On January 29, 2009, the Trademark Trial and Appeal Board (“TTAB”) of the United States Patent and Trademark Office answered a significant open question in the post-Medinol era, namely, whether a finding of fraud with regard to fewer than all International Classes in a multi-Class trademark registration requires cancellation of the entire registration or whether cancellation will be limited to all goods/services in the Class in which fraud is found. Ruling on a motion to dismiss, and in a precedential decision, G&W Labs., Inc. v. G.W. Pharma Ltd., Opp. No. 91169571 (January 29, 2009), the TTAB concluded that fraud must be considered on a Class-by-Class basis, and that a finding of fraud as to one Class therefore will not “infect” the registration’s other Classes.
Medinol and its Unanswered Questions
Since bringing the issue of fraud to the forefront in its seminal decision in Medinol Ltd v. NeuroVasx Inc., 67 U.S.P.Q.2d 1205 (2003), the TTAB has considered cases turning on a variety of technical and practical questions . As a result, trademark practitioners have been closely monitoring these decisions, as these rulings affect how U.S. trademark registrations are sought and maintained.
In Medinol, the registrant had filed a single-Class intent-to-use application to register a mark for neurological stents and catheters. A Statement of Use was later filed, attesting to use of the mark with all of the goods identified in the application, and a registration was granted covering both stents and catheters. In a subsequent cancellation action, the petitioner 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 this false averment with amounted to fraud in the procurement of the registration, which invalidated the entire registration and which could not be cured through a post-petition amendment.
In sua sponte entering summary judgment in the petitioner’s favor, the TTAB 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 goods when the Statement of Use was filed. The TTAB then canceled the registration in its entirety, despite the registrant’s (successful) request to amend its registration to delete stents. The principles embodied in Medinol have also been extended to declarations of use filed to maintain existing trademark registrations.
Among the most significant issues raised by Medinol and its progeny has been whether proof of fraud as to one Class of a multi-Class registration will necessarily lead to the cancellation of the entire multi-Class registration. For example, suppose registrant owns a registration for ACME for books and pamphlets in Class 16 and desks in Class 20, and a petitioner is able to prove that registrant was not using ACME in connection with pamphlets at the time it filed a Declaration of Use pertaining to both Classes. Would the TTAB cancel registrant’s entire ACME registration, including in Class 20?
Under Medinol and its progeny, the answer has remained unclear. Until the G&W Labs decision, the registrations involved in all cases interpreting Medinol included only a single Class application or registration. However, in dicta in Herbaceuticals, Inc. v. Xel Herbaceuticals, Inc., 86 U.S.P.Q.2d 1572 (T.T.A.B. 2008), a case involving six single-Class registrations, the TTAB cancelled four of the registrations and stated that “if fraud can be shown in the procurement of a registration, the registration is void in the international Class or Classes in which fraud based on nonuse has been committed.” Id. at 1577. This language hinted to trademark practitioners that if fraud were to be found in a multi-Class application or registration, that application or registration would only be void with respect to the Class or Classes in which the fraud was found.
The G&W Labs Decision
In G&W Labs, the TTAB expanded the dicta in Herbaceuticals into a new rule of law, namely, that proof of fraud in fewer than all Classes of a multi-Class registration will not require cancellation of the registration in toto. Further, because the issue was decided on a Rule 12(b)(6) motion to dismiss a cancellation counterclaim, similar claims appear susceptible to dismissal at the pleading stage and without the need for discovery.
In this opposition proceeding, opposer G&W Labs alleged a likelihood of confusion between its G&W mark and applicant’s GW PHARMACEUTICALS mark. G&W Labs relied on two registrations of its mark, with both registrations including Class 5 goods and Class 35 services. Applicant GW Pharma counterclaimed for cancellation of the two registrations on grounds of fraud. GW Pharma alleged that G&W Labs had never used the marks on the Class 35 services; GW Pharma did not plead similar allegations with respect to the Class 5 goods.
During the course of the opposition proceeding, and after assertion of GW Pharma’s counterclaims, G&W Labs filed a Section 8 Declaration of Use for each of the registrations, but it deleted the Class 35 services in each registration. G&W Labs then moved to dismiss, among other things, applicant’s counterclaim as to Class 5, asserting a failure to state a claim upon which relief may be granted. Specifically, G&W Labs argued that because GW Pharma’s fraud allegations pertained only to the Class 35 services, which had been deleted from the registrations, there was no basis to cancel the registrations which now contained only the Class 5 goods. GW Pharma countered that if fraud is shown as to the Class 35 services, Medinol required the registration to be cancelled in its entirety, including in Class 5.
The TTAB rejected GW Pharma’s theory granted the motion to dismiss the counterclaims as to Class 5. The TTAB found GW Pharma’s reliance on Medinol to be misplaced on the basis 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.” In contrast, the TTAB has “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.”
The TTAB viewed the multi-Class registration “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.” The TTAB 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.”
G&W Labs is one of the few post-Medinol decisions that is likely to elicit a sigh of relief from trademark owners. Although the TTAB continues to take a strict approach to fraud claims, G&W Labs has removed some of the risk to owners of multi-Class applications and registrations. Unless this decision is altered on appeal (and it is too early to evaluate whether an appeal will be filed and, if so, how these issues will be addressed on appeal), proof of fraud within a Class will void the entire Class in the application or registration but it will not void the remaining Classes. Although there are certainly many strategic reasons to continue to file single-Class applications, at least one of the primary risks of multi-Class applications and registrations has been removed for now.
The decision also opens the door to a potential “cure” for applications and registrations that cover goods and services with which the claimed mark has never been used. Prior to G&W Labs, the TTAB repeatedly 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 the holding in G&W Labs 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.