FRAUD ON THE USPTO and Trademark Identifications of Goods and Services

The USPTO recently explored the implications of the growing length of identifications of goods and services in U.S. trademark registrations and how accurately such identifications reflect actual use or intent-to-use, following the decision of the Court of Appeals for the Federal Circuit in In re Bose Corporation, 580  F.3d 1240, 91 USPQ2d 1938  (Fed. Cir.  2009) dealing with fraud and trademark applications. More information can be found at the USPTO web site by searching USPTO.gov for “Fraud on the USPTO.”


Having an application that correctly reflects the actual use or intent-to-use goods and services is as important now as it has ever been. Correctly identifying goods and services is Step 5 of our Five Step Verification for a Strong Trademark.

To verify a potential trademark is strong, available to use, and ready to register, we go much further than typical trademark services. To maximize the commercial strength and minimize the weaknesses of a trademark, we start with these FIVE VERIFICATION STEPS:

1) Verify Inherent Strength,

2) Verify Right to Use,

3) Verify Right to Register,

 4) Verify the potential mark (as currently used) Functions As A Mark, and

5) Verify that the Goods and Services ID is both the correct and the maximum claim that are user can make and verify that the Goods and Services ID meets USPTO requirements before filing.

*** We don’t stop here but this is a good start. Call us at 1-651-500-7590 for details.



Case

Posture

Holding

Torres v. Cantine Torresella S.r.l., 808 F.2d 46, 1 USPQ2d 1483 (Fed. Cir. 1986).

Appeal from decision granting summary judgment and canceling registration.

*   Fraud in obtaining renewal of a registration amounts to fraud in obtaining a registration within the meaning of section 14(c) of the Lanham Act.

* Fraud in procuring a trademark registration occurs when an applicant knowingly makes false, material representations of fact in connection with the trademark application.  

* The obligation to refrain from knowingly making false, material statements applies with equal force to renewal applications.”

* Registrant “knew or should have known” that the mark as registered and the specimen submitted were not currently in use.  

     

First International Services Corp. v. Chuckles Inc. 5 USPQ2d 1628 (TTAB 1988)

Opposition sustained on grounds of likelihood of confusion and fraud.

* Statements regarding the use of the mark on goods/services are material to issuance of a registration.

* Applicant committed fraud in its statement regarding the use of the mark on goods for which it only intended to use the mark.

* Intent:  The analysis must be whether the person knew or should have known of the falsity of the statement (citing Torres).

* The “has adopted and is using” language is clear and unambiguous and was central to the application.

Medinol Ltd. v. Neuro Vasx Inc., 67 USPQ2d 1205 (TTAB 2003)

Cancellation petitioner’s motion for summary judgment granted on issue of fraud.

* Deletion of the goods upon which the mark has not yet been used does not remedy an alleged fraud upon the Office.

* If fraud can be shown in the procurement of a registration, the entire resulting registration is void. [Note: subsequent case law has clarified that each class in a multi-class registration is assessed independently]

* Intent – The appropriate inquiry is not into the registrant’s subjective intent, but rather into the objective manifestations of that intent. Knowledge that the mark was not in use on the goods, or reckless disregard for the truth, is all that is required to establish intent to commit fraud.

* The Medinol rule  - if falsity is proven in the statement that the mark is not in use on all the goods listed in either a use-based application, a statement of use, or a §8 or §9 affidavit, then a finding of fraud could result. If fraud is found it requires cancellation of the whole registration.  McCarthy, § 31:73



Turbo Sportswear Inc. v. Marmot Mountain Ltd., 77 USPQ2d 1152 (TTAB 2005)


 

Opposition proceeding – motion to add counterclaim for cancellation of opposer’s registrations for fraud

* Grounds for counterclaim for cancellation became known during deposition of opposer; motion was timely

* Fraud cannot be cured merely by deleting from the registration those goods on which the mark was not used at the time of the signing of a use-based application or a §8 affidavit.

Standard Knitting, Ltd. v. Toyota Jidosha Kabushiki Kaisha, 77 USPQ2d 1917 (TTAB 2006).

Opposition proceeding - counterclaim for cancellation of opposer’s registrations for fraud granted

* Critical question is whether the marks were in use as of the filing date of a use-based application or as of the filing date of the SOU in an intent-to-use application. If the mark was in current use, the date of first use, even if false, is not fraud.

Grand Canyon West Ranch, LLC v. Hualapai Tribe, 78 USPQ2d 1696 (TTAB 2006)

Opposition proceeding – applicant’s motion to amend ID to delete certain services


Opposer did not plead fraud – just non-use

* As long as the mark was used on some of the identified goods/services as of the filing in a use-based application, in the absence of fraud, the application is not void in its entirety.

* The Grand Canyon Rule: When fraud is not proven, but the mark has not been used on all of the goods or services listed, the defect may be cured by deleting those goods/services on which the mark was not used or by amending a §1(a) application to a §1(b) basis.. McCarthy, § 31:73.

Maids to Order of Ohio Inc. v. Maid-to-Order Inc., 78

USPQ2d 1899 (TTAB 2006)

Petition to cancel for fraud; counterclaim for cancellation based on fraud

* Fraud occurs when an applicant or registrant knowingly makes false, material misrepresentations of fact. If there was a reasonable or legitimate basis for the representations, the applicant/registrant has not committed fraud.

American Flange & Manufacturing Co. v. Rieke Corp., 80 USPQ2d 1397 (TTAB 2006)

Opposition proceeding – included claim of fraud

* Fraud claim dismissed for failure to allege fraud with sufficient particularity.

Nevertheless, Board found insufficient evidence that applicant had the intent required to establish fraud.  “In the absence of clear and convincing evidence that applicant acted in bad faith, we conclude, on this record, that applicant did not commit fraud.”

Hurley International LLC v. Volta, 82 USPQ2d 1339 (TTAB 2007)

Opposition – motion for summary judgment as to claim of fraud granted

* The application would have been refused but for applicants’ misrepresentation regarding their use of the mark on all the recited services.

* Irrelevant that the registration had yet to issue – the timing of the misrepresentation is immaterial.

* However, a misstatement in an application as to the goods or services on which a mark has been used does not rise to the level of fraud where an applicant amends the application prior to publication.

Hachette Filipacchi Presse v. Elle Belle LLC, 85 USPQ2d 1090 (TTAB 2007)


Cancellation petitioner granted summary judgment on ground of fraud.

* Misunderstanding on the part of the attorney does not preclude a finding of fraud.  Applicant and its attorney share the duty to ensure the accuracy of the application and the truth of its statements.

* Amendment to ID, filed after motion for summary judgment and mistakenly entered by Post Registration section, does not preempt Board’s authority to determine fraud issue with respect to original ID.


Sinclair Oil Corp. v. Kendrick, 85 USPQ2d 1032 (TTAB 2007)

Opposer granted summary judgment on ground of fraud.

Post-publication amendment of the filing basis from 1(a) to 1(b) does not protect the application from a fraud claim.

Tri-Star Marketing LLC v. Nino Franco Spumanti S.R.L., 84 USPQ2d 1912 (TTAB 2007)

Denial of petition for cancellation.

* There is nothing fraudulent in providing an Identification of goods that includes both a broad product term and a specific product term so long as the applicant/registrant is using its mark on the specific product, and the specific product is encompassed within the broad product term (assuming the broad term is sufficiently definite for registration).  The converse situation is not true.

Bose Corp. v. Hexawave Inc., 88 USPQ2d 1332 (TTAB 2007) – NONPRECEDENTIAL

Counterclaim for cancellation of opposer’s registration based on fraud.

It is not reasonable to believe that an application of a mark at some point in the past to goods which have been sold still serves to constitute use when those goods, now owned by another, are subsequently shipped again in connection with a repair service.

Herbaceuticals Inc. v. Xel Herbaceuticals Inc., 86 USPQ2d 1572 (TTAB 2008

Cancellation petitioner granted partial summary judgment on grounds of fraud.

* If fraud can be shown in the procurement of a registration, the registration is void in the class or classes in which fraud based on nonuse has been shown.

* Statements of use are not divisible into “sworn” and “unsworn” portions.

* NOTE:  Summary judgment decision subsequently vacated on uncontested motion.

Hornby v. TJX Companies Inc., 87 USPQ2d 1411 (TTAB 2008)

Petition to cancel registration based partially on fraud.

Cancellation respondent did not commit fraud by stating, in the application declaration, that it did not know of any other person who had the right to use the applied-for mark or similar mark.

University Games Corp. v. 20Q.net Inc., 87 USPQ2d 1465 (TTAB 2008)


Motion for summary judgment on counterclaim for fraud.

The amendment of the identification to delete goods during ex parte prosecution raises a rebuttable presumption of a lack of willful intent to commit fraud.

Grand Canyon West Ranch, LLC v. Hualapai Tribe, 88 USPQ2d 1501 (TTAB 2008)

Amended notice of opposition asserting fraud.

Applicant committed fraud by including certain services in its revised identification when it knew or should have known that it had not used the mark in connection with those services.

Media Online Inc. v. El Clasificado Inc., 88 USPQ2d 1285 (TTAB 2008)

Motion to amend cancellation pleading to add claim of fraud.

Claim failed to set forth with particularity allegedly false statements that purportedly induced the Office to allow registration.

G&W Laboratories Inc. v. GW Pharma Ltd., 89 USPQ2d 1571 (TTAB 2009)

Motion to dismiss counterclaim for cancellation on ground of fraud.

* Each class of goods or services in a multiple-class registration must be considered separately when reviewing the issue of fraud, and judgment on the ground of fraud as to one class does not in itself require cancellation of all classes in a registration.

Hiraga v. Arena, 90 USPQ2d 1102 (TTAB 2009)

Petition for cancellation based on fraud.

* The critical question is whether the mark was in use in connection with the identified goods as of the filing date of the use-based application.

* The claimed date of first use, even if false, does not constitute fraud because the first use date is not material to the decision to approve for publication.

* Registrant had a reasonable basis for his belief that he was using the mark in commerce for the goods at the time of filing the application.


In re Bose Corp., 91 USPQ2d 1938 (Fed. Cir. 2009)

Appeal of Board decision cancelling registration based on fraud.

* In trademark fraud cases, as in other fraud cases, the standard for finding intent to deceive is stricter than the standard for negligence or gross negligence.  

* A trademark is obtained fraudulently under the Lanham Act only if the applicant or registrant knowingly makes a false, material representation with the intent to deceive the USPTO, and a party challenging a registration must prove fraud by clear and convincing evidence.

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