Check it Twice: TTAB Puts Attorney on “Naughty List” for Intent to Deceive USPTODecember 13, 2021

While it is not advisable for anyone to sign something without reading it first, the same is especially true for lawyers, who are paid to focus on the details. As demonstrated by a recent Trademark Trial and Appeal Board (TTAB) decision, inattention to such details can have costly repercussions when dealing with the United States Patent and Trademark Office (USPTO).

In In re Bose Corp., 580 F.3d 1240, 1245 (Fed. Cir. 2009), the Court of Appeals for the Federal Circuit held that fraud in procuring or maintaining a trademark registration occurs when a party knowingly makes a false, material representation of fact in connection with an application/registration with the intent of obtaining or maintaining a registration to which it is otherwise not entitled. The court explained that this willful intent to deceive is an indispensable element of the fraud analysis and must be proven with clear and convincing evidence by the party alleging fraud.

This high burden has resulted in very few findings of fraud before the USPTO, as false statements could be written off as merely unintentional. After all, a false statement made with a reasonable and honest belief that it was true, rather than a willful intent to deceive, would not constitute fraud under Bose. In the past decade, the TTAB has found fraud to exist in only two cases. This, however, is likely to change following a recent TTAB ruling.

In Chutter, Inc. v. Great Management Group, LLC, 2021 U.S.P.Q.2d 1001 (T.T.A.B. 2021), the TTAB considered whether reckless disregard of the truth or falsity of a material statement made in a filing with the USPTO satisfies the intent to deceive requirement for establishing fraud. The TTAB was faced with this question after the defendant had filed a Combined Declaration of Use and Incontestability under Sections 8 and 15 of the Trademark Act declaring that “there is no proceeding involving said rights pending and not disposed of either in the U.S. Patent and Trademark Office or in the courts,” despite a pending cancellation proceeding and civil action against the mark in question.

While the defendant’s counsel claimed he merely “did not read the filing closely enough to realize the statement was in the filing and supporting declaration,” the TTAB noted that “[a] declarant is charged with knowing what is in the declaration being signed, and by failing to make an appropriate inquiry into the accuracy of the statements the declarant acts with a reckless disregard for the truth.” The TTAB added: “In other words, [defendant’s counsel] paid little, or no, attention to the document he was signing under oath and thereby disregarded the significance of the benefits he was obtaining for his client. By failing to ascertain and understand the import of the document he was signing, far from conscientiously fulfilling his duties as counsel, [defendant’s counsel] acted in reckless disregard for the truth; nor did he take any action to remedy the error once it was brought to his attention.” The TTAB concluded this was “the legal equivalent” of a finding that the defendant’s counsel had the specific intent to deceive the USPTO and accordingly cancelled the mark in question on ground of fraud.

In support of this decision, the TTAB explained that “[t]o find otherwise could encourage declarants to conclude that such disregard carries no consequence and they can fail to read documents they are signing without penalty.” Accordingly, attorneys should be sure to heed the TTAB’s advice that “Statements made with such degree of solemnity clearly are or should be investigated thoroughly prior to signature and submission to the USPTO.”

The full decision is available here.

Nicholas J. Krob is an Associate Attorney in the Trademark, Licensing, and Litigation Practice Groups at McKee, Voorhees & Sease. For additional information, please visit www.ipmvs.com or contact Nicholas directly via email at nicholas.krob@ipmvs.com.