Friday, February 26, 2010

TTAB Vacates 2008 Fraud Ruling in Xel Pharmaceuticals Case

In an Order issued on February 25, 2010 (here), the Board vacated its March 7, 2008 ruling in Herbaceuticals, Inc. v. Xel Herbaceuticals, Inc., Cancellation No. 92045172, wherein the Board had entered partial summary judgment on the ground of fraud. It had found that Respondent Xel Pharmaceuticals committed fraud as to four of its registrations by filing knowingly false Statements of Use (signed by its attorney) regarding use of its XEL HERBACEUTICALS marks on some of the goods listed in its registrations. [TTABlogged here].

The Board observed that its March 7, 2008 order was "interlocutory in nature, did not result in the immediate cancellation by the Commissioner of the noted registrations, and ... was not immediately appealable, because it did not result in full decision of the claims in this case."

Relying on the Bose decision, Xel, on January 7, 2010, filed a motion to vacate the Board's entry of partial summary judgment on HCI's fraud claim. To date, HCI has not filed a brief in response to the motion to vacate. In view of HCI's failure to respond in any manner to Xel's motion to vacate entry of partial summary judgment, that motion is hereby granted as conceded.

Moreover, in view of the Bose decision, the Board sua sponte reviewed the pleading of HCI's fraud claim and found that it was infsufficiently pleaded. "HCI's pleaded fraud claim is based on allegations that Xel 'knew or should have known that it was not using' the involved marks on all of the goods *** and does not allege that Xel filed those statements of use with the requisite intent to deceive the USPTO. *** In addition, HCI’s fraud claim is based '[u]pon information and belief' without a specification of facts upon which such belief could reasonably be based."

The Board allowed HCI thirty days to file an amended petition to cancel repleading its fraud claim in accordance with the Bose decision.

In a footnote, the Board pointed out that "The standard for finding intent to deceive is stricter than the standard for negligence or gross negligence. Still open is the question whether a submission to the PTO with reckless disregard of its truth or falsity would satisfy the intent to deceive requirement. Bose, 91 USPQ2d at 1942, fn. 2." [For a graphical illustration of this point, go here].

Text Copyright John L. Welch 2010.


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