Friday, January 04, 2008

TTAB Cancels "FEBAL USA" Registrations Obtained Fraudulently for U.S. Distributor

Mariner Ventures, Inc. committed fraud in the procurement of two registrations for the mark FEBAL USA for furniture because it knew that it was not the owner of the marks when it applied for registration. The Board therefore granted the petitions for cancellation filed by the Italian manufacturer. Febal Cucine, S.p.A. v. Mariner Ventures, Inc., Cancellation No. 92042704 [not precedential].

Although Petitioner Febal Cucine had not used the mark FEBAL in the United States, it had standing to bring this proceeding because it was not a "mere interloper": it marketed goods in many countries, it was interested in expanding to the USA, and it entered into an agreement with an entity related to Respondent at the same time that Respondent filed a trademark application to register the FEBAL USA mark. The evidence supported "a conclusion that respondent's use was made solely to block petitioner's planned expansion into the United States."

The fraud issue was complicated by the fact that Petitioner dealt with one company, Febal U.S.A., LLC, while another, Respondent Mariner, filed the trademark applications in this country. Petitioner and Febal U.S.A. eventually entered into an exclusive distributorship agreement for the United States.

The law presumes that, absent an agreement otherwise, the foreign manufacturer owns the mark rather than the U.S. distributor. Here, in fact, the agreement between Petitioner and Febal U.S.A. "makes it clear that Febal U.S.A., LLC had no right to register the FEBAL mark without petitioner's consent." Therefore, Febal U.S.A. "could not have filed and truthfully asserted that it was the owner of the mark FEBAL USA or that it could obtain a trademark registration for the mark."

However, Mariner Ventures, Inc., filed the applications, not Febal U.S.A. Petitioner asserted that the signatories of the exclusive distribution agreement "arranged through respondent to apply for the marks at issue here." The Board agreed. It noted that Febal U.S.A. and Mariner have the same address, and that the person who executed various of Mariner's application papers attended the meeting at which the agreement was signed, and identified herself on several papers as the Secretary or the Registered Agent of Febal U.S.A. In addition, Mariner submitted to the PTO a magazine story regarding its products, but the story refers to "Febal USA," not Mariner.

"The evidence of record convinces us that Mariner Ventures, Inc. worked in tandem with Febal U.S.A., LLC to register trademarks that Febal U.S.A. could not register itself because it was a distributor, which did not have any rights to register the mark.

"[A] party cannot both negotiate an exclusive distributorship agreement with petitioner and work with another entity to register that same mark that it was prohibited from registering in its own name."

Therefore the statements made by Respondent in its applications that Mariner Ventures was the owner of the marks, were made knowingly, were false, and were material to the applications because the PTO would not have published the marks for opposition nor registered them had it known that Mariner was not the owner. That constitutes fraud on the PTO.

Text Copyright John L. Welch 2008.


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