It makes complete sense that a brand owner shouldn’t be able to lie to the Trademark Office when it tried to register its brand name as a trademark. Let there be consequences for making false statements! But it is not always that easy to avoid the fraud cow pie.
For example, when you file an application to register a trademark you are supposed to list the goods and/or services associated with that trademark. Cow pie alert!
In 2002, a medical device company stepped in the cow pie when it filed a required declaration stating it had used its brand name on “neurological stents and catheters” but it had in fact only been using the name on catheters. Penalty: its trademark registration was cancelled, even though the company attempted to come clean by amending it to delete the offending language (“stents”).
For the next six or seven years, fraud was all the rage. Litigants brought successful cancellation actions — or threatened to bring them — against all sorts of trademark registrations, triumphantly arguing fraud had been committed against the Trademark Office. Suddenly there were cow pies everywhere.
In 2009, a higher court tried to clean the field up, emphatically stating that proof of intent to deceive is required to establish fraud against the Trademark Office.
You would think that would put an end to the mess, but no. Fraud is still alive and well as a potential cow pie. The Trademark Office is willing to, and often has, concluded that some sneaky strategic behavior by brand owners can amount to an intent to deceive. And litigants are still trying to prove that trademark applicants intended to deceive the Trademark Office.
Just this month, a trademark registrant escaped stepping into the pie (but no doubt had to spend a pretty penny doing so).
A car dealership using its brand name in southeastern Massachusetts accused a Maine car dealership of fraud when it failed to disclose the Massachusetts outfit’s use of the same name in its application to federally register the trademark.
A federal registration entitles its owner to the exclusive right to use the registered name in the United States. Because of this, applicants are required to swear they believe “no one else, to the best of his or her knowledge and belief, has the right to use” a confusingly similar name. The board reviewing the case decided that though the Maine car dealership was wrong (the board kindly termed it “mistaken”) when it made this statement, there wasn’t enough evidence to show it was actually fraudulent. Phew!
Fraud continues to be an issue that brand owners (and we lawyers) must keep an eye on.