TTAB applies Bose to motion for summary judgment on fraud claim

United States of America
In Enbridge Inc v Excelerate Energy Limited Partnership (Opposition 91170364, October 6 2009), in a precedential decision, the Trademark Trial and Appeal Board (TTAB) has denied a motion for summary judgment on a fraud claim applying, for the first time, the fraud standard set out in the Federal Circuit’s decision in In re Bose Corp.  
On December 22 2008 Enbridge Inc filed an amended notice of opposition against an application for the registration of ENERGY BRIDGE filed by Excelerate Energy LP to add a fraud claim as an additional basis for opposition. To support its fraud claim, Enbridge alleged that Excelerate:
  • had not used the ENERGY BRIDGE mark in connection with the “transmission of oil” in Class 39 of the Nice Classification and the “production of energy” in Class 40 at the time of the relevant filing; and
  • knew or should have known that it did not have the requisite use. 
Excelerate denied most of the material allegations of the opposition, but admitted that “it [had] not used ENERGY BRIDGE as a service mark for the transmission of oil”. Relying on this pleading admission and deposition testimony from Excelerate’s chief executive officer that suggested that Excelerate never intended to get into the marine transportation of oil, and on deposition testimony about what Excelerate considered as the “production of energy” for purposes of its description, Enbridge moved for summary judgment on its fraud claims, asserting that Excelerate “knew or should have known” that it was not offering all the services listed in its application. 
In response, Excelerate maintained that:
  • its original statement was for the most part accurate;
  • the reference to oil was “an inadvertent, honest mistake”; and
  • it had since corrected the error by moving to amend the recitation of services (after the opposition was initiated, but before the fraud claim was added). 
With respect to the Class 40 description, Excelerate maintained that it used the ENERGY BRIDGE mark in connection with the production of energy, as defined by certain documents in evidence. Based on this evidence, Enbridge requested that the TTAB deny Excelerate’s motion for summary judgment.  

Subsequent to the Federal Circuit’s decision in Bose (for further details please see "Federal Circuit resoundingly rejects Medinol fraud standard"), Excelerate filed a motion for leave to supplement its opposition to Enbridge's motion for summary judgment with new controlling authority. In its motion, Excelerate opined to the TTAB that the "ruling in Bose mandated that summary judgment be granted in [its] favour [...] because there is no plausible argument that the fraud standard upon which [Enbridge] bottomed its argument is good law". Enbridge also filed a motion requesting leave to supplement its earlier brief in light of the Federal Circuit’s decision. Stating that it had taken the Bose decision into account in its ruling, the TTAB denied the parties’ requests.       

As to the decision on summary judgment, the TTAB concluded that Excelerate’s characterization of the Class 39 description in its application as a mistake, its subsequent amendment and its contention that the statement was for the most part true provided sufficient evidence for there to exist a genuine issue of fact about whether Excelerate had any intent to deceive the US Patent and Trademark Office (USPTO). With respect to the Class 40 services, the TTAB did not reach the intent issue, as it concluded that the inconsistent claims by the parties and the lack of an industry specific definition for 'production of energy' created genuine issues of material fact as to what constituted 'production of energy', and whether there was even a false statement made. 

The TTAB denied Enbridge's motion for summary judgment, leaving resolution of the factual conflicts to trial. In doing so, it reiterated the standard set out by the Federal Circuit, explaining that “fraud occurs when an applicant knowingly makes a false, material representation with the intent to deceive the USPTO” and that, according to Bose, “evidence of deceptive intent must be clear and convincing”. It did not, however, provide a detailed analysis of what evidence would be sufficient to meet the standard.

In addition, the TTAB did not address (nor did Excelerate raise) the fact that Enbridge had not included any allegations regarding deceptive intent in its amended notice of opposition. In contrast, in an order issued shortly after the Bose decision in the context of a ruling on an unrelated motion (Société Coopérative Vigneronne des Grandes Caves Richon Lezion v Albrecht-Piazza LLC), an interlocutory attorney stated that:
 “the TTAB will not approve pleadings of fraud which rest solely on allegations that the trademark applicant made material representations of fact in its declaration which it ‘knew or should have known’ to be false or misleading”.
The denial of Enbridge's summary judgment on the fact-intensive question of whether deceptive intent existed was not surprising in light of the Bose decision. However, the decision is interesting in that the TTAB declined to even address Excelerate's post-Bose filing asserting that summary judgment should be granted in its favour on the basis that Enbridge would not be able to meet the clear and convincing standard now necessary to sustain a fraud claim. The outcome suggests that the TTAB may not, as some predicted, reject fraud claims on a wholesale basis.

However, for now, it remains somewhat unclear what types of allegation will suffice to plead and prove a fraud claim before the TTAB. What will ultimately be instructive on the issue of fraud is a TTAB decision on the merits, whether through trial or through a grant of summary judgment.

Anita B Polott and Monique Liburd, Morgan Lewis & Bockius LLP, Washington DC

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