Thursday, July 16, 2009

Fraud! TTAB Enters Judgment on the Pleadings Against Applicant Who Admitted Non-Use of Its Mark

Here's a new, albeit not particularly significant, decision for our fraud collection. Applicant Mellbeck Ltd, acting pro se, filed an application [under Sections 1(a) and 44(e)] to register the mark shown below for a "laundry list" of more than fifty clothing items. In its answer to the Notice of Opposition, Mellbeck, a British company, admitted that it does not sell all the goods in this country. Opposer Esprit moved for judgment on the pleadings based on that admission and on a further admission made by Mellbeck in its opposition to the motion. The Board granted the motion, bringing to a halt this PTO train wreck. Esprit IP Limited v. Mellbeck Ltd, Opposition No. 91189412 (June 25, 2009) [not precedential].

Applicant's Motion to Amend: The Board first considered Mellbeck's motion to amend its application to list a mere 14 items of clothing. However, the new list included only one item ("hats") that appeared in the original identification. For that reason the Board denied the motion, but it also noted that even if the motion were granted, that would not cure Mellbeck's fraud. See Medinol Ltd. v. Neuro Vasx Inc., 67 USPQ2d 1205 (TTAB 2003). [If you want to cure, you have to do it before the application is challenged - ed.]

Opposer's Motion for Judgment on the Pleadings: Mellbeck admitted in its answer that it "does not sell in the US" all of the goods listed in its application. It "further clarifies this admission by its statement in response to the motion for judgment on the pleadings that the identification of goods in the application was set forth in error." Mellbeck moved to amend the identification, it said, to list 14 items "that should have been listed at the outset."

By setting forth an identification of goods for more than fifty goods, when applicant was not using the mark on all of these goods, and indeed may have been actually using the mark only on one of those identified goods, applicant made a material misrepresentation of fact that the U.S. Patent and Trademark Office relied upon in determining applicant's right to a registration.

Mellbeck's assertion that the original identification was set forth "in error" was of no help, since it "knew or should have known that it was not using the involved mark on the vast majority of the identified goods." Likewise of no import were the facts that Mellbeck was not represented by an attorney, and had no prior experience in United States trademark matters. See Hurley International LLC v. Volta, 82 USPQ2d 1339 (TTAB 2007).

Therefore, the Board entered judgment sustaining the opposition.

TTABlog comment: It seems to me the Board went beyond the pleadings when it looked at Mellbeck's response to Opposer's motion. As pointed out in footnote 3, The Board couldn't convert the motion to one for summary judgment because the parties had not held the required discovery conference and Opposer had not served its initial disclosures. So the Board chose the dubious "judgment on the pleadings" route.

Did Mellbeck really admit that it was not using the mark on some of the goods at the time it filed its application? It admitted in its answer that it "does not sell in the US all of the apparel items listed in the application," but what about on the filing date? Was it not selling all the items then? When it said it made an "error" in the original list, what exactly did that mean? Could it mean that Mellbeck erroneously included in the original application goods on which it was using the mark, but would soon be phasing out?

Did the Board make an improper leap in logic in order to clear this train wreck off the TTAB tracks?

Text Copyright John L. Welch 2009.


At 8:54 AM, Anonymous Paul Reidl said...

John, I agree with you. Technically the Board went beyond the pleadings and technically the statement was not an admission of non-use at the time the application was filed. But I suspect the Board saw the 2d admission in the brief and said "why in the heck should we let these folks survive when they admit that they committed fraud?"

At 3:44 PM, Anonymous Joe Dreitler said...

We should be thankful that the Board did not require the Opposer to waste the Board's time and thousands of dollars in legal fees preparing and serving discovery, taking a 30b6 deposition, arguing over the production and discovery and putting together a formal motion for summary judgment against someone who clearly committed fraud.
We ended token use in the US in 1989 to allow ITU filings and in return for requiring that sworn claims of use be legitimate use in commerce. The fact that it appears many lawyers and applicant/registrants have decided they would like a system whereby they can register and maintain any trademark for any goods without legitimate use is not the fault of the TTAB or those who call them on their actions. The Board should be congratulated to encourage others that you can get rid of these cases without spending thousands of dollars. It will encourage people in the long run to follow the law.


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