Fraud on the USPTO reaches a limit

In response to an opposition filed by G&W Laboratories Inc, GW Pharma Limited counterclaimed to cancel in their entireties the two multi-class registrations on which G&W Laboratories had relied for its opposition - namely, the word mark G&W and the device mark G&W for goods in Class 5  ("suppositories") and services in Class 35 of the Nice Classification (“distributorships in the field of suppositories and pharmaceutical preparations in the forms of tablets, topical semi-solid dosages, namely, topical creams and ointments, and liquid-containing pads to drug wholesalers, healthcare providers, managed care organizations and retail pharmacy services and retail grocery stores)”. 

 

The cancellation action was based on a fraud claim as to both registrations under the Medinol line of cases. 

 

After the filing of the counterclaims, G&W Laboratories sought to amend its registrations to delete the Class 35 services by filing Section 8 declarations that did not include Class 35. On this ground, G&W Laboratories sought to dismiss the counterclaims, arguing that there could be no fraud claim since:

GW Pharma responded to the motion to dismiss by arguing that the fraud with regard to the Class 35 services could not be cured by the belated deletion of these services from the registrations. Simply stated, the counterclaims could not be rendered moot by such unilateral action. Furthermore, GW Pharma argued that the fraud as to the Class 35 services necessarily tainted the entire registration, relying on the Medinol line of authority. GW Pharma argued that in Medinol, the TTAB had stated that “[i]f fraud can be shown in the procurement of a registration, the entire resulting registration is void”.

 

In reply, G&W Laboratories argued that the counterclaim directed only to its deleted Class 35 services could not be “bootstrapped to the remaining class of goods in the registrations”.

 

While rejecting G&W Laboratories' argument that its deletion of the Class 35 goods from the registrations mooted the fraud counterclaims in their entireties, the TTAB held that the counterclaims as to the Class 5 goods did not withstand scrutiny and should be dismissed. The TTAB specifically noted that the “cases to have considered fraud since Medinol […] involved single-class applications or registrations”. The TTAB held that fraud as to any of the goods or services in a single class will lead to cancellation of that single class covered by the application or registration, but the same does not hold true for a multi-class registration. The TTAB characterized a multi-class application as “a series of applications for registration of a single mark in connection with goods or services in each class”. On this basis, a multi-class application should be viewed as if the application had been filed in multiple, single-class applications. When each class is considered on its own for purposes of a fraud claim, fraud in one class does not affect the validity of the registration in another class in the very same application or registration. Thus, the TTAB held that G&W Laboratories' motion properly sought to dismiss the cancellation claim for its Class 5 goods. The Class 5 claim failed to state a valid cancellation claim, as that class was considered as a separate registration from that of the Class 35 services. 

 

Howeover, the TTAB found that the unilateral attempt to delete the Class 35 services from the registrations, coming after the cancellation action was filed, did not side-step the cancellation claims for fraud as to Class 35. To the contrary, based on G&W Laboratories' belated attempt to delete the Class 35 services without consent, the TTAB entered judgment on the counterclaims as to the Class 35 services in favour of GW Pharma. 

 

Therefore, the TTAB made it clear that attempting to delete goods or services unilaterally will not moot a fraud claim, but will result in an adverse judgment. The TTAB also clarified that a multi-class application is not at risk in its entirety when the fraud allegations pertain to only a single class. This decision gives trademark owners some comfort as to the vulnerability of registrations in their entireties based on fraud as to a single class.