Fraudulent claim of use kills THE SIGN

In Hurley International LLC v Volta, the US Patent and Trademark Office's (USPTO) Trademark Trial and Appeal Board (TTAB) has issued another ruling invalidating a trademark on the grounds that inaccurate statements in the application constitute fraud - regardless of the applicant's subjective intent. The board continued a line of decisions begun with Medinol Ltd v Neuro Vasx Inc, holding applicants to a rigid standard of strict accuracy in their statements to the USPTO.

Both Hurley and Medinol arose out of statements regarding whether and when the subject mark was actually in use in US commerce. In US practice, an applicant must attest under oath that the mark is in use in US commerce on all of the goods or services listed in the application. This declaration must be made either at the beginning of the application process (for applications based on use) or at the end of the process in a statement of use (for applications based on intent to use). The declaration must include language stating that the signatory has been warned:

"that wilful false statements and the like so made are punishable by fine or imprisonment or both under 18 USC §1001, and that such wilful false statements may jeopardize the validity of this application or any registration resulting therefrom."

In Hurley, the applicants were Australian musicians who filed their application to register the figurative mark THE SIGN using the USPTO's electronic filing system, without the assistance of US trademark counsel. The applicants, Paul and Joanne Volta, hold an Australian registration for THE SIGN and operate a website through which they sell their CDs. In their application they claimed use of the mark in commerce since May 19 2000 in connection with various entertainment services. Subsequently during examination, the Voltas twice amended their services recitation and submitted two additional specimens to prove use of the mark. Each of the specimens was also supported by a sworn declaration attesting that the specimen was in use in US commerce as of the filing date of the application.

The mark was published for opposition and Hurley International LLC, a subsidiary of Nike Inc, opposed. In the course of discovery, the Voltas admitted that the mark was not actually in use at any time in the United States on the services claimed and Hurley raised a claim of fraud in the procurement of the registration.

The TTAB, following Medinol, granted summary judgment for Hurley. The board reasoned that the Voltas knew or should have known at the time they filed the application that the mark was not in fact in use in the United States. The board pointed out that the language of the declaration was clear and unambiguous, and that the USPTO website provided ample information explaining the use-in-commerce requirement. Thus, the Voltas' claim that, being unrepresented by US counsel, they did not understand the use requirement, was unavailing. Nor did it matter that the applicants may honestly have believed in good faith that their use satisfied the use requirements of US law; rather, applicants are "under an obligation to investigate thoroughly the validity of such a belief before signing their application under certain penalties". Nor was the application saved by the fact that the Voltas had another valid legal basis for registration - the prior Australian registration; an alternative basis did not make the claim of use any less false, reasoned the board.

Subjective fraudulent intent is not a required element of fraud on the USPTO. Rather, the law looks at the objective manifestations of intent, and where an applicant who knows that the mark is in use only in Australia nevertheless attests (several times in the application process) that the mark is in use in the United States, this is a material misrepresentation which is fatal to the application and renders it void ab initio.

In this sense, the decision broke no new ground, apart from being the first to apply the Medinol rule to an opposed application, rather than to an already-issued registration. But in an intriguing footnote, the board indicated (without explanation) that a misstatement of this sort in an application "does not rise to the level of fraud where an applicant amends the application prior to publication".

US practitioners would be well advised to continue to press their clients hard to ascertain that the mark is actually in commercial use on each and every product or service claimed in the application, and if there is any doubt about use, to delete such goods or services during the examination process and before the mark is published.

Robert M O'Connell Jr, Goodwin Procter LLP, Boston