Tuesday, February 15, 2011

TTAB Dismisses Fraud Claim Based on Fabricated Specimen of Use: Opposer Failed to Prove Fraud "to the Hilt"

Applicant Bristol Technologies sought to register the mark Bristol Focus for computer operating systems programs, but Opposer raised two grounds in opposition: fraud and likelihood of confusion. The Board sustained the Section 2(d) claim, finding the applied-for mark likely to cause confusion with the registered mark FOCUS for other computer software programs. But as to the fraud claim, although Applicant fabricated a specimen and falsely stated that its mark was in use as of the application filing date, the Board ruled that Opposer failed to meet its "heavy burden of proof" to show fraud. Information Builders, Inc. v. Bristol Technologies, Inc., Opposition No. 91179897 (January 10, 2011) [not precedential].

Applicant's original specimen of use, a newspaper advertisement regarding Applicant's intended product line, was rejected by the Examining Attorney. Applicant was offered the option of amending the application to a Section 1(b) intent-to-use basis, but instead Applicant created a screen image (shown above) and submitted a photograph of the image as a specimen of use, accompanied by a declaration stating that the substitute specimen was in use as of the filing date of the application.

However, Applicant had not yet sold any products, had no distributors, representatives, or sales persons, no licensees, and no use of the product. No computer operating system program had been completed, no orders received, and no computer systems bearing the applied-for mark had been shipped.

Opposer argued that "Applicant's fabrication of a new specimen no more than six weeks after learning of the initial refusal constitutes clear and convincing evidence that Defendant sought to mislead the Patent and Trademark Office ...."

The Board agreed that Applicant's statement of use that accompanied the new specimen was incorrect - i.e., false. Applicant's statement was also material, because without this misrepresentation the application would not have been published for opposition. However, as we all know, the CAFC's Bose decision requires that fraud be proven "to the hilt."

The Board ruled that the record did not establish that Applicant's president, David W. Bristol, "knowingly made a false representation with respect to use of the mark as shown on these specimens with a willful intent to deceive the U.S. Patent and Trademark Office." "Mr. Bristol believed that the statement was true at the time he signed the statement of use." [Query: where is the support in the record for that last statement? - ed.]

The Board quoted Bose for the proposition that "[U]nless the challenger can point to evidence to support an inference of deceptive intent, it has failed to satisfy the clear and convincing evidence standard required to establish fraud."

Viewing the evidence in light of the above legal principles, we find that opposer has not established that Bristol Technologies, Inc. acted fraudulently in order to have its mark published for opposition. Rather, based upon the evidence of record, we find that Mr. Bristol, as a layperson, had an honest misunderstanding that the above activities represented a legitimate way to document his purported usage of the adopted term and that applicant had legitimately used the mark Bristol Focus as shown on the substitute specimen. We would not characterize his actions as trying to fabricate a fraudulent specimen. Under the standard set out in Bose by our principal reviewing Court, opposer has not met its “heavy burden of proof” in showing fraud. Opposer’s claim of fraud is therefore dismissed.

TTABlog comment:
"The party's over. It's time to call it a day." Forget fraud. It can't be proven. Either the accused party will raise an advice of counsel defense (see Brady Bunte), or if he or she doesn't have counsel, he or she will raise an "uninformed layperson" defense. In support of its ruling the Board, in footnote 37, cited the Maids to Order case, where a layperson mistakenly averred that the mark there at issue was in use in interstate commerce when it was in use only in intrastate commerce. But isn't that a much more complicated issue that a layperson might not fully understand? Is the issue here of equal complexity? Or is it more like the issue in Hurley, where the applicants' misunderstanding or lack of knowledge of the law did not excuse them from fraud based on a false statement of use?

Perhaps the only ones who can commit fraud nowadays are trademark lawyers, since they (should) know the law. But, I maintain, a trademark lawyer shouldn't be signing anything unless he or she is the actual applicant.

I just don't understand the Board's reasoning here. Early in the decision it said that it was declining to consider Applicant's final brief because the brief was not timely filed. Yet later the Board refers to what Applicant "argues" (page 15). If Applicant's brief was jettisoned, and Applicant took no testimony and there was no final hearing, where did Applicant do this arguing? [Perhaps a reader can answer that question.]

Text Copyright John L. Welch 2011.


At 9:05 AM, Anonymous Chris McHattie said...

Does anyone have any idea if this or Brady Bunte will be/have been appealed? This is a mess.

By the by, I was under the impression that if you rely on the "advice of counsel" defense, the privilege is waived with respect to the subject matter, here the opinion and the information exchanged.

Re. Trademark Bullying. Without clarity on issues such as this, "bullying" and other "shenanigans" are "TTAB Approved;" i.e. asserting a position and having the resources to pursue that position beyond the resources of your adversary. Bullying only occurs when a position is clearly invalid and who knows what's invalid at any given moment. If the conduct in Cabo Primo is not fraudulent, nothing is. This is frustrating.

At 9:10 AM, Blogger John Ward said...

It appears that nothing short of an applicant's admission of an intend to deceive will satisfy the standard of proof now at play.

At 11:11 AM, Anonymous Anonymous said...

I agree that proving fraud at the TTAB is a frustrating mess. It now seems the party alleging fraud must take discovery deposition(s) to determine if the intent to deceive the USPTO can be brought out.

At 4:54 PM, Anonymous Anonymous said...

According to the TTAB "Mr. Bristol believed that the statement was true at the time he signed the statement of use."

Looking at the TDR file I found it was not Mr. Bristol who signed the statement of use, it was his attorney.

Isn't there some due diligence requirement for an attorney who signs a statement of use for his client to investigate the validity of the facts alleged?

Plus, the TTAB had it wrong saying Bristol signed the statement of use.

At 7:30 PM, Anonymous Rob said...

It almost seems like the TTAB wants to press the issue to the other extreme so that the CAFC is required to clarify what WOULD constitute fraud, and until it does, nothing would.

At 3:28 PM, Blogger ChristianZ said...

There does seem to be a big disconnect going on here. If an applicant wins a case because they don't come out and admit fraud then when they renew the application ten years later if they do it in the same way they did before then at the time of renewal they will have to know they are committing fraud because it had been specifically called to their attention before (hope my reasoning is clear).

And even without fast-forwarding ten years it still seems that if an applicant wins a case because they don't come out and admit fraud that at that very moment everyone concerned (judge, applicant, plaintiff, the neighbor's dog, etc.) will have it called to their attention that the registration is invalid irregardless of what the applicant's intent was.

What sort of travesty of justice is occurring when when the TTAB first says, "Well, the applicant didn't come out and tell us they knowingly committed fraud so it must not be 'fraud,'" and then add to that, "But now that it has been called to our attention that the registration is invalid we'll just leave the registration alone and in the applicant's possession. This sort of absurdity somehow makes sense to us."

In short, if the registration is invalid then it is invalid . . . period. Intent means nothing. Why is that hard for people to grasp?

At 8:02 PM, Anonymous Alex B. said...

I agree with Rob's statement, above, that it seems like the Board is using these relatively egregious facts to beg the CAFC for additional clarity on this doctrine. I got the impression that the way the Board quoted the CAFC's Bose decision, it was being a little facetious and perhaps daring or taunting the CAFC to revise its ruling and provide a more practical fraud rule.


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