Tag Archives: Fraud

Secret defrauder ring (UPDATED)

Originally posted 2010-02-15 13:15:54. Republished by Blog Post Promoter

I want one, too!

What is the FRAUD-O-METER™?  Its creator, John Welch, explains:

Some say that a picture is worth a thousand words, and that is certainly true with regard to the TTABlog FRAUD-O-METER™ brand legal indicator. We all know that the CAFC in In re Bose Corporation jettisoned the TTAB’s “knew or should have known” standard for fraud set out in Medinol v. Neuro Vasx, ruling that the Board had “erroneously lowered the fraud standard to a simple negligence standard.”  The appellate court also held that proof of intent to deceive is required to establish fraud and it indicated that even “gross negligence” is not enough, but it declined to address the issue of whether “reckless disregard for the truth” would suffice.

The FRAUD-O-METER™ illustrates the current state of trademark fraud jurisprudence: the now defunct Medinol standard is depicted by the grey arrow resting in the “Negligence” wedge, while the white arrow, representing our post-Bose uncertainty, unsurely leans toward the “Reckless Disregard” wedge.

If the chart looks a bit blurry, then I suggest that you (1) move closer to your computer screen; (2) check your eyeglass prescription; or (3) double click on the chart for a larger version that you can print out or save as your computer wallpaper.

Or, kids, you can collect the whole set!

This is very clever.  Yet I have the sneaking feeling that John…  he is not to laugh from this PTO fraud, so much.

UPDATED:  The Beta for version 2.0 is out!  John explains:

The Board has yet to decide whether “reckless disregard for the truth” is enough to support a fraud ruling. There are some suggestions (including a recent article by TTAB Judge Lorelei Ritchie [TTABlogged here]) that “willful blindness” may be enough. With that in mind, I have created Version 2.0 of the Fraud-O-Meter, still in beta testing.

Vintage PTO “fraud”?

Originally posted 2009-11-15 15:10:54. Republished by Blog Post Promoter

The TTABlog® almost breathlessly — and, quite understandably, considering — links to Seattle Trademark Lawyer, who reports on a case,  One True Vine, LLC v. The Wine Group LLC, just now being uncorked in a California District Court that could well answer a lot of the questions about application of the new “fraud on the PTO” legal standards to an old, familiar fact pattern:

This factual situation looks a lot like the facts in Medinol v. Neuro Vasx: two listed items in the identification of goods, use on only one of the two, a claim of inadvertent mistake. Of course, the Board found fraud in Medinol under the TTAB’s “should have known” standard that was recently rejected by the CAFC in Bose.No whine

What standard will the court apply? How will defendant prove fraud? Is it enough for plaintiff to say that the error was inadvertent? Suppose the two listed goods were wine and nuclear reactors, and the Registrant claimed that the inclusion of “nuclear reactors” was inadvertently overlooked? Suppose plaintiff here had never sold any white wine at all under any label? What if Defendant showed that plaintiff had made the same error in other registrations?

Well, in vino veritas, right?

We’re all looking forward to the answers, which we will no doubt learn… though not before their time.

“Fraud on the PTO”

Originally posted 2008-03-18 18:44:14. Republished by Blog Post Promoter

Here’s a special guest post on the TTABlog that lays out the state of the law regarding the increasingly confusing, and sometimes distressing, issue for trademark lawyers of what constitutes “fraud” in the prosecution and maintenance of federal trademark applications and registrations.  Anyone doing trademark prosecution or litigation should bookmark this.

Pay no attention to that IP lawyer behind the curtain

Originally posted 2007-07-02 00:04:52. Republished by Blog Post Promoter

The American Intellectual Property Law Association (AIPLA) wants to see a climb down on findings of “fraud on the PTO” based on the innocent misdescription of goods in trademark applications. The problem is trademark lawyers who tell the PTO, when applying for a trademark registration, that a mark has been used along with a raft of goods and services which are, perhaps, exaggerations shall we say?, in order to get as broad protection as possible for the applicant. As the AIPLA explains:

The resolutions respond to a series of decisions by the Trademark Trial and Appeal Board that have found fraud on the Office based on a heightened duty of candor, including Medinol Ltd. v. Neuro Vasx, Inc., 67 USPQ2d 1205, 1209-10 (TTAB 2003). In Medinol, a cancellation petition was filed against a registrant whose intent-to-use application listed stents and catheters as the goods to which its mark would be applied. It subsequently filed its statement of use, in which it checked a box next to a statement that it was using the mark with the goods in the Notice of Allowance; however, it in fact had stopped using the mark for stents.

The TTAB agreed with the cancellation petitioner that the registrant committed fraud in filing the erroneous statement of use.

The AIPLA (a group which is dominated by patent lawyers, by the way — just so you know) says hey, we all make mistakes. It is a crime to err? Should the whole trademark be cancelled because of a little puffing or a slip of the quill?

To which John Welch says, “Yeah, we’ve all of us here been framed, too – so what’re you in for, bub?”

Best of 2012: Schaden-Fraud?

First posted on September 24, 2012.

John Welch has once again updated his Fraud-O-Meter!

Behind this clever Infographic-type thingy is a report of a meaningful legal development concerning the concept of fraud on the PTO.  As John explains:

Three years have passed since the CAFC’s decision in In re Bose raised the bar for proof of fraud at the TTAB. The appellate court jettisoned the “knew or should have known” standard, but left open the question of whether something less than proof of deceptive intent – say, reckless disregard for the truth – would suffice to establish fraud. The Board has yet to answer that question. In fact, it has not sustained a single claim of fraud since Bose. In a December 2011 article [TTABlogged here], TTAB Judge Lorelei Ritchie suggested that the concept of “willful blindness” might be borrowed from patent law and applied in the trademark [registration] context. The “willful blindness” standard requires less than proof of willful intent, but more than recklessness.

Earlier this year, I offered a beta version of a revised FRAUD-O-METER that included a “willful blindness” wedge, inspired by Judge Ritchie’s article and by a decision by the U.S. District Court for the Southern District of Florida …

On September 11, 2012, however, the U.S. Court of Appeals for the Eleventh Circuit reversed the district court decision. Emphasizing the subjectivity of the attorney’s declaration, the appellate court ruled that, because the attorney had “no awareness that any other organization was using the marks for which Plaintiff Order sought federal protection,” that fact alone compelled reversal of the fraud finding, “as [the attorney] could not have intended to deceive the PTO in attesting to an oath that he believed was entirely accurate.”Sovereign Military Hospitaller Order of Saint John of Jerusalem of Rhodes and of Malta v. Florida Priory of the Knights Hospitallers of the Sovereign Order of Saint John of Jerusalem, Appeal No. 11-15101 (11th Cir. Sept. 11, 2012).

In other words, willful blindness?  Not so much.  Said the Eleventh Circuit:

We have been admonished to exercise caution before importing standards from one area of intellectual-property law into another. . . The Florida Priory has not pointed to any authority to establish the sort of ‘historic kinship’ that may justify translation of a patent infringement standard into the mark-application context.

Ah:  A mark-application context!  That, indeed, is why I added the brackets in the first quoted passage, to the words “applied in the trademark [registration] context” — because willful blindness is no stranger to trademark law, as we all know from the secondary trademark infringement context.  There, willful blindness is one of the elements of secondary liability under the standard of Inwood Laboratories Inc. v. Ives Laboratories, Inc., 456 U.S. 844, 853-854 (1982).  At least that’s how we understand it around my house. Read More…

Keeping it real — the ultimate use in commerce

Originally posted 2009-05-07 12:35:59. Republished by Blog Post Promoter

The TTABlog® reports, again, on the fraud issue, but that’s not what interests me here so much this time.  Rather, it’s the question of the lifecycle of a trademark’s “use in commerce” status when plotted against that of a specific product which may no longer be manufactured, but which arguably may have trademark significance.

Ron ColemanI have looked at this question in other contexts before, particularly in this post where I wrote about a company called River West Brands, that pokes through the junk-heap of “abandoned” consumer-products trademarks and tries to make money off them.  The focus in that post was on trademarks for lines of goods that no longer exist, and I linked to related items by Pam Chestek and, guess what, John Welch that dealt with the issue.  But here there’s a twist:  The trademark, WAVE, is very much alive in Bose’s successful line of high-end audio equipment.  But, as befits a “fraud on the PTO” case, the focus here is on one particular product in the list of goods and service that is no longer in production.  Can the trademark still be a trademark?

As John Welch explains, “The TTAB, in Bose Corp. v. Hexawave, Inc., 88 USPQ2d 1332 (TTAB 2007)…, found that Bose had committed fraud in its 2001 renewal of a registration for the mark WAVE for, inter alia, audio tape recorders and players.” In other words, Bose was found to have committed “fraud” because the list contains the tape recorders and players, but by the time Bose renewed its mark in 2001 it should not have continued to seek trademark registration for a product it no longer sells.

Bose acknowledged that it stopped manufacturing and selling audio tape recorders and players in 1996-97. Nonetheless, it did not delete those goods from the WAVE registration when filing for renewal. Bose contended that the renewal was proper “because owners of audio tape recorders and players continue to send their previously purchased goods to opposer for repair services and upon completion of the repair services opposer ‘transports’ them back to the owner.

This is a great argument, but evidently the TTAB didn’t buy it because there was no case law to support it, according to John.  As he says in a 2008 article:

The Board noted that Bose offered no case support for its theory that “transporting” a product back to its owner after repair constitutes use of a trademark on the product as contemplated by Section 45 of the Trademark Act. It acknowledged that a sale of goods is not necessary to establish trademark use; shipment of samples and prototypes may suffice, but the entity causing the shipment must be the owner of the goods at the time of transportation. Here, “the scenario presented by opposer does not constitute use sufficient to maintain a registration for goods.” The question then became “whether it was reasonable for opposer to believe that it did.” The Board found that it was not, because Bose “could not point to case law that supports” its interpretation of the statute.

I don’t have the appellate briefs, though I suppose an argument not made before the TTAB cannot be the basis of an appeal before the CAFC.  But I wouldn’t have argued that “shipment” of merchandise is the trademark use that justifies continued registration.  I would have argued that where, as here, (1) the trademark is still is very much in use by the company that manufactured the tape recorders and players not so long ago, and (2) consumers still have those machines and, indeed, are shipping them to Bose for repair, the trademark “use” was not the shipping but the repairing itself.  The maintenance of the item by Bose to the level of quality deemed appropriate by Bose is certainly trademark use. Read More…

Schaden-Fraud?

John Welch has once again updated his Fraud-O-Meter!

Behind this clever Infographic-type thingy is a report of a meaningful legal development concerning the concept of fraud on the PTO.  As John explains:

Three years have passed since the CAFC’s decision in In re Bose raised the bar for proof of fraud at the TTAB. The appellate court jettisoned the “knew or should have known” standard, but left open the question of whether something less than proof of deceptive intent – say, reckless disregard for the truth – would suffice to establish fraud. The Board has yet to answer that question. In fact, it has not sustained a single claim of fraud since Bose. In a December 2011 article [TTABlogged here], TTAB Judge Lorelei Ritchie suggested that the concept of “willful blindness” might be borrowed from patent law and applied in the trademark [registration] context. The “willful blindness” standard requires less than proof of willful intent, but more than recklessness.

Earlier this year, I offered a beta version of a revised FRAUD-O-METER that included a “willful blindness” wedge, inspired by Judge Ritchie’s article and by a decision by the U.S. District Court for the Southern District of Florida …

On September 11, 2012, however, the U.S. Court of Appeals for the Eleventh Circuit reversed the district court decision. Emphasizing the subjectivity of the attorney’s declaration, the appellate court ruled that, because the attorney had “no awareness that any other organization was using the marks for which Plaintiff Order sought federal protection,” that fact alone compelled reversal of the fraud finding, “as [the attorney] could not have intended to deceive the PTO in attesting to an oath that he believed was entirely accurate.”Sovereign Military Hospitaller Order of Saint John of Jerusalem of Rhodes and of Malta v. Florida Priory of the Knights Hospitallers of the Sovereign Order of Saint John of Jerusalem, Appeal No. 11-15101 (11th Cir. Sept. 11, 2012).

In other words, willful blindness?  Not so much.  Said the Eleventh Circuit:

We have been admonished to exercise caution before importing standards from one area of intellectual-property law into another. . . The Florida Priory has not pointed to any authority to establish the sort of ‘historic kinship’ that may justify translation of a patent infringement standard into the mark-application context.

Ah:  A mark-application context!  That, indeed, is why I added the brackets in the first quoted passage, to the words “applied in the trademark [registration] context” — because willful blindness is no stranger to trademark law, as we all know from the secondary trademark infringement context.  There, willful blindness is one of the elements of secondary liability under the standard of Inwood Laboratories Inc. v. Ives Laboratories, Inc., 456 U.S. 844, 853-854 (1982).  At least that’s how we understand it around my house. Read More…

The TTABlog Fraud Collection

Originally posted 2006-05-18 10:29:26. Republished by Blog Post Promoter

Excellent trademark “research” for the slower, or lower, moments.

Canada: Courts can distinguish TM fraud from error

Originally posted 2009-02-04 04:15:08. Republished by Blog Post Promoter

Larry Munn:

The Federal Court recently made clear that Canadian law does not recognize a rule equivalent to the U.S. doctrine of fraud on the trademark office, pursuant to which any material misstatement in the processing of a registration renders the entire resulting registration void. . . .

While the U.S. doctrine appeared “initially attractive”, Canadian law allows for an amendment “where the misstatement is innocent and in good faith”.

If that “initially attractive” is something silly like “initial interest confusion,” then I get the joke, and the irony, seeing as how just as error is not fraud, there’s nothing attractive about the monster that’s become “fraud on the Trademark Office” in the U.S.:

Unlike general law where the intent of the party plays a critical role in a finding of fraud, the current line of cases decided by the Trademark Trial and Appeal Board (“TTAB”) results in a finding of fraud where the applicant or registrant “knew or should have known” that the statements were false. The subjective intent of the party is not a factor — it is the objective manifestation of the party’s intent that is determinative in a finding of fraud before the TTAB.

Thanks, Canada!  Now, I was never in favor of their splitting off from Vermont, or whatever it was, and it’s not as if they always get it right.  But this one’s a keeper.  “Fraud on the Trademark Office” has become the “gotcha” of trademark practice, presenting not only the threat of malpractice and severe prejudice to clients on the prosecution end for what can often be judgment calls or miscommunication, but potentially turning almost all litigation involving a trademark registration of any complexity into a game of Russian Roulette.

Seeing as how we’re all working our way toward one-world jurisprudence in trademark — despite the odd speed bump — is it too much to hope that Canada’s approach will cool some fevered thinking on “fraud” next time around here, too?

A fraud by any other name would… well…

While our intrepid brother the TTABlogger resorts to reading entrails, employing dowsing rods and attending seances in his search for the answer to “fraud on the PTO” trademark truth, the crew over at New York’s Kalow & Springut has been laboring every bit as mightily to get their arms around the thing.  Frequent LIKELIHOOD OF CONFUSION® commenter, neighbor, fellow-congregant and -commuter and all around good American Tal Benschar sends along what they’ve got (note the links):

Turning Tal Benschar's creativity into my profit!

Ron:
Just wanted to share with you a couple of articles my partners and I recently published in the New York Law Journal about fraud, and related matters.  (The first was pre-Bose, the second after.)
It seems like this issue is going to continue to be a hot one in TTAB practice.
Feel free to post or ciruclate the articles as you wish.

I wish a free blog post like that would come along every day, is what I wish!

I made some effort, though:  Listen up.

These articles by Tal, along with David Kalow and Milton Springut, are not only useful because they round up pretty much all the relevant law, but because they put lawyers who prosecute trademark applications on notice of the wide range of possible grounds on which the new and improved criteria for fraud on the PTO may still be asserted.

The authors also remind us that, dramatic TTAB claims for cancellation notwithstanding, at the prosecution level, attorneys who make representations to the PTO when they prepare trademark applications are not merely “filling out a form”–an easy enough feeling to get these days when, unlike in days not so long past, a trademark registration application looked and felt a lot more like a legal paper than it does via today’s online version.  Trademark lawyers, and those they direct, are essentially pledging their professional credibility with everything they tell the PTO is true in order to get that ®.

That’s still worth something, isn’t it?

Best of 2009: “Fraud on the PTO: Is it real, or all in my mind?”

This was first posted on September 3, 2009.

Bose Wave AW1 -- With cassette

Bose Wave AW1 -- With cassette

Big decision, via the TTABlog®: The worm, finally, finally, has turned on the issue of the cancellation of trademark registrations based on “fraud on the PTO,” typically arising where the description of goods and services in a registration application is found to be innacurate.

Trademark practice, says the the Federal Circuit Court of Appeals in overturning the Trademark Trials and Appeals Board, is no different from the rest of Western law — even Canada. Before you punish a party for “fraud” by taking away its valuable “asset” (a trademark registration), you have to prove… fraud (some cites omitted):

It’s a whole new ballgame at the TTAB after the U.S. Court of Appeals for the Federal Circuit yesterday reversed the Board’s decision in Bose Corp. v. Hexawave, Inc., 88 USPQ2d 1332 (TTAB 2007). The Board had found that Bose committed fraud in its 2001 renewal of a registration for the mark WAVE for, inter alia, audio tape recorders and players. The CAFC ruled that the Board, “[b]y equating ‘should have known’ with a subjective intent,” had “erroneously lowered the fraud standard to a simple negligence standard.” The CAFC found “no substantial evidence that Bose intended to deceive the PTO in the renewal process,” and it therefore reversed. In re Bose Corporation, Appeal No. 2008-1448 (Fed. Cir., Aug. 31, 2009). [Oral argument here]. . . .

Subjective intent to deceivrce, however difficult it may be to prove, is an indispensable element in the analysis. Of course, because direct evidence of deceptive intent is rarely available, such intent can be inferred from indirect and circumstantial evidence. But such evidence must still be clear and convincing, and inferences drawn from lesser evidence cannot satisfy the deceptive intent requirement. When drawing an inference of intent, the involved conduct, viewed in light of all the evidence . . . must indicate sufficient culpability to require a finding of intent to deceive.

In his commentary, John Welch raises a couple of issues, which I can hardly consider resisting taking a shot at: Read More…

Best of 2009: “Keeping it real — the ultimate use in commerce”

This was first posted on May 7, 2009.

The TTABlog® reports, again, on the fraud issue, but that’s not what interests me here so much this time. Rather, it’s the question of the lifecycle of a trademark’s “use in commerce” status when plotted against that of a specific product which may no longer be manufactured, but which arguably may have trademark significance.

Ron ColemanI have looked at this question in other contexts before, particularly in this post where I wrote about a company called River West Brands, that pokes through the junk-heap of “abandoned” consumer-products trademarks and tries to make money off them. The focus in that post was on trademarks for lines of goods that no longer exist, and I linked to related items by Pam Chestek and, guess what, John Welch that dealt with the issue. But here there’s a twist: The trademark, WAVE, is very much alive in Bose’s successful line of high-end audio equipment. But, as befits a “fraud on the PTO” case, the focus here is on one particular product in the list of goods and service that is no longer in production. Can the trademark still be a trademark?

As John Welch explains, “The TTAB, in Bose Corp. v. Hexawave, Inc., 88 USPQ2d 1332 (TTAB 2007)…, found that Bose had committed fraud in its 2001 renewal of a registration for the mark WAVE for, inter alia, audio tape recorders and players.” In other words, Bose was found to have committed “fraud” because the list contains the tape recorders and players, but by the time Bose renewed its mark in 2001 it should not have continued to seek trademark registration for a product it no longer sells.

Bose acknowledged that it stopped manufacturing and selling audio tape recorders and players in 1996-97. Nonetheless, it did not delete those goods from the WAVE registration when filing for renewal. Bose contended that the renewal was proper “because owners of audio tape recorders and players continue to send their previously purchased goods to opposer for repair services and upon completion of the repair services opposer ‘transports’ them back to the owner.

This is a great argument, but evidently the TTAB didn’t buy it because there was no case law to support it, according to John. As he says in a 2008 article:

The Board noted that Bose offered no case support for its theory that “transporting” a product back to its owner after repair constitutes use of a trademark on the product as contemplated by Section 45 of the Trademark Act. It acknowledged that a sale of goods is not necessary to establish trademark use; shipment of samples and prototypes may suffice, but the entity causing the shipment must be the owner of the goods at the time of transportation. Here, “the scenario presented by opposer does not constitute use sufficient to maintain a registration for goods.” The question then became “whether it was reasonable for opposer to believe that it did.” The Board found that it was not, because Bose “could not point to case law that supports” its interpretation of the statute.

I don’t have the appellate briefs, though I suppose an argument not made before the TTAB cannot be the basis of an appeal before the CAFC. But I wouldn’t have argued that “shipment” of merchandise is the trademark use that justifies continued registration. I would have argued that where, as here, (1) the trademark is still is very much in use by the company that manufactured the tape recorders and players not so long ago, and (2) consumers still have those machines and, indeed, are shipping them to Bose for repair, the trademark “use” was not the shipping but the repairing itself. The maintenance of the item by Bose to the level of quality deemed appropriate by Bose is certainly trademark use. Read More…