Wednesday, April 30, 2014

TTAB Grants Leave to Add Fraud Claim, If Adequately Re-pleaded

The TTAB denied the parties' cross-motions for summary judgment on the issue of abandonment in this cancellation proceeding. However, it granted petitioner's motion for leave to amend its pleading to assert a claim of fraud, provided that petitioner set forth its fraud claim with the particularity required by FRCP 9(b). [This case was the subject of a precedential interlocutory ruling in 2010]. [TTABlogged here]. SaddleSprings, Inc. v. Mad Croc Brands, Inc., Cancellation No. 92055493 (March 31, 2014) [not precedential].

Abandonment: SaddleSprings seeks to cancel Mad Croc's registration for the mark shown above, for alcoholic beverages. SS pointed to Mad Croc's admission that it has never sold alcoholic beverages under the subject mark and had no certification to sell such beverages.

Mad Croc contended that, although it did not sell alcoholic beverages to the consuming public, sales of the goods were made by its licensees - i.e., bars that prepare the CROC-TAIL brand alcoholic drink - according to respondent's guidance and instructions pursuant to verbal agreements with the licensees. Furthermore, since it did not itself sell alcoholic beverages, it did not need any governmental certification or permit.

The Board found that, at a minimum, a genuine dispute of material fact existed as to whether "proprietors in respondent's field of trade, as well as their respective customers, would perceive respondent's goods, i.e., CROC-TAIL brand cocktails, as goods in trade pursuant to the provisions of the Trademark Act."

Fraud: In its motion to amend the petition for cancellation, SaddleSprings sought to add a paragraph asserting that Mad Croc committed fraud on the USPTO by filing a Declaration of Use under Section 71, in which it attested to its continued use of the mark CROC-TAIL in commerce. The Board found the motion to be timely, but further found that the proposed allegations did not state a claim of fraud with sufficient particularity, as required by FRCP 9(b). Petitioner did not specify which statements made in the declaration of use were false or which were material or which were made with intent to deceive.

Nonetheless, because the Board liberally grants leave to amend pleadings when justice so requires, the Board granted the motion to the extent that it allowed SaddleSprings twenty days to serve an appropriately amended petition setting forth its fraud claim with the appropriate particularity.

The Board noted that its ruling was merely procedural, and did not mean that the fraud claim was meritorious.

Read comments and post your comment here.

TTABlog note:  I suspect this fraud claim will go nowhere.

Text Copyright John L. Welch 2014.


At 8:57 AM, Anonymous Anonymous said...

Then why not avoid the charade? Write an opinion that says so and don't waste their time or parties money trying to make a fraud case in the TTAB? Just a little bit of intellectual honesty and transparency might help the process.

At 9:04 AM, Anonymous Rob said...

Because the Board wants the Federal Circuit, which already said what fraud isn't, to now say what it is. In order to do that, fraud needs to be pleaded, denied, and the decision appealed.


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