Second, in my opinion the Medinol standard is better in terms of policy, although I agree in terms of statutory interpretation it was wrong (as Bose indeed held).

A party applies for a trademark. It is supposed to certify that it is using the mark for the specified goods/services. The Applicant is in a better position than anyone to know for what goods and services it is or is not using the mark. Is it too much to ask for just a bit of due diligence — about one’s own business!?!

In Medinol, the Applicant applied and got a mark for two listed goods. IT NEVER USED THE MARK FOR ONE OF THEM. NEVER. NEVER EVER.

What’s the penalty for that after Bose? Nothing. The PTO just narrows the registration to exclude those goods you never should have gotten in the first place. You still get to keep the rest of the registration, unless someone bears the now very heavy burden of proving fraud.

The PTO relies on the certification of the Applicant to hand out registrations — which are valuable in terms of exclusive rights. If you ask the govt. for something valuable, at least take a reasonable stab at making sure that the representations that entitle you to that benefit are true.

My point is, so what? Who said it has to be easy? And why should it be?

Rule 9(b) of the Federal Rules governs allegations of fraud: “In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions of a person’s mind may be alleged generally.” Although the second sentence of that rule appears to state that there is no need to make particularized allegations as to state of mind when making a claim of fraud, the majority of Circuits have not taken that approach. Rather, they require a party alleging fraud to make specific factual allegations which permit an inference of fraudulent intent. (Acc. to Moore’s Federal Practice, the 2d, 3d and 7th Circuits take this approach. Only the 9th reads the rule in its simple meaning, i.e. no particularity requirement for intent.)

The Federal Circuit – whose rulings control in the PTO –is among the majority of Circuits that take that position. See Exegen Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312 (2009), a patent case involving a charge of “inequitable conduct,” which the CAFC construes as the equivalent of fraud on the Patent Office and hence applies Rule 9(b). In fact, the Exegen ruling relied in part on trademark precedent from the Court of Customs and Patent Appeals (the Federal Circuit’s predecessor) which dealt with cancellation of trademark registrations for fraud.

Under Exegen, a party must plead “sufficient underlying facts from which a court may reasonably infer that a party acted with the requisite state of mind.” Id., 575 F.3d at 1328. At the pleading stage, these specific facts must lead to a “reasonable inference” of fraudulent intent. “A reasonable inference is one that is plausible and that flows logically from the facts alleged, including any objective indications of candor and good faith.” Id. n. 5.

So I am afraid that Welch is correct. The particularity requirement is not merely for the circumstances of the fraud (which, as you rightly point out, are fairly easy to set forth in a trademark case) but also for intent — not very easy, especially before discovery.

One final (?) comment. Contrary to Ron’s assertion, I have never been a proponent of the Board’s adoption of fraud as the cure for the Medinol-type case. As I have said many times, I think the Board got off on the wrong track when it took the fraud approach to this problem. What has been, and remains, my concern is how to ensure that the verification of use is truthful. I have suggested that the PTO concentrate on the front end of the process, perhaps by requiring a specimen of use for each item listed in the application or declaration.