concurring in the judgment in part
 and dissenting in part) (“As a general rule, the principle of
 stare decisis directs us to adhere not only to the holdings of
 our prior cases, but also to their explications of the govern-
 ing rules of law.”). Once the Supreme Court adopts “a rule,
 test, standard, or interpretation . . . that same rule, test,
 standard, or interpretation must be used by lower courts in
 later cases.” United States v. Duvall, 

740 F.3d 604, 609

 (D.C. Cir. 2013) (Kavanaugh, J., concurring in the denial of
 rehearing en banc). Lexmark established the analytical
 framework to be used for determining eligibility require-
 ments for all statutory causes of action, including under
 § 1064, absent contrary Congressional intent. Like all
 lower tribunals, we are obligated to apply that framework
 where applicable. We thus hold that the Lexmark zone-of-
 interests and proximate-causation requirements control
 the statutory cause of action analysis under § 1064.
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 CORCAMORE, LLC   v. SFM, LLC                               13



                     B. Empresa Cubana
     The Board failed to apply the Lexmark analytical
 framework, but it reached the correct result. As noted
 above, we see no meaningful, substantive difference in the
 analysis used in Lexmark and Empresa Cubana.
      The zone-of-interests requirement and the real-inter-
 est requirement share a similar purpose and application.
 The purpose of the zone-of-interests test is to “foreclose[]
 suit only when a plaintiff’s interests are so marginally re-
 lated to or inconsistent with the purposes implicit in the
 statute that it cannot reasonably be assumed that Con-
 gress authorized that plaintiff to sue.” Lexmark, 

572 U.S. at 130

 (citation and quotation marks omitted). Likewise, a
 purpose of the real-interest test is to “distinguish [parties
 demonstrating a real interest] from mere intermeddlers
 or . . . meddlesome parties acting as self-appointed guardi-
 ans of the purity of the Register.” Selva & Sons, Inc. v.
 Nina Footwear, Inc., 

705 F.2d 1316

, 1325–26 (Fed. Cir.
 1983) (citation and internal quotation marks omitted).
 Also like the zone-of-interests test, a petitioner can satisfy
 the real-interest test by demonstrating a commercial inter-
 est. Compare Lexmark, 572 U.S. 131–32 (“[T]o come within
 a zone of interests in a suit for false advertising under
 § 1125(a), a plaintiff must allege an injury to a commercial
 interest in reputation or sales.” (emphasis added)), with
 Empresa Cubana, 

753 F.3d at 1275

 (“[T]he desire for a reg-
 istration with its attendant statutory advantages is a legit-
 imate commercial interest, so to satisfy the requirements
 for bringing a cancellation proceeding.” (emphasis added)).
 Given those similarities in purpose and application, a party
 that demonstrates a real interest in cancelling a trademark
 under § 1064 has demonstrated an interest falling within
 the zone of interests protected by § 1064.
      Similarly, a party that demonstrates a reasonable be-
 lief of damage by the registration of a trademark demon-
 strates proximate causation within the context of § 1064.
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 14                               CORCAMORE, LLC   v. SFM, LLC



 Congress incorporated a causation requirement in § 1064,
 which provides a right to bring a cause of action “by any
 person who believes that he is or will be damaged . . . by
 the registration of a mark on the principal register.” § 1064
 (emphasis added). While our precedent does not describe
 the causation requirement as one of “proximate causation,”
 it nonetheless requires petitioner’s belief of damage to have
 “a sufficiently close connection,” Lexmark, 

572 U.S. at 133

,
 to the registered trademark at issue. For example, in
 Ritchie v. Simpson, 

170 F.3d 1092, 1098

 (Fed. Cir. 1999),
 we explained that possession of “a trait or characteristic
 that is clearly and directly implicated in the proposed
 mark” demonstrates a reasonable belief of damage. In
 Jewelers Vigilance Comm., Inc. v. Ullenberg Corp., 

823 F.2d 490, 493

 (Fed. Cir. 1987), we explained that a peti-
 tioner can demonstrate “standing” by asserting “some di-
 rect injury to its own established trade identity if an
 applicant’s mark is registered.” 2 The direct connection be-
 tween the belief of damage and the registered mark suffices
 to demonstrate proximate causation. Cf. Lexmark, 

572 U.S. at 133

 (holding that “a plaintiff suing under § 1125(a)
 ordinarily must show economic or reputational injury flow-
 ing directly from the deception wrought by the defendant’s
 advertising.” (emphasis added)). This direct connection
 also satisfies the purpose of the proximate-causation re-
 quirement—barring suits for alleged harm that is “too re-
 mote” from the unlawful conduct. Id. at 133. Given these
 similarities, a party that can demonstrate a reasonable




      2  While both Ritchie and Jewelers discussed opposi-
 tion proceedings under 

15 U.S.C. § 1063

, “[t]he statutory
 requirements to cancel registration of a mark under § 1064
 are substantively equal to the statutory requirements to
 oppose the registration of a mark under § 1063.” Austral-
 ian Therapeutic Supplies, 

965 F.3d at 1373

.
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 CORCAMORE, LLC   v. SFM, LLC                               15



 belief of damage by the registration of a mark also demon-
 strates damage proximately caused by the registered mark.
                            C. SFM
      Applying Lexmark’s analytical framework to the cir-
 cumstances of the underlying case, we reach the same con-
 clusion as the Board—that SFM pleaded allegations
 sufficient to demonstrate a right to challenge Corcamore’s
 registered mark under § 1064. J.A. 11–12. SFM alleges
 that because the goods sold under SFM’s SPROUTS trade-
 marks and Corcamore’s SPROUT trademark are substan-
 tially similar, purchasers will believe that Corcamore’s use
 of SPROUT is sponsored by SFM. J.A. 122, ¶ 9. This alle-
 gation is well-pleaded 3 and is sufficient to establish a real
 interest in the cancellation proceeding. See Selva, 

705 F.2d at 1326

 (“[Petitioner] has demonstrated its real interest in
 the proceeding through its reasonable allegation that its
 trademark . . . and the trademark [sought to be canceled]
 are confusingly similar.” (citation and internal quotation
 marks omitted)). SFM’s allegation, therefore, identifies an
 interest falling within the zone of interests protected by
 § 1064.
     SFM also alleges that “[b]ecause the goods sold under
 SFM’s trademark and [Corcamore’s] trademark are sub-
 stantially similar, purchasers will be led to the mistaken
 belief that SFM’s goods and [Corcamore’s] goods originate
 from the same source, or that [Corcamore’s] use of
 SPROUT has been sponsored, authorized, or warranted by
 SFM, all to SFM’s detriment.” J.A. 122 ¶ 9. This allegation
 is well-pleaded and is sufficient to establish proximate



     3    In a Rule 12(b)(6) motion to dismiss, all well-
 pleaded allegations in a petition must be accepted as true
 and the claims must be construed in the light most favora-
 ble to the non-moving party. TBMP § 503.02 (2020); Young
 v. AGB Corp., 

152 F.3d 1377, 1379

 (Fed. Cir. 1998).
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 16                               CORCAMORE, LLC   v. SFM, LLC



 causation because it demonstrates SFM’s reasonable belief
 of damage resulting from a likelihood of confusion between
 SFM’s SPROUTS mark and Corcamore’s SPROUT mark.
 See Lipton, 

670 F.2d at 1029

 (“To establish a reasonable
 basis for a belief that one is damaged by the registration
 sought to be cancelled, a petition may assert a likelihood of
 confusion which is not wholly without merit.”).
     We therefore hold that the Board correctly determined
 that SFM falls within the class of parties whom Congress
 has authorized to sue under the statutory cause of action
 of § 1064. Cf. Lexmark, 572 U.S. at 137–40. We are not
 persuaded that we should disturb the result reached by the
 Board. In other words, SFM is entitled under § 1064 to
 petition for cancellation of the trademark registration to
 SPROUT.
                        D. Sanctions
      We next review the Board’s grant of default judgment
 as a discovery sanction. J.A. 79–91. We review a grant of
 default judgment as a sanction for abuse of discretion. See
 Benedict v. Super Bakery, Inc., 

665 F.3d 1263, 1268

 (Fed.
 Cir. 2011). An abuse of discretion occurs if the decision
 (1) is clearly unreasonable, arbitrary, or fanciful; (2) is
 based on an erroneous conclusion of law; (3) rests on clearly
 erroneous fact findings; or (4) involves a record that con-
 tains no evidence on which the Board could rationally base
 its decision. Abrutyn v. Giovanniello, 

15 F.3d 1048

, 1050–
 51 (Fed. Cir. 1994).
      In its Order, the Board analyzed its express and inher-
 ent authority to sanction and found that both supported its
 decision to grant default judgment as a sanction. J.A. 87–
 91. Corcamore does not challenge the Board’s express au-
 thority to grant default judgment as a sanction under 

37 C.F.R. § 2.120

(h) and Fed. R. Civ. P. 37(b)(2). Instead, Cor-
 camore argues that the Court had no factual and legal ba-
 sis to enter default judgment in the first place.
Case: 19-1526     Document: 71     Page: 17    Filed: 10/27/2020




 CORCAMORE, LLC   v. SFM, LLC                               17



     First, Corcamore contends that the Board abused its
 discretion by entering default judgment without ever hav-
 ing addressed Corcamore’s motion to compel discovery.
 Second, Corcamore argues that the Board abused its dis-
 cretion by conducting an ex parte teleconference with SFM
 and, thereafter, denying Corcamore’s motion for a protec-
 tive order to delay a Rule 30(b)(6) deposition. Third, Cor-
 camore argues that the Board abused its discretion by
 finding that SFM did not receive Corcamore’s discovery re-
 sponses mandated by the Board’s February 27, 2018 order.
 We are not persuaded.
      Corcamore’s argument regarding its motion to compel
 is immaterial because, even if true, discovery misconduct
 by one party does not excuse the discovery misconduct of
 another party. See TBMP § 408.01 (“A party is not relieved
 of its discovery obligations, including its duty to cooperate,
 in spite of the fact that an adverse party wrongfully may
 have failed to fulfill its own obligations.”). The record does
 not support Corcamore’s allegation regarding ex parte com-
 munications because the Board explained that it “termi-
 nated the telephone conference” when Corcamore failed to
 appear and that it denied Corcamore’s motion because
 “[Corcamore] failed to include a statement in support of its
 good faith effort . . . to resolve the [discovery] dispute.”
 J.A. 45 (Order denying Corcamore’s motion for a protective
 order). Finally, Corcamore failed to follow Rule 2.119 and
 provided no written explanation for why it failed to effect
 email service, as required by the Board 4 and under
 

37 C.F.R. § 2.119

(b)(4). Under these circumstances, we see
 no abuse of discretion by the Board. Accordingly, we con-
 clude that the Board’s entry of default judgment as a sanc-
 tion was not an abuse of discretion.




     4  May 31, 2017, Board Order, 36 TTBVUE 3, SFM,
 LLC v. Corcamore, LLC, Cancellation No. 92060308 (2019).
Case: 19-1526   Document: 71    Page: 18    Filed: 10/27/2020




 18                               CORCAMORE, LLC   v. SFM, LLC



                       CONCLUSION
     We have considered the parties’ remaining arguments
 and find them unpersuasive. Because SFM meets the stat-
 utory requirements to challenge Corcamore’s registered
 mark and because the Board did not abuse its discretion in
 imposing sanctions, we affirm.
                       AFFIRMED
                          COSTS
      Costs to SFM LLC.