Prior to the recent decision by the Trademark Trial and Appeal Board (“TTAB”) in Medinol Ltd. v. Neuro Vasx, Inc., failure to use a trademark or service mark in commerce in connection with all of the goods or services identified in a trademark application or registration most often was not fatal to the entire application or registration, as long as the required allegations of use were filed. At worst, a challenge to the subject application or registration resulted only in partial cancellation or deletion of those goods and services for which bona fide use in commerce had not commenced, despite the allegation of use for the entire class or classes. In order to successfully cancel or oppose a registration or application on its whole on this basis, one needed to prove with clear and convincing evidence that the registrant or applicant had a fraudulent intent to deceive the U.S. Trademark Office.
Since the ruling in Medinol and a number of subsequent decisions, the concept of “fraud” has taken on a new meaning; intent is no longer a requisite element. In Medinol, a registration for the mark NEUROVASX in connection with “catheters and stents” was challenged on the basis that the applicant, although alleging use of the mark in its Statement of Use for both catheters and stents, had only established bona fide use for “catheters.” After the Petition to Cancel had been filed, the applicant NeuroVasx (now the registrant), attempted to amend the registration by deleting “stents” from the identification of goods. NeuroVasx asserted that the inclusion of those goods in the Statement of Use was an unintentional error and misstatement, and therefore should not rise to the level of fraud on the Office. The TTAB disagreed, and declared the entire registration void, holding that “[a] trademark applicant commits fraud in procuring a registration when it makes material representations of fact in its declaration which it knows or should know to be false or misleading.” Id. at 1209 (emphasis added). In this case, the TTAB had little difficulty in concluding that NeuroVasx should have known that half of the identified goods were not in use at the time of the Statement of Use.
The determination that a party “should know” the complete validity of an allegation of use for a particular good or service is a nebulous standard, and numerous Board decisions since Medinol have attempted to clarify the difference between false statement and incurable fraud. In Standard Knitting, Ltd. v. Toyota Jidosha Kabushiki Kaisha, the applicant’s corporate secretary and signatory of the Statement of Use failed to adequately confer with internal company personnel having knowledge of the scope of use, and this failure was sufficient to rise to the level of fraud. However, in Maids to Order of Ohio, Inc. v. Maid-to-Order, Inc., a false statement of use in interstate commence by the applicant was not deemed incurable fraud. In that case, the TTAB concluded that it would not be unreasonable for the signatory of the Statement of Use, deemed a “layperson,” to not understand what constitutes interstate commerce, and thus, the registration was not cancelled. While decisions such as these offer some guidance as to when a signatory should have knowledge, i.e., the corporate officer versus the individual layperson, there is still no bright-line standard as to what constitutes the requisite level of responsibility to know for fraud to occur. Moreover, Medinol and the subsequent cases leave open the question as to what other elements of an application may be subject to such scrutiny, and thus vulnerable under fraud, such as the validity of specimens, accuracy of dates of use, signatory authority, and other basic elements of an application. Indeed, the standards may have far-reaching effects on applications filed based on foreign applications, whether through the Madrid System or otherwise, which often comprise broad descriptions of goods and services.
It is clear that corporate representatives and in-house counsel must be more vigilant in verifying bona fide use of marks when allegations of use are signed. Inquiry, with specificity, must be made to confirm that all the goods and services in a given application or registration are in use, and that those verifying the use have personal and corporate knowledge and have done the requisite due diligence in attesting to the use. The use of checklists and other standardized procedural methods certainly may help ensure that all the parties responsible for alleging use can do so with reasonable degree of knowledge and accountability. To avoid cancellation of registrations, greater steps should be taken to periodically monitor use of all marks for changes in form and scope. All changes should be evaluated and, if significant, may require aggressive re-filing programs to keep trademark portfolios current and less vulnerable to attack.