TTAB Requires Amendment of Fraud Counterclaim in Light of Bose
[Re-posting: I'm traveling to New Orleans.] Hat tip to DW, who pointed me to a recently-issued order in Societe Cooperative Vigneronne Des Grandes Caves Richon-Lezion and Zicron-Jacob Ltd. v. Albrecht-Piazza, LLC, Opposition No. 91190040, in which the Board required the applicant-counterclaimant to amend its fraud-based petition for cancellation in light of the CAFC's decision in In re Bose Corporation, Appeal No. 2008-1448 (Fed. Cir., Aug. 31, 2009). The Board would not accept a "knew of should have known" allegation, and pointed out that "pleadings of fraud made 'on information and belief' where there is no separate indication that the pleader has actual knowledge of the facts supporting a claim of fraud also are insufficient."
FRAUD COUNTERCLAIM MUST BE AMENDED
On review of the pleadings the Board notes that applicant’s counterclaim to cancel opposer’s pleaded Registration No. 1362300 does not state a legally sufficient claim of fraud. The counterclaim alleges that opposer filed a registration renewal declaration asserting continued use with all the existing goods but, based on information and belief, at the time the declaration was filed, applicant was no longer selling some of the goods listed in the registration.
Fraud in procuring a trademark registration or renewal occurs when an applicant knowingly makes false, material representations of fact in connection with his application. Torres v. Cantine Torresella S.r.l., 808 F.2d 46, 48 (Fed. Cir. 1986). There is no fraud if a false misrepresentation is occasioned by an honest misunderstanding or inadvertence without a willful intent to deceive. Smith Int'l, Inc. v. Olin Corp., 209 USPQ 1033, 1044 (TTAB 1981). The standard for finding intent to deceive requires more than proof that the trademark applicant should have known of the falsity of its material representations of fact. See In re Bose Corp., __ F.3d __, __ USPQ2d __ (Fed. Cir., August 31, 2009).
Fed. R. Civ. P. 9(b) requires that the pleadings contain explicit rather than implied expression of the circumstances constituting fraud. King Auto., Inc. v. Speedy Muffler King, Inc., 667 F.2d 1008, 212 USPQ 801, 803 (CCPA 1981). The Board will not approve pleadings of fraud which rest solely on allegations that the trademark applicant made material representations of fact in its declaration which it "knew or should have known" to be false or misleading. In re Bose Corp., __ F.3d __, __ USPQ2d __ (Fed. Cir., August 31, 2009). Pleadings of fraud made "on information and belief" where there is no separate indication that the pleader has actual knowledge of the facts supporting a claim of fraud also are insufficient. Id.
Applicant is allowed until thirty days from the mailing date of this order to file an amended counterclaim with a legally sufficient pleading of fraud, failing which the counterclaim will be dismissed and a new schedule will issue.
Text Copyright John L. Welch 2009.