fraud on the PTO

Use of a Trademark Merely to Maintain a Trademark Registration Does Not Constitute Valid Trademark Use and Causes Loss of Attorney-Client Privilege

 

The federal court in Oregon ruled that a major footwear company committed fraud on the Trademark Office when it applied for renewal of a trademark application, and certified its continued use of the trademark, even though that use had no commercial purpose other than to preserve the trademark registration. 

The submission of the renewal to the Trademark Office constituted fraud – and thus the trademark owner’s communications with its counsel on the renewal lost protection of the attorney-client privilege under the crime-fraud exception.  Adidas America, Inc. v. TRB Acquisitions LLC (D.Ore. 2018).

The decision has important lessons for trademark owners.  Most important is that use of a trademark to establish trademark rights must have a commercial purpose – use cannot be done merely to acquire (or retain) a trademark registration. This is so even where the use is sales in large quantities.

Assessing Impact of Bose on Fraud Standard in Trademark Practice

In a prior post, Fraud Doctrine On Trademark Applications Remains Minefield, also NYLJ August 19, 2009, we discussed developments related to claims of fraud on the Patent and Trademark Office in obtaining trademark registrations and recent Trademark Trial and Appeal Board (TTAB or the Board) opinions on that issue. 

As anticipated, the Federal Circuit weighed in on the issue in an August 31 opinion entitled In Re Bose Corp., 580 F.3d 1240 (2009) and rejected the six-year old standard for showing fraud ― “should have known” of the falsity ― which the Board had previously adopted in Medinol Limited v. Neuro Vasx, Inc., 67 USPQ2d 1205 (TTAB 2003).  That standard, according to the Federal Circuit, constituted mere negligence and did not rise to the level of fraud.  Rather, fraud requires a showing of “subjective intent to deceive.” 

As explained in the opinion, intent to deceive generally implicates a knowing falsehood, which the facts in Bose simply did not support.  We discuss here what impact that decision will have on practice before the TTAB, what issues remain unresolved and what future developments in this area may be expected. 

Fraud Doctrine on Trademark Applications Remains Minefield

Since Medinol Ltd. v. Neuro Vasx, Inc., 67 U.S.P.Q.2d 1205 (TTAB 2003), the Trademark Trial and Appeal Board (“TTAB” or “The Board”), has taken a particularly hard line on misrepresentations in trademark applications.  In Medinol, the TTAB construed as fraud any false statement that the applicant “knew or should have known” was false.  Recent decisions have somewhat narrowed the application of this doctrine, yet it remains a potential minefield for trademark owners.