TTAB Again Says Correction of False Statement Before Publication Avoids Fraud

The TTAB has again stated (in dictum in this non-precedential decision) that an (innocent) false statement regarding use of a mark, if corrected before the mark is published for opposition, will not be considered fraud. That didn't help Applicant Michael Rich, who admitted during discovery that he made a mistake when he filed his use-based application for the mark MONORICO & Monkey Design: he should have separated the goods for which the mark was in use (shirts and hats) from the remaining clothing items that "were to be used in commerce." The Board granted summary judgment to the Opposer on the ground of fraud. Kipling Apparel Corp. v. Rich, Opposition No. 91170389 (April 16, 2007) [not precedential].


Applicant Rich urged that he was not represented by counsel, that he filed the application in good faith, and that did not realize his mistake until the notice of opposition was filed. He noted that he owns a registration for the word mark MONORICO for "essentially the same goods," and believed he was entitled to registration "because the word portion of the subject mark is the same as his registered mark and both involve the same goods."

Nothing doing, said the Board. "The fact that applicant misunderstood a clear and unambiguous requirement for a use-based application and was not represented by legal counsel does not shield applicant from our finding that he knew or should have known that the representation of fact in his application was false." Citing Hurley Int'l LLC v. Volta, the Board concluded that "it was not reasonable for applicant to state use dates in a use-based application for goods upon which he had no use." Rich was under an obligation to investigate thoroughly before signing the declaration.

The Board observed, however, that Rich could have avoided fraud by correcting his misstatement before the mark was published, in which case the misstatement would not have been material:

"The subject application, filed under Section 1(a) of the Trademark Act, would have been refused registration but for applicant's misrepresentation regarding his use of the mark. Prior to publication, applicant had an opportunity to remedy the matter because a misstatement in an application as to the goods or services on which a mark has been used does not rise to the level of fraud where an applicant amends the application prior to publication. See Universal Overall Co. v. Stonecutter Mills Corp., 154 USPQ 104 (CCPA 1967)."

Rich's remedy is to file a new application "relying on an appropriate and correct basis."

The Board therefore sustained the opposition.


TTABlog comment: Does it make sense for the Board to draw a line at publication? A false statement regarding use, even if innocent, may well affect third parties who search the PTO database. The fact that the statement is corrected prior to publication may mean that the PTO will not "rely" on the false statement in issuing a registration for the identified goods. But third parties may already have relied.

Should the TTAB hold that all false statements regarding use are fraudulent, regardless of when corrected? After all, the law's requirements are "clear and unambiguous." Or should the innocent applicant be let off the hook, regardless of whether at least equally innocent third parties are misled?

Further discussion of these issues may be found in the article that Ann Lamport Hammitte and I recently published, entitled Fraud for Thought: Can Fraud be Avoided by Correcting a False Statement Prior to Publication?. Also see the TTABlog commentary regarding the recent ELLE BELLE decision (here), and regarding the Hurley decision here.

Text Copyright John L. Welch 2007.