In Firehouse Restaurant Group, Inc. v. Scurmont LLC, Civil Action No. 4:09-cv-00618-RBH (D.S.C. Oct. 17, 2011), Firehouse Restaurant sued Scurmont, dba Calli Baker’s Firehouse Bar & Grille, for, among other things, infringement of Firehouse Restaurant’s registered FIREHOUSE mark. But the jury held, and the court affirmed, that Firehouse Restaurant had procured its trademark fraudulently and, more to the point, that fraud formed a valid defense to its allegations of trademark infringement.

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In its trademark application, Firehouse Restaurant swore, like all applicants, that “to the best of its knowledge and belief no other person, firm, corporation or association has the right to use the mark in commerce, either in the identical form thereof or in such near resemblance thereto as to be likely, when used on or in commerce with the goods/services of such other person, to cause confusion, or to cause mistake, or to deceive.”

However, before filing its trademark application, Firehouse Restaurant tried, but failed, to obtain a co-existence agreement with another restaurant, Firehouse Grill & Pub, which had used FIREHOUSE first.

Scurmont/Calli Baker’s Firehouse was not related to Firehouse Grill & Pub, and began using its name after Firehouse Restaurant began using its mark.

Nevertheless, the court cited a footnote from Lone Star Steakhouse & Saloon, Inc. v. Alpha of VA, Inc., 43 F.3d 922, 931, n.12 (4th Cir. 1995), which said that “the Lanham Act provides that trademarks procured by fraud are unenforceable.” Thus, even though Firehouse Restaurant had prior rights over Scurmont/Calli Baker’s Firehouse, the fact that Firehouse Restaurant committed fraud in its application rendered those senior rights unenforceable against even junior users.

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Whether this decision will stand the test of time is anyone’s guess, and it certainly is not a bad result in this particular case. But the decision raises questions.

First, Firehouse Restaurant had common law rights in its mark. Yet the ruling essentially rendered unenforceable not just its registered rights, but the common law rights as well.

Second, Firehouse Restaurant must be asking itself whether, if another junior user begins using FIREHOUSE in connection with a restaurant, it will be able to enforce its senior common law rights against that Johnny-come-lately. If not, then it’s open season on Firehouse Restaurants and its marks.

Bottom line? Be careful when submitting statements to the USPTO about your mark. What you say can come back to bite you.