Thursday, April 10, 2014

TTAB Tosses Out Fraud Claim - Insufficient Proof of Intent to Deceive the USPTO

In this cancellation proceeding, petitioner claimed that respondent had committed fraud on the USPTO when if filed its Sections 8, 9, and 15 declarations in connection with its registration for the mark shown below (translated loosely as "lucky old wang"). The declarations were signed by one Kevin Zhang as "Owner," despite the fact that he did not own the registration. Petitioner, however, did not take the testimony of Mr. Zhang or anyone else, and it failed to prove that Zhang intended to deceive the USPTO. Consequently, the Board denied the petition for cancellation. Multi Access Limited v. Wang Lao Ji Food & Beverage subsidiary, Yangcheng Pharmaceutical Stock Corp. Ltd of Guangzhou, Cancellation No. 92054959 (April 4, 2014) [not precedential].

The Board observed, once again, that fraud must be proven "to the hilt." Proof of subjective intent to deceive, although difficult to obtain, is an indispensable element of the claim. Such intent may be inferred from indirect or circumstantial evidence, but the evidence must be clear and convincing.

Mr. Zhang, an attorney who worked in California for a Chinese law firm, was Respondent's domestic representative but was not authorized to practice before the USPTO. Petitioner's theory was that Zhang knew he was not the owner of the registration and knew that he was not authorized to sign the declaration on behalf of respondent. Therefore, Respondent urged, Zheng intended to deceive the USPTO into accepting the maintenance declarations. Petitioner did not question that the mark was in use; its only claim was fraud based on Mr. Zhang's calling himself "Owner."

The Board found that the record evidence "falls short of establishing that respondent is guilty of fraud."

In response to interrogatories, Respondent stated that it did not know why Zheng had called himself "Owner." Zhang had first-hand knowledge of use of the mark in the USA. Respondent had instructed Zhang's law firm to filed the combined Section 8 & 9 document, and had fixed its seal (equivalent to a signature in China).  Respondent believed that by placing the seal on the document it was giving proper authority to the signatory. As to the Section 15 declaration, Respondent responded similarly. Petitioner provided no evidence to dispute these assertions.

The Board pointed out that a person who is authorized to verify facts on behalf of a registration owner may sign such declarations. That person may also serve as domestic representative. The fact that Mr. Zhang was not authorized to practice before the USPTO does not disqualify him from signing a verification on behalf of the registrant.

The Board agreed with Respondent that Petitioner's fraud claim was "based on inferences that are too speculative." Although his statement that he was the "Owner" of the registration was false, there was insufficient evidence to prove that Zhang intended to deceive the USPTO. The Board noted that the "owner" section of each declaration listed Respondent as the owner of the registration.

The Board therefore denied the petition for cancellation.

Read comments and post your comment here.

TTABlog note:  I don't understand how Petitioner possibly thought it could prove fraud given the evidence and the current state of fraud jurisprudence. So this is a WYHP?

Text Copyright John L. Welch 2014.


At 8:04 AM, Anonymous Anonymous said...

The skepticism of bringing a fraud claim is well founded. But if no one ever brings a claim, then we have a right with no remedy. If that is the position that, absent a Perry Mason moment there can be no such thing as fraud on the PTO on the trademark side, then why not be honest and write an opinion that says that instead of talking in code? Understandably, no Board member wants to write those words, but if that is the state of the law, it is a disservice to the bar not to be more clear. We don't need more cases where we scoff at someone who clearly thinks their opponent intentionally swore a false document with the PTO that was material and gets booed off the stage for arguing that this type of behavior ought to face some type of penalty.

At 10:15 AM, Anonymous Anonymous said...

Based on the statements by the Board, if a mark is being used by the a registrant, I doubt that there are any circumstances that would have caused the mark to be cancelled on fraud grounds. I doubt that even if the registrant admitted that it submitted falsified specimens because it was easier to doctor the specimens than acquire legitimate ones, would the Board have found fraud.

It would have been interesting if this case was decided before the Cisco vs Apple case regarding iPhone trademark. If you review the file history, Cisco appears to simply have printed a label using iPhone and put it on a package to demonstrate continued use. Not surprising this was submitted by a patent attorney (no commentary on our wonderful host). I suspect this embolden Apple to adopt the iPhone mark with the hopes that it can defeat the registration on fraud grounds (and perhaps non-use grounds). I wonder if Apple knew of the present case, it would nonetheless pursued that course.

At 11:24 AM, Anonymous Anonymous said...

It seems to me like the petitioner had no other ground to attempt to cancel this registration since it was at least 10 years old (a Section 9 was filed). Therefore, I presume the petitioner felt it was worth a shot to clear the way for a potentially similar mark of theirs and probably was well aware of the difficulty of the case (and had money to burn on this).

At 12:42 PM, Anonymous Anonymous said...

If this is truly the current state of the law in USPTO practice - - "I doubt that even if the registrant admitted that it submitted falsified specimens because it was easier to doctor the specimens than acquire legitimate ones, would the Board have found fraud" -- then I am glad I am near the end of the line. Their used to be integrity in this practice and if people strayed off that line they were called out by the tribunal and their colleagues. If we are at the point where it's no big deal, I don't want to be part of that system and call myself a "professional". Professional what?

At 5:47 PM, Anonymous RL said...

I don't understand this decision. How does respondent meet the requirements of TMEP Sections 602.03(c) and 608.01 and the corresponding CFR?


This is a foreign agent/attorney practicing before the USPTO presumably so as not to have to appoint (and hire) U.S. local counsel. The document was signed by an improper party so it should have been an incomplete response. If an Examiner doesn't catch this at the time of filing, then how will the USPTO enforce the above rules when the issue is raised post-acceptance by a 3rd party?


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