On August 31, 2009, the Federal Circuit held that a party seeking to prove fraud in the procurement or maintenance of a trademark registration before the Trademark Trial and Appeal Board must prove that the applicant or registrant knowingly made a false, material representation with the intent to deceive the Patent and Trademark Office (“PTO”). In re Bose Corporation, No. 2008-1448, slip op. at 8 (Fed. Cir. Aug. 31, 2009). In doing so, the Federal Circuit reversed a series of decisions from the Trademark Trial and Appeal Board (“TTAB”), which held that fraud could be found if an applicant or registrant “knew or should have known” that a statement to the PTO was false or misleading. See, e.g., Medinol v. Neuro Vasx, Inc., 67 U.S.P.Q.2d 1205, 1209 (T.T.A.B. 2003); Bose Corp. v. Hexawave, Inc., 88 U.S.P.Q.2d 1332, 1334 (T.T.A.B. 2007).

Fraudulent Misrepresentation

Any proprietor or person may oppose another’s trademark application or may seek to cancel another’s trademark registration on the basis that the other party committed fraud on the PTO in filing the application or obtaining the registration. 15 U.S.C. §§ 1063 & 1064. At various points during the prosecution and maintenance of a trademark registration, the trademark owner must declare, under penalty of perjury, that the information contained in a filing to the PTO is true. Such filings include new applications, allegations of use (for intent-to-use applications) and Section 8 declarations of continued use (required during the fifth and ninth year after registration and every 10 years thereafter). In these filings, the trademark owner must declare that the subject mark is in use in connection with all of the goods and/or services listed in the application or registration. If the trademark owner makes a fraudulent misrepresentation to the PTO, the application or registration is subject to refusal or cancellation for at least the entire class of goods/services at issue. See G&W Laboratories, Inc. v. G W Pharma Limited, 89 U.S.P.Q.2d 1571, 1573 (T.T.A.B. 2009) (holding that each class of goods or services in multiple-class applications must be considered separately in reviewing the issue of fraud on the PTO rather than merely refusing or canceling the entire application or registration, and noting that the line of cases since Medinol involved single-class applications or registrations and thus did not support the proposition that an application or registration should be void in its entirety).

Thus, it is important for trademark owners to thoroughly review all trademark filings before submitting them to the PTO to ensure that all statements of fact are true.

Trademark Trial and Appeal Board Decision

The dispute in Bose began when Bose opposed Hexawave’s application to register the mark HEXAWAVE based on Bose’s registration for the mark WAVE in connection with related goods. Hexawave filed a counterclaim for cancellation of Bose’s WAVE registration, alleging that Bose committed fraud on the PTO in its Section 8 continued use filing in 2001. In particular, Hexawave alleged, and Bose admitted, that when Bose filed for renewal, Bose was not selling “audio tape recorders and players” bearing the WAVE mark. Bose argued that because it was still transporting customers’ WAVE audio tape recorders and players while providing repair services, this use was sufficient to maintain its registration for these goods. The TTAB, however, held that Bose knew or should have known that such use was not sufficient to maintain the registration, and that Bose therefore committed fraud. In so holding, the TTAB cancelled Bose’s WAVE registration in its entirety. Bose Corp., 88 U.S.P.Q. 2d at 1334.

Federal Circuit Decision

Bose appealed to the Federal Circuit arguing that because it believed its use was sufficient to maintain the registration, it did not have the necessary intent to deceive the PTO when it declared that it was still using the WAVE mark for audio tape recorders and players and therefore did not commit fraud. The Federal Circuit agreed with Bose, holding 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.” In re Bose, No. 2008-1448, slip op. at 8 (emphasis added). The Federal Circuit also confirmed that the challenger must provide clear and convincing evidence of the trademark owner’s intent to deceive. See id.

The original appellee Hexawave did not appear, so the PTO was permitted to participate as the appellee. Among its arguments, the PTO asserted that Bose made a submission to the PTO with reckless disregard of its truth or falsity, which satisfies the intent to deceive requirement under Torres v. Cantine Torresella S.r.l., 808 F.2d 46, 48 (Fed. Cir. 1986). The Federal Circuit held that it did not need to resolve that issue because it determined that there was no basis to find that Bose’s conduct was reckless.

Practice Pointers

The practical effect of the Federal Circuit’s decision is to make it more difficult for a challenger to prevail on a claim that an applicant or registrant committed fraud on the PTO. Nonetheless, the Bose decision (as well as the PTO’s assertions as appellee) reinforces the seriousness with which the Federal Court, TTAB and PTO view allegations of fraud on the PTO. It remains essential for any trademark applicant or registrant to ensure that there are no false representations in filings to the PTO.

As noted, fraud concerns usually arise when a trademark owner is not using its trademark in connection with all of the goods and/or services listed in a trademark application or registration, and yet the applicant or registrant submits a statement asserting that the trademark is in fact being used in connection with all goods and/or services listed. Although the Bose court determined that “should have known” is no longer the standard, applicants and registrants are advised to take all reasonable measures to determine whether they are using the subject trademark in connection with all identified goods and/or services.

For instance, when making a Section 8 affidavit of continued use filing, a trademark registrant must review all of the goods and/or services listed in the registration to determine whether the mark is still being used in connection with each of the listed items. If not, the registrant should delete from the registration the items that are no longer in use.

If you have any questions during a trademark filing whether your use of the trademark is sufficient to procure or maintain a registration with a particular good or service, please feel free to contact us. Additionally, if one of your prior trademark filings may have included a false representation, note that an amendment to correct a false statement filed before an application is published or before a registration is challenged creates a rebuttable presumption that the owner lacked the requisite intent to commit fraud. See University Games Corp. v. 20Q.net Inc., 87 U.S.P.Q.2d 1465 (T.T.A.B. 2008); Zanella Ltd. v. Nordstrom, Inc., 90 U.S.P.Q.2d 1758 (T.T.A.B. 2008).

This article was prepared by Brandon M. Ress (bress@fulbright.com or 512 536 3040) and Patrick J. Gallagher (pgallagher@fulbright.com or 612 321 2812) from Fulbright's Intellectual Property and Technology Practice Group. For additional information, please feel free to contact Brandon Ress, Patrick Gallagher or Richard J. Groos (rgroos@fulbright.com or 512 536 3007).