Wednesday, April 05, 2006

Citable No. 19: TTAB Rejects Fraud Claims, Grants 2(d) Cancellation Counterclaim

In its 19th citable decision of 2006, the Board cleaned the clock of Petitioner Maids to Order of Ohio, Inc., rejecting its fraud claim and granting Registrant's 2(d) counterclaim for cancellation. Maids to Order of Ohio, Inc. v. Maid-to-Order, Inc., 78 USPQ2d 1899 (TTAB 2006).

Petitioner MTO-Ohio contended that Respondent had committed fraud on the PTO when it falsely claimed use of its mark MAID TO ORDER in interstate commerce. Respondent, on the other hand, asserted that its President always believed that the Chicago-based company was using its mark in interstate commerce.

The Board noted that it need not decide whether Respondent's activities constituted use in interstate commerce, but only whether Respondent's President:

"at the time of filing the application, the Section 8 declaration, and the application for renewal, knowingly made a false representation with respect to use of the mark in interstate commerce. If she had a reasonable or legitimate basis for the representations, then [Respondent] has not committed fraud." (slip op., pp. 17-18)

Reviewing the evidence, the Board concluded that Petitioner Ohio failed to meet its "heavy burden" to prove fraud. Respondent's President testified that her company sent employees to work in homes in Wisconsin on two occasions, that her employees cleaned corporate apartment owned or leased by corporations outside of Illinois; that she sent invoices for these services to the companies' out-of-state addresses; and that Respondent sent postcards and business cards to out-of-state companies. Finally, Respondent produced a list of clients that she believed were in interstate commerce; the list included names, addresses (outside of Illinois), and the years in which services were provided at the corporate apartments.

"It was not unreasonable for Ms. Kern, as a layperson, to believe that the above activities constituted use of the MAID TO ORDER mark in interstate commerce. *** This belief is sufficient to negate an inference of fraud upon the USPTO in obtaining and maintaining the registration." (slip op., pp. 20-22)

Respondent brought its own fraud claim, but that too was a dud. It maintained that when Petitioner Ohio filed the application that resulted in its registration of the MAIDS TO ORDER mark, it knew of Respondent's use and registration and failed to disclose it to the PTO. But Professor McCarthy has observed that the application oath "is phrased in terms of a subjective belief, such that it is difficult, if not impossible, to prove objective falsity and fraud so long as the affiant or declarant has an honestly held, good faith belief." Here, Petitioner Ohio's President did not believe that Respondent had prior rights in the MAID TO ORDER mark. The Board therefore concluded that Respondent had failed to prove fraud.

Finally, turning to the Section 2(d) counterclaim, the Board found that Respondent had priority by reason of its use since 1971 [priority may be based on intrastate use], whereas Petitioner commenced use in 1987. The marks at issue "project essentially the same commercial impression." The services -- Respondent's "cleaning of domestic and business premises" versus Petitioner's "maid services" and franchising of same -- are identical or related. Consequently, the Board found confusion likely, and ordered cancellation of Petitioner Ohio's registration.

TTABlog note: Keep moving! Nothing to see here! Unlike misstatements of fact that sometimes lead to a fraud finding, the statements here involved a mixture of law and fact: was a mark used in interstate commerce, and does an applicant have exclusive rights in a mark? In such situations, a person's statement can be wrong without being false and fraudulent.

Compare this case with the Board's decision in January 2006 in Standard Knitting, Ltd. v. Toyota Jidosha Kabushiki Kaisha, 77 USPQ2d 1917 (TTAB 2006). [TTABlogged here]. There the Board found Opposer's statement regarding use in commerce both wrong and fraudulent:

"Mr. Groumoutis's asserted mistake, assuming it truly was a mistake, was not a reasonable one. The language in the application that the mark 'is now in use in commerce' is clear and its meaning is unambiguous. It was not reasonable for Mr. Groumoutis to believe that if the items of clothing were ever made or sold, even if the last sale took place 20 years ago, it would support a claim that the mark 'is' in use on the goods." (slip op., p. 25)

Text Copyright John L. Welch 2006.


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