Since its 2003 decision in Medinol v. Neuro Vasx, Inc., 67 U.S.P.Q.2d 1205 (T.T.A.B. 2003), the Trademark Trial and Appeal Board (the “Board”) has repeatedly canceled registrations that were procured or maintained based on material misrepresentations that a registrant “should have known” to be false. Capitalizing on its first opportunity to weigh in on the growing Medinol body of law, the US Court of Appeals for the Federal Circuit recently rejected the Board’s “should have known” standard. In re Bose Corporation, No. 2008-1448, slip op. (Fed. Cir. Aug. 31, 2009).
The Federal Circuit ruled that, “[b]y equating ‘should have known’ of the falsity with a subjective intent, the Board [in Medinol and its progeny] erroneously lowered the fraud standard to a simple negligence standard.” As the Federal Circuit held before Medinol, negligence or even gross negligence is not enough to suggest that a registrant intended to deceive. The court thus 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.” The reasonableness of a registrant’s mistake “is not part of the analysis.” Rather, “[t]here is no fraud if a false misrepresentation is occasioned by an honest misunderstanding or inadvertence without a willful intent to deceive.”
By clarifying the fraud standard to be applied in trademark cases, the Federal Circuit’s long-awaited decision puts an end to the Board’s increasingly harsh application of the “should have known” standard of intent spawned in Medinol. Trademark owners may now trust that their registrations will not be automatically canceled based on honest or inadvertent misrepresentations.