Fraud on the United States Patent and Trademark Office occurs when a material and knowing misrepresentation is made by the trademark applicant or their trademark attorney during to the trademark application process.
If a trademark owner knowingly makes a misrepresentation of material fact during the trademark application process, they have committed fraud on the United States Patent and Trademark Office (USPTO). The penalty for committing fraud at the USPTO is the trademark registration is cancelled. The deservedly harsh penalty is a strong incentive for trademark owners, and their trademark attorneys, to make sure they are not knowingly misrepresenting facts in their trademark application.
The standard of showing fraud is relatively high. In order to prove fraud, as the Second Circuit noted in Orient Express Trading Co. v. Federated Department Stores, fraudulent statements made in a trademark application “may not be the product of mere error or inadvertent, but must indicate a deliberate attempt to mislead the PTO.” In other words, making a mistake is chalked up to human error and will not be fraud. But when a person knowingly lies or shows a “reckless disregard for the truth,” and it can be proven, then fraud has been committed.
Generally, the USPTO does not investigate fraud on the office so fraud cases play out in Trademark Trial and Appeal Board (TTAB) or district court cases where one party is trying to have a trademark registration cancelled on the grounds it was obtained fraudulently. Often times, asserting a fraud claim comes as a counterclaim and a defense in opposition cases at the TTAB and likelihood of confusion cases in district courts.
For example, in Standard Knitting v. Toyota, a 2006 TTAB case, Standard Knitting opposed Toyota’s trademark application for TUNDRA for automobiles on the grounds it was likely to be confused with Standard Knitting’s TUNDRA and TUNDRA SPORT trademark registrations for clothing. This was a tough case to begin with, but things got real bad for Standard Knitting. Toyota was able to prove the CEO of Standard Knitting made no attempt to find out if the TUNDRA and TUNDRA SPORT trademarks were in use when he signed a use based application and Statement of Use for an intent to use application (they were not in use at the time of the signing of the documents). The CEO’s refusal to inquire about use before signing the documents was considered a “reckless disregard for the truth” and the TTAB found it to be a fraud on the USPTO. As a consequence, both of Standard Knitting’s trademarks were cancelled AND they lost the opposition. Ouch!
Screenshot of the cancelled TUNDRA SPORT trademark, as seen in TESS, as a result of fraud.
The lesson of the Standard Knitting case above, do not commit fraud on the USPTO. And if you did commit fraud, try to correct the error before opening yourself up unnecessarily to cancellation by opposing applications based on your fraudulent registrations.
Claiming use on identified goods and/or services when they are not in use yet is a common way example of fraud being committed on the USPTO. Other examples of fraud leading to trademark cancellation include:
- Not submitting the correct first use dates;
- Failure to disclaim widespread use of the mark by others;
- Knowingly not meeting all the necessary standards in a Declaration for Incontestability when signing it; and
- Failure to disclose a transliteration or translation.
It is important to note that trademark registrations provide valuable trademark rights but even if fraud is proven and registrations are cancelled, the trademark owner retains whatever trademark rights it has in common law.
Anyone have any questions, comments or stories about a fraud being committed on the USPTO? Leave them below or contact us.