Petition to Cancel a Trademark Registration Based on "Fraud"
What exactly is a Petition to Cancel a Trademark Registration on the basis of fraud?
Should you instigate this proceeding against a conflicting Mark? And how do you respond if someone files a Petition to Cancel on the basis of fraud against you?
First, who has standing to file a petition to cancel a registration of a mark? Any person who believes that he is or will be damaged by the registration of a mark on the principal register can file a petition to cancel for very specific reasons. Depending on the length of time that the Mark has been registered, different bases are acceptable. Within the first five years of registration, the majority of opposition proceedings are based on: descriptiveness, geographical descriptiveness, likelihood of confusion, or no bona fide use in commerce. (The Trademark Board Manual of Practice provides a non-exhaustive list of 23 grounds for opposition. )
After the first five years of registration. The standard is different. Specifically, claims that the mark is descriptive or creates a likelihood of confusion are no longer possible. Instead, the cancellation must only be based on a claim that the registered mark is generic, is functional, has been abandoned, or was obtained through fraud (Grounds for TM Opposition and Cancellation Proceedings March 15, 2015 By Eric Misterovich – Revision/Legal)
So what about the claim of fraud? Just how hard is it to prove? And should you be worried if it’s filed against you.
It’s significant that only one case of fraud was won in the years 2009 to 2016.
And it was blatant: (First Successful Fraud Case In Five Years At U.S. Trademark Trial And Appeal Board 20 March 2015 by Laura Popp-Rosenberg ) In a precedential decision released September 30, 2014, the Trademark Trial and Appeal Board ("TTAB" or the "Board") sustained a fraud claim for the first time since 2009. Fraud in procuring or maintaining a trademark registration occurs when an applicant or registrant makes false, material representations of fact in connection with a trademark application or registration with the intent to deceive the U.S. Patent and Trademark Office ("USPTO"). The other cases (some 80 a year referring to fraud) failed. Why? Bruno Tarabichi explains in his excellent post, I Can’t Believe It’s Not Fraud! A Review of Commonly Rejected Fraud Claims by the TTAB”, the Feral Circuit Court ruling In re Bose Corp., 580 F.3d 1240 (Fed. Cir. 2009) changed everything. They held that “should have known” is not the appropriate standard for fraud on the USPTO. Rather there has to be subjective intent to deceive. And the party alleging fraud must prove fraud “to the hilt” with clear and convincing evidence. And as rulings from 2009 to 2016 show – that’s proved practically impossible.
So should you file a Petition to Cancel on the basis of fraud. It’s a high barrier to prove intent. The cost of filing a petition to cancel is hefty. (One firm charges 3900 for preliminary filings.) The cost of pursuing it in litigation is enormous. (Costs can run upwards of 75,000.) And only one case has succeeded.
If you’re opposing a petition to cancel on the basis of fraud, take heart, you’ll probably be on the winning side. You will need to consult an attorney for the best steps to take to file a Motion to Dismiss or to find an agreement that suits both parties.