Introduction

In a surprise move, the Trademark Trial and Appeal Board has redesignated a formerly nonprecedential opinion as precedential, in the process expanding the options available to the owners of federal registrations at risk of being cancelled under the Board’s earlier decision in Medinol Ltd v. NeuroVasx Inc., 67 U.S.P.Q.2d 1205 (2003). When coupled with the Board’s other recent case law in the area, the new decision, Zanella Ltd. v. Nordstrom, Inc., Opposition No. 91177858, slip op. (T.T.A.B. May 13, 2009), has established the following rules:

(1) It may be possible for the owner of a use-based multi-Class registration covering goods and services that have not actually been provided under the registered mark to escape a finding of fraud if, at any time, the owner deletes any affected classes in their entirety from the registration; and

(2) It may be possible for such an owner to escape a finding of fraud by deleting individual goods and services from its registration, so long as the deletion takes place before a challenge to the registration is threatened. Although not completely immunizing the registration against a fraud-based challenge, strategic deletions of this sort will create a presumption that the registrant has acted in good faith in procuring the registration.

Owners of registrations vulnerable to fraud-based challenges continue to have available the option of filing new applications to register their marks that omit any goods or services inappropriately recited in their original registrations. Registrants falling into this category who are disinclined to adopt that strategy and do not wish to sacrifice entire classes of goods and services in the event of such a challenge should amend their registrations to delete any inappropriate goods or services sooner rather than later.

Medinol

Although not the first opinion to address the circumstances under which a finding of fraud on the Patent and Trademark Office will lie, the Board’s decision in Medinol Ltd v. NeuroVasx Inc., 67 U.S.P.Q.2d 1205 (2003), has held the attention of trademark owners and practitioners alike since its issuance. In Medinol, the registrant filed a single-Class intent-to-use application to register a mark for neurological stents and catheters. The registrant later filed a statement of use averring that the mark was being used in connection with all of the goods identified in the application, and the resulting registration covered both stents and catheters. In a subsequent cancellation action, the petitioner for cancellation alleged that the registrant had not used the mark in connection with stents as of the date of the statement of use. The petitioner argued that the registrant’s inaccurate averment to the contrary amounted to fraud in the procurement of the registration that could not be cured by any post-petition amendments to the registration.

In sua sponte entering summary judgment in the petitioner’s favor, the Board found as a matter of law that the registrant knew, or should have known, that the mark was not in use on all of the recited goods when the statement of use was filed. The Board then cancelled (to match earlier) the registration in its entirety, despite the registrant’s (successful) request to amend its registration to delete stents. As the Board explained, “deletion of the goods upon which the mark has not yet been used does not remedy an alleged fraud upon the Office. If fraud can be shown in the procurement of a registration, the entire resulting registration is void.” Id. at 1208.

G&W Labs

The Board began to retreat from Medinol’s expansive view of the consequences of fraud in the registration process in G&W Labs v. GW Pharma Ltd., 89 U.S.P.Q.2d 1571 (T.T.A.B. 2009). There, it held that fraud in connection with particular Classes of goods and services covered by a multi-Class registration will not result in the cancellation of the entire registration; rather, cancellation is appropriate only as to the affected classes. Addressing its prior decision in Medinol, the Board noted that “[t]he line of cases to have considered fraud since Medinol has involved single Class applications or registrations. These cases have consistently held that fraud as to any goods or services in a single Class will lead to a finding that the application or registration is void in the Class in which fraud has been committed.” Id. at 1573. In contrast, the Board had “not had occasion to consider whether fraud in less than all Classes of a multiple-Class registration will subject the entire registration to cancellation for fraud.” Id.

Squarely addressing that issue, the Board held that the multi-Class registration at issue properly should be viewed “as a series of applications for registration of a mark in connection with goods or services in each Class, combined into one application” and “[a] a general matter, the filer of such an application is in the same position it would be had it filed several single-Class applications instead.” Id. at 1574. The Board therefore held that each Class of goods or services must be considered separately when considering a claim of fraud, and “judgment on the ground of fraud as to one Class does not in itself require cancellation of all Classes in a registration.” Id. Because the registrant had voluntarily amended its registration to delete the entire Class affected by its alleged misconduct, the fraud-based challenge to the registration was dismissed for failure to state a claim. See id.

The decision therefore opened the door to a potential “cure” for applications and registrations covering goods and services with which the claimed mark has never been used. Prior to G&W Labs, the Board had suggested that the key date for purposes of deleting “problem” goods and services was the date of publication; as a consequence, a post-publication amendment to an application or registration would not immunize the amended filing against attack on fraud grounds. Although G&W Labs on its face is of potentially limited usefulness where single-Class applications and registrations are concerned, it does allow owners of multi-Class trademark filings in the Patent and Trademark Office to “sacrifice” particular Classes from those filings through voluntary deletions to preserve the validity of the filing as to the remaining Classes.

Zanella

In Zanella Ltd. v. Nordstrom, Inc., Opposition No. 91177858, slip op. (T.T.A.B. May 13, 2009), the Board reclassified as precedential an earlier opinion in the same case that previously had been nonprecedential. A counterclaim asserted by the applicant in the action challenged the validity of five registrations that the opposer had asserted against the applicant. Each of the registrations in question originally covered a variety of goods, including goods that had never actually been sold under the registered mark. Well before the parties’ dispute arose, however, the opposer had voluntarily deleted the problem goods from four of the registrations, either by amending the registrations under Section 7 of the Lanham Act, 15 U.S.C. § 1057, or, alternatively, by deleting the goods when the opposer filed declarations of continuing use for the registrations under Section 8, id. § 1058.

On the applicant’s motion for summary judgment, the Board ordered the cancellation of the single registration that the opposer had failed to modify as having been fraudulently procured. With respect to the remaining registrations, however, the Board held:

(We find that opposer’s timely proactive corrective action with respect to these registrations raises a genuine issue of material fact regarding whether opposer had the intent to commit fraud. In particular, opposer’s action in correcting any false statements prior to any actual or threatened challenge to the registrations creates a rebuttable presumption that opposer did not intend to deceive the Office. In this case, we find that applicant’s evidence submitted in support of the motion for summary judgment, namely, opposer’s discovery responses and the file histories of the registrations, fails to rebut the presumption of no intent to commit fraud on the Office. Accordingly, we find a genuine issue of material fact remains with respect to whether opposer had the intent to commit fraud on the USPTO with respect to these registrations.)

Zanella, slip op. at 9-10 (citation omitted). Accordingly, resolution of the ultimate issue of whether the opposer had fraudulently procured the four amended registrations was deferred until trial.

Conclusion

Even under the Board’s most recent opinions, the deletion of individual goods and services from a registration prior to the threat of a fraud-based challenge will not necessarily prevent that challenge from succeeding; rather, such an amendment will only create a presumption that the registrant acted in good faith. As a consequence, the owner of a potentially vulnerable registration should consider pursuing a new registration that would omit any goods or services inappropriately recited in the vulnerable registration. At a minimum, such a registrant should amend its registration to delete individual goods and services sooner rather than later, as a failure to do so until after a challenge is threatened may leave no option other than the wholesale sacrifice of entire Classes of goods and services if a finding of fraud is to be avoided.