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Objecting to Trademark Registration on Grounds of Fraud Requires Very High Burden of Proof

OpenIcons [Public domain, CC0 1.0 (https://creativecommons.org/publicdomain/zero/1.0/deed.en)], via PixabayTrade names, brand names, logos, and other names or designs used to identify goods and services are some of the most valuable assets a business has. Federal trademark law gives businesses a powerful tool to protect the integrity of their “marks.” Before the U.S. Patent and Trademark Office (USPTO) will approve an application to register a mark, it allows a period of time for the public to review the application and object to the registration on certain grounds. It also allows petitions to cancel a mark for a distinct period of time after registration. The Trademark Trial and Appeal Board (TTAB) recently considered a claim of fraud in a petition for cancellation. After addressing the substantial evidentiary showing that a petitioner must make in order to establish fraud, it granted the respondent’s motion for summary judgment. Embarcadero Tech., Inc. v. Delphix Corp., Opp. No. 91197762, Canc. No. 92055153, opinion (TTAB, Jan. 21, 2016).

In order to qualify for trademark registration, an applicant must have already used the mark in commerce, or they must intend to do so at a defined point in the future. They must state specific dates—first use of the mark, and first use of the mark in commerce—in their application. They must also provide specimens of the mark, showing how it has been or will be used in commerce. Once the USPTO has approved an application, it posts a proposed registration for public review and objection. If no objections are received within 30 days, it registers the trademark, and the owner of that mark has the right to enforce it according to the terms of the Lanham Act, 15 U.S.C. § 1051 et seq.

Federal trademark law allows objections to registrations by people who claim that registration would cause them “damage.” 15 U.S.C. § 1063(a). The statute only provides two examples of possible “damage”:  “dilution by blurring,” by which the new mark would create confusion that “impairs the distinctiveness of the famous mark”; and “dilution by tarnishment,” which “harms the reputation of the famous mark.” 15 U.S.C. §§ 1063(a); 1125(c)(2)(B), (C). The person opposing registration must file a petition with the USPTO and pay a fee within the 30-day time period. A person can also file a petition to cancel a registration on the same grounds as a petition in opposition, usually within five years of the registration date. 15 U.S.C. § 1064.

The respondent in Embarcadero filed an application to register its company logo in January 2009, claiming a “bona fide intention” to use the mark in commerce. 15 U.S.C. § 1051(b). After the USPTO’s rejection of its original specimen, the respondent submitted a new specimen and revised the date it claimed to have first used the mark in commerce. The USPTO approved the application with a registration date of March 31, 2010.

Slightly less than two years later, the petitioner filed a petition for cancellation on multiple grounds, including that the respondent allegedly submitted fraudulent information—specifically, the claimed date of first use in commerce—in its application. The respondent moved for summary judgment on the fraud claim. The TTAB granted the motion, finding that the petitioner had not met its burden of proof. It noted that a fraud claim requires proof of “intent to deceive the USPTO.” Embarcadero, opinion at 5. This has a stricter standard of proof than claims of “negligence or gross negligence,” requiring “clear and convincing” evidence. Id.

Intellectual property attorney James G. Schwartz has represented businesses in the Bay Area since 1976. Contact us online or at (925) 463-1073 today to schedule a free and confidential consultation with an experienced and skilled business advocate.

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Photo credit: OpenIcons [Public domain, CC0 1.0], via Pixabay.