September–October, 2014 Vol. 104 No. 5

Allegations of Fraudulent Procurement and Maintenance of Federal Registrations Since In re Bose Corp.Theodore H. Davis Jr. and Lauren Brenner

Trademark Licensing in Canada: The Control Regime Turns 21Sheldon Burshtein

Canada’s Ill-Conceived New “Trademark” Law: A Venture into Constitutional QuicksandDaniel R. Bereskin, Q.C.

The Evolution of Trademark Economics—From the Harvard School to the Chicago School to WIPO 2013—As Sheparded by INTA and The Trademark ReporterJerre B. Swann

He Who Steals My Good Name: Likelihood-of-Confusion Surveys in TTAB ProceedingsE. Deborah Jay

Vol. 104 TMR 933

The Trademark Reporter®

ALLEGATIONS OF FRAUDULENT PROCUREMENT AND MAINTENANCE OF FEDERAL REGISTRATIONS

SINCE IN RE BOSE CORP.

By Theodore H. Davis Jr.∗ and Lauren Brenner∗∗

TABLE OF CONTENTS Page

I. INTRODUCTION .................................................................. 935

II. THE VARYING POST-BOSE TESTS FOR FRAUD ............ 936

III. APPLICATIONS OF THE TESTS TO PARTICULAR SITUATIONS ............................................... 943

A. Allegedly Fraudulent Averments of the Ownership of an Applied-for Mark ................................. 943

B. Allegedly Fraudulent Averments of the Exclusive Right to Use an Applied-for Mark in Commerce .......................................................... 950

C. Allegedly Fraudulent Averment of a Bona Fide Intent to Use an Applied-for Mark in Commerce in Connection With Particular Goods or Services ........................................... 960

D. Allegedly Fraudulent Averments of the Use of an Applied-for or Registered Mark in Commerce in Connection With Particular Goods and Services .......................................................... 965

E. Allegedly Fraudulent Recitations of the Dates of First Use in Commerce of an Applied-for Mark ............................................................. 979

∗ Partner, Kilpatrick Townsend & Stockton LLP, Atlanta, Georgia, Associate Member, International Trademark Association; member, Georgia and New York bars; adjunct professor, Emory University School of Law. ∗∗ J.D., Emory University School of Law (2014); member, Georgia bar.

The authors gratefully acknowledge the assistance of Louise Adams, Jennifer Elrod, Kimberly Snodgrass-George, and Trevor Rosen in preparing this manuscript for publication.

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F. Submission of Allegedly Fraudulent Specimens Showing the Use in Commerce of an Applied-for Mark ................................................................................. 982

G. Allegedly Fraudulent Averments of the Distinctiveness of an Applied-for Mark .......................... 985

1. Allegedly Fraudulent Averments of Inherent Distinctiveness ........................................... 985

2. Allegedly Fraudulent Averments of Acquired Distinctiveness ........................................... 988

H. Allegedly Fraudulent Averments of the Nonfunctionality of an Applied-for Mark ........................ 994

I. Submission of Allegedly Fraudulent Standards Governing the Use of an Applied-for Certification Mark ........................................................... 995

J. Allegedly Fraudulent Failure to Disclose the Historical Significance of an Applied-for Mark .............. 996

K. Allegedly Fraudulent Averments of the Excusable Nonuse of a Registered Mark ........................ 997

L. Allegedly Fraudulent Declarations of Incontestability ................................................................ 998

IV. CONCLUSION ..................................................................... 1000

Vol. 104 TMR 935

I. INTRODUCTION The allegation that a trademark or service mark owner has

defrauded the U.S. Patent and Trademark Office (USPTO) can arise in multiple contexts under the Lanham Act. A registration can be cancelled “at any time” if the registration “was obtained fraudulently” under Section 14(3) of the Act,1 and this provision has been judicially expanded to reach fraudulent filings made under Section 8 of the Act to maintain existing registrations.2 The filing of a fraudulent declaration of incontestability under Section 153 is an affirmative defense to the otherwise “conclusive evidence” of mark validity attaching to the resulting incontestable registration4 and can even be fatal to the registration itself.5 Outside the context of inter partes litigation within the USPTO, Section 37 provides that “[i]n any action involving a registered mark,” the court “may determine the right to registration, order the cancelation of registrations, in whole or in part, restore canceled registrations, and otherwise rectify the register with respect to the registrations of any party to the action.”6 Finally, allegations of fraud on the USPTO can come into play in the private cause of action under Section 38, which provides that “[a]ny person who shall procure registration in the Patent and Trademark Office of a mark by a false or fraudulent declaration or representation, oral or in writing, or by any false means, shall be liable in a civil action by any person injured thereby for any damages sustained in consequence thereof.”7

Precisely what constitutes fraud on the USPTO in these various contexts has evolved over the years, but the landmark opinion in the area is that of In re Bose Corp.,8 in which the 1. 15 U.S.C. § 1064(3) (2012). 2. See, e.g., Torres v. Cantine Torresella S.r.l., 808 F.2d 46, 48 (Fed. Cir. 1986) (upholding cancellation of fraudulently renewed, rather than fraudulently procured, registration on ground that “[f]raud in obtaining renewal of a registration amounts to fraud in obtaining a registration within the meaning of [15 U.S.C. § 1064(3)]”). 3. 15 U.S.C. § 1065. 4. Id. § 1134(b)(1). 5. See, e.g., Robi v. Five Platters, Inc., 918 F.2d 1439, 1444 (9th Cir. 1990) (affirming order cancelling registration based on filing of fraudulent Section 15 filing). 6. 15 U.S.C. § 1119. As reflected in the quoted language, Section 37 on its face refers to extant registrations: Whether it can be used to challenge pending applications is a subject of judicial disagreement. Compare Tillamook Country Smoker, Inc. v. Tillamook Cnty. Creamery Ass’n, 333 F. Supp. 2d 975, 980 (D. Or. 2004) (ordering issuance of registration on ground that “[w]hile the Act does not expressly allow a court to order registration of an unregistered mark, courts generally presume the statute confers such authority” (internal citation omitted)), aff’d, 465 F.3d 1102 (9th Cir. 2006) with Whitney Info. Network, Inc. v. Gagnon, 353 F. Supp. 2d 1208, 1211 (M.D. Fla. 2005) (holding that Section 37 does not authorize courts to intervene in application process). 7. 15 U.S.C. § 1120. 8. 580 F.3d 1240 (Fed. Cir. 2009).

936 Vol. 104 TMR Federal Circuit set a high bar for inter partes litigants claiming fraud. For over a half a decade following Bose, no findings of fraud on the USPTO were reached in inter partes proceedings within that agency, and, indeed, the Trademark Trial and Appeal Board arguably is now as hostile toward claims of fraud as it once was receptive to them. Nevertheless, the Federal Circuit and the Board are not the only tribunals to entertain fraud-based challenges to applications and registrations, and, and unlike the Board, federal courts other than the Federal Circuit itself are not bound by Federal Circuit case law, a circumstance that has prevented Bose from having the same impact outside of inter partes proceedings as it has within them. In particular, although Bose is often cited by the regional circuit courts of appeal and the federal district courts that answer to them, the test for fraud actually articulated by that opinion has not necessarily displaced regional circuit case law applying more easily satisfied tests, especially that in the Second and the Eighth Circuits.

This article examines the impact of Bose on the disposition of allegations of fraudulent procurement or maintenance of federal registrations in the approximately five years following the issuance of that opinion on August 29, 2009. Part II of the article addresses the varying standards applied to claims of fraud on the USPTO during that period, with an emphasis on those that differ from that articulated by the Bose court. Part III surveys how those standards have been applied to particular factual scenarios. The article concludes that the owners of trademark portfolios legitimately can take some comfort from Bose’s holding in the context of inter partes proceedings, but they should be aware of the unwillingness, whether deliberate or otherwise, of other federal courts to apply the strict test for fraud found in that opinion. They should be equally aware that a number of federal district courts since Bose have reached findings of fraud (or at least have left the door open for those findings) on facts that might well have been accorded less significance by the Board. Consequently, although the actual invalidation of trademark claims based on the fraudulent procurement or maintenance of those claims remains the exception, rather than the rule, registrants and applicants alike should avoid falling victim to a false sense of complacency on the issue.

II. THE VARYING POST-BOSE TESTS FOR FRAUD Beginning in Medinol Ltd v. Neuro Vasx Inc.,9 the Trademark

Trial and Appeal Board famously held applicants for trademark registrations to what appeared to be a mere negligence standard

9. 67 U.S.P.Q.2d 1205 (T.T.A.B. 2003).

Vol. 104 TMR 937 for fraud: Under Medinol and its progeny, if a registrant or applicant merely “should have known” that a material representation to the USPTO was false, that falsity would invalidate the application or registration in question. In Bose, however, the Federal Circuit disapproved the Board’s practice of finding fraud if a registrant or applicant merely “should have known” that a material representation to the USPTO was false. The appeal before that court arose from the Board’s application of Medinol to invalidate a registration covering, among other things, “audio tape recorders and players.”10 In contrast to the claim of fraud at issue in Medinol, which centered on the registrant’s conduct during the application process, the Board’s finding of fraud in Bose was based on the maintenance of a registration through the filing of a Section 8 declaration of continued use. It was undisputed that, at the time of the declaration’s execution, the registrant was not selling audio tape recorders and players under the registered mark. The declaration’s signatory, however, testified that he believed the mark remained in use as to those goods because consumers continued to return the goods to the registrant for repairs, after which the goods were transported back to their owners in interstate commerce.

Rejecting this argument on the merits, the Board went on to conclude that the registrant had defrauded the PTO because:

“[P]roof of specific intent to commit fraud is not required, rather, fraud occurs when an applicant or registrant makes a false material representation that the applicant or registrant knew or should have known was false.”

. . . . [The registrant] knew it had not manufactured or sold audio tape recorders and players for at least three years prior to filing the Section 8/9 renewal and [the registrant’s] asserted belief that the return of a repaired audio tape recorder and player to its owner after rendering repair services was sufficient to support use in connection with goods to maintain a registration for such goods was not reasonable . . . . Therefore, we find that [the registrant] committed fraud on the USPTO . . . .11 On the registrant’s appeal from this decision, the Federal

Circuit took issue with the Board’s willingness to find fraud based on what the registrant should have known. Reviewing both its past case law and that of other circuits, it held that:

10. See Bose Corp. v. Hexawave, Inc., 88 U.S.P.Q.2d 1332 (T.T.A.B. 2007) (nonprecedential), rev’d sub nom. In re Bose Corp., 580 F.3d 1240 (Fed. Cir. 2009). 11. Id. at 1338 (alteration in original) (emphasis added) (quoting Gen. Car & Truck Leasing Sys., Inc. v. Gen. Rent-A-Car Inc., 17 U.S.P.Q.2d 1398, 1400 (S.D. Fla. 1990)).

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By equating “should have known” of the falsity with a subjective intent, the Board erroneously lowered the fraud standard to a simple negligence standard . . . .

We have previously stated that “[m]ere negligence is not sufficient to infer fraud or dishonesty.” We even held that “a finding that particular conduct amounts to ‘gross negligence’ does not of itself justify an inference of intent to deceive.” The principle that the standard for finding intent to deceive is stricter than the standard for negligence or gross negligence, even though announced in patent inequitable conduct cases, applies with equal force to trademark fraud cases. After all, an allegation of fraud in a trademark case, as in any other case, should not be taken lightly. Thus, we hold that a trademark [registration] 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 PTO.12

With respect to the nature of the showing required to satisfy this standard, the court then held that:

Subjective intent to deceive, however difficult it may be to prove, is an indispensable element in the analysis. Of course, because direct evidence of deceptive intent is rarely available, such intent can be inferred from indirect and circumstantial evidence. But such evidence must still be clear and convincing, and inferences drawn from lesser evidence cannot satisfy the deceptive intent requirement.13 How any particular post-Bose claim of fraud on the USPTO

will be resolved by a court other than the Federal Circuit or the Board14 can be difficult to predict in light of the varying tests appearing in the case law. Bose is frequently cited in opinions governed by regional circuit case law, and some courts apply Bose to the letter by holding that Rule 9(b) of the Federal Rules of Civil

12. In re Bose Corp., 580 F.3d 1240, 1244-45 (Fed. Cir. 2009) (first alteration in original) (quoting Symbol Techs., Inc. v. Opticon, Inc., 935 F.2d 1569, 1582 (Fed. Cir. 1991); Kingsdown Med. Consultants, Ltd. v. Hollister Inc., 863 F.2d 867, 876 (Fed. Cir. 1988) (en banc))). 13. Id. at 1245 (internal quotation marks omitted). 14. The Board has summarized the Bose test in the following manner:

The relevant standard for proving fraud . . . requires a showing of the following four elements: (1) applicant/registrant made a false representation to the USPTO; (2) the false representation is material to the registrability of a mark; (3) applicant/registrant had knowledge of the falsity of the representation; and (4) applicant/registrant made the representation with intent to deceive the USPTO.

ShutEmDown Sports Inc. v. Lacy, 102 U.S.P.Q.2d 1036, 1044 (T.T.A.B. 2012).

Vol. 104 TMR 939 Procedure15 requires challengers to applications and registrations to plead, and ultimately to adduce clear and convincing evidence of, a knowing intent to deceive the agency through a material misrepresentation.16 Thus, one court has quoted Bose in holding that:

Fraud in procuring a trademark registration or renewal occurs when an applicant knowingly makes false, material representations of fact in connection with his application. A party seeking cancellation of a trademark registration for fraudulent procurement bears a heavy burden of proof. Indeed, the very nature of the charge of fraud requires that it be proven ‘to the hilt’ with clear and convincing evidence. There is no room for speculation, inference or surmise and, obviously, any doubt must be resolved against the charging party.17

15. Rule 9(b) provides that “[i]n alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake.” Fed. R. Civ. P. 9(b). According to one court addressing the rule’s requirements in the context of a challenge to a registration:

Rule 9(b) has four purposes: (1) to ensure that the defendant has sufficient information to formulate a defense by putting it on notice of the conduct complained of; (2) to protect defendants from frivolous suits; (3) to eliminate fraud actions where all facts are learned after discovery, and (4) to protect defendants from harm to their goodwill and reputation.

ZAO Odessky Konjatschnyi Zawood v. SIA “Baltmark Invest,” 109 U.S.P.Q.2d 1680, 1683-84 (E.D. Va. 2013). 16. See, e.g., Haggar Int’l Corp. v. United Co. for Food Indus., 906 F. Supp. 2d 96, 108 (E.D.N.Y. 2012) (“[F]or [the defendants] to prevail on [their] challenge to [the plaintiff’s] registration on the basis of fraud, [the defendant] must prove that [the plaintiff] deliberately and deceitfully made false statements in its . . . application to the USPTO that were material to the determination to grant the application. Defendants must prove this claim by clear and convincing evidence.”); E & J Gallo v. Proximo Spirits, Inc., 103 U.S.P.Q.2d 1656, 1666 (E.D. Cal. 2012) (“[F]raud in obtaining a trademark registration occurs when an application [sic] knowingly makes false, material representations of fact in connection with his application. To establish this claim, Counterclaimants carry a heavy burden and must establish fraud through clear and convincing evidence.” (citation omitted) (internal quotation marks omitted)); Pure Fishing, Inc. v. Redwing Tackle, Ltd., 888 F. Supp. 2d 726, 735 (D.S.C. 2012) (“[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 PTO.” (alteration in original) (quoting Bose, 580 F.3d at 1244 (internal quotation marks omitted)); Quality Serv. Grp. v. LJMJR Corp., 831 F. Supp. 2d 705, 710 (S.D.N.Y 2011) (quoting Bose at length); WMH Tool Grp. v. Woodstock Int’l Inc., 93 U.S.P.Q.2d 1570, 1578 (N.D. Ill. 2010) (“In order to establish a claim for fraud on the PTO, Defendants must establish the following elements as to all of these counts: (1) that the registrant made a false factual representation to the PTO; (2) that the misrepresentation was material to the validity of the registration; and (3) that the misrepresentation was made with fraudulent intent . . . . Fraudulent intent requires knowingly making a false, material misrepresentation with the intent to deceive the PTO.”); Kerzner Int’l Ltd. v. Monarch Casino & Resort, Inc., No. 3:06-CV-232-ECR-RAM, 2009 WL 5066908, at *14 (D. Nev. Dec. 14, 2009) (quoting Bose at length). 17. Alliance Bank v. New Century Bank, 742 F. Supp. 2d 532, 551 (E.D. Pa. 2010) (quoting In re Bose, 580 F.3d 1240, 1243 (Fed. Cir. 2009)) (internal quotation marks omitted).

940 Vol. 104 TMR

Other courts have applied tests that, although consistent with that in Bose, nevertheless differ from it in how they are framed. For example, in reversing a district court’s application of a willful blindness standard for fraud, the Eleventh Circuit has held that:

An applicant commits fraud when he knowingly makes false, material representations of fact in connection with an application for a registered mark. Fraud further requires a purpose or intent to deceive the PTO in the application for the mark. The party seeking cancellation on the basis of fraud must prove its claim by clear and convincing evidence. This is necessarily a heavy burden, and any doubt must be resolved against the charging party.18 Similarly, the Ninth Circuit has applied a five-part test,

which, despite not requiring clear and convincing evidence of fraud, otherwise may be as difficult to satisfy as that in Bose:

To succeed on a claim for cancellation based on fraud, [the challenger] must adduce evidence of (1) a false representation regarding a material fact; (2) the registrant’s knowledge or belief that the representation is false; (3) the registrant’s intent to induce reliance upon the misrepresentation; (4) actual, reasonable reliance on the misrepresentation; and (5) damages proximately caused by that reliance.19

Substantively identical tests have been adopted on a post-Bose basis by various federal district courts.20

Nevertheless, there is no guarantee that litigation over the validity of particular registrations and applications in the regional circuits will necessarily turn on a strict application of the Bose test or even a test necessarily consistent with it.21 For example, the

18. Sovereign Military Hospitaller Order of Saint John of Jerusalem of Rhodes & of Malta v. Fla. Priory of the Knights Hospitallers of the Sovereign Order of Saint John of Jerusalem, Knights of Malta, the Ecumenical Order, 702 F.3d 1279, 1289 (11th Cir. 2012) (citations omitted) (internal quotation marks omitted). 19. Hokto Kinoko Co. v. Concord Farms, Inc., 738 F.3d 1085, 1097 (9th Cir. 2013). 20. See Websters Chalk Paint Powder, LLC v. Annie Sloan Interiors, Ltd., No. 1:13–cv–2040–WSD, 2014 WL 4093669, at *12 (N.D. Ga. Aug. 18, 2014); Canales v. ALM Media, LLC, No. A-12-CV-1036-LY, 2014 WL 2807677, at *4 (W.D. Tex. June 20, 2014); ZAO Odessky Konjatschnyi Zawood v. SIA “Baltmark Invest,” 109 U.S.P.Q.2d 1680, 1684 (E.D. Va. 2013); Axiom Worldwide, Inc. v. HTRD Grp. Hong Kong Ltd., No. 8:11–cv–1468–T–33TBM, 2013 WL 2406260, at *10 (M.D. Fla. June 1, 2013); Cimarron Lumber & Supply Co. v. McLiney Lumber & Supply, LLC, No. 12–2240–JAR, 2013 WL 1308708, at *4 (D. Kan. Mar. 29, 2013); Global Healing Ctr. v. Powell, No. 4:10–CV–4790, 2012 WL 1709144, at *4 (S.D. Tex. May 15, 2012); Dahon N. Am., Inc., v. Hon, No. 2:11-cv-05835-ODW (JCGx), 2012 WL 1413681, at *11 (C.D. Cal. Apr. 24, 2012); Pandora Jewelers 1995, Inc. v. Pandora Jewelry, LLC, No. 09-61490-Civ, 2011 WL 2174012, at *14 (S.D. Fla. June 2, 2011); Southco, Inc. v. Penn Eng’g & Mfg. Corp., 768 F. Supp. 2d 715, 724-25 (D. Del. 2011); Ricks v. BMEzine.com, LLC, 727 F. Supp. 2d 936, 967 (D. Nev. 2010). 21. See, e.g., E & J Gallo v. Proximo Spirits, Inc., 103 U.S.P.Q.2d 1656, 1661, 1666 (E.D. Cal. 2012) (citing both Bose test and Ninth Circuit test).

Vol. 104 TMR 941 Second Circuit has applied a five-part test for fraudulent maintenance and procurement causes of action that on its face is similar to that of the Ninth Circuit. The Second Circuit test, however, departs from the strict requirement in Bose of a knowingly false representation to the USPTO in favor of the mere negligence standard applied by the Board in Medinol:

[A] party alleging that a registration was fraudulently obtained must prove the following elements by clear and convincing evidence: 1. A false representation regarding a material fact. 2. The person making the false representation knew or should

have known that the representation was false (“scienter”). 3. An intention to induce the listener to act or refrain from

acting in reliance on the misrepresentation. 4. Reasonable reliance on the representation. 5. Damage proximately resulting from such reliance.22 Likewise, at least some federal district courts have continued

to hold applicants and registrants to a strict duty of candor in their dealings with the USPTO.23 These include one New York federal district court, which addressed allegations of fraudulent procurement on the parties’ cross-motions for summary judgment without referring to any of the showings required by Bose.24 Instead, relying on pre-Bose Second Circuit authority to similar effect, it held that the registrant in question was subject to a duty of “uncompromising candor” when dealing with the USPTO.25 And, because in the court’s estimation, the registrant had failed to comply with that duty, its registration was invalidated.26

Similarly, the patent law concept of inequitable conduct has made a cameo appearance in a post-Bose Eighth Circuit opinion, although that concept is rarely applied by name in trademark litigation.27 The occasion of that appearance was an appeal from a jury finding that the plaintiff had fraudulently procured a 22. Patsy’s Italian Rest., Inc. v. Banas, 658 F.3d 254, 270-71 (2d Cir. 2011) (emphasis added) (footnote omitted) (quoting 6 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition § 31:61 (4th ed. 2008)); accord Privado Mktg. Grp. LLC v. Eleftheria Rest Corp., No. 13-cv-3137-ER, 2014 WL 3377107, at *6 (S.D.N.Y. July 7, 2014); MPC Franchise, LLC v. Tarntino, No. 11-CV-6310 CJS, 2014 WL 1920531, at *15 (W.D.N.Y. May 14, 2014); Fancaster, Inc. v. Comcast Corp., 832 F. Supp. 2d 380, 424 (D.N.J. 2011). 23. See, e.g., E.W., LLC v. Rahman, 896 F. Supp. 2d 488, 508 (E.D. Va. 2012) (invalidating registration after observing that “[i]t is . . . well established that an applicant for registration of a trademark has a duty of candor in his communications with the PTO”). 24. See City of N.Y. v. Tavern on the Green, L.P., 94 U.S.P.Q.2d 1519 (S.D.N.Y. 2010). 25. Id. at 1525 (quoting Orient Express Trading Co. v. Federated Dep’t Stores, Inc., 842 F.2d 650, 653 (2d Cir. 1988) (internal quotation marks omitted)). 26. Id. 27. See Fair Isaac Corp. v. Experian Info. Solutions, Inc., 650 F.3d 1139 (8th Cir. 2011).

942 Vol. 104 TMR registration through false representations that the mark underlying the registration was distinctive. Some of those representations had been made in response to a request for information by the examiner assigned to the registrant’s application, and, whether in reliance on these statements or for other reasons, the examining attorney assigned to the application withdrew the initial refusal to register the mark. In declining to overturn the jury’s finding of fraud, the Eighth Circuit cited the defendants’ use at trial of “a PTO expert, who testified that a reasonable examiner would consider it important in deciding whether to allow the registration to know” certain information not contained in the registrant’s responses to the examiner.28 According to the court, “there was sufficient evidence for a reasonable jury to determine that the PTO relied on a false representation in deciding whether to issue the registration.”29

Consistent with the post-Bose tests for fraud applied by certain other courts, such a test short-shrifts the requirement that misstatements to the USPTO be “material.”30 Specifically, courts and the Board alike have long held that materiality in the trademark prosecution context requires a showing that the registration in question would not have issued had the statement in question not been made.31 The test for materiality used by the Eighth Circuit—whether an examiner would have considered an applicant’s statement important—is a departure from this “but-for” standard and, indeed, is largely indistinguishable from the standard for materiality historically used in patent infringement cases in which claims of inequitable conduct have been raised.32 28. See id. at 1149-50. 29. Id. at 1150; see also Paleteria La Michoacana, Inc. v. Productos Lacteos Tocumbo S.A. De C.V., No. 11–1623 (RC), 2014 WL 4759945, at *29 (D.D.C. Sept. 25, 2014) (citing favorably to Eighth Circuit test for materiality but otherwise entering summary judgment in registrant’s favor); Gen. Linen Serv., Inc. v. Gen. Linen Serv. Co., No. 12-cv-111-LM, 2014 WL 2605430, at *5-6 (D.N.H. June 11, 2014) (citing favorably to Eighth Circuit standard in declining to grant motion to dismiss allegations of fraudulent procurement and maintenance). 30. For an example of a post-Bose test not referencing materiality at all, see Country Fare LLC v. Lucerne Farms, 102 U.S.P.Q.2d 1311, 1317 (D. Conn. 2011) (“To raise a successful defense of fraud under 15 U.S.C. § 1115(b)(1) the allegedly fraudulent statements must show a deliberate attempt to mislead the Patent and Trademark Office and may not be the product of an error or inadvertence. The fraud must be proven by clear and convincing evidence.” (quoting E. Gluck Corp. v. Rothenhaus, 585 F. Supp. 2d 505, 513 (S.D.N.Y. 2008) (citations omitted) (internal quotation marks omitted)). 31. See, e.g., Modern Fence Techs., Inc. v. Qualipac Home Improvement Corp., 726 F. Supp. 2d 975, 991 (E.D. Wis. 2010) (denying defense motion for summary judgment on ground that “it is not clear . . . that, but for the misrepresentation regarding advertising, the federal registrations would not or should not have issued”). 32. See, e.g., Halliburton Co. v. Schlumberger Tech. Corp., 925 F.2d 1435, 1440 (Fed. Cir. 1991) (“Information is material [for inequitable conduct purposes] if there is ‘substantial likelihood that a reasonable examiner would consider it important in deciding whether to allow the application to issue as a patent.’” (quoting 37 C.F.R. § 1.56 (1989)).

Vol. 104 TMR 943 And, of equal importance, that standard had been rejected even in the patent context nearly three months earlier by the Federal Circuit’s holding in Therasense, Inc. v. Becton, Dickinson & Co.33 that “as a general matter, the materiality required to establish inequitable conduct is but-for materiality.”34 In any case, and whatever the merits or demerits of the Eighth Circuit’s post-Bose approach, that approach demonstrates that applicants and registrants alike should not blindly assume that an application of the Federal Circuit’s standard of materiality will be the order of the day.

III. APPLICATIONS OF THE TESTS TO PARTICULAR SITUATIONS

A. Allegedly Fraudulent Averments of the Ownership of an Applied-for Mark

A threshold requirement for a successful application to register a mark is that the signatory aver under oath a belief “that he or she, or the juristic person in whose behalf he or she makes the verification, to be the owner of the mark sought to be registered.”35 The allegation that signatories fraudulently violated this portion of the application oath was a frequent source of litigation in the five years following Bose’s issuance, and, if the distribution of opinions addressing the issue is any indication, that litigation took place far more often before federal district courts than in proceedings before the Board. Taken as a whole, those opinions suggest that, although the post-Bose Board is wholly unreceptive to this theory of fraud, and although that tends to be true of most courts as well, some allegations of fraudulent claims of mark ownership have met with success.

In cases in which the veracity of the signatory’s claim to own an applied-for mark is at issue, the majority outcome is an opinion clearing the signatory of any fraudulent intent,36 often as a matter of law.37 In one case disposing of this theory, the court determined 33. 649 F.3d 1276 (Fed. Cir. 2011) (en banc). 34. Id. at 1291. 35. 15 U.S.C. § 1051(a)-(b) (2012). 36. See, e.g., New Look Party Ltd. v. Louise Paris Ltd., No. 11 Civ. 6433(NRB), 2012 WL 251976, at *5 n.7 (S.D.N.Y. Jan. 11, 2012) (denying request for cancellation presented by motion for preliminary injunction on ground that “plaintiff has done no more than offer the assertion that [the registrant] knew it was not the ‘the owner of the [registered] mark and entitled to use the mark as applied’”). 37. See, e.g., Gray v. Novell, Inc., 412 F. App’x 199, 205 (11th Cir. 2011) (affirming holding on registrant’s motion for summary judgment that registrant validly had acquired mark from predecessor in interest and that representation of ownership in application therefore had been accurate); Progressive Emu, Inc. v. Nutrition & Fitness, Inc., No. 2:12-cv-01079, 2014 WL 2890837, at *8 (N.D. Ala. June 25, 2014) (“Because the evidence in this case shows that [the registrant] has the superior claim to ownership, . . . [the registrant’s]

944 Vol. 104 TMR that there was a material factual dispute as to whether the defendant actually owned the mark underlying its registration at the time it applied to register the mark.38 Nevertheless, the existence of such a dispute was not dispositive evidence that the defendant had defrauded the USPTO; rather, “[t]he question [in fraudulent misconduct inquiries] is not whether the [challenged] statement is factually false, but whether the applicant subjectively believed that it was false at the time he or she made the representation.”39 Because the signatory on the defendant’s application “consistently maintained her belief that [the registrant] owned the rights to the . . . business [associated with the applied-for mark] and its related intellectual property,” the plaintiff could not carry the strict burden of proving fraud, and summary judgment in the defendant’s favor therefore was appropriate.40

Another example of this theory of fraud falling short as a matter of law can be found in the outcome of a dispute involving competitors in the tequila industry.41 The action began as a declaratory judgment action in which the counterclaim plaintiffs sought the invalidation of registrations covering differing views of a bottle design owed by the lead counterclaim defendant.42 The gravamen of the counterclaim plaintiffs’ assertion of fraudulent procurement was that the lead counterclaim defendant had inaccurately represented during the application process that it was the sole source of the tequila sold in the bottle: According to the court’s characterization of this argument, “Counterclaimants

motion for summary judgment will . . . be granted . . . .”); Colón-Lorenzana v. S. Am. Rests. Corp., No. 12-1794 (MEL), 2014 WL 1794459, at *4-5 (D.P.R. May 6, 2014) (granting motion to dismiss claim of fraudulent procurement grounded in theory that that registrant’s claim to own mark for sandwich was inconsistent with challenger’s claim to have invented sandwich); Axiom Worldwide, Inc. v. HTRD Grp. Hong Kong Ltd., No. 8:11–cv–1468–T–33TBM, 2013 WL 2712787, at *5 (M.D. Fla. June 12, 2013) (rejecting registrant’s claim of ownership but nevertheless granting its motion for summary judgment on ground that “based on the evidence supplied by [the registrant], the Court finds that [the registrant] subjectively believed that it had a right to use the relevant trademarks, and as such, did not commit fraud in submitting its application to the USPTO”); Dahon N. Am., Inc., v. Hon, No. 2:11-cv-05835-ODW (JCGx), 2012 WL 1413681, at *11 (C.D. Cal. Apr. 24, 2012) (granting motion to dismiss claim of fraudulent procurement grounded in theory that registrant had falsely claimed to be the owner of marks intended to be used by companies related to registrant); Sci. Computing Assocs. v. Warnes, No. 07-CV-6351, 2011 WL 1327398, at *6 (W.D.N.Y. Apr. 5, 2011) (dismissing for failure to state a claim counterclaim for cancellation grounded in cursory allegation that rights to registered mark were obtained fraudulently). 38. See Ricks v. BMEzine.com, LLC, 727 F. Supp. 2d 936 (D. Nev. 2010). 39. Id. at 967. 40. Id. 41. See E & J Gallo v. Proximo Spirits, Inc., 103 U.S.P.Q.2d 1656 (E.D. Cal. 2012). 42. The counterclaim plaintiffs’ allegations of fraud sounded in both a request under Section 37 for the cancellation of the lead counterclaim defendant’s registrations and a cause of action for monetary relief under Section 38. See id. at 1661, 1667-68.

Vol. 104 TMR 945 contend that [the lead counterclaim defendant] knowingly misrepresented in its application that it was the owner of the marks, even though it knew that [another counterclaim defendant] was the sole manufacturer of the tequila and that [the lead counterclaim defendant] does not control the quality of the goods.”43 Reviewing the summary judgment record, the court identified three reasons why the counterclaim plaintiffs could not establish that the lead counterclaim defendant’s averments of ownership were inaccurate, much less fraudulent. First, “[the lead counterclaim defendant] correctly points out that it may own trademark rights in the bottle design even though it is the distributor of the product.”44 Second, several agreements between the counterclaim defendants expressly granted the lead counterclaim defendant the trade dress rights to the bottle’s appearance.45 And, third, those same agreements established that the lead counterclaim defendant did, in fact, have at least some control over the quality of the tequila in question.46 The counterclaim plaintiffs therefore prevailed on the ground that “[t]he absence of specific false statements is compelling, particularly when Counterclaimants have the heavy burden to establish this claim of fraud by clear and convincing evidence.”47

The difficulty in proving the required scienter by applicants and registrants also has led to the rejection of allegations of fraud under this theory after trial.48 In a representative case producing

43. Id. at 1664. 44. Id. 45. Id. at 1664-65. 46. Id. at 1665. 47. Id. at 1667. 48. See, e.g., Excell Consumer Prods. Ltd. v. Smart Candle LLC, No. 11 C 7220(MEA), 2013 WL 4828581, at *23 n.8 (S.D.N.Y. Sept. 10, 2013) (finding registrant to be junior user of disputed mark following bench trial but nevertheless concluding that “[b]ecause we found that [the registrant] operated in the good faith belief that they [sic] had the right to register the trademark, we conclude that they [sic] did not deliberately attempt to mislead the PTO.”); Factory Five Racing, Inc. v. Shelby, No. 91150346, 2010 WL 4232609, at *20 (T.T.A.B. Oct. 13, 2010) (nonprecedential) (rejecting claim of fraud after trial on ground that “[i]t is abundantly clear that [the lead plaintiff] has a sincere, good-faith belief that he is the owner of the rights to the [applied-for marks]”); Galaxy Metal Gear, Inc. v. Direct Access Tech., Inc., No. 91184213, 2010 WL 3501481, at *6 (T.T.A.B. Aug. 10, 2010) (nonprecedential) (rejecting claim of fraud following trial on ground that “[e]ven if applicant’s witness is incorrect in his belief that applicant owns the mark, . . . opposer has not carried its heavy burden of proving the ‘subjective intent to deceive,’ which, the Court in Bose noted, ‘however difficult it may be to prove, is an indispensable element in the analysis’” (quoting Bose, 476 F.3d at 1491)); Slaska Wytwornia Wodek Gatunkowtch “Polmos” SA v. Stawski Distrib. Co., No. 92044806, 2010 WL 3164751, at *7 (T.T.A.B. Jul. 26, 2010) (nonprecedential) (rejecting claim of fraud after trial because “the record does not include any agreement between the parties that clearly defines ownership of the [registered] mark . . . in the United States” and, therefore, “it is unreasonable to infer that respondent filed the application with intent to deceive the Office as to ownership”); cf. Multi Access Ltd. v. Wang Lao Ji Food & Beveragesubsidiary, Yancheng Pharma. Stock Corp. of Guangzhou,

946 Vol. 104 TMR this result, there was no dispute that the plaintiff’s principal was aware of the defendants’ use of a strikingly similar mark at the time he signed applications to register the plaintiff’s version of the mark. In fact, the parties had a long-standing business relationship both before and after the applications were filed, under which the plaintiff distributed the defendants’ products. 49 That knowledge, however, was not enough to satisfy the test for fraud50 based on the court’s finding after a bench trial that the scienter of the plaintiff’s principal at the time he executed the applications in question was, at a minimum, in dispute. After reviewing a variety of doctrinal tests for allocating ownership rights between manufacturers and distributors, the court determined that six of those factors were relevant to the parties’ relationship: (1) which party originated the mark and first applied it to the associated goods; (2) which party’s name appeared with the mark; (3) which party maintained the quality and uniformity of the associated goods; (4) with which party the public identified the product and to whom purchasers made complaints; (5) which party paid for the advertising and promotion of the associated goods; and (6) which party possessed the goodwill associated with the mark.51 Of those factors of which there was record evidence,52 the third, the fourth, and the sixth factors favored the plaintiff, while the defendants failed to prove by the required clear and convincing evidence that the first and second factors favored them.53 The plaintiff’s colorable claim of actual ownership therefore weighed against a finding of fraud, as did its signatory’s lack of knowledge of trademark law and the defendants’ failure to object when notified of the plaintiff’s intent to register the mark.54

A final reported opinion of note rejecting a cause of action based on an allegedly fraudulent claim of mark ownership arose No. 92054959, 2014 WL 1649333, at *4-9 (T.T.A.B. Apr. 4, 2014) (nonprecedential) (finding that attorney’s mistaken identification of himself as “owner” when executing combined declaration under Sections 8 and 15 did not result in fraudulent maintenance of registration). 49. See Haggar Int’l Corp. v. United Co. for Food Indus., 906 F. Supp. 2d 96 (E.D.N.Y. 2012). 50. The court framed that test in the following manner:

For [the defendants] to show that [the plaintiff] committed fraud by asserting ownership of the [applied-for] mark[] . . . to the USPTO, [the defendants] must prove, by clear and convincing evidence, that [the plaintiff] deliberately and deceitfully misrepresented itself to be the owner of the mark[]. Thus, if [the plaintiff] had “at least ‘color of title’ to the mark,” it did not commit fraud by asserting ownership.

Id. at 108 (quoting Yocum v. Covington, 216 U.S.P.Q. 210, 216-17 (T.T.A.B. 1982)). 51. Id. at 112. 52. The trial record did not contain evidence or testimony on the fifth factor, namely, which party had paid to advertise or promote the sale of goods bearing the mark. Id. at 125. 53. Id. at 113-25. 54. Id. at 126.

Vol. 104 TMR 947 out of a business relationship in which a defendant, one Dr. Wittmann, had invented a surgical patch for use during abdominal surgery.55 Dr. Wittmann initially commercialized his invention through the plaintiff, which sold patches under the unregistered WITTMANN PATCH mark and in which he owned a 49 percent stake. While still associated with the plaintiff, he secured a federal registration of the WITTMANN PATCH mark in his own name, but the validity of that registration was put into play, when, seven years after leaving the plaintiff, he organized two new companies that used the registered mark in direct competition with the plaintiff. Weighing the merits of the plaintiff’s motion for a preliminary injunction, the court concluded that the plaintiff was likely to succeed in demonstrating its ownership of the disputed mark.56 Nevertheless, that finding did not translate into one that the registration had been fraudulently procured. Rather:

[The plaintiff] cannot establish fraud simply by showing that Wittmann was mistaken, and it does not present clear and convincing evidence that Wittmann attempted to mislead the USPTO. Nor does [the plaintiff] show that its rights to the mark were so clearly established that Wittmann’s failure to disclose them constituted fraud.57 Of course, not all post-Bose claims of fraudulent procurement

grounded in inaccurate claims of mark ownership have failed, and, indeed, several challengers asserting them have had better luck. For example, the plaintiff in one case turning on this theory was a manufacturer of mulch products, which discovered that its distributor had registered a mark the plaintiff believed it owned.58 In granting the plaintiff’s motion for a preliminary injunction, the court applied a four-factor test to resolve the parties’ competing 55. See Starsurgical Inc. v. Aperta, LLC, 832 F. Supp. 2d 1000 (E.D. Wis. 2011). 56. Id. at 1003 (“Simply because Wittmann was a shareholder and officer of [the plaintiff] does not mean that he owns the mark.”). 57. Id. at 1004.

The court subsequently reiterated this point on the parties’ cross-motions for summary judgment. See Starsurgical Inc. v. Aperta, LLC, No. 10–CV–01156, 2014 WL 4072117 (E.D. Wis. Aug. 14, 2014). At that stage of the case, the plaintiff’s fraud-based attack on Wittmann’s registration was grounded in the theory that Wittmann had inaccurately claimed ownership of the underlying mark based on the mark’s putatively licensed use by the plaintiff. The court was unimpressed with the plaintiff’s showing that the plaintiff was not, in fact, a licensee:

Wittmann responds that he honestly believed that he had licensed [the plaintiff] to use the trademark and that he owned the mark based on [the plaintiff’s] use of it. He points out that the mark contains his name and that [the plaintiff] asked him for permission to use it. I conclude that a jury must decide what Wittmann believed when he filed his application in 2002 and his subsequent declaration of continued use in 2009.

Id. at *8. 58. See Country Fare LLC v. Lucerne Farms, 102 U.S.P.Q.2d 1311 (D. Conn. 2011).

948 Vol. 104 TMR claims of ownership.59 Each of the relevant factors lined up in the plaintiff’s favor,60 and the defendant’s case was not helped by its having submitted an altered sample of the plaintiff’s packaging in support of its own application.61 For purposes of the plaintiff’s bid for preliminary injunctive relief, the defendant therefore was deprived of the benefit of its registration:

Although a high burden applies to the Plaintiff’s claim that Defendant committed fraud on the Trademark Office, the Court finds that the Plaintiff has clearly met its burden of persuasion [by] presenting clear and convincing evidence that the Defendant secured a trademark [registration of] the [disputed] mark through fraud, as reflected [in] testimonial evidence and supporting exhibits, evincing that the Plaintiff had clear rightful ownership to the [disputed] trademark and that the defendant made material misrepresentations in its application to the Trademark Office . . . despite its knowledge of the Plaintiff[’]s rightful ownership of the mark.62 A different defendant and federal registrant found to have

submitted a fraudulent claim of mark ownership on a motion for summary judgment had the deck stacked even more against him.63 The defendant was one of a number of family members involved in the historically peacefully coexisting use of a mark for pizzerias in western New York. When the family’s ties began to unravel, the defendant sought and received an unrestricted federal registration of the mark based upon his alleged use as early as 1980. The summary judgment record demonstrated that the plaintiff had been only eight years old on that claimed date, but that consideration did not lead to the invalidation of the plaintiff’s registration. Rather, the court was more concerned with the undisputed fact that the plaintiff had not himself used the mark at any date. Instead, he had at most been a one-third shareholder in a company that had; moreover, after receiving his registration, he attempted to sell his interest in that company to his siblings. Finding fraud as a matter of law, the court held that:

[T]he record indicates that [the defendant] had no good faith basis whatsoever to claim that he owned the [disputed] mark.

59. That test contemplated consideration of: “(1) which party invented and first affixed the mark on to the product, (2) which party’s name appeared with the trademark; (3) which party maintained the quality and uniformity of the product; and (4) with which party the public identified the product and to whom purchases [sic] made complaints.” Id. at 1317 (quoting Tactica Int’l v. Atl. Horizon Int’l, 154 F. Supp. 2d 586, 600 (S.D.N.Y. 2001)). 60. Id. at 1317-18. 61. See id. at 1314. 62. Id. at 1317. 63. See MPC Franchise, LLC v. Tarntino, No. 11-CV-6310 CJS, 2014 WL 1920531 (W.D.N.Y. May 14, 2014).

Vol. 104 TMR 949

Instead, [the defendant] was well aware that he was merely a one-third owner of [his company]. [The defendant’s] misstatement of ownership was not a mistake, but instead, was part of his long-term plan to sell his interest in [his company] and begin his own franchising business. To be clear on that point, [the defendant] was not attempting to register the mark on behalf of the corporation in which he was a part owner; he registered it for himself . . . .

[The defendant] cannot defeat summary judgment merely by claiming, in conclusory fashion, that he believed he owned the mark, without offering any evidence to support such a belief.64 Of perhaps greater significance from a doctrinal perspective, a

New York federal district court has reached a post-Bose finding of fraud as a matter of law using the older Medinol standard to evaluate the validity of a registration secured through an inaccurate averment of mark ownership.65 The registration at issue was that of the TAVERN ON THE GREEN mark for restaurant services, which was owned by a registrant that the court found was merely a licensee of the City of New York, rather than the mark’s owner. Instead of applying a “clear and convincing evidence” standard of proof, the court held the registrant to a duty of “uncompromising candor.”66 The registrant had executed a 1973 agreement with the city containing the word “license” and reciting what passed as quality-control provisions. Under these circumstances, the registrant’s failure to disclose that agreement in its 1978 application fell short of that duty: “That the 1973 Agreement is not explicitly labeled a trademark license agreement does not alter the fact that [the registrant’s principal] acknowledged the City’s rights to the [mark] in the Agreement and knew that his venture was merely one in a succession of operators of the restaurant.”67 Because the registrant was aware at the time of its application that it was a mere licensee, a finding of fraud and the cancellation of the registration at issue were appropriate as a matter of law.68

Finally, just as the heavily factual nature of the inquiry into registrants’ claims of mark ownership often precludes the grant of summary judgment motions filed by challengers to registrations, so too can it scuttle registrants’ attempts to have the issue resolved

64. Id. at *17. 65. See City of N.Y. v. Tavern on the Green, L.P., 94 U.S.P.Q.2d 1519 (S.D.N.Y. 2010). 66. Id. at 1525 (quoting Orient Express Trading Co. v. Federated Dep’t Stores, Inc., 842 F.2d 650, 653 (2d Cir. 1988)). 67. Id. 68. Id.

950 Vol. 104 TMR as a matter of law.69 In one case in which it was undisputed that the defendants had been the first to use the disputed marks in commerce, the plaintiff nevertheless pursued a Section 38 cause of action against them on the theory that they did not, in fact, own the marks.70 The defendants moved to dismiss that cause of action for failure to state a claim, but the court declined to do so. Reviewing the plaintiff’s complaint, it instead held that:

Plaintiff alleges that Defendants, when applying for registration of [the disputed] marks, misrepresented to the USPTO that they had ownership of those marks. More specifically, Plaintiff submits that Defendants falsely presented themselves to the USPTO as owners of the . . . marks after they allegedly agreed to allow Plaintiff to use the [primary mark] and any associated marks. These factual allegations go beyond merely reciting the elements of the cause of action and put Defendants on sufficient notice as to Plaintiff’s claim. Defendants have not shown that they are entitled to dismissal of Plaintiff’s Lanham Act claims.71

B. Allegedly Fraudulent Averments of the Exclusive Right to Use an Applied-for

Mark in Commerce Assuming that they are neither seeking a concurrent-use

registration nor basing their claims on a filing in another national trademark office, applicants seeking to register marks in the USPTO must include in their applications a verified statement that:

[T]o the best of the verifier’s knowledge and belief, no other person has the right to use such mark in commerce either in the identical form thereof or in such near resemblance thereto as to be likely, when used on or in connection with the goods of such other person, to cause confusion, or to cause mistake, or to deceive . . . .72

Post-Bose treatments of accusations that applicants or registrants have violated this obligation by fraudulently failing to disclose the existence of other users of the same or similar marks have produced varying results. When those accusations have failed, that

69. See, e.g., Canales v. ALM Media, LLC, No. A-12-CV-1036-LY, 2014 WL 2807677, at *4 (W.D. Tex. June 20, 2014) (relying on averments in complaint of registrant’s knowledge of challenger’s prior use of disputed mark to deny motion to dismiss request for cancellation of registration grounded in allegedly false claim of ownership in the application process). 70. See Wellpath Solutions, Inc. v. Wellpath Energy Servs., LLC, No. 6:12cv286, 2013 WL 1314423 (E.D. Tex. Mar. 28, 2013). 71. Id. at *3. 72. 15 U.S.C. §§ 1051(a)(3)(D), 1051(b)(3)(D) (2012).

Vol. 104 TMR 951 failure has all too often resulted from the difficulty in proving the signatory’s scienter, and, when they have succeeded, that success has taken place exclusively in district court litigation, rather than that before the Board.

On one side of the issue, and assuming that an applicant actually was aware of the prior use in the United States of a confusingly similar mark at the time it applied to register its own mark,73 the Board consistently has confirmed that that knowledge cannot in and of itself be the basis of a finding of fraud.74 As it 73. Obviously, a party pursuing a fraud-based challenge to an application or registration grounded in an alleged violation of the required oath must make a threshold showing that the signatory on the application at issue was aware of the prior use of a mark likely to be confused with that covered by the application. See, e.g., Privado Mktg. Grp. LLC v. Eleftheria Rest Corp., No. 13-cv-3137-ER, 2014 WL 3377107, at *6 (S.D.N.Y. July 7, 2014) (granting motion to dismiss counterclaim for cancellation on ground that “[e]ven when read as a whole, . . . nothing in the counterclaims tends to suggest that [the registrant] had reason to know of and intentionally conceal Counterclaim Plaintiffs’ alleged first use [of the disputed mark”]); Intellogy Solutions, LLC v. IntelliGolf, Inc., No. 91198579, 2013 WL 4397053, at *2-4 (T.T.A.B. July 29, 2013) (nonprecedential) (finding that applicant’s awareness of opposer’s use of a domain name did not establish applicant’s awareness of opposer’s use of mark corresponding to that domain name); Cavern City Tours Ltd. v. Hard Rock Café Int’l Inc., No. 92044795, 2011 WL 5014033, at *7 (T.T.A.B. Sept. 29, 2011) (nonprecedential) (rejecting claim of fraud after trial based on finding that “petitioner has not identified any individual connected in any way with respondent who knew of petitioner’s alleged rights to the mark in the United States prior to the filing of respondent’s application”). For an opinion holding that an applicant’s awareness of an allegedly conflicting use outside of the United States is irrelevant to this inquiry, see Paleteria La Michoacana, Inc. v. Productos Lacteos Tocumbo S.A. De C.V., No. 11–1623 (RC), 2014 WL 4759945, at *30-31 (D.D.C. Sept. 25, 2014). 74. See, e.g., Bresette v. Sigma Holding Corp., No. 92054984, 2014 WL 1649334, at *13 (T.T.A.B. Mar. 31, 2014) (nonprecedential) (rejecting claim of fraud after trial on ground that “the fact that respondent was in receipt of a letter from petitioner, in which petitioner claimed rights in the [disputed] mark, without more, is not sufficient for petitioner to meet the stringent requirement that fraud be proven to the hilt with clear and convincing evidence, including of intent to deceive the office”); 299614 Alberta Ltd. v. Fresh Hemp Foods, Ltd., No. 91201475, 2014 WL 1390523, at *6 n.4 (T.T.A.B. Mar. 26, 2014) (nonprecedential) (“We note that opposer did not specifically assert that applicant was aware of opposer’s ‘superior’ rights. For this reason, the fraud claim was not properly pleaded.”); Diak v. Crafts Americana Grp., No. 91195102, 2013 WL 5946236, at *7 (T.T.A.B. Oct. 22, 2013) (nonprecedential) (rejecting claim of fraud after trial on ground that respondent had disclosed existence of third party using pattern and color combination similar to that covered by design mark registration); MedBox, LLC v. PVM Int’l, Inc., No. 91199915, 2013 WL 5820846, at *10 (T.T.A.B. Oct. 10, 2013) (nonprecedential) (“[T]o the extent that the fraud claim is based on the allegation that applicant and/or [its principal] knew about opposer or opposer’s use of [an allegedly confusingly similar mark] prior to filing the involved application, that is not enough to establish fraud, and even if it was, the record contains no evidence supporting the allegation.”); Katz Commc’ns, Inc. v. Katz Mktg. Solutions LLC, No. 91191178, 2013 WL 3188904, at *17 (T.T.A.B. Feb. 21, 2013) (nonprecedential) (rejecting claim of fraud after trial on ground that applicant’s receipt of demand letter from opposer “failed to prove that applicant knew that opposer had rights in any [confusingly similar] mark, let alone that opposer had rights superior to applicant’s, or that applicant believed that its use of its mark would be likely to cause confusion”); Orange 21 N. Am. Inc. v. Beryll Brand Div. Est., No. 91181440, 2012 WL 684463, at *9 (T.T.A.B. Feb. 20, 2012) (nonprecedential) (rejecting claim of fraud after trial on ground that prior inter partes dispute between parties did not in and of itself establish that claim of exclusive right to use was fraudulent); Little Concepts, LLC v. Striker Records, Inc., No. 92050431,

952 Vol. 104 TMR explained in Qualcomm Inc. v. FLO Corp.75 while denying an opposer’s motion for summary judgment on the issue:

A plaintiff claiming that the declaration or oath in a defendant’s application for registration was executed fraudulently, in that there was another use of the same or a confusingly similar mark at the time the oath was signed, must allege particular facts which, if proven, would establish that: (1) there was in fact another use of the same or a confusingly similar mark at the time the oath was signed; (2) the other user had legal rights superior to applicant’s; (3) applicant knew that the other user had rights in the mark superior to applicant’s, and either believed that a likelihood of confusion would result from applicant’s use of its mark or had no reasonable basis for believing otherwise; and that (4) applicant, in failing to disclose these facts to the U.S. Patent and Trademark Office, intended to procure a registration to which it was not entitled.76 For the most part, the disposition of failure-to-disclose claims

by federal courts has been consistent with this analysis,77 2010 WL 5574282, at *6 (T.T.A.B. Dec. 27, 2010) (nonprecedential) (“Having failed to prove that it has superior rights in the mark vis-à-vis respondent, petitioner ipso facto has not and cannot prove that respondent filed its application with knowledge of petitioner’s superior rights, and that it committed fraud when it failed to disclose such rights to the Office in filing its application. Stated differently, petitioner having failed to prove its superior rights, there were no such rights of which respondent could have had knowledge and which respondent could have knowingly failed to disclose to the Office.”); Eddy Packing Co. v. HEB Grocery Co., No. 92041545, 2010 WL 1720597, at *17 (T.T.A.B. Apr. 14, 2010) (nonprecedential) (rejecting claim of fraud after trial on ground that “in order to prove that respondent committed fraud, petitioner was required to show not only that respondent’s statement [of an exclusive right to use] was literally false, but also that respondent knew it to be false”). 75. 93 U.S.P.Q.2d 1768 (T.T.A.B. 2010). 76. Id. at 1770. 77. See, e.g., Neurovision Med. Prods. Inc. v. NuVasive, Inc., 494 F. App’x 749, 751 (9th Cir. 2012) (vacating jury finding of fraudulent procurement on ground that “[t]he district court erred by instructing the jury to determine only whether [the registrant] omitted [from its application] knowledge of [the challenger’s] prior use of the [disputed] mark; the proper inquiry is whether [the registrant] wilfully omitted knowledge of [the challenger’s] prior use of the . . . mark”); Am. Eagle Outfitters, Inc. v. Am. Eagle Furniture, Inc., No. 11 C 02242, 2013 WL 6839815, at *14 (N.D. Ill. Dec. 27, 2013) (ordering registration cancelled based on abandonment of underlying mark but declining to find fraud as a matter of law on ground that the registration’s owners “simply did not understand the true import of the declaration in their application” and that “there is not sufficient evidence to establish that they fraudulently intended to mislead the PTO when they did not disclose [a third party’s] use of the [same] mark”); Purepecha Enters. v. El Matador Spices & Dry Chiles, No. 11 C 2569, 2012 WL 3686776, at *13 (N.D. Ill. Aug. 24, 2012) (denying motion for summary judgment by challenger after noting record support of registrant’s claim of priority and concluding that “the Court would be hardpressed [sic] to conclude that [the challenger] has established by clear and convincing evidence that [the registrant] deliberately attempted to mislead the PTO by presenting materially false and misleading information when [the registrant] applied for its trademark registration.”); cf. Sturgis Motorcycle Rally, Inc. v. Rushmore Photo & Gifts, Inc., No. 11–5052, 2013 WL 5424707, at *4, 8 (D.S.D. Mar. 6, 2013) (rejecting

Vol. 104 TMR 953 including a number that have found no fraud as a matter of law. Indeed, some post-Bose courts have proven so resistant to this theory of fraudulent procurement that they have dismissed challenges based on it at the pleadings stage for failure to state a claim.78 At stake in one case producing such a result were the plaintiff’s four registrations of the mark THE SCOOTER STORE, which, between them, covered insurance claims processing services, as well as maintenance, repair, and delivery services for wheelchairs, power chairs, lift chairs, and motorized scooters.79 In response to having the registrations asserted against it, the defendant counterclaimed for their cancellation on the theory that the plaintiff had failed during the registration process to disclose the existence of a third-party sole proprietorship that used, and had secured an Ohio registration of, the same mark in connection with the retail sale and service of durable medical equipment; according to the defendant, the plaintiff then compounded its original fraud while filing affidavits under Section 8 for two of the registrations.80

The court held that the plaintiff was entitled to the dismissal of the counterclaim for cancellation under the results of a four-factor test substantively identical to that applied by the Board in Qualcomm.81 Although the plaintiff’s averments satisfied the first two of the relevant requirements, they failed to do the same with respect to the others. As to the third factor, the court held that “[m]ere knowledge . . . of another’s actual use of a mark is insufficient to show bad faith.”82 The defendant may have alleged that the plaintiff was aware of the third-party’s Ohio registration, but that awareness was irrelevant because “[a] state trademark

challenger’s attack on registrant’s averments of exclusive use in context of inquiry into acquired distinctiveness of registered mark); Quality Serv. Grp. v. LJMJR Corp., 831 F. Supp. 2d 705, 711 (S.D.N.Y. 2009) (same); WMH Tool Grp. v. Woodstock Int’l, Inc., 93 U.S.P.Q.2d 1570, 1579 (N.D. Ill. 2009) (same); Salu, Inc. v. Original Skin Store, No. CIV. S-08-1035 FCD/KJM, 2010 WL 1444617, at *4 (E.D. Cal. Apr. 12, 2010) (same). 78. See, e.g., Bauer Bros. v. Nike Inc., 98 U.S.P.Q.2d 1160, 1164 (S.D. Cal. 2011) (dismissing action on ground that complaint failed to identify “a specific person or entity who previously used the phrase at issue on [the same goods as those of the registrant]” and, additionally, failed to aver that that prior user had rights superior to those of the registrant, and that the registrant was aware of those superior rights); see also Military Order of Purple Heart Serv. Found., Inc. v. Others First, Inc., No. GLR–12–1483, 2012 WL 6761816, at *3 (D. Md. Dec. 28, 2012) (dismissing averments of fraudulent procurement on ground that “there are no factual allegations in this Count that the [registrant] believed a third party had superior rights in the mark or that it had no reasonable basis to believe that no other person or entity had a right to use the mark”). 79. See Scooter Store, Inc. v. SpinLife.com, LLC, 777 F. Supp. 2d 1102 (S.D. Ohio 2011). 80. See id. at 1108-09. 81. Id. at 1110. 82. Id. at 1112.

954 Vol. 104 TMR registration does not prevent another user from obtaining a federal registration to a mark.”83 And, as to the fourth, it concluded that:

If a petitioner fails to plead adequately the third element, “[a] fortiori, petitioner has also failed to sufficiently plead the fourth element of the claim, i.e., that respondent willfully deceived the PTO by failing to disclose [another party’s superior] rights in the mark, in an effort to obtain a registration to which it was not entitled.”84 Another motion to dismiss for failure to state a claim

succeeded in an action in which the plaintiff averred that the lead defendant’s predecessor had fraudulently failed to disclose its awareness of the plaintiff’s pending application to a closely similar mark during the application process.85 As a threshold matter, the court held that:

[W]hen an applicant avers that it has the exclusive right to use the [applied-for] mark, a fraud claim against the applicant will not lie unless the applicant knew that another person “possess[ed] a superior or clearly established right to use the same or substantially identical mark” for the same or substantially the same goods or services.86

The plaintiff’s attempt to satisfy this standard rested on the theory that the lead defendant’s predecessor had been aware of the plaintiff’s pending application at the time that the predecessor bootstrapped a Russian application into a United States application under Section 44(d).87 Because the predecessor’s Russian application predated the plaintiff’s application, the predecessor’s priority of rights should have disposed of the plaintiff’s allegations of fraud as a matter of law, but the court chose instead to address the issue under the rubric of the predecessor’s scienter: “Here, [the plaintiff] has not pled any facts indicating that [the predecessor] believed that [the plaintiff] had superior rights to the mark. [The plaintiff’s] pleading indicates only that [the plaintiff] itself believed that its rights were superior; this is insufficient to suggest [the predecessor’s] specific intent.”88

A different example of a failure-to-disclose claim falling short of the mark as a matter of law came in an Eleventh Circuit opinion

83. Id. 84. Id. (first alteration in original) (quoting Intellimedia Sports, Inc. v. Intellimedia Corp., 43 U.S.P.Q.2d 1203, 1208 (T.T.A.B. 1997)). 85. See ZAO Odessky Konjatschnyi Zawod v. SIA “Baltmark Invest,” 109 U.S.P.Q.2d 1680 (E.D. Va. 2013). 86. Id. at 1686 (third alteration in original) (quoting Intellimedia Sports, 43 U.S.P.Q.2d at 1208). 87. 15 U.S.C. § 1126(d) (2012). 88. ZAO Odessky, 109 U.S.P.Q.2d at 1686.

Vol. 104 TMR 955 reversing a finding of fraud as clearly erroneous.89 That proceeding arose out of the rather byzantine relationship between a Catholic religious order and a non-Catholic religious order, which may or may not have had a common origin. The counterclaim defendant owned four registrations, each of which had matured from an application containing the required sworn averment that the counterclaim defendant enjoyed the exclusive right to use the applied-for mark. Based on contacts between the parties over the years, as well as Supreme Court authority on the subject of the active inducement of utility patent infringement,90 the district court found after a bench trial that those sworn averments were necessarily fraudulent because the counterclaim defendant and its signatory had been willfully blind to the counterclaim plaintiff’s rights.91

The Eleventh Circuit reversed. Based on a factual finding below that the signatory on the counterclaim defendant’s applications was personally unaware of the counterclaim plaintiff’s use of its mark, the appellate court concluded that “[t]his fact alone compels reversal of the fraud finding, as [the signatory] could not intended to deceive the PTO in attesting to an oath that he believed was entirely accurate”;92 moreover, even if the signatory had been aware of that use, “[i]f the declarant subjectively believes the applicant has a superior right to use the mark, there is no fraud.”93 Finally, the district court’s reliance on case law from the utility patent context was misplaced because

89. See Sovereign Military Hospitaller Order of Saint John of Jerusalem of Rhodes & of Malta v. Fla. Priory of the Knights Hospitallers of the Sovereign Order of Saint John of Jerusalem, Knights of Malta, the Ecumenical Order, 702 F.3d 1279 (11th Cir. 2012). 90. See Global-Tech Appliances, Inc. v. SEB S.A., 131 S. Ct. 2060 (2011). 91. See Sovereign Military Hospitaller Order of Saint John of Jerusalem of Rhodes & of Malta v. Fla. Priory of the Knights Hospitallers of the Sovereign Order of Saint John of Jerusalem, Knights of Malta, the Ecumenical Order, 816 F. Supp. 2d 1290 (S.D. Fla. 2011), aff’d in part, rev’d in part, and vacated in part, 702 F.3d 1279 (11th Cir. 2012). 92. Id. at 1291. 93. Id. at 1292. On this issue, the court concluded from the trial record that:

Here, the [counterclaim plaintiff] did not put forth any evidence to establish that [the signatory]—or [the counterclaim defendant], for that matter—knew or believed that [the counterclaim plaintiff] had a superior right to the marks at issue. Even assuming knowledge of [the counterclaim plaintiff] as of 1983, [the counterclaim defendant’s] relevant service mark registrations provide that the marks were first used in commerce in 1926 and 1927. The bare knowledge that [the counterclaim plaintiff] existed as of 1983 does not undermine [the counterclaim defendant’s] claim to be the senior user of those marks because, even knowing of [the counterclaim plaintiff’s] existence, [the counterclaim defendant] could justifiably believe that its marks were superior based on their first use dating back to the 1920s. In any event, [the counterclaim plaintiff] failed to proffer any evidence that [the signatory] (or [the counterclaim defendant]) believed that [the counterclaim plaintiff] had a right to use [its] marks in commerce. This is fatal to the claim of fraud.

Id. (footnote omitted) (citations omitted).

956 Vol. 104 TMR that court had failed to “exercise caution before importing standards from one area of intellectual-property law into another”94 and because “[the counterclaim plaintiff] does not make an argument to otherwise justify the district court’s use of this standard.”95

Other cases in which this theory of fraud was presented have led to successful motions for summary judgment filed by registrants.96 In one, the challenger to the validity of the registration under scrutiny had a date of first use prior to that of the registrant.97 The summary judgment record demonstrated that there was no dispute that the registrant was aware of the challenger’s prior use at the time it applied to register its mark and that the registrant had not volunteered the existence of that prior use to the USPTO. Having found earlier in its opinion that the parties’ marks were not confusingly similar, however, the court was in no mood to entertain the suggestion that the registrant had been obligated to make such a disclosure.98 Beyond this, the challenger’s disclaimer from its own registration of the only words the parties’ marks had in common only further demonstrated that no reasonable fact finder could conclude that the challenger had

94. Id. at 1291. 95. Id. 96. See, e.g., Box Acquisitions, LLC v. Box Packaging Prods., LLC, No. 12 C 4021, 2014 WL 1245264, at *8-9 (N.D. Ill. Mar. 26, 2014) (rejecting allegations of fraudulent procurement on summary judgment based on challenger’s failure to establish anything more than registrant’s awareness of challenger’s past use of claimed mark); Pandora Jewelers 1995, Inc. v. Pandora Jewelry, LLC, No. 09-61490-Civ, 2011 WL 2174012, at *13 (S.D. Fla. 2011) (entering summary judgment in registrant’s favor on ground that “[t]he oath . . . does not require an applicant to disclose all other persons who may be using the mark; it only requires an applicant to disclose those persons who the applicant believes possesses [sic] the legal right to use the mark” and because challenger’s showing lacked proof of subjective intent to defraud USPTO); Dorpan, S.L. v. Hotel Melia, Inc., 851 F. Supp. 2d 398, 409 (D.P.R. 2012) (rejecting allegations of fraudulent procurement on summary judgment based on challenger’s failure to adduce evidence of registrant’s awareness of challenger’s putative prior rights), rev’d on other grounds, 728 F.3d 55 (1st Cir. 2013); Donovan v. Bishop, No. 1:09-cv-275-WTL-TAB, 2010 WL 4062370, at *3 (S.D. Ind. Oct. 14, 2010) (granting registrant’s motion for summary judgment on ground that “none of [the challenger’s] evidence establishes the critical fact—that [the registrant] knew that other individuals had the right to use the marks”); Magna Int’l, Inc. v. Deco Plas, Inc., No. 3:08CV427, 2010 WL 2044873, at *11 (N.D. Ohio May 21, 2010) (“Even assuming that [an] affidavit [proffered by the challenger] is sufficient to create a genuine issue of fact about whether [the registrant’s] employees attended the [challenger’s] grand opening, that fact is not material. It at most demonstrates that [the registrant] knew about [the challenger’s] use of the [disputed mark] . . . . [The challenger] has provided no evidence that [the registrant] lacked a good faith belief that it was the senior user.”); Kerzner Int’l Ltd. v. Monarch Casino & Resort, Inc., No. 3:06-CV-232-ECR-RAM, 2009 WL 5066908, at *17 (D. Nev. Dec. 14, 2009) (granting registrant’s motion for summary judgment based on parties’ agreement that undisclosed mark was not likely to be confused with registrant’s mark). 97. See World Wide Sales Inc. v. Church & Dwight Co., 93 U.S.P.Q.2d 1313 (N.D. Ill. 2009). 98. Id. at 1319.

Vol. 104 TMR 957 carried its burden of proving fraud by clear and convincing evidence.99

These outcomes notwithstanding, however, at least some courts have credited claims that registrants had falsely claimed to have the exclusive right to use their marks, especially at the pleadings stage.100 One plaintiff advancing such a claim survived a motion to dismiss grounded in the theory that the plaintiff’s complaint failed to aver prior rights clearly established by a court decree, a settlement, or a competing registration.101 The court held that theory to be wanting, concluding instead that “a trademark applicant needs to disclose to the USPTO those users it knows to have superior or clearly established rights in the [applied-for] mark.”102 With respect to the defendant’s scienter on that issue, it then observed that:

Plaintiff makes five factual allegations by which they [sic] attempt to show Defendant’s knowledge of Plaintiff’s superior rights to the [disputed] mark: (1) Defendant’s trademark clearance search which revealed Plaintiff’s attempts to procure federal registration; (2) the competitor relationship between the two parties in a field where Plaintiff has enjoyed “decades of commercial success;” (3) Defendant’s knowledge of Plaintiff and its marks by a co-founder’s understanding of the same; (4) Defendant’s adoption of other product names imitating Plaintiff’s; and (5) the two parties’ products appearing in a common distributor’s catalogue.103

Because “[f]raud, by its nature is difficult to detect and to state with certainty,” these allegations, taken as true for purposes of the 99. See id. 100. See, e.g., Gen. Linen Serv., Inc. v. Gen. Linen Serv. Co., No. 12-cv-111-LM, 2014 WL 2605430, at *5-6 (D.N.H. June 11, 2014) (denying, without extended analysis, motion to dismiss counterclaim grounded in allegedly false representation of exclusive use in application process); Burnscraft Mfg. Corp. v. Nat’l Constr. Rentals, Inc., No. H-13-2769, 2014 WL 1386300, at *5 (S.D. Tex. Apr. 9, 2014) (denying motion to dismiss based in substantial part on plaintiff’s allegations of defendants’ awareness of plaintiff’s prior rights); Tuff-Wall, Inc. v. Sherwin-Williams Co., No. 2:13-CV-99-KS-MTP, 2014 WL 1342976, at *2 (S.D. Miss. Apr. 3, 2014) (denying motion for judgment on the pleadings on ground that “[i]f Defendant offered to purchase [goods bearing the plaintiff’s mark] or sell [them] in its stores, it is reasonable to infer that it knew Plaintiff had the right to use the trademark and was using it”); Cimarron Lumber & Supply Co. v. McLiney Lumber & Supply, LLC, No. 12–2240–JAR, 2013 WL 1308708, at *5 (D. Kan. Mar. 29, 2013) (“The Court acknowledges that Counterclaim Plaintiffs will have a heavy burden of proving knowledge, however the Court cannot conclude, at this juncture, that their allegations are insufficient to withstand [the registrant’s] motion to dismiss.”); cf. Canales v. ALM Media, LLC, No. A-12-CV-1036-LY, 2013 WL 5719476, at *14 (W.D. Tex. Oct. 18, 2013) (declining to dismiss complaint alleging fraudulent procurement of Texas state registration). 101. See Prof’l’s Choice Sports Med. Prods., Inc. v. Eurow & O’Reilly Corp., No. 13cv1484 AJB (KSC), 2014 WL 524007 (S.D. Cal. Feb. 10, 2014). 102. Id. at *5. 103. Id. at *7.

958 Vol. 104 TMR motion to dismiss, established the required bad-faith intent to deceive the USPTO.104

Moreover, although they are rare, actual findings of fraudulent procurement under a failure-to-disclose theory have occurred on motions for summary judgment. For example, one court finding fraud as a matter of law did so in a dispute among the members of an extended family involved in the operation of pizza parlors under the PUDGIE’S mark.105 In the initial stages of a dispute with his cousins, the defendant sought and received a federal registration of that mark in his individual name. The court found it beyond material dispute that the defendant had failed to disclose the mark’s use for directly competitive services by: (1) a company the defendant owned in equal shares with his two siblings; and (2) additional companies owned by his cousins. It therefore concluded that the defendant had no “good faith basis for failing to disclose that his close family members had been using the Pudgie’s mark for decades, or that he was already engaged in a dispute with them over the use of the mark”;106 beyond that, “even assuming arguendo that [the defendant] individually had the right to use the mark, he has not produced evidence tending to show how he could have honestly believed that Plaintiffs [his cousin’s companies], or even his siblings, did not have a right to use the mark that was at least equal to his.”107 Cancellation of the defendant’s registration therefore was appropriate even under the heightened evidentiary burden applicable to the plaintiffs’ claim of fraudulent procurement.

Another court reaching such a finding as a matter of law did so after holding that the lead defendant had a duty of candor when pursuing a registration of the disputed mark in the USPTO.108 Whether the court’s ultimate finding of fraud as a matter of law was driven by this standard is an open question. On the one hand, the summary judgment record was sufficiently replete with undisputed evidence of a long-standing business relationship between the parties and the lead defendant’s awareness of the plaintiff’s use of the mark “well before [the lead defendant] filed his application [for a] trademark registration”109 that such a finding could have resulted under any test for fraudulent procurement. On the other hand, however, the lead defendant’s testimony that he believed the earlier transaction merely 104. Id. 105. See MPC Franchise, LLC v. Tarntino, No. 11-CV-6310 CJS, 2014 WL 1920531 (W.D.N.Y. May 14, 2014). 106. Id. at *17. 107. Id. 108. See E. W., LLC v. Rahman, 896 F. Supp. 2d 488, 508 (E.D. Va. 2012). 109. Id. at 509.

Vol. 104 TMR 959 authorized the plaintiff to use the mark under license (as opposed to an outright assignment of the mark from the defendants to the plaintiff) ordinarily would have created a dispute of material fact on the issue. The court’s dismissal of that testimony suggests that the putative duty of candor it had recognized was indeed responsible for the outcome:

Even viewing the evidence in a manner most favorable to the Defendants, i.e., that [the lead defendant] truly believed this licensing arrangement to be the case when he submitted the application, [his] statement that no other person had the right to use the mark in commerce would still constitute a false and misleading statement.110 Finally, of course, findings that registrants have fraudulently

failed to disclose other users can take place after full trials on the merits.111 One such finding by a jury came in a case in which the lead plaintiff was the owner of the registered FIREHOUSE mark for restaurant services.112 Evidence and testimony adduced at trial established that a principal of the lead plaintiff became aware of a third-party establishment operating under the FIREHOUSE GRILL & PUB mark approximately six months before the lead plaintiff applied to register its mark, and both the principal and one of the lead plaintiff’s franchisees acknowledged that the third party enjoyed priority of rights vis-à-vis the lead plaintiff and that franchisee. The lead plaintiff sought to explain away its prior knowledge by arguing that the third party operated a pool hall that was distinguishable from the lead plaintiff’s restaurant services and that it had reached a coexistence agreement with the third party. The court was insufficiently convinced by these arguments to overturn the jury’s finding of fraud. Noting that the lead plaintiff’s principal had sought to memorialize the alleged

110. Id.

Here, of course, the court erred. Assuming the transaction between the parties was indeed a license and not an assignment of the mark from the defendants to the plaintiff, any use of the mark by the plaintiff would have inured to the benefit of the defendants under Section 5 of the Lanham Act, 15 U.S.C. § 1055 (2012). Under those circumstances, the plaintiff’s use of the mark would not in any way have been inconsistent with the lead defendant’s averment of an exclusive right to use the applied-for mark; instead, as far as the relationship between the plaintiff and the defendants is concerned, that averment would have been entirely correct: “Ownership rights in a trademark or service mark may be acquired and maintained through the use of the mark by a controlled licensee even when the only use of the mark has been made, and is being made, by the licensee.” United States Patent and Trademark Office, Trademark Manual of Examining Procedure § 1201.03(f) (2013); accord Pneutek, Inc. v. Scherr, 211 U.S.P.Q. 824, 833 (T.T.A.B. 1981). 111. See, e.g., On Site Energy Co. v. MTU Onsite Energy Corp., No. 10–CV–1671(JS)(WDW), 2013 WL 3990919, at *3-4 (E.D.N.Y. Aug. 2, 2013) (declining to disturb jury finding of fraud). 112. See Firehouse Rest. Grp. v. Scurmont LLC, No. 4:09-cv-00618-RBH, 2011 WL 4943889 (D.S.C. Oct. 17, 2011).

960 Vol. 104 TMR coexistence agreement only after the lead plaintiff had filed its application,113 it held that:

Viewing the evidence in the light most favorable to the . . . Defendants, the legitimate inference to be drawn from this evidence is that there was, in fact, no consent agreement between the parties prior to [the lead plaintiff’s] filing the FIREHOUSE word mark application with the USPTO. Moreover, the Court finds that there is legally sufficient evidence in the record upon which a reasonable jury could conclude that [the lead plaintiff’s principal] knew of Firehouse Grill & Pub’s senior use of the word “Firehouse” and believed that there was a likelihood of confusion between [the plaintiff’s] Restaurants and Firehouse Grill & Pub at the time [the lead plaintiff] submitted the FIREHOUSE word mark application at his direction. Based on the foregoing, a reasonable jury could have found, by clear and convincing evidence, that [the lead plaintiff] intended to deceive the USPTO when it filed its application for the FIREHOUSE word mark, to which it knew it was not entitled, and declared that “no other person, firm, corporation, or association has the right to use the mark in commerce” in a manner likely to cause confusion.114

C. Allegedly Fraudulent Averment of a Bona Fide Intent to Use an Applied-for Mark

in Commerce in Connection With Particular Goods or Services

Accusations that intent-to-use applications or the registrations maturing from them are based on fraudulent averments of the required bona fide intent to use have generally not proven successful after Bose. Indeed, there is only one readily apparent opinion, reported or otherwise, in which such an accusation has survived until trial.115 Largely because of the difficulty in proving the required scienter, the others have failed either at the pleadings stage or on motions for summary judgment. And, as in the context of other averments of fraudulent procurement and maintenance,

113. According to the plaintiff’s principal, he had spoken with principal of the third party for ten minutes “on a busy night” at that establishment, after which (and after the lead plaintiff’s filing date) he mailed a $5,000 to the third party along with a letter putatively memorializing a coexistence agreement between the two companies. The check was never cashed. Id. at *4-5. 114. Id. at *5 (footnotes omitted). 115. See, e.g., MedBox, LLC v. PVM Int’l, Inc., No. 91199915, 2013 WL 5820846, at *11 (T.T.A.B. Oct. 10, 2013) (nonprecedential) (rejecting claim of fraud after trial on ground that “there was nothing improper or false in applicant declaring that it had a bona fide intent to use the involved mark (through its licensee)”).

Vol. 104 TMR 961 the majority of those accusations have been addressed by courts, rather than by the Board.

One such ill-fated challenge was leveled at a lead defendant alleged to have had “knowingly made a false and material representation that it had a bona fide intention to use [its] mark in commence [sic] . . . on or in connection with . . . fruits, spirits, honey drink, peppermint nastoyka, sake, rice spirit, gin, rum, bitter nastoyka, liqueurs, whiskey, brandy or aperitifs” when registering its mark.116 That representation was fraudulent, the plaintiff claimed, because the lead defendant had in fact intended to use the applied-for mark only in connection with vodka and because the lead defendant had intended to deceive the USPTO by averring otherwise.117 That was not enough for the court, which held the plaintiff to the strict pleading requirements of Rule 9. It noted that “[m]issing from [the plaintiff’s] exhaustive recitation of the elements of its cause of action are any supporting facts suggesting knowledge or intent on the part of [the defendant].118 Specifically, “[w]hile [the plaintiff] provides the factual circumstances surrounding the presentation of these statements to the USPTO, these allegations are insufficient with regards to [the defendant’s] state of mind.”119

Other fraud-based attacks based on this theory have failed on motions for summary judgment.120 One particularly notable federal district court opinion addressing a claim of fraudulent procurement at the summary judgment stage of the case before it demonstrated both the high burden faced by the party asserting 116. Quoted in ZAO Odessky Konjatschnyi Zawod v. SIA “Baltmark Invest,” 109 U.S.P.Q.2d 1680, 1685 (E.D. Va. 2013). By the time the application matured into a registration, its identification of goods had been amended to cover “alcoholic beverages; namely distilled spirits; distilled rice spirits; aperitif wines; alcoholic aperitif bitters; alcoholic honey drink; peppermint schnapps; alcoholic fruit-based beverages; sake; gin; run [sic]; liqueurs; whiskey; brand; [and] vodka.” Quoted in id. at 1682. 117. According to the court’s summary of the complaint’s allegations on this issue:

[The plaintiff] points to the Certificate of Label Approval (“COLA”) registry [maintained by the Alcohol and Tobacco Tax and Trade Bureau], which contains applications by [the lead defendant] only for vodka labels and the lack of evidence before the TTAB [in a prior proceeding between the parties] regarding plans to market goods other than vodka as indications of [the defendant’s] fraudulent intent.

Id. at 1686. 118. Id. at 1685. 119. Id. 120. See, e.g., Hill Holliday Connors Cosmopulos, Inc. v. Greenfield, 433 F. App’x 207, 218-19 (4th Cir. 2011) (affirming entry of summary judgment in registrant’s favor on ground that counterclaim plaintiff had failed to demonstrate any use of commerce of his claimed mark, which rendered registrant’s alleged failure to disclose that use immaterial); Hana Fin., Inc. v. Hana Bank, 398 F. App’x 257, 259 (9th Cir. 2010) (affirming entry of summary judgment in registrant’s favor on ground that “[the registrant’s] mere knowledge of a competing use of the [disputed] mark is insufficient to establish the requisite fraudulent intent”).

962 Vol. 104 TMR such a claim and the dubious wisdom, at least under some circumstances, of asserting it in the first place.121 The registration in question was of the WOULD YOU RATHER . . .? mark for a board game, and it matured from an intent-to-use application filed on July 31, 1997.122 The game was slow to reach the market, and the plaintiffs therefore availed themselves of the five extensions of time available to them before filing a statement of use on November 29, 2004.123 Following the USPTO’s approval of the statement of use, the plaintiffs’ registration was issued on July 19, 2005.124 When the plaintiffs asserted the rights to their registered mark against the producer of a competitive product, that defendant counterclaimed for the cancellation of the plaintiffs’ registration on the ground that the plaintiffs had fraudulently represented throughout the application process that they had a bona fide intent to use their mark. That counterclaim was filed with the court on July 17, 2006, well before the registration’s fifth anniversary of issuance.125

Dismissing the counterclaim on the parties’ cross-motions for summary judgment, the court first addressed the relationship between the plaintiffs’ allegedly false representations and the fraud-based nature of the defendant’s challenge to their registration, concluding that “the falsity and intent prongs are separate, so absent the requisite intent to mislead the PTO, even a material misrepresentation would not qualify as fraud under the Lanham Act warranting cancellation.”126 The court then turned to the defendant’s argument that there was no objective evidence of the plaintiffs’ bona fide intent to use their mark throughout the application process. It held that “[t]hose arguments . . . address only the falsity prong of fraud; they do not demonstrate the clear and convincing evidence necessary to prove subjective intent to deceive the PTO, which . . . is ‘indispensible’ to any fraud cancellation claim.”127 In any case, the convincing evidence and testimony describing the plaintiffs’ efforts to develop and market the game bearing their mark128 forced the defendant into an ill-fated fallback argument: 121. See Spin Master, Ltd. v. Zobmondo Entm’t LLC, 778 F. Supp. 2d 1052 (C.D. Cal. 2011). 122. See id. at 1056. 123. See id. at 1057-59. 124. See id. at 1059. 125. The date of the counterclaim is not apparent from the court’s opinion, but it is recited in the defendant’s responsive pleading to the plaintiffs’ amended complaint. See Answer, Affirmative Defenses and Counterclaims, Falls Media LLC v. Zobmondo!! Entm’t LLC, 778 F. Supp. 2d 1052 (C.D. Cal. 2011), 2007 WL 5303522 (C.D. Cal. Jan. 24, 2007). 126. 778 F. Supp. 2d at 1061 (internal quotation marks omitted).

127. Id. (quoting In re Bose Corp., 580 F.3d 1240, 1243 (Fed. Cir. 2009)). 128. For a description of those efforts, see id. at 1055-59, 1061-66.

Vol. 104 TMR 963

[The defendant] also repeatedly argues that there is a negative inference to be drawn from the fact that [the plaintiffs] sought and obtained all possible extensions of time to file their statement of use. But absent a subjective intent to deceive the PTO during this time, there is nothing wrong with [the plaintiffs] requesting (and being granted) all of the available statutory extensions. Congress created the intent-to-use system and the Court will not treat compliance with statutory procedures as evidence of fraud. Indeed, [the plaintiffs] are far from the only ones to have used the full set of procedures created by Congress: as of 2008, almost 15,000 registrations had been issued after the maximum number of extensions was granted. Thus, [the defendant] cannot demonstrate fraud by pointing to the authorized use of the full system of statutory extensions.129 The ultimate outcome—entry of summary judgment in the

plaintiffs’ favor—may well have been unavoidable, but the fraudulent procurement ground for cancellation pursued by the defendant virtually guaranteed that result. Indeed, the Ninth Circuit had made this very point earlier in the litigation: “If the plaintiff establishes that a mark has been properly registered, the burden shifts to the defendant to show by a preponderance of the evidence that the mark is not protectable.”130 Had the defendant resisted the temptation to accuse the plaintiffs of fraud, it would merely have had to prove that the plaintiffs lacked a bona fide intent to use their mark under that standard. By injecting fraud into the case, however, the defendant unnecessarily saddled itself with the burden of making that showing first, and then proving by clear and convincing evidence that the plaintiff’s averments of a bona fide intent to use had been made in bad faith.131

A different defendant’s assertion of fraudulent procurement based on inaccurate averments of a bona fide intent to use during the application process similarly fell short of the mark on summary judgment.132 An importer and distributor of Japanese 129. Id. at 1066. 130. Zobmondo Entm’t, LLC v. Falls Media, LLC, 602 F.3d 1108, 1113 (9th Cir. 2010). 131. See Spin Master, 778 F. Supp. 2d at 1066-67 (“The undisputed facts defeat any possibility of [the defendant] carrying its burden by clear and convincing evidence that [the plaintiffs] subjectively intended to deceive the PTO at any time during the ITU registration process.”).

Of course, had the plaintiffs’ registration passed its fifth anniversary prior to the defendant’s challenge, the plaintiffs’ alleged lack of a bona fide intent to use their mark would not have been available as a ground for cancellation under Section 14(3) of the Act, 15 U.S.C. § 1064(3) (2012). Under those circumstances, the defendant would have had little choice but to pursue the argument that the defendants lacked the required bona fide intent and that their representations to the contrary rose to the level of intentional fraud. 132. See Hokto Kinoko Co. v. Concord Farms, Inc., 810 F. Supp. 2d 1013 (C.D. Cal. 2011), aff’d, 738 F.3d 1085 (9th Cir. 2013).

964 Vol. 104 TMR mushrooms, the plaintiff asserted rights to four registrations, each of which it had acquired from a predecessor, each of which had matured from an intent-to-use application, and each of which was less than five years old at the time of the litigation.133 Having admitted that the applications recited goods that its predecessor did not intend to sell under the marks, i.e., goods other than mushrooms, the plaintiff amended the resulting registrations to delete those goods. Because the defendant sought the cancellation of even the amended registrations, the acceptance of those amendments forced it to pursue the theory that the predecessor’s inaccurate averments rose to the level of fraud.134

The district court entered summary judgment in the plaintiff’s favor, and the Ninth Circuit affirmed. The applications in question had been based on corresponding applications filed in the Japanese trademark office, and both courts credited the plaintiff’s argument that its predecessor had been unaware of the differing requirements for registration in the two countries. Referring to the defendant’s “heavy burden” to prove fraud,135 the Ninth Circuit acknowledged that there had been inaccuracies in the applications filed by the plaintiff’s predecessor.136 At the same time, however, it concluded that “[the defendant] has failed . . . to put forward evidence as to any of the remaining four elements of a claim for cancellation due to fraud.”137 That included the defendant’s failure to place the scienter of the plaintiff’s predecessor into dispute:

[The predecessor] asserts that the false representation was the result of its misunderstanding about the differences between U.S. and Japanese trademark registration

133. The registrations at issue were Reg. No. 3210268 (issued Feb. 20, 2007), Reg. No. 3182866 (issued Dec. 10, 2006), Reg. No. 3179700 (issued Dec. 15, 2006), and Reg. No. 3182867 (issued Dec. 12, 2006); the date of the opinion rejecting the defendant’s allegations of fraudulent procurement was August 16, 2011. 134. Proof that an intent-to-use applicant lacked the required bona fide intent to use its mark in connection with particular goods and services entitles the prevailing challenger only to the deletion of those goods and services from the application or registration at issue. See Syndicat Des Proprietaires Viticulteurs de Chateauneuf-du-Pape v. Pasquier DesVignes, 107 U.S.P.Q.2d 1930, 1943 (T.T.A.B. 2013). In contrast, proof of fraud can invalidate an application or registration as to the entire International Class in which the “problem” goods or service are found. See G&W Labs. v. G.W. Pharma Ltd., 89 U.S.P.Q.2d 1571, 1574 (T.T.A.B. 2009). 135. See Hokto Kinoko Co. v. Concord Farms, Inc., 738 F.3d 1085, 1097 (9th Cir. 2013). 136. The court concluded from the summary judgment record that:

Here, there is no dispute that there was a material false representation in [the registrant’s predecessor’s] applications to register the marks. The applications contained a statement that [the predecessor] had a “bona fide intention” to use the registered marks on a wide variety of non-mushroom products, ranging from live fish to bonsai trees. [The predecessor’s] representative admitted in deposition that [the predecessor] had no intention to use the marks on those products.

Id. 137. Id.

Vol. 104 TMR 965

requirements. The American trademark attorney whom [the predecessor] hired to register the trademarks testified that he could not recall making an inquiry to confirm that [the predecessor] had [a] bona fide intent to use the marks on non-mushroom products, and that it was not his usual practice to make such inquiries. Moreover, once [the predecessor] realized its error, it filed requests to amend its trademark registration. [The defendant] has put forth no evidence suggesting that the false statement here was anything other than the result of a simple mistake. [The defendant] adduced no evidence that [the predecessor] knew of the misstatement made by its lawyer or intended to defraud the USPTO. [The defendant] has also failed to put forward evidence of intent, reliance, or damages. Instead, as the district court correctly concluded, [the defendant] relies “purely on attorney argument to support its position.” Such argument, in the absence of evidence, does not create a triable dispute of material fact.138

D. Allegedly Fraudulent Averments of the Use of an Applied-for or Registered Mark

in Commerce in Connection With Particular Goods and Services

The issue of allegedly fraudulent averments of the use in commerce of an applied-for or registered mark in connection with particular goods and services is one that has been addressed by the Trademark Trial and Appeal Board as often as it has by federal courts. Whether because the appeal in Bose arose in this context or for other reasons, the Board has in all but two opinions139 taken a hard line toward challengers proceeding under this theory.140 Less 138. Id. 139. See infra notes 170-90 and 197-98 and accompanying text. 140. In fact, some of the Board’s early post-Bose jurisprudence was so strict that it held some litigants to the strict Bose standard even when, as a technical matter, it was unnecessary to do so. For example, in Way v. Falwell, No. 91184128, 2011 WL 1886400 (T.T.A.B. May 3, 2011) (nonprecedential), the opposer advanced a claim of fraud arising from the applicant’s allegedly inaccurate averment that, as of the applicant’s amendment to allege use, its mark was in use in commerce with certain goods recited in that document. If proven, that allegation in and of itself would have been an adequate basis on which to sustain the opposition, without the need for any proof of the applicant’s scienter. In light of the opposer’s claim that the applicant’s averment of use in commerce was not merely false but fraudulent, however, the Board dismissed the opposition with the observation that “[t]here is a difference between the ground of nonuse and the ground of fraud; intent is a critical element of the latter but is not required to prove the former. Opposer brought this opposition on the ground of fraud, not on the ground of nonuse, and therefore it was required to prove this element.” Id. at *5.

In contrast, the Board was in a more forgiving mood the following year in ShutEmDown Sports Inc. v. Lacy, 102 U.S.P.Q.2d 1036 (T.T.A.B. 2012), in which the petitioner for cancellation of a registration that had not yet passed its fifth anniversary claimed that the respondent had fraudulently represented its mark was used in commerce

966 Vol. 104 TMR than two months after Bose, the Board served notice of the defunct nature of its jurisprudence under Medinol by holding that allegations of fraud advanced in a cancellation action failed to satisfy the pleading requirements of Rule 9(b) of the Federal Rules of Civil Procedure.141 Although extensive, the Board’s observations on this point merit reproduction at length:

[The] allegations in . . . the amended petition to cancel regarding respondent’s alleged false statements to the Office are based solely upon information and belief. These allegations fail to meet the Fed. R. Civ. P. 9(b) requirements as they are unsupported by any statement of facts providing the information upon which petitioner relies or the belief upon which the allegation is founded (i.e., known information giving rise to petitioner’s stated belief, or a statement regarding evidence that is likely to be discovered that would support a claim of fraud).

A pleading of fraud on the USPTO must . . . include an allegation of intent. Moreover, although Rule 9(b) allows that intent may be alleged generally, the pleadings must allege sufficient underlying facts from which a court may reasonably infer that a party acted with the requisite state of mind. Pleadings of fraud which rest solely on allegations that the trademark applicant or registrant made material representa-tions of fact in connection with its application or registration which it “knew or should have known” to be false or misleading are an insufficient pleading of fraud because it implies mere negligence and negligence is not sufficient to infer fraud or dishonesty. Thus under Bose, intent is a specific element of a fraud claim and an allegation that a declarant “should have known” a material statement was false does not make out a proper pleading.142 The Board’s applications of Bose have been equally

pronounced in the summary judgment context, in which, if it has not rejected claims of fraud as a matter of law,143 it has at least during the application process. That claim proved to be well-founded, leading the Board to enter judgment in the petitioner’s favor on the ground that the respondent’s registration was void ab initio, despite the absence of any such claim from the petition for cancellation. Id. at 1045-46. The petitioner therefore was spared the consequences of its ill-considered—and wholly unnecessary, in light of the age of the respondent’s registration—strategy of pursuing only a fraud-based challenge to the registration. 141. Asian & W. Classics B.V. v. Selkow, 92 U.S.P.Q.2d 1478 (T.T.A.B. 2009). 142. Id. at 1479 (footnotes omitted) (citations omitted). 143. See, e.g., Kaplan v. Cytosport, Inc., No. 92050950, 2010 WL 1920478, at *3 (T.T.A.B. Apr. 26, 2010) (nonprecedential) (granting summary judgment to registrant accused of fraudulently representing in combined Section 8 and 15 declaration that mark was in use in connection with milk products after determining that the registration and the declaration referred only to nutritional supplements).

Vol. 104 TMR 967 denied motions for summary judgment filed by challengers to applications and registrations.144 This phenomenon includes the disposition of a claim of fraudulent procurement in a case in which a petitioner for cancellation moved for summary judgment under a Medinol-based theory of fraud, only to have the Federal Circuit issue Bose before the petitioner’s reply brief was due.145 Although the petitioner apparently established to the Board’s satisfaction that the registered mark at issue was not in use in connection with any of the goods covered by the registration, the intervening change in law was fatal to its motion:

It is clear that under the holding of Bose that intent must be separately proved; and on a motion for summary judgment it must be shown that there is no genuine issue about the existence of intent to deceive the Office. In this case, petitioner has not carried its burden of establishing the absence of a genuine issue of material fact as to respondent’s intent to deceive. More particularly, petitioner has not introduced any direct evidence of respondent’s intent to deceive the Office. Nor has petitioner introduced any indirect or circumstantial evidence which would lead us to the inevitable conclusion (which on summary judgment means the absence of any genuine issue of material fact) that respondent had the intent to deceive the Office, or at least had a reckless disregard for the truth. As to the falsity of the statements in question, it appears that applicant [sic] may not, in fact, be using the mark sufficiently to maintain a registration. However, petitioner’s motion for summary judgment was only brought on the fraud claim and not on the abandonment claim and the existence of a genuine issue of material fact as to intent precludes granting petitioner judgment on the fraud claim.146 Likewise, the Board in a different case denied an opposer’s

motion for summary judgment after concluding that there was a factual dispute over whether the applicant’s admittedly inaccurate claim to have engaged in the “transmission of oil” under its mark had been made in bad faith.147 As the Board explained, “whether [the] applicant knowingly made this representation of use with the intent to deceive the USPTO remains a genuine issue of fact to be 144. See, e.g., E. & J. Gallo Winery v. Scott, No. 92044282, 2010 WL 2783899, at *3 (T.T.A.B. Jun. 30, 2010) (nonprecedential) (“Inasmuch as the allegation of fraud in the petition to cancel is not properly pleaded [in the absence of an averment of a bad-faith representation of use in commerce] and is therefore insufficient to state a claim for fraud, the motion for summary judgment is deemed moot as to the ground of fraud.”). 145. DaimlerChrysler Corp. v. Am. Motors Corp., 94 U.S.P.Q.2d 1086 (T.T.A.B. 2010). 146. Id. at 1090 (footnotes omitted). 147. Enbridge, Inc. v. Excelerate Energy LP, 92 U.S.P.Q.2d 1537 (T.T.A.B. 2009).

968 Vol. 104 TMR determined at trial.”148 The opposer’s fraud-based challenge to another claim in the application, namely, that the applicant had engaged in the “production of energy” under its mark came to naught when the Board determined that there was conflicting evidence over whether the claim was inaccurate in the first instance.149 That conflict ultimately led the Board to conclude that “the lack of clear and convincing evidence on the issue of whether applicant made a false statement regarding use of its mark in connection with the identified services mandates denial of opposer’s motion.”150

Finally, the Board has not been shy about rejecting claims of fraudulent averments of use in commerce following full trials on the merits of those claims.151 For example, soon after Bose, the 148. See id. at 1541. 149. According to the Board:

[T]he present record includes no single, industry-specific definition of “production of energy.” Given that this record is unclear with respect to the meaning of “production of energy,” a genuine issue exists as to a pivotal element of the fraud claim, namely, whether applicant’s statement that it was using its mark in connection with “production of energy” was, in fact, false.

Id. at 1542. 150. Id. 151. See, e.g., Threshold.TV Inc. v. Metronome Enters., 96 U.S.P.Q.2d 1031, 1041 (T.T.A.B. 2010) (“Because opposer has not demonstrated that any statements made in applicant’s statements of use were false, let alone proved to the hilt an intention by applicant to deceive the USPTO, opposer’s claim of fraud must fail”); Toufigh v. Persona Parfum, Inc., 95 U.S.P.Q.2d 1872, 1876 (T.T.A.B. 2010) (“Since petitioner has failed to show that any statements made in respondent’s Statement of Use declaration were false, let alone proving this to the hilt, petitioner’s claim of fraud fails.”); see also Wolverine Outdoors, Inc. v. Marker Volkl (Int’l) GmbH, No. 91161363, 2013 WL 5655832, at *8 (T.T.A.B. Sept. 30, 2013) (nonprecedential) (rejecting claim of fraud on ground that “as of the date [the signatory] signed the statement of use . . ., the record evidence shows the mark was in use on most, if not all, of the [goods] identified in the registration, and the [counterclaim petitioner for cancellation] has not shown that [the registrant] intentionally sought to defraud the Office into awarding it a registration for an overly broad list of goods”); Orange 21 N. Am. Inc. v. Beryll Brand Div. Est., No. 91181440, 2012 WL 684463, at *10 (T.T.A.B. Feb. 20, 2012) (nonprecedential) (rejecting claim of fraud on ground that “it is not enough for fraud to show that a party ‘knew or should have known’ its mark was not in use; actual knowledge and an intent to deceive must be shown”); Thomas G. Faria Corp. v. Complete Innovations, Inc., No. 92050168, 2011 WL 5014034, at *8 (T.T.A.B. Sept. 25, 2011) (nonprecedential) (“[T]estimony [by the respondent’s principal] makes clear that [the principal] disclosed the purportedly ‘false statements’ to the examining attorney in their August 22, 2006 telephone conference in order to figure out how to complete the application process. Based on the purportedly false statements, the examining attorney concluded that respondent had made use in commerce and suggested that respondent delete the intent-to-use filing basis and rely on use in commerce. Respondent had absolutely no intent to mislead the Office.”); Way v. Falwell, No. 91184128, 2011 WL 1886400, at *5 (T.T.A.B. May 3, 2011) (nonprecedential) (rejecting claim of fraud based on opposer’s failure to make threshold showing that applicant’s representation of use in commerce was inaccurate); N. Face Apparel Corp. v. Baranzyk, No. 92046488, 2010 WL 985362, at *5 (T.T.A.B. Mar. 9, 2010) (nonprecedential) (rejecting claim of fraud based on petitioner’s failure to establish inaccuracy of claim of use in commerce in Section 8 declaration); C. & J. Clark Int’l Ltd. v. Unity Clothing Inc., No. 92049418, 2013 WL 3168093, at *4 (T.T.A.B. Apr. 24, 2013)

Vol. 104 TMR 969 Board had the opportunity to apply that opinion’s holding in a cancellation action in which the registrant admitted that it had sold only some of the goods covered by its registration.152 Despite concluding that the registrant’s averments of actual use had been false, the Board declined to reach a finding of fraud based on testimony from the registrant’s trial witness that the registrant’s identification of goods had been assembled with the assistance of its counsel. As the Board explained:

While [the registrant] sought to obtain a registration covering as broad a description of goods as possible despite the fact that it was not using the mark on all the goods listed in the description of goods, there is no evidence or testimony indicat-ing that [the registrant] was advised that it could not or should not apply for . . . products not identified by its . . . mark.153

The Board did not rule out the possibility of a finding of fraud despite the registrant’s prior consultations with counsel. Nevertheless:

[I]t was incumbent on [the petitioner] to establish . . . a factual basis [for his allegation of fraudulent procurement] by, for example, eliciting further testimony as to the actual advice [the registrant] received when it “discussed with counsel” the list of goods it intended to include in the application and whether or to what extent [the registrant] relied on such advice. We will not infer . . . that counsel necessarily advised [the registrant] that it was not entitled to seek registration of the mark for goods upon which the mark was not in use, and that [the registrant] ignored that advice.154

Rather than cancelling the registration in its entirety, the Board therefore exercised its authority under Section 18 of the Lanham (nonprecedential) (“[O]n this record, [the respondent’s] explanation is plausible in that it mistakenly believed that it could list goods for which it was not using its mark already so long as it was making use of its mark on other goods identified in the application at the time. We do not have clear and convincing evidence to suggest the false statements were the result of a fraudulent intent rather than [the respondent’s] principal . . . simply misunderstanding the requirement that all, and not just some, identified goods must be used in commerce at the time of filing a use-based application.”); Paul Audio, Inc. v. Zhou, No. 92049924, 2011 WL 6780740, at *14 (T.T.A.B. Dec. 6, 2011) (nonprecedential) (dismissing petition for cancellation on ground that “[t]he record . . . is replete with instances where respondent made misrepresentations occasioned by his misunderstanding of the law or through inadvertence, not with a willful intent to deceive”); cf. Reliance Std. Life Ins. Co. v. Am. Nat’l Ins. Co., No. 91178996, 2012 WL 1881493, at *7-13 (T.T.A.B. Apr. 30, 2012) (nonprecedential) (finding that registrant’s knowingly false representations concerning the scope of its services while distinguishing prior registered mark did not constitute fraud based on challenger’s failure to establish bad-faith intent). 152. See M.C.I. Foods, Inc. v. Bunte, 96 U.S.P.Q.2d 1544 (T.T.A.B. 2010). 153. Id. at 1549. 154. Id.

970 Vol. 104 TMR Act,155 to “restrict” the registration to delete only the offending goods.156

For the most part, post-Bose courts have been equally skeptical of claims of fraudulent procurement and maintenance based on the classic Medinol scenario,157 with a number of challengers learning the hard way that a failure to demonstrate the inaccuracy of an averment of use will render an inquiry into the averring party’s scienter moot.158 For example, while filing a post-registration Section 8 declaration of ongoing use, one plaintiff registrant deleted a number of items from the registration’s identification of goods.159 To the defendant, the amendment was a smoking gun that established the inaccuracy of a statement of use filed by the registration during the application process that included each of the deleted goods. Applying the Bose test for fraud, the court accorded the amendment no such significance. Instead, it credited declaration testimony from the plaintiff’s officers that the mark had, in fact, been used in connection with each of the goods in the statement of use. Because the record demonstrated an absence of falsity in the first instance, the court declined to entertain the defendant’s theory that the plaintiff’s trademark counsel had acted with an intent to deceive the USPTO when she filed the statement of use; rather, “the lack of evidence to show that the mark was not in use undermines [the defendant’s] claim the [statement of use] was filed with a reckless disregard for the truth.”160

Other courts addressing this theory similarly have declined to make the required threshold finding that a registered or applied-for mark was not in use in connection with particular goods and services. For example, when the plaintiff operator of a community bank under the CUSTOMER FIRST mark introduced into evidence a registration with a broadly worded identification of

155. 15 U.S.C. § 1068 (2012). 156. M.C.I. Foods, 96 U.S.P.Q.2d at 1550. 157. That scenario obviously presupposes that the challenged application or registration is based on Section 1(a) of the Act, 15 U.S.C. § 1051(a) (2012). For an opinion properly recognizing that an applicant for registration under Section 66, id. § 1141f, does not need to aver use in commerce to secure a registration, see Dorpan, S.L. v. Hotel Melia, Inc., 851 F. Supp. 2d 398, 409 (D.P.R. 2012) (rejecting fraud-based attack grounded in alleged lack of use in commerce of mark registered under Section 66), rev’d on other grounds, 728 F.3d 55 (1st Cir. 2013). 158. See, e.g., Global Healing Ctr. v. Powell, No. 4:10–CV–4790, 2012 WL 1709144, at *5 (S.D. Tex. May 15, 2012) (dismissing challenge to registration on ground based on challengers’ failure to allege facts establishing that registered mark was not being used in connection with goods recited in registration). 159. See Pure Fishing, Inc. v. Redwing Tackle, Ltd., 888 F. Supp. 2d 726 (D.S.C. 2012). 160. Id. at 736.

Vol. 104 TMR 971 services,161 the defendant argued that certain of them, namely, investment banking and mortgage-related services, had never actually been provided under the mark. The court rejected this argument, in part because, although the plaintiff’s most significant use of the mark had been in connection with a checking account offered to all of its customers, the checking account was the “hub” for the entire suite of services offered by the plaintiff.162 The court also adopted a rather forgiving attitude toward averments of actual use in file-wrapper histories:

[The defendant’s] interpretation of the words contained in the Statement of Use [filed by the plaintiff] is simply too confining. A registrant is afforded a certain amount of discretion in [the] use of its mark. A registrant is permitted to use the mark as it sees fit within the overall descriptions [in its identification of goods or services] so long as its use furthers an appropriate business purpose. The Statement of Use in the application merely puts the USPTO on notice of the generic categories in which the mark is used.163

Applying the principle that “[a] central element of fraud is an intent to defraud,” the court found that what it considered to be the plaintiff’s truthful representations in the application process precluded the defendant from demonstrating the existence of such an intent.164

Of course, even if an applicant’s recitation of use in connection with particular goods and services was, in fact, inaccurate, that inaccuracy will not necessarily produce a finding of fraud in the absence of a bad-faith intent to deceive.165 One basis of a Section

161. The registration covered “[s]ervices customary in the banking industry, namely, banking, banking consultation, investment banking services, mortgage and personal banking services, namely, origination, acquisition servicing, securitization, and brokerage of commercial and personal mortgage loans and online banking services.” Quoted in Alliance Bank v. New Century Bank, 742 F. Supp. 2d 532, 540 (E.D. Pa. 2010). 162. See id. Although playing less of a role in the court’s analysis, the record also established that “[the plaintiff] advertised the slogan ‘Customer First Banking Just Hit Home’ on various bus shelters throughout the Delaware River Valley in 2006. [The plaintiff’s] employees even wore lapel pins that stated CUSTOMER FIRST.” Id. 163. Id. 164. Id. at 551. 165. See, e.g., Grey Matter Medical Prods., LLC v. Schreiner Grp. Ltd. P’ship, No. C13–5861 BHS, 2014 WL 3015618, at *3 (W.D. Wash. July 2, 2014) (holding as a matter of law that registrant’s arguably inaccurate identification of goods did not rise to the level of a fraudulent representation); Am. Eagle Outfitters, Inc. v. Am. Eagle Furniture, Inc., No. 11 C 02242, 2013 WL 6839815, at *14 (N.D. Ill. Dec. 27, 2013) (ordering cancellation of registration on ground of abandonment based on finding as a matter of law that registered mark had never been used in connection with covered services but finding that factual dispute as to intent underlying recitation of use precluded cancellation for fraudulent procurement); Global Healing Ctr. v. Powell, No. 4:10–CV–4790, 2012 WL 1709144, at *6 (S.D. Tex. May 15, 2012) (dismissing challenge to registration for failure to state claim on ground that challengers had failed to advance “even a conclusory recitation” of the

972 Vol. 104 TMR 38 claim for cancellation was that the counterclaim defendant had procured its registration through a false representation in his circa-1988 application of use in commerce, when, in fact, the uses to which the mark had been were “mere preparation,” “demonstrations,” “testing,” or “marketing presentations.”166 In granting the counterclaim defendant’s motion for summary judgment, the court applied a “known or should have known” version of the test for fraud,167 but it nevertheless identified two reasons for finding the plaintiff’s theory wanting as a matter of law. The first was that “[u]nder [the] law at the time of the [counterclaim defendant’s] trademark application, the registrant of a trademark need only have made a single ‘token use’ of the mark in commerce.”168 The second was that:

It is undisputed that [the counterclaim defendant’s principal] engaged in significant commercial and promotional activity involving the [registered] mark over the course of many years. These activities occurred both before and after [he] delivered his sworn statements to the PTO . . . . Even if [the counterclaim plaintiff] could show that none of the activities conducted by [the counterclaim defendant’s principal] technically constituted use of the mark in interstate commerce, either because they were mere demonstrations, or involved sales of products other than broadcast services or communication, it has offered no evidence from which a jury may conclude that [the counterclaim defendant’s principal] “knew or should have known” that his statements to the PTO were incorrect. A lay businessman who spends years of his life selling branded radios, performing branded broadcasts, and vigorously promoting additional businesses under a given mark would have no obvious reason to suspect that his significant efforts do not constitute “use in commerce.”169 There are, however, at least some exceptions to the general

post-Bose rule rejecting claims of fraud grounded in allegedly inaccurate averments of use in commerce. One of the more notable registrant’s intent to deceive the USPTO); Donovan v. Bishop, No. 1:09-cv-275-WTL-MJD, 2011 WL 1560991, at *3 (S.D. Ind. Apr. 21, 2011) (granting registrant’s motion for summary judgment on ground that “[e]ven though the [registrant’s claims of use in commerce] may have been false, the Plaintiff has not introduced any evidence indicating that they were knowingly false”); Kerzner Int’l Ltd. v. Monarch Casino & Resort, Inc., No. 3:06-CV-232-ECR-RAM, 2009 WL 5066908, at *15 (D. Nev. Dec. 14, 2009) (granting registrant’s motion for summary judgment on ground that challenger had failed to place into dispute registrant’s good-faith belief that registrant’s licensee had used registered mark in commerce as of filing date of registrant’s statement of use). 166. Quoted in Fancaster, Inc. v. Comcast Corp., 832 F. Supp. 2d 380, 425 (D.N.J. 2011). 167. Id. at 424. 168. Id. at 425. 169. Id. at 425-26.

Vol. 104 TMR 973 of those exceptions came in Nationstar Mortgage LLC v. Ahmad,170 the only case in which the Board has reached a finding of fraud on the merits since Bose. Nationstar was an opposition proceeding in which an individual applicant filed a use-based application to register his mark for a variety of real estate–related services; once the application was opposed, the applicant amended the application to assert a mere intent to use the mark in connection with the claimed services.171 The Board declined to hold that the amendment obviated the need to address the opposer’s fraud-based challenge to the application, holding instead that “once an opposition has been filed, fraud cannot be cured merely by amending the filing basis for those goods or services on which the mark was not used at the time of the signing of the use-based application.”172 As a consequence, “applicant’s amendment, made after publication and institution of a challenge based on fraud, cannot aid applicant in defense of that claim.”173

Moving to the merits of the opposer’s challenge, the Board found as a factual matter that the applicant had not used his mark in connection with any of his claimed services as of the filing date of his application.174 The application’s recitation of use therefore was inaccurate, but did that inaccuracy rise to the level of fraud? The Board concluded that it did, based on: (1) the applicant’s awareness that he could not lawfully engage in some of the services at issue;175 (2) his testimony that “he did not use the . . .

170. No. 91177036, slip op. (T.T.A.B. Sept. 30, 2014) (precedential). 171. The applicant’s identification of services read as follows:

Real estate brokerage; rental of real estate; real estate management services, namely, management of commercial and residential properties; real estate investment; residential and commercial property and insurance brokerage; mortgage brokerage; and business finance procurement services, in Class 36.

Quoted in id. at 2. 172. Id. at 6. 173. Id. at 7. 174. According to the Board, “[t]he record at best establishes that applicant may have rendered real estate agency services under the mark . . . prior to the filing date of the application, as corroborated by applicant’s witnesses . . . . Real estate agency services, however, are not listed services in this application.” Id. at 30; see also id. at 32 (“In this case, there is no corroborating evidence that applicant offered any of the services identified in the application at the time he filed it. Moreover, the record establishes that applicant could not lawfully hold himself out as a mortgage broker, insurance broker, or real estate broker because he was not properly licensed at the time he filed the application.”). 175. On this issue, the Board found that:

Applicant’s testimony indicates that he knows and understands: (i) the restrictions on him as a real estate agent; (ii) the distinctions in the real estate industry between the activities of a real estate agent, a real estate broker, an insurance broker, and a mortgage broker; (iii) that each is a term of art in the industry; (iv) that each requires appropriate licensure; and (v) that he was not licensed as a real estate broker, insurance broker, or mortgage broker as of the filing date of the application. Applicant testified in detail about how a real estate agent who is not licensed as a broker must

974 Vol. 104 TMR mark on any business documents (such as contracts or market analysis reports), lawn signs, or invoices, that he did not operate a[n] . . . office [under the mark], that he did not answer the telephone [using the mark], and that he did not place a directory assistance listing for [the mark]”;176 (3) his “contradictory, inconsistent, and indefinite” testimony that he had used his mark on business cards, flyers, postcards, and letters prior to the filing date of his application;177 (4) the characterization of the applicant’s company as a corporation on some of the applicant’s specimens despite the fact that the company was incorporated years after the specimens were putatively generated;178 (5) the applicant’s failure to file his application until after the opposer had contacted him about a possible purchase of domain names corresponding to his mark;179 and (6) his failure to post any online content accessible at those domain names “until . . . two years after registering them and months after [he] filed his trademark application.”180 According to the Board, and contrary to the situation in Bose, the issue was not “a nuance of trademark law that applicant may have incorrectly interpreted. Rather, this case involves applicant making false statements about his own industry and his own activities, knowing the requirements regarding what he was allowed to do and not do if he did not have the appropriate licenses.”181 Noting that “we have inferred culpable intent in cases where we have found an accused party’s testimony to lack credibility,”182 the Board found just such a lack of credibility en route to ruling in the opposer’s favor.

The evidentiary underpinnings for the Board’s findings of falsity, knowledge, and bad-faith intent may well have been (and apparently were) extensive, but several aspects of the Board’s methodology are worth noting. Although citing Bose for the proposition that “[s]ubjective intent to deceive, however difficult it may be to prove, is an indispensable element in the analysis,”183

be associated with a real estate broker, and that he was a real estate agent associated with a broker.

Id. at 35 (footnotes omitted). 176. Id. at 36. 177. Id. 178. Id. 179. Id. 180. Id. 181. Id. at 37; see also id. at 33 (“The record clearly establishes that applicant knew he was not rendering all of the identified services as of the filing date of his application, and nevertheless he swore that he was using the [applied-for] mark . . . in commerce in connection with all of the services.”). 182. Id. at 34. 183. Id. at 33 (alteration in original) (quoting Bose, 580 F.3d at 1244) (internal quotation marks omitted).

Vol. 104 TMR 975 the Board’s finding of fraud rested in part on its conclusion that “[t]he surrounding facts and circumstances provide clear and convincing evidence that applicant did not have a good faith reasonable basis for believing that he was using [his] mark in commerce for all the services identified in the application.”184 The significance of such a conclusion, however, is difficult to square with Bose, in which, addressing a similar finding by the Board, the Federal Circuit noted that “[w]e do not need to resolve the issue of the reasonableness as it is not part of the analysis”;185 rather, “[u]nless the challenger can point to evidence to support an inference of deceptive intent, it has failed to satisfy the clear and convincing evidence standard required to establish a fraud claim.”186

Indeed, in one part of its opinion, the Nationstar Board appears to have departed from a strict requirement of scienter altogether in favor of pre-Bose case law holding signatories to an affirmative duty to investigate the veracity of their averments to the USPTO.187 On this issue, the Board invoked 37 C.F.R. § 11.18188 to hold that the applicant “was obligated to read and understand what he was signing and investigate the accuracy of his statements in the application to confirm they had evidentiary support prior to signature and submission to the USPTO.”189 In the absence of circumstances warranting an investigation into the factual basis of an averment, however, a failure to conduct such an

184. Id. at 34. 185. Bose, 580 F.3d at 1236 (emphasis added). 186. Id. at 1246. 187. The Board’s opinion is notable for its citations throughout to numerous Medinol-era opinions that many practitioners may have thought had been relegated to the past. See Nationstar, slip op. at 6 (citing Sinclair Oil Corp. v. Kendrick, 85 U.S.P.Q.2d 1032 (T.T.A.B. 2007)); id. at 6-7, 37, 39 (citing Hachette Filipacchi Presse v. Elle Belle LLC, 85 U.S.P.Q.2d 1090 (T.T.A.B. 2007)); id. at 33, 37, 38 (citing Herbaceuticals Inc. v. Xel Herbaceuticals Inc., 86 U.S.P.Q.2d 1572 (T.T.A.B. 2008)); id. at 38, 39 (citing Hurley Int’l LLC v. Volta, 82 U.S.P.Q.2d 1339 (T.T.A.B. 2007)). 188. That regulation provides in relevant part that:

(b) By presenting to the Office or hearing officer in a disciplinary proceeding (whether by signing, filing, submitting, or later advocating) any paper, the party presenting such paper, whether a practitioner or non-practitioner, is certifying that . . .

. . . . (2) To the best of the party’s knowledge, information and belief, formed after an inquiry reasonable under the circumstances,

. . . . (iii) The allegations and other factual contentions have evidentiary support or, if specifically so identified, are likely to have evidentiary support after a reasonable opportunity for further investigation or discovery . . . .

37 C.F.R. § 11.18(b)(2)(iii) (2014). 189. Nationstar, slip op. at 38.

976 Vol. 104 TMR investigation and actual knowledge of the averment’s falsity are not one and the same.190 Of equal significance, the signatory and the individual applicant obviously were one and the same in Nationstar, but that factual scenario is not characteristic of all, or even most, litigation in which fraud-on-the-USPTO claims are raised. The Board’s suggestion that a mere failure by a signatory to conduct due diligence into facts within another’s possession can be proof of fraud, apparently regardless of the signatory’s actual knowledge of those facts, resembles Medinol’s discredited “should have known” test more than that found in Bose.

Actual findings of fraud under this theory also have come from district courts,191 including one hearing an infringement action brought by a plaintiff that had secured a registration of its mark for “herbal, non-consumable, incense.”192 The “non-consumable” qualifier anticipated a ban, issued by the Drug Enforcement Agency during the pendency of the plaintiff’s application, on a key ingredient of the plaintiff’s incense. Although the plaintiff discontinued the ingredient, it substituted another that also fell afoul of federal law, and the resulting criminal prosecution led to a plea bargain in which the plaintiff’s principals acknowledged that the incense sold under their mark was intended for human consumption. Because the plea bargain foreclosed the plaintiff from arguing that the incense it actually had sold fell within the scope of its identification of goods, a counterclaim for cancellation advanced by the defendants was well-taken. As the court explained in granting the defendants’ motion for summary judgment on the issue and sanctioning the plaintiff with an award of the defendants’ attorneys’ fees, “the Patent and Trademark Office never had the opportunity to assess the legality of [the plaintiff’s] product because [the plaintiff] misrepresented what the product was.”193 And, in any case, “based on the preclusive effect of [the] guilty pleas, the Court concludes that [the plaintiff] subjectively intended to deceive the Patent and Trademark Office when it misrepresented its product as “not for human consumption.”194

190. Cf. Iowa Pub. Employee’s Retirement Sys. v. Deloitte & Touche LLP, 919 F. Supp. 2d 321, 332 (S.D.N.Y. 2013) (“[I]f an auditor is ‘not aware of facts indicating that a transaction was suspicious, or part of a fraud, the auditor’s failure to investigate the transaction—even if negligent—does not provide a basis for a fraud claim.’” (quoting In re CBI Holding Co., Inc., 419 B.R. 553, 566–67 (S.D.N.Y. 2009)). 191. See, e.g., Melodrama Publ’g, LLC v. Santiago, No. 12 Civ. 7830(JSR), 2013 WL 1700929, at *5-6 (S.D.N.Y. Apr. 11, 2013) (ordering cancellation of registration based in part on registrant’s admissions in answer that she had never used registered mark). 192. Quoted in Kratom Lab, Inc. v. Mancini, No. 11-80987-CIV, 2013 WL 3927838, at *1 (S.D. Fla. Jul. 29, 2013). 193. Id. at *3. 194. Id.

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What on its face seems to have been far less egregious conduct led the Second Circuit to affirm a pre-Bose jury finding of fraud based on an inaccurate identification of services.195 The registration in question covered restaurant services, but the evidence and testimony at trial demonstrated that the registrant and its predecessors had provided only pizzeria services under the registration. Although the challengers to the registration had advanced a number of theories at trial why fraud had occurred, the Second Circuit’s focus on appeal was limited to the distinction between pizzerias, on the one hand, and restaurants generally, on the other hand:

There was evidence of fraud in [the registrant’s] statement that it had continuously used the mark for restaurant services since 1933. It follows that [the registrant] specified the services in connection with which the mark was used more broadly than it was actually used, a fact [the registrant] had to have known.

“[S]ince a registration is prima facie evidence that the registrant is using the registered mark on the goods and services specified in the registration,” [the registrant’s] misrepresentation resulted in a registered mark that was broader in scope than it should have been.196

Contrary to the Bose analysis, the finding of fraud at issue therefore rested on the Second Circuit’s conclusion that the registrant merely “had to have known” the falsity of its representations, rather than on the registrant’s actual knowledge of that falsity.

Other opinions addressing this theory of fraud also have reached results favorable to challengers to registrations, albeit without ultimately resolving the issue. These include a Board opinion declining to dismiss an amended petition for cancellation based on the petitioner’s failure to satisfy Rule 9’s requirements.197 According to the Board’s reading of the amended petition:

[P]etitioner has sufficiently alleged fraud. Its allegations are not based solely on “information and belief,” but are also based on the results of an investigation which, petitioner alleges, revealed that respondent was not using its mark on all of the goods listed in its Statements of Use at the time the Statements of Use were filed. More specifically, petitioner alleges that its investigation revealed that respondent’s mark

195. See Patsy’s Italian Rest., Inc. v. Banas, 658 F.3d 254 (2d Cir. 2011). 196. Id. at 271-72 (emphasis added) (quoting 3 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition § 19:48 (4th ed. 2008)). 197. See Meckatzer Löwenbrau Benedikt Weiß KG v. White Gold, LLC, 95 U.S.P.Q.2d 1185 (T.T.A.B. 2010).

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was not used on any of the goods listed in its Statements of Use, other than vodka. Moreover, the [amended petition], in contrast to the original petition for cancellation, specifically alleges that “Respondent knowingly made false, material misrepresentations of fact in procuring the Registrations with the intent to defraud the U.S.P.T.O.” These allegations are sufficiently specific and particular under Fed. R. Civ. P. 9(b).198 A number of courts have similarly declined to dispose of claims

of fraudulent averments of use as a matter of law. Some have done so at the pleadings stage,199 but at least one has deferred resolution of the issue on a motion for summary judgment.200 That court was faced with a registration reciting that the registered mark at issue, which was owned by the plaintiff, had been used in connection with routers and chop saws. The summary judgment record included testimony by two witnesses suggesting that the plaintiff had not sold those goods as of the filing date of its use-based application. The same testimony, however, also suggested that certain goods sold by the plaintiff under its mark could fall within these categories; moreover, as the court noted, the plaintiff had introduced “an expert report prepared for this litigation, classifying some of [the plaintiff’s] pre-application machinery as chop saws and routers.”201 Under these circumstances, the court concluded, summary judgment in the defendants’ favor was inappropriate, both because “[the plaintiff’s] arguments involve issues of credibility, and credibility is a determination to be made

198. Id. at 1187 (citations omitted). 199. For a particularly forgiving opinion denying a motion to dismiss a counterclaim for cancellation on this theory, see Adams v. Grand Slam/Ovis, No. 12-cv-2938-WJM-BNB, 2014 WL 103782, at *5 (D. Colo. Jan. 10, 2014) (“Courts have found that, for the purposes of Rule 9(b), it is adequate to allege that a trademark applicant made various false representations in its statement of use, and that contrary to the applicant’s representations, the [applied-for] mark was not being used in conjunction with all the goods and services when the statement of use was filed.”); see also NetJets Inc. v. Intellijet Grp., No. 2:12-cv-00059, 2013 WL 5675464, at *1, 6 (S.D. Ohio Oct. 17, 2013) (granting defendant leave to assert counterclaim for cancellation grounded in plaintiff’s alleged internal use of mark, notwithstanding absence of express averment in proposed counterclaim of bad-faith intent); Bauer Bros. v. Nike Inc., 98 U.S.P.Q.2d 1160, 1165 (S.D. Cal. 2011) (holding, in cursory analysis, that counterclaim plaintiff had adequately alleged fraudulent procurement based on counterclaim defendant’s failure to use mark in connection with all goods recited in registration); Assurant, Inc. v. MedAssurant, Inc., No. 3:08-CV-569-RJC-DCK, 2010 WL 3489129, at *9 (W.D.N.C. July 26, 2010) (declining to resolve factual dispute between parties as to the extent of use of registered mark on motion to dismiss for failure to state a claim); CTF Dev., Inc. v. Penta Hospitality, LLC, No. C 09-02429 WHA, 2009 WL 3517617, at *2-6 (N.D. Cal. Oct. 26, 2009) (denying motion to dismiss on ground that counterclaim plaintiff had adequately alleged intentional bad-faith representations of use in commerce during application process). 200. See WMH Tool Grp. v. Woodstock Int’l Inc., 93 U.S.P.Q.2d 1570 (N.D. Ill. 2010). 201. Id. at 1579.

Vol. 104 TMR 979 at the time of trial”202 and because “[c]onstruing all inferences in [the plaintiff’s] favor, the Court cannot conclude for purposes of summary judgment that [the plaintiff’s] inclusion of chop saws and routers [in its] application . . . was a misrepresentation.”203

E. Allegedly Fraudulent Recitations of the Dates of First Use in Commerce of an

Applied-for Mark Inaccurate recitations of dates of first use in commerce, even if

they can be proven,204 have not fared well as bases of successful claims of fraud since Bose,205 often because actual use of the mark at issue occurred prior to the filing of the document in which that use was averred,206 but also because of the difficulty of proving the

202. Id. 203. Id. 204. A claimed date of first use in commerce obviously must be proven false before it can be proven fraudulent. See, e.g., Groupion, LLC v. Groupon, Inc., 859 F. Supp. 2d 1067, 1081 (N.D. Cal. 2012) (granting registrant’s motion for summary judgment based on conclusion that registrant had accurately stated dates of first use); O.T.H. Enters. v. Vasquez, No. 92050569, 2012 WL 5196156, at *16 (T.T.A.B. Sept. 27, 2012) (nonprecedential) (rejecting claim of fraud after trial on ground that “[a]lthough there are contradictory statements [in the record], petitioner has not met its burden of proving that the date of first use is incorrect and therefore false”). 205. See, e.g., Color Me House, Inc. v. Discovery Commc’ns, Inc., No. C12–5935 RJB, 2013 WL 1283806, at*6 (W.D. Wash. Mar. 27, 2013) (holding, without extended analysis, that admittedly inaccurate dates of first use did not merit denial of registrant’s motion for preliminary injunction). 206. As the Board has explained in granting a motion to dismiss for failure to state a claim, “the dates of first use alleged by an applicant in a use-based application or statement of use filed in an intent-to-use application, even if false, do not constitute fraud, as long as there was technical trademark use on or before the filing date of the application or statement of use.” Willis v. Can’t Stop Prods., Inc., No. 92051212, 2011 WL 4871875, at *3 (T.T.A.B. Sept. 21, 2011) (nonprecedential); see also Paleteria La Michoacana, Inc. v. Productos Lacteos Tocumbo S.A. De C.V., No. 11–1623 (RC), 2014 WL 4759945, at *31 (D.D.C. Sept. 25, 2014) (“Federal courts and the TTAB consistently have held that the date of first use is immaterial to a registration application so long as the actual date of initial use predated the application . . . . Thus, even if [the challenger] is correct that [the registrant] claimed the wrong date of first use in its applications—a question on which the Court need not take a position—it fails to demonstrate how such an error was material.”); Diak v. Crafts Americana Grp., 2013 WL 5946236, at *7 (T.T.A.B. Oct. 22, 2013) (nonprecedential) (“[A]s long as the date of use asserted is prior to the filing date of the application, it does not affect the prosecution of the application.”); Bio-One, Inc. v. A.L.E.G., Inc., No. 92052195, 2012 WL 893483, at *2 (T.T.A.B. Mar. 7, 2012) (“Petitioner does not allege, nor has it proven, that respondent did not make use of its mark as of the filing date of the application in 2007. Thus, petitioner’s claim of fraud, even if the allegations were taken as true, does not state a ground of fraud because it fails to allege that the supposed false statement was material.”); Slaska Wytwornia Wodek Gatunkowtch “Polmos” SA v. Stawski Distrib. Co., No. 92044806, 2010 WL 3164751, at *5 (T.T.A.B. July 26, 2010) (nonprecedential) (rejecting claim of fraud after trial on ground that “because petitioner has not challenged the fact that respondent used the registered mark prior to the filing date of the underlying application, petitioner’s claim of fraud based on an allegedly false date of first use is untenable”).

980 Vol. 104 TMR required bad faith of the party signing that document.207 For example, two years after Bose, the Board declined to reach a finding of fraud based on an applicant’s unsuccessful attempt, during the pendency of an opposition, to amend its application to recite one of two dates of first use earlier than that claimed in its amendment to allege use.208 Although the Board found as a factual matter that the applicant had failed to prove the either of the earlier dates, that failure did not necessarily mean that the applicant had committed fraud. Rather, the “opposer has not established that applicant’s stated reason for seeking to change its use dates—that after retaining counsel and after counsel’s investigation, applicant discovered its stated dates of first use were not accurate—is false and that applicant intended to deceive the USPTO.”209

The Eighth Circuit applied the clear and convincing evidence standard to reach a similar result in an appeal before it.210 The alleged fraud at issue occurred when a restaurant franchisor filed an application reciting as a date of first use the date on which one of the franchisor’s franchisees had used the mark. The franchisee argued that the franchisor’s appropriation of the franchisee’s date of first use proved the franchisor’s awareness of the franchisee’s putative rights to the mark as of the application date. The Eighth Circuit disagreed for two reasons, the first of which was that the parties’ franchise agreement accorded ownership of marks used by the franchisee to the franchisor.211 The second was that “[v]iewing the facts in the light most favorable to [the franchisee], [the franchisor] knew [the franchisee] believed that it had rights to the [mark] when [the franchisor] submitted its trademark application. This fact alone, however, is not sufficient to show bad faith, and [the franchisee] has shown no more.”212 The district court therefore

207. See, e.g., Wind Turbine Indus. v. Jacobs Wind Elec. Co., No. 09-36 (MJD/SRN), 2010 WL 4723385, at *12 (D. Minn. Nov. 16, 2010) (denying motion for summary judgment filed by challenger to registration and grounded in theory that registrant had fraudulently recited its predecessor’s date of first use in application); Decho Corp. v. Brigitte Mueller, No. 91183001, 2011 WL 3828714, at *12 (T.T.A.B. Aug. 12, 2011) (nonprecedential) (“Opposer has not proven fraud. The fact that a party has set forth erroneous dates of first use, by itself, does not necessarily constitute fraud.”); Orange 21 N. Am. Inc. v. Beryll Brand Div. Est., No. 91181440, 2012 WL 684463, at *10 (T.T.A.B. Feb. 20, 2012) (nonprecedential) (rejecting claim of fraud after trial on ground that “in his discovery deposition, [the applicant’s principal] stated dates of first use consistent with the dates shown in the application for registration of the mark, and explained, perhaps somewhat ambiguously, the reason there is a discrepancy regarding some of the dates provided in applicant’s responses to opposer’s interrogatories”). 208. See Threshold.TV, Inc. v. Metronome Enters., 96 U.S.P.Q.2d 1031 (T.T.A.B. 2010). 209. Id. at 1041. 210. See Pinnacle Pizza Co. v. Little Caesar Enters., 598 F.3d 970 (8th Cir. 2010). 211. See id. at 980. 212. Id. at 981.

Vol. 104 TMR 981 properly had granted the franchisor’s motion for summary judgment on the issue.213

So too was a New York federal district court equally unreceptive to a claim of fraudulent procurement grounded in the registrant’s alleged misstatement of its date of first use.214 As the court summarized the defendants’ showing on this issue, “[i]t is undisputed that in its application, [the plaintiff] represented that it first used the [applied-for] mark in commerce on September 1, 1985, and the evidence suggests that the actual date of first use was later, in 1986.”215 Nevertheless, that showing fell short for two reasons. The first was that the plaintiff’s counsel, and not the plaintiff’s signatory, had inserted the incorrect date,216 which precluded a finding that the signatory had “knowingly stated a false date of first use with [an] intent to deceive.”217 The second reason was that the incorrect date had not been material to the USPTO’s decision to issue the registration: “The distinction between 1985 and 1986 only becomes relevant and material if the USPTO had to determine which of two companies had the superior claim because of first use in United States commerce.”218

Finally, one particularly dubious claim of fraudulent procurement under this theory rested on a registrant’s undisputed failure to recite a date of first use in the circa-2006 intent-to-use application that matured into its registration.219 According to a challenger to that registration, the registrant’s averment of a mere intent to use its mark was inaccurate because the registrant already had used the mark “on a product sold in Great Britain in the late 1980s.”220 In granting the registrant’s motion for summary judgment, the court properly observed that:

Section [1(b)(3)] . . . which governs applications for trademark based on intent to use, does not require an applicant to state the date of first use. [The registrant’s] statement in applying for the registration does not make any mention of the date of its initial use, let alone a false statement in this regard.221

213. See id. 214. See Haggar Int’l Corp. v. United Co. for Food Indus., 906 F. Supp. 2d 96 (E.D.N.Y. 2012). 215. Id. at 126 (citations omitted). 216. Id. at 127. 217. Id. at 128. 218. Id. at 127. 219. See World Wide Sales Inc. v. Church & Dwight Co., 93 U.S.P.Q.2d 1313 (N.D. Ill. 2009). 220. Id. at 1320. 221. Id.

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F. Submission of Allegedly Fraudulent Specimens Showing the Use in Commerce of an Applied-for Mark An argument infrequently raised by challengers to

applications or registrations but which nevertheless makes occasional appearances in the case law is that the owners of those claims have defrauded the USPTO by knowingly submitting inaccurate or otherwise misleading specimens. This argument traditionally has not ended well for its proponents,222 and that was the result in one federal district court action in which it was raised in the context of a Section 38 cause of action.223 The counterclaim plaintiff averred that the counterclaim defendant had filed a Section 8 affidavit of continuing use supported by blank letterhead and envelopes. According to the court’s summary of the counterclaim plaintiffs’ argument, the counterclaim defendant’s principal “had been told that letterhead was insufficient in previous communications with the PTO, and . . . that any subsequent submission of blank letterhead is sufficient for a jury to ‘permissibly infer’ that ‘[the counterclaim defendant’s] intent was fraudulent.’”224 The court held that the registrant was entitled to summary judgment:

This evidence proves nothing. First, even if the submission was “knowingly . . . insufficient” evidence of use, that alone does not demonstrate knowledge that the underlying statements concerning use were false. A person may know that he or she submitted insufficient proof of a proposition

222. See, e.g., Ritchie Eng’g Co. v. Delta T. Corp., No. 11-1513 ADM/JJG, 2012 WL 1150844, at *5 (D. Minn. Apr. 6, 2012) (granting motion to dismiss claim of fraudulent maintenance of registration covering three classes of goods grounded in registrant’s submission of single specimen); Marketquest Grp. v. BIC Corp., No. 11-CV-618 JLS (WMC), 2011 WL 5360899, at *4 (S.D. Cal. Nov. 7, 2011) (rejecting claim of fraudulent procurement grounded in submission of computer “mock-ups” of goods bearing mark); Novozymes Bioag, Inc. v. Cleary Chem., LLC, No. 91200105, 2013 WL 4635993, at *1-3 (T.T.A.B. Aug. 16, 2013) (nonprecedential) (entering summary judgment in favor of registrant accused of having inaccurately represented that specimen was in use in commerce as of filing date of application based on near-identity of that specimen to specimen actually in use in commerce as of that date); Intellogy Solutions, LLC v. IntelliGolf, Inc., No. 91198579, 2013 WL 4397053, at *4 (T.T.A.B. July 29, 2013) (nonprecedential) (“With regard to applicant’s allegations related to improper specimens, i.e., the submission of a press release by opposer rather than an advertisement as a specimen of service mark use, this allegation without more does not constitute fraud as the examining attorney could not have been misled as to what is apparent on the face of the specimen.”); O.T.H. Enters. v. Vasquez, No. 92050569, 2012 WL 5196156, at *17-18 (T.T.A.B. Sept. 27, 2012) (nonprecedential) (rejecting claim of fraud after trial on grounds that petitioner had failed to prove that specimens supporting registration had been altered and that “even if portions of the specimens at issue were altered, without proof of the registrant’s intent to deceive, the submission of a partially altered specimen is not material to registration where portions of the specimen show the mark as actually used in commerce”). 223. See Fancaster, Inc. v. Comcast Corp., 832 F. Supp. 2d 380 (D.N.J. 2011). 224. Id. at 426.

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without knowing that the proposition is actually false. Second, [the counterclaim plaintiffs’] claim is belied by the fact that the blank letterhead and envelopes were accepted by the PTO as proof of continuous use. [The counterclaim defendants’] real complaint is not with [the] submission to the PTO, but with the PTO’s decision to accept the—undeniably flimsy—evidence in approving the incontestability application. There is no suggestion that the letterhead was deliberately misleading or that [the counterclaim defendant’s principal] was not genuinely engaged in efforts to market services using the [registered] mark, albeit with limited success. While [the] submission of an inadequate exhibit to the PTO might have been careless or put its application in jeopardy, it cannot, without more, serve as “clear and convincing evidence” of scienter.225 Although Section 38 is the mechanism most commonly

invoked by parties seeking monetary relief for the fraudulent procurement or maintenance of registrations, it is not the only one, and, indeed, one federal district court had the opportunity to address such an attempted recovery under California state law.226 Invoking California’s Unfair Competition Law,227 the plaintiff sought leave to amend its complaint to assert a cause of action grounded in the defendants’ maintenance of a federal registration covering their ZERO mark for motorcycle tires with a specimen that allegedly displayed the P ZERO mark.228 The court refused to allow the proposed amendment on the ground that it would be futile:

[T]he fact that Defendants submitted the allegedly false statement with the exemplar undermines any assertion of a willful intent to deceive the PTO, since the PTO obviously could assess the accuracy of Defendants’ representation by comparing it to the exemplar. Stated another way, if Defendants’ intent were to deceive the PTO, it would be illogical for them to have attached an exemplar which ostensibly contradicts their representation.229 A different court, this one entertaining a counterclaim for

cancellation under Section 37, rejected the defendants’ claim that the plaintiff had fraudulently procured its registration by

225. Id. 226. See Zero Motorcycles, Inc. v. Pirelli Tyre S.p.A., 802 F. Supp. 2d 1078 (N.D. Cal. 2011), rev’d on other grounds, 517 F. App’x 589 (9th Cir. 2013). 227. Cal. Bus. & Prof. Code Ann. § 17200 (West 2008 & Supp. 2014). 228. See Zero Motorcycles, 802 F. Supp. 2d at 1088. 229. Id. (footnote omitted).

984 Vol. 104 TMR submitting specimens that failed to refer to the lead defendant.230 This line of attack originated in the plaintiff’s filing of specimens that did have such a reference in support of an earlier application to register the same mark; that application lapsed after the plaintiff failed to respond to the USPTO’s request for confirmation that the plaintiff actually owned the mark. Notwithstanding the history of the earlier application, the court was unimpressed with the defendants’ argument that the plaintiff necessarily intended the second set of specimens to deceive the office into issuing the plaintiff a registration. As it pointed out, the parties’ business relationship had ended the month before the plaintiff filed its second application, which meant that “it would have been improper for [the plaintiff] to submit bags that included [the lead defendant’s] name when it applied for registration of the mark [the second time].”231 Under these circumstances, “the defendants have failed to prove by ‘clear and convincing’ evidence that the omission of [the lead defendant’s] name from the specimen bags submitted in support of [the plaintiff’s second] application was knowingly fraudulent.”232

These opinions notwithstanding, some federal district courts have declined to give specimens submitted to the USPTO entirely clean bills of health.233 One or the more compelling post-Bose allegations of fraud on the USPTO was advanced not as a basis for a claim or counterclaim for cancellation but instead in response to a preliminary injunction motion.234 The plaintiff prosecuting the motion was the record owner of six federal registrations covering marks the plaintiff claimed were used under license by various third parties. Unfortunately for the plaintiff, the defendant’s research disclosed that each of the six registrations had been either secured or maintained using specimens generated years earlier by third parties who were not the plaintiff’s licensees; indeed, many of those specimens had been clearly altered to include affirmative notices of mark ownership by the plaintiff.235 230. See Haggar Int’l Corp. v. United Co. for Food Indus., 906 F. Supp. 2d 96 (E.D.N.Y. 2012). 231. Id. at 129. 232. Id. 233. See, e.g., Melodrama Publ’g, LLC v. Santiago, No. 12 Civ. 7830(JSR), 2013 WL 1700929, at *5 (S.D.N.Y. Apr. 11, 2013) (ordering cancellation of registration based in part on registrant’s admitted submission of specimens produced by challenger). 234. See Edge Games, Inc. v. Elec. Arts, Inc., 745 F. Supp. 2d 1101 (N.D. Cal. 2010). 235. See id. at 1108-13. The following are representative of the court’s findings as to each of the plaintiff’s registrations:

[E]vidence of fraud is seen in the comic-book specimen submitted to the USPTO by Dr. Langdell [the plaintiff’s principal] in November 2005 for his application to register “THE EDGE” in connection with comic books. In support of the application, Dr. Langdell submitted the cover of the “Edge” comic book—which . . . was last published a decade earlier by an unrelated company who was never a licensee of plaintiff—as a

Vol. 104 TMR 985 Although not ordering the registrations’ cancellation because it was only deciding the issue of a preliminary injunction, the court nevertheless held that the plaintiff’s allegations of mark ownership were sufficiently in dispute that the plaintiff was unlikely to succeed on the merits of its infringement claims.236

G. Allegedly Fraudulent Averments of the Distinctiveness of an Applied-for Mark

An additional basis for challenges to the validity of filings in the USPTO is that an applicant or registrant has made fraudulent claims of distinctiveness. Such a challenge can be grounded in one of two theories: (1) the applicant or registrant has fraudulently represented its mark is inherently distinctive; or (2) the applicant or registrant has fraudulently represented under Section 2(f) of the Lanham Act237 that its mark has acquired distinctiveness, or, at a minimum, has fraudulently represented facts supporting a claim of acquired distinctiveness under that statute. As in the context of other fraud-based attacks on claims in the USPTO, federal district courts have addressed, and on occasion proven more receptive to, these theories than has the Board.

1. Allegedly Fraudulent Averments of Inherent Distinctiveness

Some post-Bose claims that applicants and registrants have fraudulently characterized their marks as inherently distinctive have failed to make the grade.238 For example, one court made

specimen . . . . [P]laying “spot the differences,” the specimen submitted to the USPTO appears to have been doctored in three material ways. First, and most egregious, the name of the comic book was changed from “Edge” to “The Edge” in the specimen. This was done apparently to show that “THE EDGE” mark was being used in commerce in connection with comic books. Second, a “TM” was added to the manipulated title . . . . Third, a disclaimer was tacked on to the bottom of the specimen that stated “‘The Edge’ is the trademark of The Edge Interactive Media, Inc. All Rights Reserved.” These “enhancements” were not present in the original comic-book cover.

Id. at 1111-12 (citation omitted). 236. See id. at 1115. 237. Section 2(f) provides that the USPTO “may accept as prima facie evidence that [an applied-for] mark has become distinctive . . . proof of substantially exclusive and continuous use thereof as a mark by the applicant in commerce for the five years before the date on which the claim of distinctiveness is made.” 15 U.S.C. § 1052(f) (2012). 238. See, e.g., Bell’s Brewery, Inc. v. Bell Hill Vineyards, LLC, No. 91177980, 2009 WL 5118319, at *6-7 (T.T.A.B. Dec. 17, 2009) (nonprecedential) (rejecting claim that applied-for mark was geographically descriptive and that applicant’s averment to the contrary was fraudulent), aff’d, 404 F. App’x 502 (Fed. Cir. 2010); Slaska Wytwornia Wodek Gatunkowtch “Polmos” SA v. Stawski Distrib. Co., No. 92044806, 2010 WL 3164751, at *9 (T.T.A.B. Jul. 26, 2010) (nonprecedential) (rejecting claim of fraud grounded in respondent’s alleged failure to disclose translation of mark allegedly showing its genericness based on findings that “the record shows that there is no precise translation of the term” and that “the record

986 Vol. 104 TMR short work of the claim that a registrant had secured two registrations of the same mark only after fraudulently representing to the USPTO that the mark was suggestive, rather than merely descriptive.239 That disposition came on the registrant’s motion for summary judgment, but the registrant’s victory was not driven by the court’s conclusion that there were no factual disputes concerning the issue. Instead, the court held, the registrant’s arguments to the USPTO had been legal, rather than factual, in nature. As it further explained:

[The registrant] was simply advancing a position that may or may not have persuaded the PTO. [The registrant’s] statements that the mark was not merely descriptive but, rather, at most suggestive were neither material misstatements of fact nor constituted the withholding of an essential fact as required to state a claim for fraud on the PTO.240 In contrast, the Board has proven sympathetic to at least one

claim of fraudulent procurement based on the proposition that the registered mark at issue was found to be inherently distinctive only after its owner allegedly withheld information that would have caused the USPTO to recognize that the mark was in fact primarily geographically descriptive.241 The alleged withholding occurred in response to a direct inquiry by an examiner whether the mark had any geographic significance or any meaning in a foreign language. Although the mark was a geographic place-name, and although the goods sold under the mark came from that location, that information was not conveyed to the examiner, who approved the mark for publication after entering an examiner’s amendment reciting that the mark “has no significance other than as a trademark.”242 When the applicant opposed another party’s application to register a similar mark, its notice of opposition triggered a counterclaim alleging that the applicant’s counsel had acted with a deceptive intent when allowing the applicant’s application to move forward.243 Denying the applicant’s motion to dismiss for failure to state a claim, the Board observed that:

is devoid of any direct evidence of respondent’s intent to deceive the Office by withholding any purported translation of [the mark]”). 239. See Learning Internet v. Learn.com, Inc., No. CV 07-227-AC, 2009 WL 6059550 (D. Or. Nov. 25, 2009). 240. Id. at *14 (citations omitted). 241. See Caymus Vineyards v. Caymus Med. Inc., 107 U.S.P.Q.2d 1519 (T.T.A.B 2013). 242. Quoted in id. at 1523. 243. As a preliminary matter, the Board took a dim view of the applicant’s argument that it was not responsible for the conduct of its attorney. As to that issue, it held that “[i]t is well settled that a client is bound by the actions of its attorney.” Id.

Vol. 104 TMR 987

If, as alleged by [the counterclaim plaintiff], [the mark] has geographic significance and had such significance when the examiner’s amendment was entered, [the applicant] was obliged to be truthful about that fact during the conversation with the examining attorney and, if necessary, seek correction of the examiner’s amendment after it was entered. Deliberately omitting relevant information, as has been alleged by [the counterclaim plaintiff], may be treated as the equivalent of a false statement in its effect and also, under certain circumstances, show the necessary element of intent.244 At least some courts have reached conclusions to similar effect

when presented with the allegation that a knowingly inaccurate claim of inherent distinctiveness constituted fraud on the USPTO.245 These include the Eighth Circuit in a suit brought by two affiliated credit score developers against three credit bureaus challenging, among other things, the defendants’ use of the lead plaintiff’s registered 300-850 service mark.246 The defendants responded to the plaintiffs’ trademark causes of action by seeking the invalidation of the lead plaintiff’s mark and the cancellation of the registration covering it on the ground that the mark lacked distinctiveness. A jury agreed with the defendants that the lead plaintiff had fraudulently procured its non-Section 2(f) registration through false representations made to the examining attorney assigned to its application, and, based on that finding, the district court ordered the USPTO to cancel the lead plaintiff’s registration.

The Eighth Circuit affirmed. It noted that the USPTO initially rejected an application to register the lead plaintiff’s mark on the ground that the mark was merely descriptive of the associated services. In response to the rejection, the lead plaintiff twice represented, once through a witness and once through its counsel, that it was unaware of any other parties using the applied-for mark “as a unique identifier for credit bureau risk scores.”247 Whether in reliance on these statements or for other reasons, the 244. Id. at 1524. 245. See, e.g., U.S. Soo Bahk Do Moo Duk Kwan Federation, Inc. v. Int’l Tang Soo Do Moo Duk Kwan Ass’n, No. 3:12–CV–00669, 2014 WL 3845578, at *7 (M.D. Pa. Aug. 4, 2014) (denying defense motion for summary judgment on grounds that “even if the trademarks were found to be invalid for genericness and/or descriptiveness, the factfinder would still need to determine whether Plaintiff’s declarant knowingly represented the contrary” and that “[t]he declarant’s subjective mental state at the time of application is clearly a disputed issue of fact which cannot be resolved at the summary judgment stage”); Canada Pipeline Accessories, Co. v. Canalta Controls, Ltd., No. 3:12–8448, 2013 WL 3233464, at *6-7 (S.D.W. Va. June 25, 2013) (denying motion to dismiss counterclaim for cancellation grounded in theory that registrant had fraudulently represented that salient component of mark had no meaning in industry). 246. See Fair Isaac Corp. v. Experian Info. Solutions, Inc., 650 F.3d 1139 (8th Cir. 2011). 247. Quoted in id. at 1148.

988 Vol. 104 TMR examining attorney assigned to the application withdrew the initial refusal to register the mark, and the application subsequently matured into the registration at issue in the litigation. The jury’s verdict withstood appellate scrutiny based in part on expert witness testimony that “a reasonable examiner would consider it important in deciding whether to allow the registration to know whether others were using 300 to 850 as a score range for credit scoring services” and in part on the temporal relationship between the statements in question and the issuance of the registration.248 According to the court, “there was sufficient evidence for a reasonable jury to determine that the PTO relied on a false representation in deciding whether to issue the registration.”249

2. Allegedly Fraudulent Averments of Acquired Distinctiveness

As in the context of other allegations of fraud, more than a few litigants have found it difficult to establish their opponents’ claims of acquired distinctiveness were fraudulent.250 For example, one court granted a motion to dismiss a counterclaim for cancellation premised in part on the plaintiff’s allegedly fraudulent claim of acquired distinctiveness for the BLUE MARTINI mark with the following observation:

In evaluating a [claim of acquired distinctiveness], the PTO considers whether the mark has become distinctive through . . . “substantially exclusive and continuous use in commerce.” Therefore, the existence of other bars bearing the name “Blue Martini” does not militate against the granting of a [registration], so long as the party seeking a [registration] can demonstrate substantial exclusivity.251 The same result held with respect to the defendants’ claim

that the plaintiff had fraudulently misrepresented the number of clubs it intended to open under the mark. Although the inaccuracy of the plaintiff’s declaration testimony on this issue was beyond 248. Id. at 1149-50. 249. Id. at 1150. 250. See, e.g., Websters Chalk Paint Powder, LLC v. Annie Sloan Interiors, Ltd., No. 1:13–cv–2040–WSD, 2014 WL 4093669, at *13 (N.D. Ga. Aug. 18, 2014) (“The Amended Complaint fails to allege that [the registrant] knowingly made a material misrepresentation [under Section 2(f)] in connection with the registration of the [registered] mark. It also fails to allege any facts that [the registrant] intended to deceive the USPTO.”); Diak v. Crafts Americana Grp., No. 91195102, 2013 WL 5946236, at *7 (T.T.A.B. Oct. 22, 2013) (nonprecedential) (finding that respondent’s payments to customers executing declarations in support of claim of acquired distinctiveness did not constitute fraud in the absence of evidence that the declarations were false). 251. Quality Serv. Grp. v. LJMJR Corp., 831 F. Supp. 2d 705, 711 (S.D.N.Y. 2011) (quoting 15 U.S.C. § 1052(f) (2006)).

Vol. 104 TMR 989 dispute—the testimony referred to what the court described as “the logical impossibility of opening four clubs in five states”252—that was of little consequence. Hurdling over the permissive language of Section 2(f),253 the court held that the representation in the testimony was irrelevant as a matter of law. Under its reading of the statute, “in determining whether a mark is distinctive, the PTO can only consider use in commerce ‘for the five years before the date on which the claim of distinctiveness is made.’”254 Consequently, “[e]ven accepting Defendants’ allegation that Plaintiff deliberately misled the PTO in asserting that it had leases for additional locations, the PTO’s decision to grant [a registration to the] . . . mark would not be affected.”255

The court then turned its attention to a final creative (if nothing else) argument advanced by the defendants, which was that a disclaimer of the words “blue martini” from the plaintiff’s first registration necessarily rendered the plaintiff’s claims of acquired distinctiveness during the prosecution of its second registration fraudulent. The court once again availed itself of the Lanham Act’s express text for guidance, this time invoking Section 6(b).256 Because that section provides that “[n]o disclaimer . . . shall prejudice or affect . . . [the registrant’s] right of registration on another application if the disclaimed matter be or shall have become distinctive of his goods or services,”257 it barred the defendants’ attack on the second registration as a matter of law. Dismissal for failure to state a claim therefore was appropriate.258

Fraud-based challenges to claims of acquired distinctiveness also have fallen short as a matter of law on motions for summary judgment.259 For example, the Board took a dim view of this theory of fraud in a cancellation action in which the registrant had secured its registration under Section 2(f) after representing to the 252. Id. 253. Section 2(f) typically is interpreted as adopting a flexible standard, rather than a bright-line rule. Specifically, “the language of the statute is permissive, and the weight to be accorded this kind of evidence depends on the facts and circumstances of the particular case.” In re Ennco Display Sys. Inc., 56 U.S.P.Q.2d 1279, 1286 (T.T.A.B. 2000); see also In re Udor U.S.A. Inc., 89 U.S.P.Q.2d 1978, 1986 (T.T.A.B. 2009) (concluding that, in light of widespread third-party use of similar designs, “a mere claim of five years of use is insufficient”). 254. Quality Serv. Grp., 831 F. Supp. 2d at 711-12 (emphasis added) (quoting 15 U.S.C. § 1052(f) (2006)). 255. Id. at 712. 256. 15 U.S.C. § 1056(b) (2012). 257. Id. 258. See Quality Serv. Grp., 831 F. Supp. 2d at 711. 259. See, e.g., Salu, Inc. v. Original Skin Store, No. CIV. S-08-1035 FCD/KJM, 2010 WL 1444617, at *4 (E.D. Cal. Apr. 12, 2010) (rejecting as a matter of law claim that registrant’s unsuccessful pre-application UDRP action against third-party placed substantial exclusivity of registrant’s use in dispute for purposes of registrant’s claim of acquired distinctiveness).

990 Vol. 104 TMR USPTO that its mark had been in substantially exclusive and continuous use for the five years immediately preceding the representation.260 The summary judgment record in the case established that, for at least some of that five-year period, the mark had been owned by a predecessor to the registrant and that the registrant’s research into the mark’s allegedly continuous use perhaps not been as thorough as it could have been. The Board was unwilling to go so far as to hold that the registrant could escape a finding of fraud merely because its principal had relied on the advice of counsel when affixing her signature to the Section 2(f) declaration. Nevertheless, it ultimately held that the registrant was entitled to summary judgment on the continuity-of-use issue on the ground that:

[E]ven if [the principal’s] statements in the Section 2(f) declaration were false, [her] testimony demonstrates that the statements were not made with the requisite intent to deceive the USPTO . . . . [S]he testified that she “believed” that the statements regarding continuous use contained in the Section 2(f) declaration were true based on her personal observations of use of the mark . . . on rack cards and brochures, and that she did not merely rely on the advice of counsel to sign the declaration but undertook “some due diligence” to verify that the statements were true.261

The Board was equally receptive to the principal’s testimony that she had believed that the use by third parties of arguably similar marks did not render her company’s use of its mark nonexclusive for purposes of the declaration.262

If registrants sometimes have prevailed as a matter of law where this theory of fraud is concerned, their opponents generally have not.263 For example, the plaintiff before one court had 260. See Alcatraz Media Inc. v. Chesapeake Marine Tours, Inc., 107 U.S.P.Q.2d 1750 (T.T.A.B. 2013), aff’d, 565 F. App’x 900 (Fed. Cir. 2014). 261. Id. at 1769-70. 262. As to this issue, the Board found that as a matter of law that:

[W]ith regard to the statements in the Section 2(f) declaration attesting to “substantially exclusive” use, [the registrant’s principal] testified that although she was aware of third-party use of the marks DISCOVERY ANNAPOLIS TOURS and GHOST TOURS OF ANNAPOLIS during the five-year period referenced in the Section 2(f) declaration, she did not believe that such use meant that respondent’s use of the term ANNAPOLIS TOURS alone was non-exclusive. Thus, based on the record evidence, we find that [she] did not have the requisite intent to commit fraud when she executed the Section 2(f) declaration.

Id. at 1770. 263. See, e.g., Learning Internet v. Learn.com, Inc., No. CV 07-227-AC, 2009 WL 6059550, at *5-12 (D. Or. Nov. 25, 2009) (holding that challenger to registration had failed to establish as a matter of law that registrant’s representations of exclusive and continuous use of its mark, as well as its proffered (and inaccurate) evidence of advertising expenditures, were knowingly false).

Vol. 104 TMR 991 successfully registered certain features of hinges used in the fencing industry after establishing the features’ secondary meaning.264 Discovery, however, established that the plaintiff’s Section 2(f) showing had been based in part on admittedly false statements concerning its advertising and promotion of the features. Specifically, declaration testimony detailing the plaintiff’s putative purchase of advertisements in trade journals and attaching supporting documentary evidence proved to be inaccurate; worse still, the plaintiff “admitted that it did not advertise the [claimed features] in any publication for several years because it intended to conceal the design to prevent ‘copycats’ from usurping its design.”265 Not surprisingly, this development led the defendant to seek the invalidation of the plaintiff’s registrations on a motion for summary judgment.

The court denied the defendant’s motion for two reasons, the first of which was a strict application of the scienter requirement for a finding of fraud.266 The second reason was the court’s equally strict application of the materiality requirement for a finding of fraudulent procurement:

A misrepresentation is “material” if, but for the misrepresentation, the federal registration either would not or should not have issued. Although [the plaintiff] does not seem to dispute the falsity of the representations made to the USPTO with respect to its advertising, [the plaintiff] states that one of the invoices initially submitted to the USPTO demonstrated that money was spent to attend [a] tradeshow to display [its] hinge[s]. Moreover, [the plaintiff] claims that the products themselves have been marketed and sold substantially and continuously since at least as early as 1998 . . . and 2000 . . . , and this claim has not been disputed. Therefore, it is not clear to me that, but for the misrepresentation regarding advertising, the federal registrations would not or should not have issued. Accordingly, whether such misrepresentations were material is a factual

264. Modern Fence Techs., Inc. v. Qualipac Home Improvement Corp., 726 F. Supp. 2d 975 (E.D. Wis. 2010). 265. Id. at 990. 266. As the court explained:

To be sure, [the plaintiff’s] mark was initially rejected on the basis of nondistinctiveness. Thus, it would appear questionable whether such misrepresentations in the declaration were the result of a misunderstanding, inadvertence, a mere negligent omission, or the like. However, the ultimate determination of [the plaintiff’s] intent rests upon a credibility finding, which is precisely a finding that cannot properly be made at the summary judgment stage. Instead, the issue of intent requires fact finding by a trier of fact.

Id.

992 Vol. 104 TMR

question, making partial summary judgment on the issue of fraud inappropriate.267

Under this approach, of course, an applicant’s submission of at least some bona fide evidence of secondary meaning in the registration process will preclude a finding, at least as a matter of law, that the concurrent submission of admittedly inaccurate (and allegedly fraudulent) evidence is material.

A different defense bid for judgment as a matter of law, this one grounded in the argument that the plaintiff had established the secondary meaning of the color white for woodworking equipment through fraudulent filings, also foundered on conflicting evidence in the record.268 It was undisputed that, in response to an examiner’s initial ornamentality-based rejection of its application and as part of its showing of acquired distinctiveness, the plaintiff had submitted examples of industry usage of colors other than white. It was equally undisputed, however, that the signatory on the plaintiff’s Section 2(f) declaration was aware of other white products in the market269 and that he had not volunteered the existence of those products to the attorney prosecuting the application “based on [the signatory’s] belief that the other products were (a) not competing goods; (b) limited offerings; and/or (c) a small part of a large product line primarily consisting of non-white products.”270 The court was unmoved by the contention that the plaintiff had not been under any duty to “‘ferret out and disclose’ any adverse information”; rather, the court held, “contrary to [the plaintiff’s] assertions, [the plaintiff] did have a duty to provide any known examples to the Examiner instead of unilaterally deciding they were not relevant.”271 At the same time, however, it sufficiently credited the plaintiff’s showing that its use of white was the only one in the

267. Id. at 990-91 (citation omitted). 268. See WMH Tool Grp. v. Woodstock Int’l, 93 U.S.P.Q.2d 1570 (N.D. Ill. 2009). 269. According to one example cited by the court:

[The plaintiff’s response to the initial rejection of its application] also attached examples of competitive manufacturers’ woodworking and metalworking machines in a variety of colors. One submitted publication contained the cover and three pages from the October 2003 issue of Popular Woodworking, showing green machinery by various manufacturers . . . as examples of “industry standard colors.” [The plaintiff’s Section 2(f) declarant] testified that it was a habit of his to look through entire issues of trade publications and that he “could almost assure” that he had looked at the entire October 2003 issue of Popular Woodworking. But other pages from the same issue, depicting white-colored goods made by [the plaintiff’s] competitors, were omitted (Defendants claim deliberately so).

Id. at 1574 (citations omitted). 270. Id. at 1574-75. 271. Id. at 1579.

Vol. 104 TMR 993 relevant market that summary judgment in the defendants’ favor was inappropriate.272

Still another unsuccessful motion for summary judgment of fraud grounded in this theory was advanced by a defendant accused of infringing the federally registered STURGIS mark for the well-known motorcycle rally held annually in Sturgis, South Dakota.273 Responding to the USPTO’s determination that the mark was primarily geographically descriptive, the registrant, the Sturgis Chamber of Commerce, averred in a circa-2001 declaration under Section 2(f) “that as a result of . . . the Sturgis Chamber’s continuous and substantially exclusive use of the STURGIS mark . . . since at least as early as July 1, 1987, the purchasing public has come to identify the STURGIS mark with the [Chamber].”274 As the court concluded, the summary judgment record demonstrated that “[c]ontrary to the assertion of substantially exclusive use of STURGIS by the Chamber, in truth STURGIS or Sturgis was used by hundreds of vendors before and during the time the Chamber asserted its own exclusive use.”275 Nevertheless, that record was an insufficient basis on which to invalidate the Chamber’s registration as a matter of law. Rather, “there is a fact question for a jury to decide—was it the intention of [the Chamber] to defraud the PTO?”276

Nevertheless, not all fraud-based attacks on claims of acquired distinctiveness in the registration process have failed, at least on motions to dismiss.277 In an example of a successful challenge (at least at the pleadings stage) grounded in an allegedly fraudulent claim of secondary meaning, the gravamen of the accusation of fraud before the court was that the counterclaim plaintiff had falsely represented to a USPTO examiner that it was the exclusive user of its mark.278 Although that representation was accompanied by other submissions, including testimony from consumers, sales figures, advertising expenditures, and promotional materials, the 272. Id. 273. See Sturgis Motorcycle Rally, Inc. v. Rushmore Photo & Gifts, Inc., No. 11–5052, 2013 WL 5424707 (D.S.D. Mar. 6, 2013). 274. Quoted in id. at *8. 275. Id. 276. Id. at *4. 277. See, e.g., Gen. Linen Serv., Inc. v. Gen. Linen Serv. Co., No. 12-cv-111-LM, 2014 WL 2605430, at *5-6 (D.N.H. June 11, 2014) (denying motion to dismiss counterclaim grounded in allegedly false representation in application process of continuous use of descriptive mark for five years preceding application); Meth Lab Cleanup, LLC v. Spaulding Decon, LLC, No. 8:10-cv-2550-T-30TGW, 2011 WL 398047, at *2 (M.D. Fla. Feb. 4, 2011) (denying plaintiff registrant’s motion to dismiss counterclaim for cancellation on ground that “Defendants claim that Plaintiff knew that the applications did not qualify under Section 2(f) of the Trademark Act because Plaintiff was not the substantial and exclusive user of the marks during the relevant period of time (five years or more”). 278. See Southco, Inc. v. Penn Eng’g & Mfg. Corp., 768 F. Supp. 2d 715 (D. Del. 2011).

994 Vol. 104 TMR examiner rejected the counterclaim plaintiff’s claim of acquired distinctiveness, only to relent upon the submission of additional evidence and testimony. According to the counterclaim plaintiff, the refusal to accept its initial showing was proof of the lack of materiality of its representation of exclusive use, and it moved to dismiss the counterclaim defendant’s challenge to its registration on that basis. The court declined to do so: “That the Examiner sought additional evidence on the issue of distinctiveness does not . . . establish that she did not rely on the initial evidence submitted” when ultimately issuing a registration to the counterclaim plaintiff.279

H. Allegedly Fraudulent Averments of the Nonfunctionality of an Applied-for Mark

Of the three common-law prerequisites for trademark validity—use in commerce, distinctiveness, and nonfunctionality—the last of these has been addressed the least in the context of fraud-on-the-USPTO inquiries. In an exception to this general rule, however, one case presented the issue of whether the plaintiff, which owned a series of registrations covering the configurations of hinge plates used in the fencing industry, had intentionally misled the examiners assigned to two of its applications into finding that the configurations covered by them were nonfunctional.280 There were three bases of this claim, which was advanced by a defendant accused of infringement: (1) the plaintiff had strategically submitted drawings of the back side of its hinges to “deflect the examiner’s attention” from the fact that plaintiff had conceded the functionality of a key feature of the hinges when securing two other registrations bearing on the hinges; (2) the plaintiff had failed to disclose promotional materials relating to its designs in response to a direct request for them; and (3) the plaintiff had failed to disclose information concerning alternative designs in response to a direct request for it.281

In denying the defendant’s motion for summary judgment on the issue of fraudulent procurement, the court concluded as a threshold matter that “because material questions of fact existing regarding the functionality of the [plaintiff’s claimed hinge features], judgment as a matter of law with respect to [the plaintiff’s] allegedly having committed fraud on the USPTO by concealing the functionality of the [features] is not appropriate.”282

279. Id. at 726. 280. See Modern Fence Techs., Inc. v. Qualipac, 726 F. Supp. 2d 975 (E.D. Wis. 2010). 281. Id. at 988-89. 282. Id. at 989.

Vol. 104 TMR 995 Nevertheless, it then went on to conclude with respect to the first two of the defendant’s three theories of fraud that “[t]here is simply not sufficiently clear and convincing evidence from which to infer that [the plaintiff] submitted drawings of the back side of the hinge and did not provide information regarding [its promotion of the claimed features] with an intent to deceive the USPTO.”283 The court’s disposition of the defendant’s third theory of fraud was more detailed, but the result was the same. Although it was undisputed that the plaintiff had sent cease-and-desist letters to third parties prior to filing its applications and that the plaintiff had failed to disclose the existence of the third parties’ designs to the USPTO, there was a factual dispute as to whether the plaintiff’s policing efforts related to the designs actually covered by the applications, as opposed to other designs:

Because the court cannot discern the extent of [the plaintiff’s] knowledge regarding competitors’ [use of designs similar to those covered by the registrations at issue], it is not clear that Modern Fence intended to mislead the USPTO in its application for federal registration. In other words, because there is no clear and convincing evidence that [the plaintiff] acted fraudulently in not disclosing competitors’ designs to the USPTO, judgment as a matter of law cannot be granted in favor of [the defendant]. Indeed, there is an issue of fact regarding whether [the plaintiff] withheld information concerning competitors’ designs from the USPTO and if so, whether it deliberately withheld the information.284

I. Submission of Allegedly Fraudulent Standards Governing the Use of an Applied-for

Certification Mark In addition to a specimen of use, an applicant for registration

of a certification mark must submit the standards under which it certifies qualified parties to use the applied-for mark. One such applicant, the owner of the SWISS MADE certification mark for watches, derived its standards from a Swiss ordinance governing the use of that mark.285 In response to an examiner’s request for its standards, the applicant submitted two documents, which the applicant described as “a copy of its standards as well as an abstract of the Swiss Ordinance on which these standards are based.”286 The abstract expressly referred to the applied-for mark,

283. Id. 284. Id. at 990. 285. See Swiss Watch Int’l Inc. v. Fed. of Swiss Watch Indus., 101 U.S.P.Q.2d 1731 (T.T.A.B. 2012). 286. Quoted in id. at 1745.

996 Vol. 104 TMR but the standards themselves did not, and those circumstances led a petitioner for cancellation of the registration maturing from the application to claim that the submission of both documents had been part of a deliberate attempt to defraud the USPTO.

The Board proved unreceptive to this theory of fraudulent procurement:

Respondent made no false statements to the examining attorney, and a false statement is one of the critical elements in proving fraud. Further, there must be an intent to deceive the USPTO. Although deliberately omitting relevant portions of a document, or making a statement that, while true, gives only part of the story and therefore is deliberately designed to mislead, may be treated as a false statement in its effect and also show the necessary element of intent, that is clearly not the case here. Petitioner’s assertion that respondent submitted both documents in order to “outfox the examiner” is not a substitute for showing that submitting both documents gave an incomplete picture and, in effect, resulted in the withholding of necessary information. The examining attorney was given both the Standards and the Ordinance; both were clearly marked; and respondent clearly stated in its response that it was submitting both, and that the Standards were based on the Ordinance.287

The registration therefore withstood scrutiny.288

J. Allegedly Fraudulent Failure to Disclose the Historical Significance of an Applied-for Mark

As reflected in the discussions in the previous sections, most post-Bose fraud-based attacks on the validity of applications and registrations to be discussed in reported opinions have asserted conventional bases grounded in the statutory requirements for registration. Of those not doing so, the most creative—if not the most bizarre—came in a case in which the registered marks were DON’T TREAD ON ME and its abbreviation, DTOM, both of which were used in connection with apparel.289 The defendant argued that the plaintiff had defrauded the USPTO by failing to disclose the historical significance of the first mark, as well as that mark’s use by third parties. Unfortunately for the defendant, the court concluded that it had “failed to offer any authority for the proposition that a trademark with historical significance is not subject to registration.”290 Beyond that, “[e]ven if [the defendant] 287. Id. at 1746 (citation omitted). 288. Id. 289. See Bauer Bros. v. Nike Inc., 98 U.S.P.Q.2d 1160 (S.D. Cal. 2011). 290. Id. at 1165.

Vol. 104 TMR 997 had done so, the [defendant’s counterclaims] do not allege with particularity ‘the historical significance and origin’ of the phrases at issue, nor do they allege that, because of that historical significance, [the plaintiff] knew that no trademark [registration] could be rightfully issued as to the phrases at issue.”291 The plaintiff’s motion to dismiss the counterclaim therefore was well-taken.292

K. Allegedly Fraudulent Averments of the Excusable Nonuse of a Registered Mark

If a registered mark is not in use in commerce in connection with particular goods or services recited in the registration at the time a declaration of ongoing use under Section 8 of the Lanham Act is due for the registration, the registrant has the option of submitting a declaration averring the mark’s nonuse is excusable.293 The veracity of allegations of excusable nonuse in the post-registration maintenance context is not an issue that is frequently addressed in the case law, and, indeed, there is only one reported post-Bose opinion squarely evaluating the merits of a claim that the registrant has fraudulently misrepresented the circumstances preventing it from using its mark.294 In the litigation producing it, the lead defendant’s predecessor had secured a registration under Section 44(e) without showing that its mark was in use. The registration was then assigned to the lead defendant, which was merged into another company and dissolved before a Section 8 declaration was filed in the lead defendant’s name averring that litigation between the parties and the Russian government’s shutdown of the lead defendants’ manufacturing facilities had prevented it from marketing goods under the registered mark in the United States. Not so, argued the plaintiff: According to it, the mark’s use was in part attributable to the lead defendant’s undisclosed-to-the-USPTO merger and dissolution; moreover, because the declaration had been filed after the merger, any representations made on behalf of the lead defendant necessarily were false and fraudulent. Even if those allegations were true, however, the court held that they failed to state a claim for the cancellation of the lead defendant’s registration. Rather, “[the plaintiff] has provided the Court with no facts suggesting that [the lead defendant] made a deliberate choice to withhold its change in corporate status to the USPTO. The failure to inform the 291. Id. 292. See id. 293. See generally In re New England Mut. Life Ins. Co., 33 U.S.P.Q.2d 1532, 1534 (Comm’r 1991). 294. See ZAO Odessky Konjatschnyi Zawod v. SIA “Baltmark Invest,” 109 U.S.P.Q.2d 1680, 1685 (E.D. Va. 2013).

998 Vol. 104 TMR USPTO of [the defendant’s] merger . . . does not equate to knowledge of wrongdoing.”295

L. Allegedly Fraudulent Declarations of Incontestability

Section 15 of the Lanham Act provides that, following the fifth anniversary of its issuance, a registration on the Principal Register can become “incontestable” if the registrant files a declaration averring, inter alia, that the registered mark has been in continuous use in connection with the goods and services covered by the registration for the five years preceding the declaration’s execution.296 Under the Act’s express terms, a fraudulent Section 15 is relevant only to the conclusive evidentiary presumptions attaching to an incontestable registration,297 rather than to the validity of the registration itself,298 but courts and the

295. Id. at 1665. 296. The salient portion of Section 15 provides that:

[T]he right of the owner to use such registered mark in commerce for the goods or services on or in connection with which such registered mark has been in continuous use for five consecutive years subsequent to the date of such registration and is still in use in commerce, shall be incontestable: Provided, That— (1) there has been no final decision adverse to the owner’s claim of ownership of such mark for such goods or services, or to the owner’s right to register the same or to keep the same on the register; and (2) there is no proceeding involving said rights pending in the United States Patent and Trademark Office or in a court and not finally disposed of; and (3) an affidavit is filed with the Director within one year after the expiration of any such five-year period setting forth those goods or services stated in the registration on or in connection with which such mark has been in continuous use for such five consecutive years and is still in use in commerce, and other matters specified in paragraphs (1) and (2) of this section.

15 U.S.C. § 1065 (2012). 297. See id. § 1115(b)(1). 298. The submission of a fraudulent Section 15 declaration is not an express ground for the cancellation of a registration that has passed its fifth anniversary under Section 14(3) of the Act, and, because incontestability is triggered by the filing of a Section 15 declaration, rather than by its acceptance, the materiality of inaccurate statements in such a declaration is open to question. As to the first of these propositions, the Lanham Act automatically restricts the grounds upon which a registration may be challenged on the registration’s fifth anniversary, with Section 14(3) allowing cancellation only:

if the registered mark becomes the generic name for the goods or services, or a portion thereof, for which it was registered, or is functional, or has been abandoned, or its registration was obtained fraudulently or contrary to the provisions of . . . subsection (a), (b), or (c) of section [2] for a registration under this chapter or contrary to similar prohibitions of such prior Acts for a registration under such Acts, or if the registered mark is being used by, or with the permission of, the registrant so as to misrepresent the source of the goods or services on or in connection with which the mark is used.

15 U.S.C. § 1064(3) (2012). The statute therefore allows cancellation only if the registration itself, and not the incontestable evidentiary presumptions secured by a Section 15 declaration, is obtained fraudulently. See Park ’N Fly, Inc. v. Dollar Park & Fly, Inc., 469

Vol. 104 TMR 999 Board generally have ratified the theory that a fraudulent Section 15 declaration is an extrastatutory basis for cancellation.299

A rare example of a post-Bose opinion reaching the merits of a fraud-based attack on Section 15 declarations arose in a cancellation action involving the rights to the VILLAGE PEOPLE mark for entertainment services.300 In a nonprecedential decision, the Board addressed the claim that the respondent had fraudulently claimed the benefits of incontestability because, as that claim was summarized by the Board, “the specimens submitted with the [respondent’s combined Section 8 and Section 15] post-registration declarations were not in continuous use for the five years immediately preceding the filing of the declarations.”301 The Board did not hesitate to dismiss that portion of the petition for failure to state a claim. As it explained, “for a Section 15 declaration, which asserts five years of continuous use, U.S. 189, 195 (1985) (“[Section 14(3)] allows cancellation of an incontestable [registration] at any time . . . if it was obtained fraudulently . . . .”). A Section 15 declaration is not an act in the “obtaining” of a registration because it is not a prerequisite for either the maintenance of a registration or Section 14’s statute of limitations on cancellation actions. See, e.g., Imperial Tobacco Ltd. v. Philip Morris, Inc., 899 F.2d 1575, 1579 n.6 (Fed. Cir. 1990) (“[S]ection [14] is not dependent on the filing of a declaration under section 15 which provides incontestable rights of use . . . .”); W. Worldwide Enters. v. Qinqdao Brewery, 17 U.S.P.Q.2d 1137, 1139 (T.T.A.B. 1990) (“[A] registration that is over five years old may be cancelled solely on the grounds set forth in Section 14[3], irrespective of whether or not the owner of the registration has filed an affidavit under Section 15.”); see also United States Patent and Trademark Office, Trademark Manual of Examination Procedure § 1605 (2014) (“Filing an affidavit or declaration of incontestability under §15 of the Trademark Act (‘§15 affidavit or declaration’) is optional. An eligible registrant may choose to claim the benefits of incontestability and file an appropriate affidavit or declaration, or may elect to retain the registration without those benefits. The requirements for maintaining and renewing a federal registration are not affected.”). As to the second:

The USPTO does not “accept” §15 affidavits or declarations. Rather, the USPTO reviews the affidavit or declaration to determine whether it is consistent with the requirements of the statute and rules (e.g., whether it is signed, whether it was filed at an appropriate time, and whether the §15 claims are properly set forth).

When a §15 affidavit or declaration complies with the requirements of the statute and rules, the USPTO updates its records to acknowledge receipt of the affidavit or declaration and sends a notice of acknowledgment to the owner of the registration. Acknowledging receipt of the affidavit or declaration provides notice to the public that an affidavit or declaration of incontestability has been filed; it is not a determination by the USPTO that the registration is in fact incontestable. The question of whether the registration is incontestable arises and is determined by a court if there is a proceeding involving the mark.

Id. (citation omitted). 299. See, e.g., Gen. Linen Serv., Inc. v. Gen. Linen Serv. Co., No. 12-cv-111-LM, 2014 WL 2605430, at *5-6 (D.N.H. June 11, 2014) (declining, in cursory treatment, to dismiss counterclaim for cancellation grounded in registrant’s submission of allegedly fraudulent Section 15 declaration). 300. See Willis v. Can’t Stop Prods., Inc., No. 92051212, 2011 WL 4871875 (T.T.A.B. Sept. 21, 2011) (nonprecedential). 301. Id. at *3.

1000 Vol. 104 TMR there is no requirement that the same specimen be used for those five years, only that the mark be in use for five continuous years prior to the filing of the declaration.”302 Because the petition lacked any allegation that the mark itself had not been in continuous use, the Board ultimately held that “[t]o the extent that petitioner is claiming fraud . . . , petitioner simply misunderstands the law.”303

IV. CONCLUSION If the Federal Circuit’s goal in Bose was to limit the burst of

findings of fraud under the Medinol standard, the Board’s post-Bose case law suggests that the court has achieved that goal in inter partes litigation: It took over five years after Bose for the Board to make an actual finding of fraud, and, indeed, that tribunal left the door open for such a finding in only two of its myriad other opinions to address the issue.304 Nevertheless, the relative absence of actual findings of fraud by the Board is no guarantee that courts other than the Federal Circuit will apply the strict Bose standard, especially the Second Circuit, which continues to recognize a Medinol-style negligence standard for findings of fraud,305 and the Eighth Circuit, for which the concept of materiality lacks the strict but-for relationship found elsewhere in trademark jurisprudence.306 Likewise, truly egregious conduct—or at least conduct perceived by individual courts (and even by the Board) to be truly egregious—remains a basis for the invalidation of filings in the USPTO, whatever the standard that may be applied. Although the risk of a finding of fraudulent procurement or maintenance almost certainly has decreased in the post-Bose era, that risk therefore still exists, and those responsible for the management of trademark and service mark portfolios would do well to continue to take it into account.

302. Id. 303. Id. 304. See supra notes 170-90, 197-98, and 241-44 and accompanying text. 305. See supra notes 22 and 195-96 and accompanying text. 306. See supra notes 27-34 and 246-49 and accompanying text.