Precedential No. 41: Finding Fraud, TTAB Sustains Opposition to NATIONSTAR for Real Estate Brokerage Services
The Board sustained a fraud claim for the first time since the CAFC issued its 2009 decision in In re Bose, finding that Applicant Mujahid Ahmad’s averments as to his use of the mark NATIONSTAR for various real estate brokerage services were fraudulent. Nationstar Mortgage LLC v. Mujahid Ahmad, 112 USPQ2d 1361 (TTAB 2014) [precedential].
On April 20, 2006, Mr. Ahmed personally filed a use-based application for the NATIONSTAR mark for “Real estate brokerage; rental of real estate; real estate management services, namely, management of commercial and residential properties; real estate investment; residential and commercial property and insurance brokerage; mortgage brokerage; and business finance procurement services.” Mr. Ahmad is a real estate agent in Virginia. He was not a real estate broker, insurance broker, or mortgage insurance broker, each of which requires a state license, at the time of filing his application to register.
Ahmad testified that he chose the mark in 2004-2005, after checking the Virginia corporate records and the USPTO databases. In April 2005, he registered several domain names containing the word “nationstar.” In early April 2006, opposer Nationstar Mortgage LLC contacted Ahmad, offering to buy two of the domain names. Within days, Ahmad filed the application here at issue.
After the subject opposition was commenced, Mr. Ahmad, now represented by counsel, filed a motion to amend the filing basis of his application to Section 1(b) intent-to-use. In June 2008, the Board granted the motion to amend, but noted that “amending the filing basis of the opposed application to Section 1(b) does not protect the application from the fraud claim.”
Fraud must be proven with clear and convincing evidence. A false statement made with a reasonable and honest belief of its truth is not fraud. There must be an “intent to mislead the USPTO into issuing a registration to which the applicant was not otherwise entitled.”
Ahmad’s testimony regarding use of the mark NATIONSTAR as of his filing date was of grave concern to the Board, due to his “evasiveness and his failure to respond directly to straightforward questions.” For example, he could not identify which printed materials he created and which were created by others, he claimed not to know whether his business earned any income, and he dodged questions about his filing of tax returns. The Board found his testimony “so lacking in conviction and credibility as to be virtually incapable of corroboration.” The documents that he provided were of “virtually no probative value” because he could not state who created them or when.
The Board observed that, as a real estate agent, Mr. Ahmad was well aware that legal documents must be carefully reviewed prior to signing. According to his testimony, Ahmad was well aware of the restrictions on real estate agents and he knew that separate licenses are required for brokers.
In short, the Board found Ahmad’s testimony to be “not at all credible,” and it concluded that Ahmad was not using the NATIONSTAR mark with any of the recited services prior to his filing date. At most he may have rendered real estate agency services prior to the filing date, as corroborated by two witnesses. Those services, however, were not listed in the application.
The Board next found that the false statements made by Ahmad were made knowingly and with an intent to deceive the USPTO. It noted that the law does not require “smoking gun” evidence of deceptive intent; direct evidence of deceptive intent is seldom available. Therefore, deceptive intent may be inferred from the surrounding facts and circumstances. Here, the surrounding facts and circumstances “provide clear and convincing evidence that applicant did not have a good faith reasonable basis for believing that he was using the NATIONSTAR mark in commerce for all the services identified in the application.”
The Board distinguished this case from In re Bose, where it was not unreasonable for the corporate officer who signed the Section 8 declaration there at issue to believe that the mark was in use in interstate commerce. Here, there was no nuance of trademark law that applicant may have incorrectly interpreted. Instead this case involved an applicant making false statements about his own industry and his own activities, knowing that he did not have the appropriate licenses.
The fact that Ahmad filed the subject application himself did not give him “a free pass to disregard the straightforward requirements of a use-based application and the solemnity of the application declaration that he signed subject to criminal penalties under 18 U.S.C. Section 1001.”
The Board therefore sustained the opposition, declining to consider the additional grounds of likelihood of confusion and lack of bona fide intent.
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TTABlog note: What do we learn from this decision? How did Ahmad think he was going to avoid a fraud finding? It is good to see that there are indeed some serious consequences to filing a false declaration.
Text Copyright John L. Welch 2014.