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CAFC Redirects TTAB in Trademark Fraud Ruling Today: In re Bose Decided

Posted in Law Suits, Loss of Rights, Trademarks, TTAB

Today is a really, really big day for trademark types.

As many of us have been saying for a couple of years now, trademark fraud (i.e., fraud on the U.S. Trademark Office) continues to be one of the hottest issues facing trademark owners and the attorneys who represent them. Perhaps after today, not so much, but who really knows, we’ll see.

For those not already plugged into the issue of trademark fraud, most mark the 2003 decision of the Trademark Trial and Appeal Board (TTAB) in Medinol v. Neuro Vasxas the starting point for a much lower, and easier to prove, standard of fraud.

After Medinol, if a trademark owner knew or "should have known" it made a material false statement to the Trademark Office, the entire resulting trademark registration was subject to cancellation at any time. Since then, and following the reasoning in Medinol, the TTAB issued numerous decisions granting opposition or cancellation of trademark applications and registrations on fraud grounds, causing trademark owners and their attorneys great concern with what many have called a strict liability standard, not one based upon an actual "intent to deceive" the U.S. Trademark Office. Most of these cases have fallen into the "overinclusive" goods and services category of fraud cases — basically, cases having sworn statements that the applied-for mark is currently in use in connection with all of the listed goods and services, when in fact, something less than all the goods or services are actually in use with the mark.

For those interested on the development of the trademark fraud issue, here is a pdf of my slides for a talk I gave in January 2008, at LAIPLA’s Washington in the West continuing education conference.

As some of you may recall, during several of my talks over the last two years, I have figuratively flashed a yellow light and cautioned that the CAFC — the TTAB’s primary reviewing court —  has not been heard on the subject of trademark fraud for quite some time, and it has not been clear to me that the CAFC actually would endorse the TTAB’s easier to prove fraud standard in the Medinol line of cases. Today the CAFC weighed in on the subject.

Earlier today, the United States Court of Appeals for the Federal Circuit (CAFC) decided In re Bose, a long-anticipated decision on what it takes to establish fraud before the U.S. Trademark Office. In doing so, the CAFC flashed a red light, indicating the TTAB had read "too broadly" prior CAFC precedent that had mentioned the words "should have known," and it specifically reaffirmed "that 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," and it further redirected the TTAB: "Unless 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."

So, after today, trademark fraud still exists, and it can be proven, provided it is "proven to the hilt," with "clear and convincing evidence," leaving "no room for speculation, inference or surmise," and so long as "any doubt must be resolved against the charging party." Basically, "deception must be willful to constitute fraud." [Here is a link to a pdf of the CAFC’s Bose decision].

Hat tip to John Welch of the TTABlog for alerting his followers of the CAFC’s decision published first thing in the morning today.

My more detailed perspectives about the CAFC’s Bose decision will follow later.

Also, stay tuned, because we continue to await the CAFC’s fraud decision that it is currently reviewing in Grand Canyon West Ranch, LLC v. Hualapai Tribe.

  • John L. Welch

    Thanks for the hat tip, Steve. I believe the Grand Canyon v. Hualapai case has been settled and the appeal withdrawn.