Prior to the decision of the Trademark Trial and Appeal Board (“TTAB”) in Medinol Ltd. v. Neuro Vasx., Inc., 67 U.S.P.Q.2d 1205 (T.T.A.B. 2003), filing an overbroad statement of use with the U.S. Patent and Trademark Office (“PTO”) in connection with a trademark registration could subject a registrant to fraud liability only upon proof of bad faith. The TTAB made clear in the Medinol decision, however, that even the most innocent overstatements of use can trigger wholesale cancellation of over-claimed marks. Medinol has been reaffirmed recently in Sinclair Oil Corp. v. Kendrick, 85 U.S.P.Q.2d 1032 (T.T.A.B. 2007) and Hachette Filipacchi Presse v. Elle Belle, LLC, 85 U.S.P.Q.2d 1090 (T.T.A.B. 2007), confirming the importance of revamping practices to best protect your trademarks in the aftermath of Medinol.
Medinol arose out of a trademark dispute between two medical device manufacturers, Neuro Vasx, Inc. and Medinol Ltd. Neuro Vasx had certified in a signed statement of use that its mark “NEUROVASX” was used in connection with catheters and stents, when in fact the mark was used only in connection with catheters. Pointing to this discrepancy, Medinol petitioned for cancellation on the basis of fraud.
The TTAB agreed and cancelled Neuro Vasx’s mark in full. According to the TTAB, the statement of use made clear that Neuro Vasx had certified as true something it knew or should have known was false. It did not matter, the Board held, whether Neuro Vasx had made an honest mistake in doing so; demonstrating lack of intent could not change that Neuro Vasx knew or should have known that its statement of use was materially inaccurate. Nor could Neuro Vasx save its mark with an after-the-fact amendment removing all references to stents. According to the Board, correcting the overbroad statement of use would not change the fact that Neuro Vasx had committed fraud upon the PTO in the procurement of its registration.
After Medinol, a company can no longer rely on good faith or post-registration amendments to guard against fraud-based cancellation of its mark. Rather, it must work proactively to protect both existing and future trademarks from a finding of strict-liability Medinol fraud. Below is a list of suggested practices that will both reduce the likelihood of fraud and mitigate the effects of a finding of fraud.
1. Monitor Marks
The best protection against Medinol fraud is to meticulously monitor trademark usage. Trademark owners should ensure that all signed filings alleging use accurately reflect usage. One strategy is to develop a checklist system with the company’s marketing division that requires physical evidence confirming each use before any documents alleging use are sent to the PTO. Companies should also consider setting up a yearly review process for registered marks. A review could help to identify uses that have since lapsed, preventing any mistaken declarations of lapsed uses on renewal applications. Regardless of the method chosen, signed documents claiming trademark uses should not be filed with the PTO unless each use has been specifically confirmed by someone within the company.
Because Medinol applies retroactively, trademark owners should review their portfolios to identify marks that are, or could become, vulnerable to fraud claims. Mark owners can start with a comprehensive evaluation of all past use assertions filed with the PTO to determine whether there are any alleged uses that were not in place at the time of filing. If a complete review is infeasible, companies should examine at least (1) those marks that it considers most valuable, (2) those that draw the most attention from its competitors, and (3) those that are likely to become the subject of litigation. Under no circumstances should a trademark owner initiate litigation to protect a mark without first confirming that the mark is immune to a Medinol attack. Initiating suit to protect a fraudulent mark is likely to backfire – resulting in not only dismissal of the suit, but total cancellation of the mark.
2. Minimize Multi-Class Registrations
In light of the expansive reach of Medinol remedies, multi-class trademark applications should be kept to a minimum. Although the multi-class form spares companies from the administrative burdens of keeping up with separate registrations for the same mark, it renders all classes of use vulnerable to cancellation when fraud is found in conjunction with one. The better alternative is filing segregated registrations of the same mark for each class of use.
3. Amend Mistakes Discovered Prior to Publication
As Medinol illustrates, amending a registration to delete an overbroad use will not protect it against cancellation. A later case has suggested in dictum, however, that an amendment filed prior to publication “does not rise to the level of fraud.” Hurley Int. LLC v. Volta, 82 U.S.P.Q.2d 1339, 1344 n.5 (T.T.A.B. 2007). Thus, if a mistake is discovered before publication, it might be feasible to amend, so long as the response to the mistake follows close on the heels of its discovery.
4. File New Registrations for Existing Vulnerable Marks
If a mistake comes to light after publication, file a new application for the mark with a narrowed statement of use. Laying low and hoping the mistake goes unnoticed is not advisable as this course of inaction will leave mark owners unable to police their marks because accused infringers will be able to raise fraud as an affirmative defense.
5. Be Wary of Medinol’s Requirements in International Trademark Registrations Under Madrid
Medinol does not interface well with the Madrid Protocol, a treaty designed to facilitate the process of obtaining international trademark protection. Under Madrid, a mark owner can, by filing a “root” registration in one signatory country, easily register the mark in other signatory countries. Medinol creates problems because most foreign countries, unlike the United States, do not require use of a mark (or intent to use a mark) before granting trademark protection. As a result, foreign mark owners often provide liberal descriptions of the goods and services associated with their marks. After Medinol, however, foreign companies relying on Madrid must make sure that their U.S. extension applications contain fully compliant statements of use.
Trademark owners cannot afford to ignore the changed landscape of trademark registration in the aftermath of the Medinol decision. Wholesale cancellation of a valuable mark can be prevented through diligent maintenance of trademark usage. In particular, trademark owners should (1) prepare their statements of use with the utmost care, (2) aggressively monitor their active marks, and (3) re-register marks that are currently protected by fraudulent registrations.