Friday, August 07, 2009

Recommended Reading: Joe Dreitler on "Why the TTAB Got It Right in Medinol"

Joe Dreitler is a bona fide trademark expert, and he has strong views on the Lanham Act's "use" requirement and the TTAB's fraud doctrine. I know, because Joe sends me his comments whenever I discuss a fraud case. I recently persuaded him to set out his thoughts on the current state of fraud jurisprudence, and he provides an important historical perspective on the subject in his article, "Why the TTAB Got it Right in Medinol." (pdf here).

Joe asserts that the Medinol decision is significant "because it laid down a bright line, objective standard for fraud."

Indeed, given this background and clear language of the statute and legislative intent in 1988 to change the Lanham Act to:

1) require section 44 applicants to have a bona fide intent to use the mark on every good and service for which they apply; and
2) require every applicant to have made bona fide commercial use on each and every good in their use based application, statement of use, section 8 declaration and renewal application,

it is hard to imagine how the TTAB could have done anything other than cancel the NEUROVASX registration for “medical devices, namely, stents and catheters.”

He finds it "regrettable" that the AIPLA, passed a board resolution in 2007 critical of Medinol, and then filed "what can charitably be called a disingenuous amicus curiae brief in the appeal to the CAFC of Bose Corp. v. Hexawave Inc., 88 USPQ2d 1332 (TTAB 2007), involving fraud based upon signing a sworn statement of use when there was no use of the mark for certain goods or services." [See TTABlog here].

If trademark owners are allowed to file false, sworn declarations of use with the USPTO and not automatically have their trademark registrations cancelled, what type of system does the U.S. have? Do we have a “permissive” use system? If the Federal Circuit agrees with AIPLA’s position we are back at a quasi token use system – which is exactly opposite to the language and legislative intent of the TLRA of 1988.

I'm sure you will find Joe's provocative article both interesting and informative. I certainly did.


At 10:01 AM, Anonymous Anonymous said...

On the patent side of the PTO, they distinguish between "fraud" and "inequitable conduct." Maybe it is time for that on the trademark side.

At 10:39 AM, Anonymous Anonymous said...

Mr. Dreitler has commented on "use" related to Section 44 registrations by foreign applicants. I wonder what his thoughts are on "use" related to Section 66(a) registrations by foreign applicants, in particular, whether U.S. applicants still have a higher burden to prove "use" than Section 66(a) applicants.

At 7:58 AM, Blogger John L. Welch said...

What makes you think that U.S. appplicants "have a higher burden to prove 'use' than Section 66(a) applicants?"

At 8:45 AM, Anonymous Joe Dreitler said...

There is no higher burden of proof for any particular filing basis. Section 66a of the Lanham Act also requires a declaration of a bona fide intention to use in the US for a Madrid extension. "Use" is a defined term in statute and applies to all US trademark applications, regardless of the basis for the filing. There is no basis for suggesting that non US based applications coming into the US under Madrid may have a 3 page list of goods with no bona fide intent to use the mark on all listed goods.

At 9:40 AM, Blogger John L. Welch said...

In line with Joe's comment, see the recent TTAB decision in Honda v. Winkelmann and the Lane v. Jackson case cited therein (TTABlogged on April 10, 2009).

At 6:14 PM, Anonymous Anonymous said...

Mr. Dreitler, Mr. Welch,

Thank you for your responses. I am familiar with Honda v. Winkelmann, cited by Mr. Welch. Please consider that in Honda the applicant could provide no evidence of any kind that it had any intention to use the mark on any of the goods listed in the registration, and that it was shown that the applicant was not even using the mark in his own country. The evidence was so overwhelming that opposer won on summary judgment (in spite of intent being an issue of fact).

Imagine, however, the more common situation where a foreign applicant filing under 66(a) may list 10 goods and that at time of trial there is a question as to whether he had the intent to use the mark for good #9 at the time of registration. He might have had the intent at the time of registration, but his intent might have changed along the way, or use the mark on good #9 may have lost economic sense after registration, or applicant's business plan did not materialize after registration.

Thank you again for your responses and comments.

At 7:18 PM, Anonymous Miriam Richter, Esq. said...

As someone who was not in practice prior to the revisions of 1989 I found the perspective of this article extremely helpful. I too agree that the TTAB got Medinol right and I agree that the AIPLA is off course in their Bose amicus brief. I think it behooves all of us to be acutely aware of what is sworn to in trademark applications. But I don't see Bose as a fraud issue but rather a "use" definition issue, although the bench clearly wanted to discuss the fraud issue. I'm afraid that we may be worse off if the CAFC finds, on the basis that it was not unrealistic for Bose's counsel to have a good faith belief that their "use" met the statutory definition, that although it wasn't statutory use, it wasn't fraudulent either. Such a ruling would create more confusion as to the "should have known" fraud. I think the best case scenario would be for the CAFC to find that Bose's use meets the statutory definition of "transported in commerce".

It is evident from the article that the legislative intent behind the 1989 changes was to get rid of the deadwood and to end the practice of reserving marks for possible future use. The situation in which Bose finds itself is not analogous - they have product at the end of its commercial life due to changes in the technology. They have not abandoned the product, their mark, or their consumers and still provide service for the product and still have all the associated goodwill. I also question what the difference would be to the consumer if they had deleted the goods from the registration. Certainly no one else could come along and use it for audio players even if the technology was still viable. This too argues against the purpose of the 1989 revision. The issue of who has rights to well-known marks at the end of their life span has always troubled me but that is a different conversation!

My hope was that Grand Canyon West Ranch would be found to be fraud and put an end to the strange new creature the TTAB created: the rebuttable presumption of no fraud based on subsequent correction of the fraud. But I guess that is not to be since the case just recently settled.


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