Opp. No. 91190040 (TTAB Sept. 20, 2009)
In what is believed to be its fi rst ruling on the issue of fraud following the Federal Circuit’s Bose decision, the TTAB imposed a heightened pleading requirement on a fraud counterclaimant, holding that the mere allegations that an applicant had made material representations of fact that it “knew or should have known” were false or misleading were insuffi cient to state a claim. Emphasizing that no fraud occurs where a false misrepresentation is occasioned by an honest misunderstanding or inadvertence, the TTAB held that any supportable claim of fraud must include the allegation of “willful intent to deceive.”
The action in this case arose from a contested motion fi led by Société Cooperative Vigeronne des Grandes Caves Richon-le-Zion and Zicron-Jacob Ltd. (“Opposers”) to amend their Notice of Opposition to include an additional registration to support their dilution claim. In response to the original opposition, Albrecht-Piazza, LLC (“Applicant”) fi led a counterclaim seeking to cancel Opposers’ pleaded registration on fraud grounds. In its counterclaim, Applicant alleged, on information and belief rather than actual knowledge, that Opposers’ renewal declaration falsely claimed continued use on all existing goods although Opposers were no longer selling some of the goods listed in the registration. Applicant’s fraud counterclaim alleged that Opposers “knew or should have known” that their declaration of continued use was false or misleading.
Following the lead of the Federal Circuit in its recent decision in Bose, the TTAB emphasized that fraud in procuring a trademark registration or renewal occurs only when a registrant knowingly makes false, material representations of fact. Thus, where the false misrepresentation is occasioned by an honest misunderstanding or inadvertence without a willful intent to deceive, there is no fraud. In analyzing Applicant’s counterclaim, the TTAB noted that Applicant’s allegations were made solely based upon “information and belief” rather than actual knowledge, and relied upon the implication that Opposers “knew or should have known” that their declaration was false. The TTAB held that absent an indication in the pleadings that Applicant has actual knowledge of Opposers’ willful intent to deceive and/or facts supporting such intent, Applicant’s counterclaim failed to state a claim.
The decision confi rms the end of the TTAB’s strict rule of fraud under Medinol and underscores that post-Bose, a claim of fraud must be pled with particularity to withstand a motion to dismiss. In other words, going forward, to make out a viable claim of fraud, a litigant must have reasonable grounds to allege that the challenged applicant or registrant acted with willful intent, and not mere inadvertence, and made its false and material representation both knowingly and with the intent of deceiving the PTO.