By now, many trademark attorneys are aware of the recent decision of In re Bose Corporation and that the Court of Appeals for the Federal Circuit (CAFC) held that fraud on the PTO includes only those times when a party knowingly makes false material representations with the intent to deceive the PTO. See In re Bose Corporation, Appeal No. 2008-1448 (Fed. Cir., Aug. 31, 2009). This fraud standard is anything but radical and represents a return to a more traditional notion of fraud in trademark prosecution. Still, with this change trademark prosecution and enforcement strategies based on the old Medinol fraud standard should be revisited.
Since the 2003 Trademark Trial and Appeal Board (TTAB) decision in Medinol Ltd. v. Neuro Vasx Inc., trademark applicants and registrants had struggled to understand fully what their exposure may have been to fraud claims when seeking trademark registrations or even protecting against the cancellation of their current registrations due to “fraud” attacks by third parties. “Fraud” in the Medinol sense was determined by whether a party making a declaration to the PTO “should have known” that the information in a given declaration was not wholly accurate. If a party made such a declaration, its ensuing or continuing registration could have been attacked and cancelled based on the PTO finding that the registration was secured or maintained fraudulently–even if the declarant had no intent to deceive when the declaration was made. That Medinol standard obviously begged the questions of what someone “should have known” at the time he or she made the declaration, under what circumstances information be known by someone, who was a declarant, and what is he or she responsible for knowing.
After five years of navigating the Medinol-darkened trademark landscape, the CAFC now has changed the course of fraud decisions in the PTO and elsewhere. In the Bose decision, the Court made it very clear that, “a trademark is obtained fraudulently under the Lanham Act only if the applicant or registrant knowingly makes a false, material representation with the intent to deceive the PTO.” This holding appears clear and sure enough, and it returns trademark prosecution to a more traditional standard for fraud. Still, with every holding come new questions that will need answering and new strategies for ensuring protections and maintaining rights.
Some worry the PTO is filled with trademark registrations and applications that do not comply with US law regarding trademark use or the bona fide intent to use and that without Medinol there is a danger that the Register will develop further problems. Others maintain that while Bose changes the idea of “fraud” on the PTO from the one set out in Medinol, this new standard will give way to a different framework to address major issues of concern—namely, false statements in trademark filings, no PTO accountability because fraud will be difficult to prove, issues regarding parties’ trademark use and bona fide intention to use, a bloated and unreliable US register.
That new framework could take any of a number of forms: new rules for trademark filing, requiring parties to prove use of a mark on all the claimed goods, similarly requiring proof of use for all claimed goods at the time of trademark registration renewal, or a further development of existing standards such as what is or is not “reasonable” for an attorney or other party to know and declare when communicating with the PTO. Medinol may be gone, but the PTO’s rules likely will continue developing around the Bose ruling and parties will need to be wary of their declarations soon enough.
In the meantime, continue to evaluate prosecution and strategies based on the new Bose fraud standard and stay tuned.
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