Federal Circuit Clarifies Standard for Fraud on the United States Patent and Trademark Office
9/24/2009
In recent years, there has been tremendous uncertainty as to what constitutes “fraud” in the procurement of trademark rights before the U.S. Patent and Trademark Office (the USPTO). Not surprisingly, trademark owners and applicants have an ongoing duty to be accurate and honest in their filings with the USPTO. For example, if a trademark owner files a declaration with the USPTO stating that it is using a trademark to identify products A, B, C and D, the owner must be using the trademark in connection with allof the products at the time the declaration is made.
In a significant development, the United States Court of Appeals for the Federal Circuit (the Federal Circuit) reversed a decision of the Trademark Trial and Appellate Board (TTAB) and clarified that “[t]here is no fraud [on the USPTO] if a false misrepresentation is occasioned by an honest misunderstanding or inadvertence without a willful intent to deceive.”
The Federal Circuit’s decision In re Bose Corp. (which can be found at this link) addressed the possible cancellation of the registration of Bose’s well-known WAVE trademark. The Bose case originated when Bose opposed a third party application to register the trademark HEXAWAVE, based on Bose’s prior registration of the WAVE mark. The applicant, however, counter-claimed to cancel Bose’s registration for the WAVE mark, alleging that Bose had committed a fraud on the USPTO by certifying that it was selling all of the products identified in the registration when, in fact, it was not.
In its defense, Bose presented evidence that its failure to delete the unused products from its WAVE renewal application was an innocent mistake. Nonetheless, based on the standard for fraud established in Medinol v. Neuro Vasx, Inc., the TTAB found that Bose knew or should have known the application to be false or misleading and ordered a cancellation of the WAVE mark.
On appeal, the Federal Circuit noted that a fraud on the USPTO, like fraud in other areas of United States law, requires an element of willfulness. Therefore, the Federal Circuit held that the TTAB had erred in the Medinol case.
The Federal Circuit in Bose held that to prevail on a claim of fraud a party must show an intent to deceive, proven by clear and convincing evidence. Because the evidence showed that Bose had, at most, acted negligently, and not intentionally, the Federal Circuit reversed the cancellation order and, in so doing, overruled the lower fraud standard set forth by the TTAB in the Medinol case.
While trademark applicants and owners should continue to exercise care in trademark filings, the recent decision of the Federal Circuit in the Bose case provides trademark owners with some comfort that their applications or registrations will not be subject to opposition or cancellation based solely on a good faith, inadvertent misstatement made in the trademark prosecution process.
The opinions expressed in this bulletin are intended for general guidance only. They are not intended as recommendations for specific situations. As always, readers should consult a qualified attorney for specific legal guidance.
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