I’m here in New York attending the Practising Law Institute’s CLE, “Navigating Trademark Practice Before the PTO: From Filing Through the TTAB Hearing.” Today we covered a lot of ground, from trademark clearance, to bases for registration refusal, to ex parte appeals. Despite this diverse lineup, there was one issue that seemed to come up over and over: fraud.
Fraud on the PTO occurs when a person makes a material misrepresentation of fact that the person knew or should have known was false or misleading. It can occur, for example, when a trademark owner files a declaration of use stating it has made actual use of its mark with all of the applied-for categories of goods. If that statement is not 100% accurate, it is subject to challenge and the entire registration may be cancelled. One presenter stated that the belief that upwards of 50% of registrations may be vulnerable to attack on this ground.
That’s a shocking statistic. In response, the Trademark Trial and Appeal Board is stepping up its enforcement efforts. While cancelling a registration because of fraud used to be unheard of, it’s now becoming fairly common. One need look no further than last month’s decision in Hurley Int’l LLC v. Volta, No. 91158304 (TTAB 2007), to gauge the Board’s recent attitude. (Discussion in the TTABlog here.) In that case, the applicants represented to the PTO that they had used the subject mark in connection with all of their applied-for classes of services. In the subsequent opposition proceeding, however, they admitted in discovery they had not used the mark with some of the services. Upon learning this, the opposer moved for summary judgment on the ground of fraud. The pro se applicants blamed their error on health problems and their ignorance of the law.
The TTAB was not persuaded. It concluded: “The fact that applicants allegedly misunderstood a clear and unambiguous requirement for an application based on use, were not represented by legal counsel, and were suffering health problems does not change our finding of fraud herein.”
Therefore, the Board granted the opposer’s motion for summary judgment and denied the applicants’ motion to amend their application to correct the error as being too little, too late.
From today’s presentations, it sure looks like fraud challenges are here to stay. Trademark owners who think their registration may be vulnerable to such an attack should think hard about re-applying for registration. Just make sure any new application is based on facts that are rock-solid.