Investigation can meet actual knowledge requirement in fraud allegation

United States of America

In Meckatzer Lowenbrau Benedikt Weib KG v White Gold LLC (Cancellation 92051014, May 13 2010), the Trademark Trial and Appeal Board (TTAB) has addressed the sufficiency of a pleaded allegation of fraud in an amended petition for cancellation.  

In May 2009 Meckatzer Lowenbrau Benedikt Weib KG filed a petition to cancel White Gold LLC’s registrations for the word mark WHITE GOLD and the device mark WHITE GOLD, both registered for:

aperitifs; orak; brandy; wine; whiskey; gin; vodka; prepared alcoholic cocktails; liqueurs; alcoholic beverages, namely, alcoholic coffee-based beverage; alcoholic tea-based beverage; alcoholic punch; calvados; champagne; cognac; curaçao; herb liqueurs; ouzo; schnapps; tequila; alcoholic beverages containing fruit; distilled spirits; mead; peppermint liqueurs; alcoholic bitters; rum; sake; hard cider; rice alcohol.”                           
 
In its original petition to cancel the registration of these two marks, Meckatzer alleged that White Gold had committed fraud in obtaining registration of the marks. Meckatzer further alleged that it had applied for the registration of the word mark WEISS GOLD and the mark MECKATZER LÖWENBRÄU WEISS GOLD (and design).
 
Both of these applications were for beer and other alcoholic beverages. Meckatzer’s applications had been refused registration on the ground of likelihood of confusion with White Gold’s marks.

In lieu of an answer, White Gold filed a motion to dismiss in August 2009 and alleged that Meckatzer lacked standing to petition to cancel White Gold’s registrations. The TTAB issued an order on November 3 2009, in which it found that Meckatzer had alleged standing. However, sua sponte, the TTAB raised the issue of whether Meckatzer had adequately pled its fraud claim in accordance with the standards set by the US Court of Appeals for the Federal Circuit decision in In re Bose (for further details please see "Federal Circuit resoundingly rejects Medinol fraud standard"). The TTAB found that allegations of fraud based “on information and belief” were insufficient to meet the pleadings standard for fraud. Meckatzer was permitted to file an amended petition to cancel.

Meckatzer timely filed its first amended petition to cancel on December 3 2009. White Gold filed a motion to dismiss the amended petition, alleging that the fraud claim was insufficiently pled. 

In a precedential opinion, the TTAB found that Meckatzer had pled its fraud claim with particularity. Specifically, Meckatzer did not base its allegations solely “on information and belief”, but also alleged to have carried out an investigation into White Gold’s use of its mark. The investigation, according to Meckatzer, revealed that White Gold had used the marks only on vodka when it submitted its statements of use. The TTAB further determined that Bose does not require that a plaintiff allege that a particular individual “knew of the withheld information of the falsity of the material misrepresentation, and withheld or misrepresented this information with a specific intent to deceive the [US Patent and Trademark Office]”. Meckatzer’s allegations withstood the motion to dismiss.

Although there is no requirement to conduct an investigation prior to filing a notice of opposition or petition to cancel, an investigation is one way to meet the requirement of actual knowledge in an allegation of fraud.

Leigh Ann Lindquist, Sughrue Mion PLLC, Washington DC

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