Friday, February 12, 2010

TTABlog Bonus: Your Very Own FRAUD-O-METER™

Some say that a picture is worth a thousand words, and that is certainly true with regard to the TTABlog FRAUD-O-METER™ brand legal indicator. We all know that the CAFC in In re Bose Corporation jettisoned the TTAB's "knew or should have known" standard for fraud set out in Medinol v. Neuro Vasx, ruling that the Board had "erroneously lowered the fraud standard to a simple negligence standard." The appellate court also held that proof of intent to deceive is required to establish fraud and it indicated that even "gross negligence" is not enough, but it declined to address the issue of whether "reckless disregard for the truth" would suffice.

The FRAUD-O-METER™ illustrates the current state of trademark fraud jurisprudence: the now defunct Medinol standard is depicted by the grey arrow resting in the "Negligence" wedge, while the white arrow, representing our post-Bose uncertainty, unsurely leans toward the "Reckless Disregard" wedge.

If the chart looks a bit blurry, then I suggest that you (1) move closer to your computer screen; (2) check your eyeglass prescription; or (3) double click on the chart for a larger version that you can print out or save as your computer wallpaper.

The next time you think you have a fraud case, pull out your FRAUD-O-METER™ and take a guess as to where the facts of your case fall. If you are the accused party, you apparently may safely fess up to gross negligence but not reckless disregard for the truth. For the accusing party, don't settle for proof of gross negligence; go for at least reckless disregard for the truth. [Just don't ask me how to tell the difference.]

TTABlog note: A hat tip to Nate Harris of Lando & Anastasi, LLP, for his assistance in putting the final touches (i.e., the arrows) on the chart.

Copyright John L. Welch and Nathan T. Harris 2010.


At 5:24 PM, Anonymous Zick Rubin said...

I'm afraid that your FRAUD-O-METER (TM) mark for your legal indicator is likely to cause confusion with my own FREUD-O-METER(TM) mark for measuring the effectiveness of one's psychotherapist. In fact, the specific levels of the FRAUD-O-METER and the FREUD-O-METER are remarkably similar:

1. FRAUD-O-METER: Inadvertenece
FREUD-O-METER: Psychotherapist pays no attention to what you are saying.

2. FRAUD-O-METER: Negligence
FREUD-O-METER: Psychotherapist seems to be listening but can't remember what you have said from one session to the next.

3. FRAUD-O-METER: Gross negligence
FREUD-O-METER: Psychotherapist mixes you up with another patient.

4. FRAUD-O-METER: Reckless disregard
FREUD-O-METER: Psychotherapist goes to the bank to cash your check while you are still talking.

5. FRAUD-O-METER: Willful intent
FREUD-O-METER: After cashing your check, psychotherapist takes off for Cancun while you are still talking.

In light of the obvious potential for confusion, I could ask you to cease and desist. But since I developed the FREUD-O-METER only this afternoon, I have decided to rename it the SHRINK-RAP (tm).

Zick Rubin

At 10:42 PM, Anonymous Rob said...

Bose did not (and could not -- see below) overrule Torres. Their way out of the mess they had created was to construe Torres' "should have known" test to potentially mean "reckless disregard", as in the context of fraud, simple negligence is not enough.

The TTAB is obviously eager to set a precedent that says "reckless disregard" is enough to show fraud. But you are of course correct that there's no meaningful difference between that standard and gross negligence. The Federal Circuit is not crazy about the "reckless disregard" standard, but it can live with it (as suggested in Bose) and rejecting that standard would mean overruling Torres, which per its own Circuit Rules, is only possible en banc. Not gonna happen.

At 5:12 AM, Anonymous Chili Palmer said...

On February 11, 2010, the Illinois Appellate Court (First District) granted an order taking judicial notice that Leo Stoller had been deceptive.

The Illinois Appellate Court, on its own motion, also ordered that Leo Stoller show cause as to why he should not be held in Contempt of Court regarding sixteen appeals. The Court also ordered Leo Stoller to show cause as to why those appeals should not be dismissed.

The Illinois Appellate Court entered the orders in view of an earlier order entered by the Seventh Circuit Court of Appeals. In that order, the Seventh Circuit Court of Appeals held that Leo Stoller had been deceptive and referred the matter to the U.S. Attorney to determine whether Leo Stoller should be prosecuted for perjury.

See the order at:


Post a Comment

<< Home