440-600-1992

Identifying Federal Trademark Goods and Services: A Cautionary Tale

Formulating an accurate identification of goods and services is a critical element of preparing a federal trademark application. Failure to do so, or failure to accurately restate the goods and services in Statements of Use, Declarations of Continued Use, and/or renewals can result in your registration being cancelled for fraud on the trademark Office. In 2003 the Trademark Trial and Appeals Board (TTAB) in Medinol v. Neuro Vasx, Inc. established a very low bar for finding fraud.[i] Later in 2009 the Federal Circuit in In re Bose Corp. raised the bar back to a more reasonable level, but the danger of cancellation remains.[ii]

The identification is used by United States Patent and Trademark Office examiners to determine whether an applicant's mark would cause a likelihood of confusion, i.e. whether it would infringe on the trademark of another, and thus whether a registration should be allowed. After registration, the identification is used by other trademark owners to determine whether they infringe, or would infringe, registered marks. Thus, it serves as notice to the public and can potentially be a factor in establishing willful infringement. Accordingly, the law places a high value on accurately identifying the goods and services with which a registered trademark is used.

Applicants are often tempted to list large numbers of goods or services without carefully verifying that each and every one is actually used in commerce. This can be a very dangerous approach because, even after In re Bose Corp., erroneously claiming that your trademark is used in connection with goods or services with which it is not can result in your registration being cancelled for fraud on the trademark Office.

In Medinol v. Neuro Vasx, Inc., Neuro Vasx applied for registration of the mark NEUROVASX for "medical devices, namely, neurological stents and catheters."[iii] After registration of the mark, Medinol petitioned for cancellation of the mark since Neuro Vasx had not used the mark in connection with stents.[iv] Specifically, Medinol alleged that Neuro Vasx had knowingly made false statements as to the identification of goods and services of the mark to the USPTO in obtaining the registration, and therefore the Neuro Vasx had committed fraud on the USPTO and was "not entitled to continue registration."[v] In response the Board stated, "[i]f fraud can be shown in the procurement of a registration, the entire resulting registration is void."[vi] Furthermore, the Board clarified fraud by stating an "applicant commits fraud in procuring a registration when it makes material representations of fact in its declaration which it knows or should know to be false or misleading."[vii] According to the Board, the element of intent is determined by "the objective manifestations of that intent" as oppose to "subjective intent."[viii] Concluding, the Board found that applicant "knew or should have known" that the statement of use was incorrect.[ix] Petitioner was granted summary judgment.[x]

Subsequently, however, this subjective intent approach to fraud on the USPTO was rejected in In re Bose Corp. by the Federal Circuit.[xi] In this case, Bose had registered the trademark WAVE and was attempting to prevent a similar trademark from being registered by another company, Hexawave, Inc.[xii] Upon initiation of an opposition by Bose, Hexawave asserted that the trademark WAVE should be cancelled on the ground that Bose had committed fraud on the USPTO by renewing its registration when it knew that it no longer manufactured or sold some of the goods listed in the trademark registration.[xiii] The Court rejected the Medinol standard stating, "[b]y equating 'should have known' of the falsity with a subjective intent, the Board erroneously lowered the fraud standard to a simple negligence standard."[xiv] Instead the Court held that "a trademark is obtained fraudulently under the Lanham Act only if the applicant or registrant knowingly makes a false, material representation with the intent to deceive the PTO."[xv] In this case, while Bose no longer manufactured or sold the goods under the mark, it still repaired them, some under warranty.[xvi] Bose had the mistaken belief that "use in commerce" as required for trademark registration included their current activities with regards to those goods. This mistaken belief did not constitute fraud.[xvii]

After Medinol practitioners understood the elevated importance of accurately preparing not only applications, but also Statements of Use, Declarations of Continued Use and renewals. Of course, while In re Bose overruled Medinol, it did not eliminate the trademark owner's duty of candor entirely. Furthermore, it is likely that in an enforcement action an accused infringer would attempt to invalidate a registrant's mark by setting forth evidence of intent to deceive. In such situations, it would be helpful to have documentary evidence showing that the identification of goods and services was reviewed and verified each time a declaration or sworn statement thereof is made to the Office. Ideally, the mark owner would systematize and document the review and verification process so that it could later be used as evidence. These efforts should form part of a comprehensive intellectual property (IP) management program conducted in coordination with your IP attorney.

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