TTAB Denies Fraud Claim But Sustains SUNDICATORS Section 2(d) Opposition

The Board sustained this Section 2(d) opposition, finding applicant's mark SUNDICATORS likely to cause confusion with opposer's mark SUN/DICATORS, both for sun awareness products that measure UV radiation and alert the user to reapply sunscreen or retreat indoors in order to prevent overexposure. But the Board dismissed opposer's fraud claim due to lack of proof of applicant's intent to deceive the USPTO with its false statements regarding use of its mark. Pretty Pale, Inc. v. JADS Int’l, LLC, Opposition No. 91222470 (September 15, 2017) [not precedential] (Opinion by Angela Lykos).

Likelihood of Confusion: The Board had little difficulty finding the goods related and the marks confusingly similar. Applicant JADS asserted that Opposer Pretty Pale did not have bona fide use of its mark in commerce prior to its filing date. It argued that "Opposer had 'a registered domain name, a paucity of business cards, embryonic literature, and unmarked products in "swag bags,"' and that this does not constitute “evidence of proper marking of the product to qualify as trademark usage."

The Board pointed out, however, that "Priority can be shown in marks for goods given away as promotional items." Moreover, goods need not be sold "in order to come within the ambit of the statute." They can be given away. Opposer's testimony established that she gave away the products at events such as the Oscars, the Golden Globes and the Teen Choice Awards, and that the mark SUN/DICATORS appeared on the product or its packaging.

Fraud: "Fraud in procuring a trademark registration occurs when an applicant knowingly makes false, material representations of fact in connection with its application with intent to deceive the USPTO." See In re Bose Corp., 580 F.3d 1240, 91 USPQ2d 1938, 1941 (Fed. Cir. 2009). A party alleging fraud in the procurement of a registration bears the heavy burden of proving fraud with clear and convincing evidence. Bose, 91 USPQ2d at 1939 (quoting Smith Int’l, Inc. v. Olin Corp., 209 USPQ 1033, 1044 (TTAB 1981)).

Although Applicant JADS filed an amendment to allege use, it admitted in discovery that it had not "sold, offered for sale or otherwise distributed any products or services under or in connection" with its mark, and had not used its mark in interstate commerce." The Board found no question that applicant’s CEO/President, Mr. Levine, "made false statements in his signed declaration submitted with the AAU, and that such statements were material. Thus, the pivotal issue is whether Opposer has shown that Applicant had the requisite intent to deceive the USPTO."

JADS contended that through an “innocent mistake of what constituted legal trademark usage in commerce by [Applicant] and its original attorney, [A]pplicant submitted as a specimen of use a prototype package bearing the mark … [and] acting in good faith, did not intend to deceive the USPTO." It pointed out that opposer "failed to adduce any evidence of Applicant’s intent to deceive by taking the testimony deposition of Applicant’s President, Andrew Levine, who signed the AAU or Applicant’s former attorney."

The Board observed that the statements made by applicant in its answer and in its final brief cannot be considered as evidence on its behalf. On the other hand, Opposer Pretty Pale bore the burden of proof on the issue of fraud, and Applicant JADS "is not obligated to rebut allegations of fraudulent intent."

The Board concluded that the evidence was in sufficient to support the inference of an intent to deceive the USPTO. Although the Board may infer deceptive intent from a party's testimony coupled with other factual findings - see Nationstar Mortg. LLC v. Ahmad, 112 USPQ2d 1361 (TTAB 2014) - here, there was no testimony from Mr. Levine or anyone else associated with JADS. Nor were there any admissions in the record regarding intent.

Opposer misunderstands the critical significance of Mr. Levine’s testimony in establishing intent, given his role as the signatory of Applicant’s AAU. While intent to deceive can be inferred from indirect and circumstantial evidence, such evidence must still be clear and convincing, and inferences drawn from lesser evidence cannot satisfy the deceptive intent requirement. Bose, 91 USPQ2d 1941. Standing alone, Mr. Levine’s false representations fall short of qualifying as “clear and convincing” indirect or circumstantial evidence so as to justify an inference sufficient to satisfy the intent to deceive requirement. Similarly, we cannot draw the inference based on the filing of Applicant’s subsequent application the level of intent qualifying as fraud. “[A]bsent the requisite intent to mislead the PTO, even a material misrepresentation would not qualify as fraud under the Lanham Act warranting cancellation.” Bose, 91 USPQ2d at 1940 (citing King Auto., Inc. v. Speedy Muffler King, Inc., 667 F.2d 1008, 212 USPQ 801 (CCPA 1981)).

And so the Board dismissed opposer's fraud claim.

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TTABlog comment: Apparently fraud cannot be proven without testimony and/or admissions from the accused party. It's happened only once at the TTAB since Bose. See the Nationstar case cited above.

Text Copyright John L. Welch 2017.