Landmark fraud case goes to Medinol

In Medinol Ltd and NeuroVasx Inc, the US Patent and Trademark Office's (PTO) Trademark Trial and Appeal Board (TTAB) has issued a precedent-setting decision on the issue of fraud in a trademark cancellation action (Case 92040535). The TTAB's decision clarifies that the test for fraud includes what a party (or its attorney) "should have known" about the facts stated in an application, not merely what the party did know or intended to do.

In August 2000 Minnesota's NeuroVasx was granted a federal registration for the trademark NEUROVASX for "medical devices, namely neurological stents and catheters". As a result, Israeli company Medinol's own application for registration of the mark NIROVASCULAR for "medical devices, namely stents" was blocked. After some investigation, Medinol filed a petition for cancellation of the NEUROVASX registration alleging that, at the time NeuroVasx submitted its required sworn affidavit to the PTO attesting to use of the mark in commerce, it had in fact not used the mark in connection with stents and, therefore, the registration was procured by knowingly false or fraudulent statements. NeuroVasx responded by denying that its intent in submitting its statement of use was fraudulent, arguing that the erroneous submission to the PTO was an "oversight", and filing a combined motion to amend its registration (deleting 'stents') and for summary judgment. Medinol opposed the motion, objected to the proposed amendment and argued that - even if it were allowed - the amendment would not cure the fraud. It stated:

"Allowing [NeuroVasx] simply to amend its registration, without any factual showing regarding the merits of the fraud allegations or defences thereto, essentially rewards [NeuroVasx] for its fraudulent behaviour since 2000."

The TTAB agreed and held 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."

It further held that the appropriate inquiry is not into the registrant's subjective intent, but rather into the objective manifestations of that intent. The TTAB concluded that NeuroVasx's knowledge that its mark was not in use on stents - or its reckless disregard for the truth - is all that is required to establish intent to commit fraud in the procurement of a registration.

Howard J Shire, Kenyon & Kenyon, New York