Fraud in Trademark Applications and Registrations: Proving or Defeating Allegations

Transcription

1 Presenting a live 90-minute webinar with interactive Q&A Fraud in Trademark Applications and Registrations: Proving or Defeating Allegations Navigating Differing Standards at the TTAB and in the Regional Circuits, Mitigating the Risk of Invalidation TUESDAY, JANUARY 13, pm Eastern 12pm Central 11am Mountain 10am Pacific Today s faculty features: Stephen R. Baird, Shareholder, Winthrop & Weinstine, Minneapolis Jennifer Lee Taylor, Partner, Morrison & Foerster, San Francisco Theodore H. Davis, Jr., Partner, Kilpatrick Townsend & Stockton, Atlanta The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions ed to registrants for additional information. If you have any questions, please contact Customer Service at ext. 10.

2 CAFC Redirects TTAB in Trademark Fraud Ruling Today: In re Bose Decided I Page 1 of 2 Collaborations in Creativity & the Law CAFC Redirects TTAB in Trademark Today: In re Bose Decided Fraud Ruling By Steve Baird on August 31st, 2009 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 ofthe Trademark Trial and Appeal Board (TTAB) in Medinal v. Neura Vasx, as 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 casesbasically, 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 Medinalline 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 Base, 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

3 CAFC Redirects TTAB in Trademark Fraud Ruling Today: In re Bose Decided I Page 2 of 2 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. Tags: Bose, CAFC, Clear and Convincing Evidence, Court of Appeals for the Federal Circuit, Fraud, Fraud Trademark Office Trademark Laws Trademark Registration Trademark Portfolio Trademark Attorney Trademark Fraud CAFC Court of Appeals for the Federal Circuit Hualapai Tribe Grand Canyon West Ranch, Grand Canyon West Ranch, Grand Canyon West Ranch, LLC v. Hualapai Tribe, Hualapai Tribe, Intent to Deceive, LLC v. Hualapai Tribe Bose Clear and Convincing Evidence Intent to Deceive, Trademark Attorney, Trademark Fraud, Trademark Laws, Trademark Office, Trademark Portfolio, Trademark Registration Winthrop & Weinstine, P.A. 1 Suite South Sixth Street 1 Minneapolis, MN Telephone: (612) Fax: (612) Copyright 2015, Winthrop & Weinstine, P.A. All Rights Reserved. Strategy, design, marketing & support by LexBlog 15

4 True Lies, Trademark Fraud, and the Medinol Detour I Page 1 of2 Collaborations in Creativity & the Law True Lies, Trademark Detour Fraud, and the Medinol By Steve Baird on September 28th, 2009 Posted in Almost Advice, Law Suits, Loss of Rights, Trademarks, TTAB Trademark types: As promised, here are some of my more detailed thoughts and perspectives (at least for the time being) on the most significant trademark case of the year: In re Bose. Thanks to Thomson Reuters for asking me to share them with their readers. I look forward to some great dialogue on the likely implications resulting from this long-anticipated trademark fraud decision. Marketing types: An adversary's ability to cancel your company's trademark registration for fraud just got much more difficult with this important Bose decision. Basically, fraud means fraud again. Instead of your adversary only needing to prove that you should have known that a material statement made to the Trademark Office actually was false at the time you made it (as was the law applied by the U.S. Trademark Office for the last six years), now, simple negligence is no longer enough to establish trademark fraud, instead, an actual intent-to-deceive the Trademark Office must be proven. Having said that, despite this revived more difficult-to-prove fraud standard, it is as important as ever to treat the statements or representations you make to the Trademark Office as seriously as ever, and with the utmost solemnity, making sure you truly understand what you are signing so you can actually affirm the truth of those statements and representations. It probably goes without saying that the apparent simplicity of the electronic trademark forms can be quite deceiving. So, there are no stupid questions when it comes to your understanding before signing electronic form documents that are submitted to the Trademark Office. UPDATE: ExecSense Webinar on the Bose Decision, now available for purchase. Just so you know, all royalties due to me are being donated to The Ronald McDonald House Charity. Tags: Actual Intent to Deceive, Bose, CAFC, Clear and Convincing Evidence, Court of Appeals for the Federal Circuit, ExecSense, Fraud, Intent to Deceive, Medinol, Medinol v. Neuro Vasx, Ronald McDonald House, Trademark Attorney, Trademark Fraud, Trademark Laws, Trademark Office, Trademark Registration Winthrop & Weinstine, P.A. I

5 True Lies, Trademark Fraud, and the Medinol Detour I Page 2 of2 Suite 3500 I 225 South Sixth Street I Minneapolis, MN Telephone: (612) I Fax: (612) Copyright 2015, Winthrop & Weinstine, P.A. All Rights Reserved. Strategy, design, marketing & support by LexBlog

6 Web-based trademark research :: Thomson CompuMark :: Client Times Online Page 1 of3 THOMSON REUTERS THQMSONCQMPUMARK )'00 can't be molt! CErtatl1!" True Lies, Trademark Fraud, and the Medinol Detour: The Federal Circuit Reverses In re Bose by Stephen R. Baird The fraudulent procurement and maintenance of federal trademark registrations has been one of the hottest, most rapidly developing and widely discussed legal issues facing virtually all trademark owners and their counsel (at least during the past six years), following the Trademark Trial and Appeal Board's (TTAB's or Board's) landmark decision in Medinol v. Neuro Vasx, Inc., 67 U.S.P.Q.2d 1205 (HAB 2003). Well before Medinol, pursing allegations of trademark fraud was tempting and attractive to many litigants since fraud is a statutory defense to "incontestability" (15 U.S.C. 1115(b)(1)), and registrations that are "fraudulently" obtained may be cancelled "at any time" (15 U.S.C. 1064(3)) -- they are not protected by the typical five-year statute of limitations that prevents most other statutory grounds for cancellation. Before Medinol, however, fraud claims and defenses were largely unproductive litigation diversions as trademark fraud was considered to be "often pied," but "rarely proven." Indeed, such claims and defenses were widely labeled as "disfavored," because the focus was on the trademark owner's very difficult-to-prove "subjective intent," with any and all doubts about fraud being resolved against the accusing party. As a result, "inadvertence," "honest mistakes," "negligent omissions," and "honest misunderstandings," easily rebuffed trademark fraud charges. Moreover, this fraud had to be proven "to the hilt" with "clear and convincing evidence," leaving no room for "speculation, conjecture, or surmise." Just because a statement or representation was false and material didn't make it fraudulent. These often-recited limitations on trademark fraud challenges, however, for the most part, took a back seat during the TTAB's recent six-year drive down Medinollane, as the Board began to focus far more heavily on the "objective manifestations of intent" and the lower and much easier-to-prove "should have known" standard, granting fraud-based oppositions and cancellations at record pace, even on summary judgment in many cases (sometimes even sua sponte, as was the case in Medinol). On August 31,2009, the Court of Appeals for the Federal Circuit (CAFC) put into reverse, the Board's continued travel plans down Medinollane, tossing the "should have known" standard out the window, in favor of an actual "intent to deceive the PTO" standard, in the longanticipated trademark fraud ruling of In re Bose Corporation: "Subjective intent to deceive, however difficult it may be to prove, is an indispensable element in the [fraud] analysis." In doing so, the CAFC has signaled trademark owners and their counsel it now may be safe to /2015

7 Web-based trademark research :: Thomson CompuMark :: Client Times Online Page 2 of3 bring the often-cited limitations on fraud out of the back seat, to the front and center (once again), as the Board's detour down Medinollane appears to come to an abrupt dead end. The TTAB's Six-Year Detour: The Drive Down Medinol Lane The most basic facts of the trademark fraud found by the Board in the Medinol case are welldocumented and have been discussed elsewhere at great length. In Medinol, Neuro Vasx had an intent-to-use trademark application mature into a registration covering "medical devices, namely, neurological stents and catheters," but it admitted in its answer to a cancellation action that it, in fact, had never used the mark in connection with "stents," only "catheters," either at the time of filing its statement of use or later. Concerned about the solemnity of the sworn statements made when filing trademark documents with the PTO, sua sponte, the TTAB entered summaryjudgment against Neuro Vasx, holding: "A trademark applicant commits fraud in procuring a registration when it makes material representations of fact in its declaration which it knows or should know to be false or misleading." (emphasis added). What many have forgotten about the Medinol facts are that in finding fraud, the TTAB was moved by the existence of a mere two items listed in the description of goods: stents and catheters. Perhaps the Board asked itself, how hard can it be to know whether either or both items are actually in use? The TTAB went on and also considered important: "Neither the identification of goods nor the statement of use itself were lengthy, highly technical, or otherwise confusing, and the President/CEO who signed the document was clearly in a position to know (or to inquire) as to the truth of the statements therein." (emphasis added). In addition, to further justify its inference of fraud in ruling on summary judgment, the Board noted that Neuro Vasx had received the registration certificate improperly covering "stents" a whole two years before it sought to correct the misstatement. As such, Neuro Vasx's "failure to point out its misstatement and seek correction thereof prior to the filing of the petition for cancellation clearly supports our finding that the misstatement was intentional." Moreover, that the improper inclusion of stents was "'apparently overlooked' - does nothing to undercut the conclusion that respondent knew or should have known that its statement of use was materially incorrect. Respondent's knowledge that its mark was not in use on stents - or its reckless disregard for the truth - is all that is required to establish intent to commit fraud in the procurement of a registration." It is important to recognize, with all due respect and deference to the Board, it did not create or make up the lower and easier-to-prove "should have known" standard followed in Medinol and its progeny. In fact, the CAFC itself appeared to endorse the same language in Torres v. Cantine Torresella s.u., 808 F.2d 46,1 USPQ2d 1483 (Fed. Cir. 1986), some seventeen years before Medinol, when it affirmed the Board's cancellation of a registration based on fraud: "The problem of fraud arises because Torres submitted a label that he knew or should have known was not in use that contained a mark clearly different from the one in use. In addition, he submitted an affidavit stating the mark was in use on wine, vermouth, and champagne when he knew it was in use only on wine." (emphasis added). Although the CAFC appeared to endorse the "should have known" standard in the first place (at least with respect to the specimen portion of the fraud finding in Torres), three trademark fraud cases decided after Torres and before Bose, actually may have foreshadowed the coursereversal outcome in Bose, had the Board been operating its high beams. In 1990, the CAFC acknowledged the prior Torres precedent, but nevertheless in G.H. Mumm & Cie v. Desnoes & Geddes Ltd., 917 F.2d 1292,16 USPQ2D 1635 (Fed. Cir. 1990), affirmed the Board's dismissal of a trademark fraud claim based on the registrant's submission of a "partially completed" label as a specimen of use in a renewal application, excusing it as not being "appropriate or good practice," but not fraud either, because had the actual specimen of use been submitted it would have been accepted. In 1997, the CAFC decided Metro Traffic Control, Inc. v. Shadow Network Inc., 104 F.3d 336 (Fed. Cir. 1997), affirming the Board's dismissal of a fraud claim because the applicant's statements, "though false, were not uttered with the intent to mislead the PTO." Id. at Because applicant's "misstatements did not represent a 'conscious effort to obtain for his business a registration to which he knew it was not entitled,'" no fraud occurred. Id. At 341. Moreover, two years later, the CAFC reversed and remanded a judgment of the United States District Court for the Northern District of Ohio in The L.D. Kichler Co. v. Davoil, Inc., 192 F.3d 1349, 1352 (Fed. Cir. 1999), without any reference to Torres or the "should have known" standard: "To cancel the... trademark for fraud there must also be a showing that Kichler 7d61 06/ d/1ithe _Bose _ Decision.htm

8 Web-based trademark research:: Thomson CompuMark :: Client Times Online Page 3 of3 knowingly submitted a false declaration with an intent to deceive... The district court, however, made no attempt to determine whether Kichler had the requisite intent. Therefore, we remand the case so the district court may determine whether there existed significant prior use by others, and if so, whether Kichler knowingly submitted a false declaration with an intent to deceive." (emphasis added). Page 1 ~;2 Steve Baird founded and chairs Winthrop & Weinstine's intellectual property and trademark and brand management groups. He is a previous recipient of the Brand Names Education Foundation's Ladas Memorial Award for Writing, a former law clerk to the late Wilson Cowen, Senior Judge on the Court of Appeals for the Federal Circuit, and Steve has served as a member of the International Trademark Association's Brief Amicus Committee. He has passionately represented clients in trademark and related intellectual property matters for more than 18 years, with clients spanning virtually every industry. Having focused on trademarks and the legal implications of branding and design for nearly two decades, Steve is a frequent speaker and author on trademarks, brand management, and related intellectual property subjects /2015

9 Web-based trademark research:: Thomson CompuMark:: Client Times Online Page 1 of2 THOMSON REUTERS THOMSON COMPUMARK '(Oilam''!:bi'!l'!'\Ore ~tt<!ltu' True Lies, Trademark Fraud, and the Medinol Detour: The Federal Circuit Reverses In re Bose by Stephen R. Baird The CAFC's Bose Decision The Bose case implicated a renewal application (under Sections 8 and 9 of the Lanham Act), signed by the General Counsel of Bose Corporation, claiming current use of the WAVE trademark in connection with a variety of goods, including "audio tape recorders and players." These virtually archaic products were not excluded from the renewal application despite the fact that Bose had stopped manufacturing and selling them 4-5 years earlier, and despite the fact that the General Counsel "knew that Bose discontinued those products when he signed the Section 8/9 renewal." He gave testimony, however, that he believed it was proper to not exclude the items from the listing of goods since Bose continued to repair such items and ship the repaired items back to customers across state lines, in interstate commerce. The Board considered this belief "unreasonable" (since Bose was providing repair services, not offering goods with this activity), finding fraudulent procurement and maintenance of a trademark registration with an over-inclusive listing of goods. The CAFC, however, ruled that "reasonableness" is "not part of the analysis." Instead, it advised that the Lanham Act prohibits "knowingly inaccurate or knowingly misleading statements" to the Trademark Office. Bart Schwartz Int'l Textiles, Ltd. V. Fed. Trade Comm'n, 289 F.2d 665, 669 (CCPA 1961). Absent the requisite intent to mislead the PTO, even a material misrepresentation does not qualify as fraud under the Lanham Act. King Auto., Inc. v. Speedy Muffler King, Inc., 667 F.2d 1008, 1011 n.4 (CCPA 1981). "In other words, deception must be willful to constitute fraud," cautioned the CAFC, citing Smith lnt't, Inc. v. Olin Corp., 209 USPQ 1033, 1044 (HAB 1981); Woodstock's Enters. Inc. (Cal.) v. Woodstock's Enters. Inc. (Or.), 43 USPQ2d 1440, 1443 (T.TAB. 1997); First Int'l Servs. Corp. v. Chuckles, lnc., 5 USPQ2d 1628, 1634 (T.TAB. 1988); and Giant Food, Inc. v. Standard Terry Mills, lnc., 229 USPQ 955, 962 (T.TAB. 1986). While the CAFC appeared to agree with the Board that "objective manifestations" are relevant to the fraud analysis because "intent must often be inferred from the circumstances and related statement made," it firmly disagreed with "equating 'should have known' of the falsity with a subjective intent," because in dolnq so, "the Board erroneously lowered the fraud standard to a simple negligence standard." According to the CAFC, subjective intent, however difficult to prove is an "indispensable element" in the trademark fraud analysis. While it may be "inferred from indirect and circumstantial evidence," it still must be "clear and convincing." Indeed, "inferences drawn from lesser evidence will not satisfy the deceptive intent requirement." The involved conduct, viewed in light of all the evidence, must be of sufficient culpability to require a finding of intent to deceive: "We hold 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." Stated another way, the CAFC ruled: "There is no fraud if the false representation is occasioned by an honest misunderstanding or inadvertence without a willful intent to deceive." So, unless the party alleging fraud "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." IThe _Bose_Decision_page2.htm 1112/2015

10 Web-based trademark research :: Thomson CompuMark:: Client Times Online Page 2 of2 Despite the PTO's specific request in the Bose appeal for the CAFC to endorse a "reckless disregard" standard for fraud determinations, this panel of the CAFC, appears to have saved for another day any determination of whether a reckless drive down Medinollane might cost future trademark owners and practitioners a fraud ticket: "[E]ven if we were to assume that reckless disregard qualifies, there is no basis for finding [Bose's] conduct reckless.". It is also worth noting that this panel of the CAFC did not attempt to overturn Torres in deciding Bose (it could en banc, however), and it didn't expressly label the CAFC's prior use of "should have known" as dicta either, but it did say the TTAB read Torres "too broadly," highlighting that the registrant in Torres had actual knowledge ("knows") it was not using the mark on two-thirds of the goods listed in the registration (wine, but not champagne or vermouth), and indicating that the CAFC's reading of Torres doesn't deviate from the rule that intent to deceive is required.. Page 12 ~ Steve Baird founded and chairs Winthrop & Weinstine's intellectual property and trademark and brand management groups. He is a previous recipient of the Brand Names Education Foundation's Ladas Memorial Award for Writing, a former law clerk to the late Wilson Cowen, Senior Judge on the Court of Appeals for the Federal Circuit, and Steve has served as a member of the Intemational Trademark Association's Brief Amicus Committee. He has passionately represented clients in trademark and related intellectual property matters for more than 18 years, with clients spanning virtually every industry. Having focused on trademarks and the legal implications of branding and design for nearly two decades, Steve is a frequent speaker and author on trademarks, brand management, and related intellectual property subjects /2015

11 Web-based trademark research:: Thomson CompuMark:: Client Times Online Page 1 of2 THOMSON REUTERS THOMSON COMPUMAAK '(00 eafl1: bei'w>i'$ ~ln)' True Lies, Trademark Fraud, and the Medinol Detour: The Federal Circuit Reverses In re Bose by Stephen R. Baird Some Rear View Mirror Glances at Bose and Where We're Headed Probably the most unfortunate aspect of the CAFC's decision in Bose is the apparent reliance on and connection the court made between "fraudulent procurement" of a trademark registration under the Lanham Act and the "inequitable conduct" patent law jurisprudence: "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." Wasn't there any other available legal authority for the basic proposition that "intent to deceive is stricter" than the standard for negligence or gross negligence? This patent law reference unfortunately seems likely to invite future litigants to use the vast body of "inequitable conduct" patent case law as a potential road map in litigating what are now likely to be far more highly-intensive and factspecific trademark fraud cases. The good news for many trademark owners and practitioners is that, once again, fraud really means fraud, even in the trademark world. It is back to being limited to culpable conduct that is as bad as "fraud" actually sounds when the word is spoken. So, we can all breath a collective sigh of relief that fraud can no longer be proven by showing simple negligence, gross negligence, or what some have considered to be strict liability. But, we'll have to wait and see whether a "reckless disregard for the truth" is enough to establish trademark fraud. We'll also have to wait and see what kind and amount of evidence and what sort of "objective manifestations" will suffice to prove the required "intent to deceive the PTO" under the "clear and convincing" standard. Either way, we can only hope, that Bose does not erase all the learning occasioned while traveling down Medinollane with the Board. Indeed, trademark owners and practitioners would do well to continue to take their sworn statements in trademark filings very, very seriously. Without a doubt, the Medinol Board had it right on this point: "Statements with such degree of solemnity are - or should be - investigated thoroughly prior to signature and submission to the PTO." The many successes that litigants have enjoyed in pursuing successful fraud claims during the Board's trip down Medinol lane have been substantial and they can hardly be described as mere litigation diversions. The question remains, now that fraud claims abound in a multitude of cases currently being litigated before the Board, what will happen to those claims, will they be dropped, or will the parties go the distance to prove the necessary subjective intent to deceive the PTO? In the end, trademark owners and practitioners (as they attempt to navigate this u-turn and revised set of instructions to move forward again) have good reason to wonder what, if any, case law developed by the Board while on Medinollane survives Bose, or whether the CAFC's decision in Bose will relegate Medinol and its progeny, solely for drives down memory lane. Pagelg3 Steve Bairdfoundedand chairs Winthrop & Weinstine's intellectualpropertyand trademarkand brand management groups. He is a previousrecipientof the Brand Names _Bose_Decision_page3.htm 1112/2015

12 Web-based trademark research:: Thomson CompuMark:: Client Times Online Page 2 of2 Education Foundation's Ladas Memorial Award for Writing, a former law clerk to the late Wilson Cowen, Senior Judge on the Court of Appeals for the Federal Circuit, and Steve has served as a member of the International Trademark Association's Brief Amicus Committee. He has passionately represented clients in tradernark and related intellectual property matters for more than 18 years, with clients spanning virtually every industry. Having focused on trademarks and the legal implications of branding and design for nearly two decades, Steve is a frequent speaker and author on trademarks, brand management, and related intellectual property subjects. 06/d/1 IThe _Bose_Decision _page3.htm 1112/2015

13 Trademark Fraud = Reckless Disregard For The Truth? I Page 1 of3 Collaborations in Creativity & the Law Trademark Truth? Fraud = Reckless Disregard For The By Steve Baird on September 22nd, 2010 Posted in Trademarks Aaron Keller was busy yesterday making weighty predictions about the basis for our next economy: The Designed Economy. As I prepare to provide attendees at the Midwest IP Institute tomorrow with a trademark fraud update - today, I thought I'd provide a preview - and even go out on a small limb - making a couple of predictions of my own, relating to the far more scintillating topic of trademark fraud before the United States Patent and Trademark Office (USPTO). As you may recall last year, I wrote about the Court of Appeals for the Federal Circuit's (CAFC) groundbreaking decision In re Bose, here, here, here, and here, in which the CAFC rejected the Trademark Trial and Appeal Board's (TTAB) less stringent "knew or should have known" negligence standard of fraud, instead coming down in favor of a much more stringent - and difficult to prove standard - SUbjectiveintent to deceive the USPTO. Over the last year, much attention has been given to the fact that the CAFC left open and chose not to decide, in In re Bose, the question of whether a "reckless disregard for the truth" may suffice in proving the necessary subjective intent to deceive. Many argue that "reckless disregard" should suffice in proving fraud for the sake of the integrity of the U.S. trademark system, to ensure that trademark owners and their counsel are kept honest and/or don't become lazy or complacent about the solemnity of the oath in their trademark filings. Reading the tea leaves, I'm predicting that the TTAB will not wait for the CAFC to decide the issue and the TTAB will rule that "reckless disregard" constitutes a sufficient level of culpability to infer a specific intent to deceive. If so, what does that mean? What kind of trademark conduct might satisfy a "reckless disregard" standard? Well, we know from the CAFC's In re Bose decision (footnote 2) what conduct does not rise to the level of "reckless disregard" for the truth: In-house counsel at Bose signs under oath trademark renewal documents indicating that, at least as of 200 1, the WAVE trademark was still in use in commerce on various goods, including audio tape recorders and players; Bose stopped manufacturing and selling audio tape recorders and players sometime between 1996 and 1997; The in-house counsel at Bose knew that Bose discontinued those products when he signed the renewal documents, but he believed (unreasonably, according to the TTAB) that the WAVE

14 Trademark Fraud = Reckless Disregard For The Truth? I Page 2 of3 mark still was used in commerce because "in the process of repairs, the product was being transported back to customers"; Before Bose submitted the 2001 declaration of use, neither the USPTO nor any court had interpreted "use in commerce" to exclude the repairing and shipping of repaired goods. As the CAFC held, given all these facts, "even if we were to assume that reckless disregard qualifies, there is no basis for finding [the] conduct reckless." The final bullet point above, however, begs a few questions. What if there had been a decision (somewhere in the U.S.) contrary to the interpretation relied on by Bose's in-house counsel in signing the renewal documents? What if in-house counsel was unaware of such a decision? What if there were decisions for and against his interpretation? Is there a duty to conduct and update appropriate legal research before relying on key interpretations of trademark law? What if he knew about a contrary case, but disagreed with it? What if outside trademark counsel opined such a case incorrectly interpreted trademark law? Would an opinion from trademark counsel, blessing an inhouse filing, insulate against a fraud finding? What does all this say, if anything, about the risks of in-house counsel signing certain trademark documents at the USPTO? Is there less risk if a non-lawyer signs PTO trademark documents, perhaps a business person with actual knowledge of the facts, but not saddled with expert knowledge of trademark law? Sorry, no predictions on answers to any ofthese questions, at least for today. My final prediction for the day: The CAFC eventually will decide that "reckless disregard" alone, or without more, is not sufficient to trigger a fraud finding since it is not supported by a literal reading of the statute. I read the CAFC's In re Bose decision to say, fraud means fraud, and I believe when forced to decide the question, it will corne down favoring a literal reading of the plain meaning of fraud within the Lanham Act, leaving to Congress the decision of whether an amendment to the Act may be required to preserve the integrity of the U. S. trademark system. What do you think? Tags: Bose, CAFC, Culpability, Federal Circuit Court of Appeals, Fraud, In re Bose, Intent to Deceive, Predictions, Reckless Disregard, Trademark Fraud, Trademark Law, Trademark Laws, Trademark Office, Trademark Registration, Trademark Trial and Appeal Board, TTAB, U.S. Trademark System, USPTO Winthrop & Weinstine, P.A. 1 Suite South Sixth Street 1 Minneapolis, MN Telephone: (612) Fax: (612)

15 Trademark Fraud = Reckless Disregard For The Truth? I Page 3 of3 Copyright 2015, Winthrop & Weinstine, P.A. All Rights Reserved. Strategy, design, marketing & support by LexBlog httpt/iwww.duetsblog.coml /articles/trademarks/trademark-fraud-reckless-disregard /20 15

16 Registration Symbol Misuse As Trademark Fraud? I Page 1 of3 Collaborations in Creativity & the Law Registration Symbol Misuse As Trademark Fraud? By Steve Baird on November 1st, 2010 Posted in Marketing, Trademarks, TTAB Trademark types frequently encounter brand owners and managers with substantial misunderstanding and confusion about when use of the federal registration notice symbol is lawful. Most of the time a misuse or technical violation results from an honest mistake, but sometimes the misuse is, and starts out intentional, or perhaps the misuse begins to look intentional if it isn't promptly fixed or corrected upon learning ofthe misuse. Section 906 of the u.s. Patent and Trademark Office's Trademark Manual of Examining Procedure (TMEP) answers some of the most common questions regarding misuse with this guidance: The federal registration symbol should be used only on or in connection with the goods or services that are listed in the federal registration. The federal registration symbol may not be used with marks that are not actually registered in the USPTO. Even if an application is pending, the federal registration symbol may not be used until the mark is registered. Registration in a state of the United States does not entitle a person to use the federal registration notice. A party may use terms such as "trademark," "trademark applied for," "TM" and "SM" regardless of whether a mark is registered. These are not official or statutory symbols of federal registration. This information and guidance, however, begs the question of whether misuse is a serious violation and the possible consequences of misusing the registration symbol? As you may recall, we've talked a bit before about possible false advertising claims against the trademark owner who misuses the symbol and a possible unclean hands defense in favor of the trademark owner's enforcement target, especially when the misuse is accompanied by a bad faith intent to deceive. As it turns out, we really need to add another important potential consequence to the list, one that I fear will be abused and used for pure tactical advantage in trademark enforcement efforts, namely, larticles/trademarks/registration-symbol-misuse-as-trad /2015

17 Registration Symbol Misuse As Trademark Fraud? I Page 2 of3 assertions of trademark fraud, despite the current heightened standard of fraud, with the Court of Appeals for the Federal Circuit now requiring a specific intent to deceive the Trademark Office. Actually, registration symbol misuse is not really a new ground of trademark fraud, but it has been rather uncommonly and infrequently alleged, at least in recent years. One of the reasons for my concern of abuse stems from a recent TTAB decision permitting this rather conclusory and bare bones trademark fraud claim to survive a motion to dismiss: Applicant knowingly and willfully used the symbol in connection with the term... in an attempt to deceive or mislead consumers or others in the trade into believing that the mark was registered. A pdf of the TTAB' s decision with scant analysis - from about six weeks ago - in North Atlantic Operating Co., Inc. et al v. DRL Enterprises, Inc. Opposition No ), is linked here. Relying only on the above-quoted allegation, the TTAB decided: "We find that the allegation set forth above includes the necessary pleading of intent, and specifies that applicant's misuse was knowing and willful, and an attempt to deceive or mislead consumers." In contrast to most trademark fraud cases where various false and misleading statements - relied upon by the Trademark Office - are the focus of the fraud challenge, in North Atlantic Operating Co., the focus was on an alleged intent to deceive the public, as opposed to the USPTO. The Federal Circuit has held: "The improper use of a registration notice in connection with an unregistered mark, if done with intent to deceive the purchasing public or others in the trade into believing that the mark is registered, is a ground for denying the registration of an otherwise registrable mark." Copelands' Enterprises Inc. v. CNV Inc., 945 F.2d 1563,20 USPQ2d 1295 (Fed. Cir. 1991). Presumably, the same conduct would sustain a petition to cancel as well. Although, the statutory support for the broader focus is unclear, it appears that an intent to deceive the USPTO is not required, so long as there is an intent to deceive the relevant public regarding registration. Another reason for my concern stems from the apparently satisfactory yet conclusory fraud allegation. There are simply no details regarding the who, what, where, why, and when, of the alleged trademark fraud, and this failure appears to contradict recent TTAB case law confirming that fraud must be pled with particularity under Fed. R. Civ. P. 9(b). Indeed, our friend John Welch over at the TTABlog has reported multiple times on the TTAB tightening up the pleading requirements for trademark fraud claims, following the Federal Circuit's landmark decision in In re Bose, here, here, and here. Finally, the Federal Circuit's Cope lands, Enterprises decision makes clear that how quickly a trademark owner corrects a misuse of the registration notice symbol after learning of the misuse, will impact the determination of whether the trademark owner is charged with an intention to deceive the public. If we couple that guidance with the current uncertainty of whether the requisite intent may be established with a reckless disregard for the truth, trademark types and the brand owners and managers they represent, are all well-advised to pay more attention to what many previously have written off as honest mistakes and technical violations with no real or significant consequences. Only time will tell whether the registration notice symbol misuse type of trademark fraud claim will remain uncommon or gain traction in our Post-Bose world. 1O/ll/articles/trademarks/registration-symbol-misuse-as-trad... 1/12/2015

18 Registration Symbol Misuse As Trademark Fraud? I Page 3 of3 Tags: Brand Management, Brand Owner, Consequences of Misusing Trademark Registration Notice Symbol, Fed. R. Civ. P. 9, Fraud, FRCP 9, In re Bose, Registration Notice, Registration Symbol, TMEP, TMEP 906, Trademark Fraud, Trademark Office, Trademark Registration, Trademark Registrations, Trademark Types, USPTO Winthrop & Weinstine, P.A. 1 Suite 3500/225 South Sixth Street 1 Minneapolis, MN Telephone: (612) Fax: (612) Copyright 2015, Winthrop & Weinstine, P.A. All Rights Reserved. Strategy, design, marketing & support by LexBlog /articles/trademarks/registration-symbol-misuse-as-trad... 1/12/2015

19 Trademark Attorneys & Verified USPTO Statements I Page 1 of2 Collaborations in Creativity & the Law Trademark Statements Attorneys & Verified USPTO By Steve Baird on November 8th, 2010 Posted in Almost Advice, Law Suits, Trademarks, TTAB "Just because you can," is rarely a good reason to support a decision that really matters. This principle is no less true in the trademark world than it is elsewhere. So, relying on your own navigation of the U.S. Patent and Trademark Office's (USPTO) online search database without also seeking a trademark attorney's competent analysis of the search results, can be a dangerous plan, even though you can go it alone. Likewise, just because you can file a trademark application yourself doesn't make it a smart business decision to avoid engaging a professional with day-to-day working knowledge of all the USPTO nuances and pitfalls. There are, however, limits on what outside trademark attorneys should do for their trademark owner clients. For example, another decision in the trademark world that really matters, but doesn't get enough attention, is who should sign verified statements filed with the U.S. Patent and Trademark Office (USPTO). The Trademark Rules liberally permit certain attorneys, among more obviously appropriate persons, to sign such statements on behalf of the trademark owner: (i) A person with legal authority to bind the owner (e.g., a corporate officer or general partner of a partnership); (ii) A person with firsthand knowledge of the facts and actual or implied authority to act on behalf of the owner; or (iii) An attorney as defined in Section 11.1 of this chapter who has an actual written or verbal power of attorney or an implied power of attorney from the owner. But, again, just because a trademark attorney can sign verified statements with the USPTO on behalf of the trademark owner doesn't make it a good idea. In fact, it should be a last resort for a trademark owner to have its outside trademark counsel sign verified statements with the USPTO. As a result, I continue to be amazed how many outside trademark counsel continue to make it a regular practice of signing verified statements on behalf of their trademark owner clients. While I fully recognize it may provide a convenience to have outside trademark counsel sign such statements, and there may well be times when the urgency of a looming deadline requires it, the frequency of validity and fraud challenges in trademark oppositions, cancellations, and district court litigation, should be enough to encourage trademark owners to first consider these risks: The person signing the verified statements becomes a potential fact witness; 1/12/2015

20 Trademark Attorneys & Verified USPTO Statements I Page 2 of2 If outside trademark counsel becomes a witness, he/she may be disqualified and precluded from representing the trademark owner in a dispute involving the filing; Concerning the factual accuracy ofthe statements made to the USPTO, outside trademark counsel will rarely have firsthand knowledge and never be closest to the true facts; Trademark owners are unlikely to successfully defend any false statements made by their trademark counsel that are based on legal misunderstanding (i.e., "bona fide intent to use," "use in commerce," "interstate commerce," "substantially exclusive" use, and misuse ofthe federal registration symbol); and The TTAB appears inclined to adopt "reckless disregard" as sufficient culpability to justify an inference of intent to deceive the USPTO in trademark fraud challenges. So, can you think of and share any additional reasons not to have outside trademark counsel signing verified statements with the USPTO? Where do you stand on the issue with in-house trademark counsel? How about in-house corporate counsel who lacks trademark expertise? And, what about the reasons in favor of outside trademark counsel signing such documents, are there any beyond convenience and deadline urgency? Finally, do you agree that outside trademark counsel should be the one designated to sign verified statements only as a last resort? Tags: Trademark Application, Trademark Attorney, Trademark Cancellation, Trademark Distinctiveness, Trademark Fraud, Trademark Laws, Trademark Office, Trademark Opposition, Trademark Registration, Trademark Registrations, Trademark Types, USPTO Winthrop & Weinstine, P.A. I Suite South Sixth Street I Minneapolis, MN Telephone: (612) I Fax: (612) Copyright 2015, Winthrop & Weinstine, P.A. All Rights Reserved. Strategy, design, marketing & support by LexBlog 1/12/2015

21 Trademark Fraud No More? I Page 1 of2 Collaborations in Creativity & the Law Trademark Fraud No More? By Steve Baird on September 21st, 2011 Posted in Law Suits, Trademarks, TTAB Just over two years ago, we reported on the CAFC's landmark trademark fraud decision of In re Bose, here, here, and here. In addition, I wrote a piece for Thomson Reuters' Client Times Online called True Lies, Trademark Fraud, and the Medinol Detour: The Federal Circuit Reverses In re Bose." Our friend, John Welch over at the TTABlog, on the second anniversary of In re Bose, genuinely piqued my interest with his recent and seductive post entitled "TTABlog Special Report: List of Fraud Claims Sustained by TTAB Since In re Bose Corporation." I thought to myself, what have I missed, but apparently and thankfully nothing, as John explained: "None. The TTAB has not sustained a single fraud claim in the two years since the CAFC issued its decision in In re Bose Corporation. Nor has it decided whether reckless disregard for the truth is sufficient to satisfy the 'intent' element." I'm thinking that at least until the CAFC provides further guidance on the subject or the TTAB goes out on a limb and decides to adopt "reckless disregard" even before the CAFC decides whether that standard is sufficient, we'll continue to await decisions that grant successful trademark fraud claims, at least at the USPTO and TTAB. I'm also thinking that if trademark fraud is an important claim in a case, the client might be best served litigating and proving that claim in federal district court, at least for the time being, since there is at least one federal district court (District of Minnesota) that has sustained ajury's finding of trademark fraud under the more stringent In re Bose standard, and that decision has now been affirmed by the Eighth Circuit Court of Appeals. Whatever the forum though, why on earth do trademark attorneys continue to sign verified use statements on behalf of their clients and submit them to the USPTO, when it appears that they are the only class of human beings capable of committing trademark fraud on the USPTO, at least as far as the TTAB is currently concerned. If you want more, please join us at the Midwest IP Institute on Thursday and Friday, more info here. Tags: Bose, CAFC, Court of Appeals for the Federal Circuit, District of Minnesota, Eighth Circuit Court of Appeals, In re Bose, Midwest IP Institute, Reckless Disregard, Trademark Attorney, Trademark Fraud, Verified Statments to USPTO articles/trademarks/trademark-fraud-no-morel 1112/2015

22 Trademark Fraud No More? I Page 2 of2 Winthrop & Weinstine, P.A. I Suite 3500 I 225 South Sixth Street I Minneapolis, MN Telephone: (612) I Fax: (612) Copyright 2015, Winthrop & Weinstine, P.A. All Rights Reserved. Strategy, design, marketing & support by LexBlog 11/09larticles/trademarks/trademark-fraud-no-morel 1112/2015

23 Trademark Fraud Claims Won't Go Away Despite CAFC's In re Bose Decision I Page 1 of2 Collaborations in Creativity & the Law Trademark Fraud Claims Won't Go Away Despite CAFC's In re Bose Decision By Steve Baird on August 31st, 2012 Posted in Articles, Law Suits, Trademarks, TTAB, USPTO Trademark fraud claims aren't going away, despite the fact that the Trademark Trial and Appeal Board (TTAB) has not found fraud in a single trademark opposition or cancellation since the Federal Circuit decided In re Bose in 2009, rejecting the prior "knew or should have known" standard in favor of the much more difficult and heightened "specific intent to deceive" the USPTO standard. We continue to see these claims in the TTAB, but trademark fraud is being raised increasingly in federal district court cases too, perhaps to avoid In re Bose as controlling precedent, and perhaps because damage claims are possible under 15 U.S.C. 1120, and attorney fees also can be awarded in "exceptional cases" - all remedies unavailable in oppositions or cancellation before the TTAB. In a trademark case filed just last month in U.S. District Court for the District of Minnesota, Renpure LLC, owner of the RENPURE federal trademark registration (covering personal care items, including hair care preparations) and recipient of a cease and desist letter from Ren Limited, a Ll.K.entity that owns an earlier federal trademark registration for REN (also covering personal care items, including hair care preparations) brought a declaratory judgment action, requesting that the court declare that: (1) the U.K. entity has no valid or enforceable trademark rights in the U.S., and (2) the REN trademark registration be cancelled due to Ren's alleged fraud on the USPTO. Renpure's complaint (pdf here) is also asking for damages resulting from the alleged fraudulently procured REN trademark registration under 15 U.S.C No doubt, this will be an interesting trademark fraud case to follow, and we'll be sure to keep you posted, so stay tuned. In the meantime, with Renpure fighting with Ren over the Ren trademark for hair care and personal care products, it makes me wonder about if and when Jeffrey Alan Deane a/k/a Chaz Dean's WEN hair care trademark rights might enter the picture? You know, the Wen haircare infomercial folks? Tags: 15 U.S.C. 1119, 15 U.S.C. 1120, Declaratory Judgment, Declaratory Judgment Action, District of Minnesota, Exceptional Case, Intent to Deceive, Jeffrey Alan Deane, Knew or Should Have Known, Minnesota, Ren Limited, Renpure LLC, Should Have Known, Trademark Fraud, U.S. District Court, Wen Winthrop & Weinstine, P.A /081articles/trademarks/trademark-fraudl 1112/2015