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Fraud in Trademark Applications and Registrations: Proving or Defeating Allegations Navigating Differing Standards at the TTAB and in the Regional Circuits, Mitigating the Risk of Invalidation Today’s faculty features: 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 10. TUESDAY, JANUARY 13, 2015 Presenting a live 90-minute webinar with interactive Q&A Stephen R. Baird, Shareholder, Winthrop & Weinstine, Minneapolis Jennifer Lee Taylor, Partner, Morrison & Foerster, San Francisco Theodore H. Davis, Jr., Partner, Kilpatrick Townsend & Stockton, Atlanta

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Fraud in Trademark Applications and

Registrations: Proving or Defeating Allegations Navigating Differing Standards at the TTAB and

in the Regional Circuits, Mitigating the Risk of Invalidation

Today’s faculty features:

1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific

The audio portion of the conference may be accessed via the telephone or by using your computer's

speakers. Please refer to the instructions emailed to registrants for additional information. If you

have any questions, please contact Customer Service at 1-800-926-7926 ext. 10.

TUESDAY, JANUARY 13, 2015

Presenting a live 90-minute webinar with interactive Q&A

Stephen R. Baird, Shareholder, Winthrop & Weinstine, Minneapolis

Jennifer Lee Taylor, Partner, Morrison & Foerster, San Francisco

Theodore H. Davis, Jr., Partner, Kilpatrick Townsend & Stockton, Atlanta

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CAFC Redirects TTAB in Trademark Fraud Ruling Today: In re Bose Decided IDuetsBlog Page 1 of 2

DuetsBlogCollaborations in Creativity& the Law

CAFC Redirects TTAB in Trademark Fraud RulingToday: In re Bose DecidedBy Steve Baird on August 31st, 2009

Posted in Law Suits, Loss of Rights, Trademarks, TTAB

Today is a really, really big day for trademark types.

As many of us have been saying for a couple of years now, trademark fraud (i.e., fraud on the U.S.Trademark Office) continues to be one of the hottest issues facing trademark owners and the attorneyswho represent them. Perhaps after today, not so much, but who really knows, we'll see.

For those not already plugged into the issue of trademark fraud, most mark the 2003 decision oftheTrademark Trial and Appeal Board (TTAB) inMedinal v.Neura Vasx, as the starting point for amuch lower, and easier to prove, standard of fraud.

After Medinol, if a trademark owner knew or "should have known" it made a material false statementto the Trademark Office, the entire resulting trademark registration was subject to cancellation at anytime. Since then, and following the reasoning inMedinol, the TTAB issued numerous decisionsgranting opposition or cancellation of trademark applications and registrations on fraud grounds,causing trademark owners and their attorneys great concern with what many have called a strictliability standard, not one based upon an actual "intent to deceive" the U.S. Trademark Office. Mostof these cases have fallen into the "overinclusive" goods and services category of fraud cases­basically, cases having sworn statements that the applied-for mark is currently in use in connectionwith all of the listed goods and services, when in fact, something less than all the goods or servicesare actually in use with the mark.

For those interested on the development of the trademark fraud issue, here is a pdf of my slides fora talk I gave in January 2008, at LAIPLA's Washington in the West continuing education conference.

As some of you may recall, during several of my talks over the last two years, I have figurativelyflashed a yellow light and cautioned that the CAFC - the TTAB' s primary reviewing court - has notbeen heard on the subject of trademark fraud for quite some time, and it has not been clear to me thatthe CAFC actually would endorse the TTAB' s easier to prove fraud standard in the Medinalline ofcases. Today the CAFC weighed in on the subject.

Earlier today, the United States Court of Appeals for the Federal Circuit (CAFC) decided In re Base,a long-anticipated decision on what it takes to establish fraud before the U.S. Trademark Office. Indoing so, the CAFC flashed a red light, indicating the TTAB had read "too broadly" prior CAFCprecedent that had mentioned the words "should have known," and it specifically reaffirmed "that atrademark is obtained fraudulently under the Lanham Act only if the applicant or registrant knowinglymakes a false, material representation with the intent to deceive the PTO," and it further redirected the

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CAFC Redirects TTAB in Trademark Fraud Ruling Today: In re Bose Decided IDuetsBlog Page 2 of 2

TTAB: "Unless the challenger can point to evidence to support an inference of deceptive intent, it hasfailed to satisfy the clear and convincing evidence standard required to establish a fraud claim."

So, after today, trademark fraud still exists, and it can be proven, provided it is "proven to the hilt,"with "clear and convincing evidence," leaving "no room for speculation, inference or surmise," and solong as "any doubt must be resolved against the charging party." Basically, "deception must be willfulto constitute fraud." [Here is a link to a pdf of the CAFC's Bose decision].

Hat tip to John Welch of the TTABlog for alerting his followers of the CAFC's decision publishedfirst thing in the morning today.

My more detailed perspectives about the CAFC's Bose decision will follow later.

Also, stay tuned, because we continue to await the CAFC's fraud decision that it is currentlyreviewing in Grand Canyon West Ranch, LLC v. Hualapai Tribe.

Tags: Bose, CAFC, Clear and Convincing Evidence, Court of Appeals for the Federal Circuit, Fraud,Fraud Trademark Office Trademark Laws Trademark Registration Trademark Portfolio TrademarkAttorney Trademark Fraud CAFC Court of Appeals for the Federal Circuit Hualapai Tribe GrandCanyon West Ranch, Grand Canyon West Ranch, Grand Canyon West Ranch, LLC v. HualapaiTribe, Hualapai Tribe, Intent to Deceive, LLC v. Hualapai Tribe Bose Clear and Convincing EvidenceIntent to Deceive, Trademark Attorney, Trademark Fraud, Trademark Laws, Trademark Office,Trademark Portfolio, Trademark Registration

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True Lies, Trademark Fraud, and the Medinol Detour IDuetsBlog Page 1 of2

DuetsBlogCollaborations in Creativity& the Law

True Lies, Trademark Fraud, and the MedinolDetourBy Steve Baird on September 28th, 2009

Posted in Almost Advice, Law Suits, Loss of Rights, Trademarks, TTAB

Trademark types: As promised, here are some of my more detailed thoughts and perspectives (at leastfor the time being) on the most significant trademark case of the year: In re Bose.

Thanks to Thomson Reuters for asking me to share them with their readers. I look forward to somegreat dialogue on the likely implications resulting from this long-anticipated trademark frauddecision.

Marketing types: An adversary's ability to cancel your company's trademark registration for fraudjust got much more difficult with this important Bose decision. Basically, fraud means fraud again.

Instead of your adversary only needing to prove that you should have known that a material statementmade to the Trademark Office actually was false at the time you made it (as was the law applied bythe U.S. Trademark Office for the last six years), now, simple negligence is no longer enough toestablish trademark fraud, instead, an actual intent-to-deceive the Trademark Office must be proven.

Having said that, despite this revived more difficult-to-prove fraud standard, it is as important as everto treat the statements or representations you make to the Trademark Office as seriously as ever, andwith the utmost solemnity, making sure you truly understand what you are signing so you can actuallyaffirm the truth of those statements and representations.

It probably goes without saying that the apparent simplicity of the electronic trademark forms can bequite deceiving. So, there are no stupid questions when it comes to your understanding before signingelectronic form documents that are submitted to the Trademark Office.

UPDATE: ExecSense Webinar on the Bose Decision, now available for purchase. Just so you know,all royalties due to me are being donated to The Ronald McDonald House Charity.

Tags: Actual Intent to Deceive, Bose, CAFC, Clear and Convincing Evidence, Court of Appeals forthe Federal Circuit, ExecSense, Fraud, Intent to Deceive, Medinol, Medinol v. Neuro Vasx, RonaldMcDonald House, Trademark Attorney, Trademark Fraud, Trademark Laws, Trademark Office,Trademark Registration

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THOMSON REUTERS THQMSONCQMPUMARK)'00 can't bemolt! CErtatl1!"

True Lies, Trademark Fraud, and the Medinol Detour:The Federal Circuit Reverses In re Boseby Stephen R. Baird

The fraudulent procurement and maintenance of federal trademark registrations has been oneof the hottest, most rapidly developing and widely discussed legal issues facing virtually alltrademark owners and their counsel (at least during the past six years), following theTrademark Trial and Appeal Board's (TTAB's or Board's) landmark decision in Medinol v.NeuroVasx, Inc., 67 U.S.P.Q.2d 1205 (HAB 2003).

Well before Medinol, pursing allegations of trademark fraud was tempting and attractive tomany litigants since fraud is a statutory defense to "incontestability" (15 U.S.C. §1115(b)(1)),and registrations that are "fraudulently" obtained may be cancelled "at any time" (15 U.S.C.§1064(3)) -- they are not protected by the typical five-year statute of limitations that preventsmost other statutory grounds for cancellation. Before Medinol, however, fraud claims anddefenseswere largely unproductive litigation diversions as trademark fraud was considered tobe "often pied," but "rarely proven."

Indeed, such claims and defenses were widely labeled as "disfavored," because the focus wason the trademark owner's very difficult-to-prove "subjective intent," with any and all doubtsabout fraud being resolved against the accusing party. As a result, "inadvertence," "honestmistakes," "negligent omissions," and "honest misunderstandings," easily rebuffed trademarkfraud charges. Moreover, this fraud had to be proven "to the hilt" with "clear and convincingevidence," leaving no room for "speculation, conjecture, or surmise." Just because a statementor representation was false and material didn't make it fraudulent.

These often-recited limitations on trademark fraud challenges, however, for the most part, tooka back seat during the TTAB's recent six-year drive down Medinollane, as the Board began tofocus far more heavily on the "objective manifestations of intent" and the lower and mucheasier-to-prove "should have known" standard, granting fraud-based oppositions andcancellations at record pace, even on summary judgment in many cases (sometimes even suasponte, as was the case in Medinol).

On August 31,2009, the Court of Appeals for the Federal Circuit (CAFC) put into reverse, theBoard's continued travel plans down Medinollane, tossing the "should have known" standardout the window, in favor of an actual "intent to deceive the PTO" standard, in the long­anticipated trademark fraud ruling of In re Bose Corporation: "Subjective intent to deceive,however difficult it may be to prove, is an indispensable element in the [fraud] analysis." Indoing so, the CAFC has signaled trademark owners and their counsel it now may be safe to

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bring the often-cited limitations on fraud out of the back seat, to the front and center (onceagain), as the Board's detour down Medinollane appears to come to an abrupt dead end.

The TTAB's Six-Year Detour: The Drive Down Medinol Lane

The most basic facts of the trademark fraud found by the Board in the Medinol case are well­documented and have been discussed elsewhere at great length. In Medinol, NeuroVasx hadan intent-to-use trademark application mature into a registration covering "medical devices,namely, neurological stents and catheters," but it admitted in its answer to a cancellation actionthat it, in fact, had never used the mark in connectionwith "stents," only "catheters," either atthe time of filing its statement of use or later. Concerned about the solemnity of the swornstatements madewhen filing trademark documentswith the PTO, sua sponte, the TTABentered summaryjudgment against Neuro Vasx, holding: "A trademark applicant commits fraudin procuring a registrationwhen it makes material representationsof fact in its declarationwhich it knows or should know to be false or misleading." (emphasis added).

What many have forgotten about the Medinol facts are that in finding fraud, the TTAB wasmoved by the existence of a mere two items listed in the description of goods: stents andcatheters. Perhaps the Board asked itself, how hard can it be to knowwhether either or bothitems are actually in use? The TTAB went on and also considered important: "Neither theidentification of goods nor the statement of use itself were lengthy, highly technical, orotherwise confusing, and the President/CEOwho signed the document was clearly in a positionto know (or to inquire) as to the truth of the statements therein." (emphasis added). In addition,to further justify its inference of fraud in ruling on summary judgment, the Board noted thatNeuroVasx had received the registration certificate improperly covering "stents" a whole twoyears before it sought to correct the misstatement. As such, Neuro Vasx's "failure to point outits misstatement and seek correction thereof prior to the filing of the petition for cancellationclearly supports our finding that the misstatementwas intentional." Moreover, that the improperinclusion of stents was "'apparently overlooked' - does nothing to undercut the conclusion thatrespondent knew or should have known that its statement of use was materially incorrect.Respondent's knowledge that its mark was not in use on stents - or its reckless disregard forthe truth - is all that is required to establish intent to commit fraud in the procurement of aregistration."

It is important to recognize, with all due respect and deference to the Board, it did not create ormake up the lower and easier-to-prove "should have known" standard followed in Medinol andits progeny. In fact, the CAFC itself appeared to endorse the same language in Torres v.Cantine Torresella s.u., 808 F.2d 46,1 USPQ2d 1483 (Fed. Cir. 1986), some seventeen yearsbefore Medinol, when it affirmed the Board's cancellation of a registration based on fraud: "Theproblem of fraud arises because Torres submitted a label that he knew or should have knownwas not in use that contained a mark clearly different from the one in use. In addition, hesubmitted an affidavit stating the mark was in use on wine, vermouth, and champagne when heknew it was in use only on wine." (emphasis added).

Although the CAFC appeared to endorse the "should have known" standard in the first place (atleast with respect to the specimen portion of the fraud finding in Torres), three trademark fraudcases decided after Torres and before Bose, actually may have foreshadowed the course­reversal outcome in Bose, had the Board been operating its high beams.

In 1990, the CAFC acknowledged the prior Torres precedent, but nevertheless in G.H. Mumm& Cie v. Desnoes & Geddes Ltd., 917 F.2d 1292,16 USPQ2D 1635 (Fed. Cir. 1990), affirmedthe Board's dismissal of a trademark fraud claim based on the registrant's submission of a"partially completed" label as a specimen of use in a renewal application, excusing it as notbeing "appropriate or good practice," but not fraud either, because had the actual specimen ofuse been submitted it would have been accepted.

In 1997, the CAFC decided Metro Traffic Control, Inc. v. Shadow Network Inc., 104 F.3d 336(Fed. Cir. 1997), affirming the Board's dismissal of a fraud claim because the applicant'sstatements, "though false, were not uttered with the intent to mislead the PTO." Id. at 340-41.Because applicant's "misstatements did not represent a 'conscious effort to obtain for hisbusiness a registration to which he knew it was not entitled,'" no fraud occurred. Id. At 341.

Moreover, two years later, the CAFC reversed and remanded a judgment of the United StatesDistrict Court for the Northern District of Ohio in The L.D. Kichler Co. v. Davoil, Inc., 192 F.3d1349, 1352 (Fed. Cir. 1999),without any reference to Torres or the "should have known"standard: "To cancel the ... trademark for fraud there must also be a showing that Kichler

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knowingly submitted a false declarationwith an intent to deceive.... The district court,however, made no attempt to determine whether Kichler had the requisite intent. Therefore, weremand the case so the district court may determinewhether there existed significant prior useby others, and if so, whether Kichler knowingly submitted a false declarationwith an intent todeceive." (emphasis added).

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Steve Baird founded and chairs Winthrop & Weinstine'sintellectual property and trademark and brand managementgroups. He is a previous recipient of the Brand NamesEducation Foundation's Ladas Memorial Award for Writing, aformer law clerk to the late Wilson Cowen, Senior Judge on theCourt of Appeals for the Federal Circuit, and Steve has servedas a member of the International Trademark Association's BriefAmicus Committee. He has passionately represented clients intrademark and related intellectual property matters for more than18 years, with clients spanning virtually every industry. Havingfocused on trademarks and the legal implications of brandingand design for nearly two decades, Steve is a frequent speakerand author on trademarks, brand management, and relatedintellectual property subjects.

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THOMSON REUTERS THOMSON COMPUMARK'(Oilam''!:bi'!l'!'\Ore ~tt<!ltu'

True Lies, Trademark Fraud, and the Medinol Detour:The Federal Circuit Reverses In re Boseby Stephen R. Baird

The CAFC's Bose Decision

The Bose case implicated a renewal application (under Sections 8 and 9 of the LanhamAct),signed by the General Counsel of Bose Corporation, claiming current use of the WAVEtrademark in connection with a variety of goods, including "audio tape recorders and players."These virtually archaic products were not excluded from the renewal application despite thefact that Bose had stopped manufacturing and selling them 4-5 years earlier, and despite thefact that the General Counsel "knew that Bose discontinued those products when he signed theSection 8/9 renewal." He gave testimony, however, that he believed it was proper to notexclude the items from the listing of goods since Bose continued to repair such items and shipthe repaired items back to customers across state lines, in interstate commerce. The Boardconsidered this belief "unreasonable" (since Bose was providing repair services, not offeringgoodswith this activity), finding fraudulent procurement and maintenance of a trademarkregistrationwith an over-inclusive listing of goods.

The CAFC, however, ruled that "reasonableness" is "not part of the analysis." Instead, itadvised that the LanhamAct prohibits "knowingly inaccurate or knowingly misleadingstatements" to the Trademark Office. Bart Schwartz Int'l Textiles, Ltd. V. Fed. Trade Comm'n,289 F.2d 665, 669 (CCPA 1961).Absent the requisite intent to mislead the PTO, even amaterial misrepresentationdoes not qualify as fraud under the LanhamAct. King Auto., Inc. v.SpeedyMuffler King, Inc., 667 F.2d 1008, 1011 n.4 (CCPA 1981). "In other words, deceptionmust be willful to constitute fraud," cautioned the CAFC, citing Smith lnt't, Inc. v. Olin Corp., 209USPQ 1033, 1044 (HAB 1981); Woodstock's Enters. Inc. (Cal.) v. Woodstock's Enters. Inc.(Or.), 43 USPQ2d 1440, 1443 (T.TAB. 1997); First Int'l Servs. Corp. v. Chuckles, lnc., 5USPQ2d 1628, 1634 (T.TAB. 1988); and Giant Food, Inc. v. Standard Terry Mills, lnc., 229USPQ955, 962 (T.TAB. 1986).

While the CAFC appeared to agree with the Board that "objective manifestations" are relevantto the fraud analysis because "intent must often be inferred from the circumstances and relatedstatement made," it firmly disagreed with "equating 'should have known' of the falsity with asubjective intent," because in dolnq so, "the Board erroneously lowered the fraud standard to asimple negligence standard."

According to the CAFC, subjective intent, however difficult to prove is an "indispensableelement" in the trademark fraud analysis. While it may be "inferred from indirect andcircumstantial evidence," it still must be "clear and convincing." Indeed, "inferences drawn fromlesser evidence will not satisfy the deceptive intent requirement." The involved conduct, viewedin light of all the evidence, must be of sufficient culpability to require a finding of intent todeceive: "We hold that a trademark is obtained fraudulently under the LanhamAct only if theapplicant or registrant knowingly makes a false, material representation with the intent todeceive the PTO."

Stated another way, the CAFC ruled: "There is no fraud if the false representation isoccasioned by an honest misunderstanding or inadvertence without a willful intent to deceive."So, unless the party alleging fraud "can point to evidence to support an inference of deceptiveintent, it has failed to satisfy the clear and convincing evidence standard required to establish afraud claim."

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Despite the PTO's specific request in the Bose appeal for the CAFC to endorse a "recklessdisregard" standard for fraud determinations, this panel of the CAFC, appears to have savedfor another day any determination of whether a reckless drive down Medinollane might costfuture trademark owners and practitioners a fraud ticket: "[E]ven if we were to assume thatreckless disregard qualifies, there is no basis for finding [Bose's] conduct reckless.".

It is also worth noting that this panel of the CAFC did not attempt to overturn Torres in decidingBose (it could en banc, however), and it didn't expressly label the CAFC's prior use of "shouldhave known" as dicta either, but it did say the TTAB read Torres "too broadly," highlighting thatthe registrant in Torres had actual knowledge ("knows") it was not using the mark on two-thirdsof the goods listed in the registration (wine, but not champagne or vermouth), and indicatingthat the CAFC's reading of Torres doesn't deviate from the rule that intent to deceive isrequired..

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Steve Baird founded and chairs Winthrop & Weinstine'sintellectual property and trademark and brand managementgroups. He is a previous recipient of the Brand NamesEducation Foundation's Ladas Memorial Award for Writing, aformer law clerk to the late Wilson Cowen, Senior Judge on theCourt of Appeals for the Federal Circuit, and Steve has servedas a member of the Intemational Trademark Association's BriefAmicus Committee. He has passionately represented clients intrademark and related intellectual property matters for more than18 years, with clients spanning virtually every industry. Havingfocused on trademarks and the legal implications of brandingand design for nearly two decades, Steve is a frequent speakerand author on trademarks, brand management, and relatedintellectual property subjects.

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THOMSON REUTERS THOMSON COMPUMAAK'(00 eafl1: be I'W>I'$ ~ln)'

True Lies, Trademark Fraud, and the Medinol Detour:The Federal Circuit Reverses In re Boseby Stephen R. Baird

Some Rear View Mirror Glances at Bose and Where We're Headed

Probably the most unfortunate aspect of the CAFC's decision in Bose is the apparent relianceon and connection the court made between "fraudulent procurement" of a trademarkregistration under the LanhamAct and the "inequitable conduct" patent law jurisprudence: "Theprinciple that the standard for finding intent to deceive is stricter than the standard fornegligenceor gross negligence, even though announced in patent inequitable conduct cases,applieswith equal force to trademark fraud cases. After all, an allegation of fraud in atrademark case, as in any other case, should not be taken lightly." Wasn't there any otheravailable legal authority for the basic proposition that "intent to deceive is stricter" than thestandard for negligence or gross negligence?This patent law reference unfortunately seemslikely to invite future litigants to use the vast body of "inequitable conduct" patent case law as apotential road map in litigatingwhat are now likely to be far more highly-intensive and fact­specific trademark fraud cases.

The good news for many trademark owners and practitioners is that, once again, fraud reallymeans fraud, even in the trademark world. It is back to being limited to culpable conduct that isas bad as "fraud" actually sounds when the word is spoken. So, we can all breath a collectivesigh of relief that fraud can no longer be proven by showing simple negligence, grossnegligence, or what some have considered to be strict liability. But, we'll have to wait and seewhether a "reckless disregard for the truth" is enough to establish trademark fraud. We'll alsohave to wait and see what kind and amount of evidence and what sort of "objectivemanifestations"will suffice to prove the required "intent to deceive the PTO" under the "clearand convincing" standard.

Eitherway, we can only hope, that Bose does not erase all the learning occasioned whiletraveling down Medinollane with the Board. Indeed, trademark owners and practitioners woulddo well to continue to take their sworn statements in trademark filings very, very seriously.Without a doubt, the Medinol Board had it right on this point: "Statementswith such degree ofsolemnity are - or should be - investigated thoroughly prior to signature and submission to thePTO."

The many successes that litigants have enjoyed in pursuing successful fraud claims during theBoard's trip down Medinol lane have been substantial and they can hardly be described asmere litigation diversions. The question remains, now that fraud claims abound in a multitude ofcases currently being litigated before the Board, what will happen to those claims, will they bedropped, or will the parties go the distance to prove the necessary subjective intent to deceivethe PTO?

In the end, trademark owners and practitioners (as they attempt to navigate this u-turn andrevised set of instructions to move forward again) have good reason to wonder what, if any,case law developed by the Board while on Medinollane survives Bose, or whether the CAFC'sdecision in Bosewill relegate Medinol and its progeny, solely for drives down memory lane.

Pagelg3

Steve Bairdfoundedand chairsWinthrop&Weinstine'sintellectualpropertyand trademarkand brandmanagementgroups. He is a previous recipientof the BrandNames

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Education Foundation's Ladas Memorial Award for Writing, aformer law clerk to the late Wilson Cowen, Senior Judge on theCourt of Appeals for the Federal Circuit, and Steve has servedas a member of the International Trademark Association's BriefAmicus Committee. He has passionately represented clients intradernark and related intellectual property matters for more than18 years, with clients spanning virtually every industry. Havingfocused on trademarks and the legal implications of brandingand design for nearly two decades, Steve is a frequent speakerand author on trademarks, brand management, and relatedintellectual property subjects.

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Trademark Fraud =Reckless Disregard For The Truth? I DuetsBlog Page 1 of3

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Trademark Fraud = Reckless Disregard For TheTruth?By Steve Baird on September 22nd, 2010

Posted in Trademarks

Aaron Keller was busy yesterday making weighty predictions about the basis for our next economy:The Designed Economy.

As I prepare to provide attendees at the Midwest IP Institute tomorrow with a trademark fraud update- today, I thought I'd provide a preview - and even go out on a small limb - making a couple ofpredictions of my own, relating to the far more scintillating topic of trademark fraud before the UnitedStates Patent and Trademark Office (USPTO).

As you may recall last year, I wrote about the Court of Appeals for the Federal Circuit's (CAFC)groundbreaking decision In re Bose, here, here, here, and here, in which the CAFC rejected theTrademark Trial and Appeal Board's (TTAB) less stringent "knew or should have known" negligencestandard of fraud, instead coming down in favor of a much more stringent - and difficult to provestandard - SUbjectiveintent to deceive the USPTO.

Over the last year, much attention has been given to the fact that the CAFC left open and chose not todecide, in In re Bose, the question of whether a "reckless disregard for the truth" may suffice inproving the necessary subjective intent to deceive. Many argue that "reckless disregard" shouldsuffice in proving fraud for the sake of the integrity of the U.S. trademark system, to ensure thattrademark owners and their counsel are kept honest and/or don't become lazy or complacent about thesolemnity of the oath in their trademark filings.

Reading the tea leaves, I'm predicting that the TTAB will not wait for the CAFC to decide the issueand the TTAB will rule that "reckless disregard" constitutes a sufficient level of culpability to infer aspecific intent to deceive. If so, what does that mean? What kind of trademark conduct might satisfy a"reckless disregard" standard?

Well, we know from the CAFC's In re Bose decision (footnote 2) what conduct does not rise to thelevel of "reckless disregard" for the truth:

• In-house counsel at Bose signs under oath trademark renewal documents indicating that, at leastas of 2001, the WAVE trademark was still in use in commerce on various goods, includingaudio tape recorders and players;

• Bose stopped manufacturing and selling audio tape recorders and players sometime between1996and 1997;

• The in-house counsel at Bose knew that Bose discontinued those products when he signed therenewal documents, but he believed (unreasonably, according to the TTAB) that the WAVE

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mark still was used in commerce because "in the process of repairs, the product was beingtransported back to customers";

• Before Bose submitted the 2001 declaration of use, neither the USPTO nor any court hadinterpreted "use in commerce" to exclude the repairing and shipping of repaired goods.

As the CAFC held, given all these facts, "even if we were to assume that reckless disregard qualifies,there is no basis for finding [the] conduct reckless."

The final bullet point above, however, begs a few questions. What if there had been a decision(somewhere in the U.S.) contrary to the interpretation relied on by Bose's in-house counsel in signingthe renewal documents? What if in-house counsel was unaware of such a decision? What if therewere decisions for and against his interpretation? Is there a duty to conduct and updateappropriate legal research before relying on key interpretations of trademark law? What if he knewabout a contrary case, but disagreed with it? What if outside trademark counsel opined such a caseincorrectly interpreted trademark law? Would an opinion from trademark counsel, blessing an in­house filing, insulate against a fraud finding?

What does all this say, if anything, about the risks of in-house counsel signing certain trademarkdocuments at the USPTO? Is there less risk if a non-lawyer signs PTO trademark documents, perhapsa business person with actual knowledge of the facts, but not saddled with expert knowledge oftrademark law?

Sorry, no predictions on answers to any ofthese questions, at least for today.

My final prediction for the day: The CAFC eventually will decide that "reckless disregard" alone, orwithout more, is not sufficient to trigger a fraud finding since it is not supported by a literal reading ofthe statute. I read the CAFC's In re Bose decision to say, fraud means fraud, and I believe whenforced to decide the question, it will corne down favoring a literal reading of the plain meaning offraud within the Lanham Act, leaving to Congress the decision of whether an amendment tothe Act may be required to preserve the integrity of the U. S. trademark system.

What do you think?

Tags: Bose, CAFC, Culpability, Federal Circuit Court of Appeals, Fraud, In re Bose, Intent toDeceive, Predictions, Reckless Disregard, Trademark Fraud, Trademark Law, Trademark Laws,Trademark Office, Trademark Registration, Trademark Trial and Appeal Board, TTAB, U.S.Trademark System, USPTO

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Registration Symbol Misuse As Trademark Fraud?By Steve Baird on November 1st, 2010

Posted in Marketing, Trademarks, TTAB

Trademark types frequently encounter brand owners and managers withsubstantial misunderstanding and confusion about when use of the federal registration notice symbolis lawful. Most of the time a misuse or technical violation results from an honest mistake, butsometimes the misuse is, and starts out intentional, or perhaps the misuse begins to look intentional ifit isn't promptly fixed or corrected upon learning ofthe misuse.

Section 906 of the u.S. Patent and Trademark Office's Trademark Manual of Examining Procedure(TMEP) answers some of the most common questions regarding misuse with this guidance:

• The federal registration symbol should be used only on or in connection with the goods orservices that are listed in the federal registration.

• The federal registration symbol may not be used with marks that are not actually registered inthe USPTO.

• Even if an application is pending, the federal registration symbol may not be used until themark is registered.

• Registration in a state of the United States does not entitle a person to use the federalregistration notice.

• A party may use terms such as "trademark," "trademark applied for," "TM" and "SM"regardless of whether a mark is registered. These are not official or statutory symbols of federalregistration.

This information and guidance, however, begs the question of whether misuse is a serious violationand the possible consequences of misusing the registration symbol? As you may recall, we've talked abit before about possible false advertising claims against the trademark owner who misuses thesymbol and a possible unclean hands defense in favor of the trademark owner's enforcement target,especially when the misuse is accompanied by a bad faith intent to deceive.

As it turns out, we really need to add another important potential consequence to the list, one that Ifear will be abused and used for pure tactical advantage in trademark enforcement efforts, namely,

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assertions of trademark fraud, despite the current heightened standard of fraud, with the Court ofAppeals for the Federal Circuit now requiring a specific intent to deceive the Trademark Office.Actually, registration symbol misuse is not really a new ground of trademark fraud, but it has beenrather uncommonly and infrequently alleged, at least in recent years.

One of the reasons for my concern of abuse stems from a recent TTAB decision permitting this ratherconclusory and bare bones trademark fraud claim to survive a motion to dismiss:

Applicant knowingly and willfully used the ® symbol in connection with the term ... inan attempt to deceive or mislead consumers or others in the trade into believing that themark was registered.

A pdf of the TTAB' s decision with scant analysis - from about six weeks ago - in North AtlanticOperating Co., Inc. et al v.DRL Enterprises, Inc. Opposition No. 91158276), is linked here.

Relying only on the above-quoted allegation, the TTAB decided: "We find that the allegation set forthabove includes the necessary pleading of intent, and specifies that applicant's misuse was knowingand willful, and an attempt to deceive or mislead consumers."

In contrast to most trademark fraud cases where various false and misleading statements - reliedupon by the Trademark Office - are the focus of the fraud challenge, in North Atlantic OperatingCo., the focus was on an alleged intent to deceive the public, as opposed to the USPTO.

The Federal Circuit has held: "The improper use of a registration notice in connection with anunregistered mark, if done with intent to deceive the purchasing public or others in the trade intobelieving that the mark is registered, is a ground for denying the registration of an otherwiseregistrable mark." Copelands' Enterprises Inc. v. CNV Inc., 945 F.2d 1563,20 USPQ2d 1295 (Fed.Cir. 1991). Presumably, the same conduct would sustain a petition to cancel as well. Although, thestatutory support for the broader focus is unclear, it appears that an intent to deceive the USPTO is notrequired, so long as there is an intent to deceive the relevant public regarding registration.

Another reason for my concern stems from the apparently satisfactory yet conclusory fraud allegation.There are simply no details regarding the who, what, where, why, and when, of the alleged trademarkfraud, and this failure appears to contradict recent TTAB case law confirming that fraud must be pledwith particularity under Fed. R. Civ. P. 9(b). Indeed, our friend John Welch over at the TTABlog hasreported multiple times on the TTAB tightening up the pleading requirements for trademark fraudclaims, following the Federal Circuit's landmark decision in In re Bose, here, here, and here.

Finally, the Federal Circuit's Cope lands , Enterprises decision makes clear that how quickly atrademark owner corrects a misuse of the registration notice symbol after learning of the misuse, willimpact the determination of whether the trademark owner is charged with an intention to deceive thepublic. If we couple that guidance with the current uncertainty of whether the requisite intent may beestablished with a reckless disregard for the truth, trademark types and the brand owners andmanagers they represent, are all well-advised to pay more attention to what many previously havewritten off as honest mistakes and technical violations with no real or significant consequences.

Only time will tell whether the registration notice symbol misuse type oftrademark fraud claim will remain uncommon or gain traction in our Post-Bose world.

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Tags: Brand Management, BrandOwner, Consequences of Misusing Trademark Registration NoticeSymbol, Fed. R. Civ. P. 9, Fraud, FRCP 9, In re Bose, Registration Notice, Registration Symbol,TMEP, TMEP 906, Trademark Fraud, Trademark Office, Trademark Registration, TrademarkRegistrations, Trademark Types, USPTO

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Trademark Attorneys & Verified USPTOStatementsBy Steve Baird on November 8th, 2010

Posted in Almost Advice, Law Suits, Trademarks, TTAB

"Just because you can," is rarely a good reason to support a decision that really matters. This principleis no less true in the trademark world than it is elsewhere.

So, relying on your own navigation of the U.S. Patent and Trademark Office's (USPTO) online searchdatabase without also seeking a trademark attorney's competent analysis of the search results, canbe a dangerous plan, even though you can go it alone. Likewise, just because you can file a trademarkapplication yourself doesn't make it a smart business decision to avoid engaging a professional withday-to-day working knowledge of all the USPTO nuances and pitfalls.

There are, however, limits on what outside trademark attorneys should do for their trademark ownerclients. For example, another decision in the trademark world that really matters, but doesn't getenough attention, is who should sign verified statements filed with the U.S. Patent and TrademarkOffice (USPTO). The Trademark Rules liberally permit certain attorneys, among more obviouslyappropriate persons, to sign such statements on behalf of the trademark owner:

(i) A person with legal authority to bind the owner (e.g., a corporate officer or generalpartner of a partnership);

(ii) A person with firsthand knowledge of the facts and actual or implied authority to acton behalf of the owner; or

(iii) An attorney as defined in Section 11.1 of this chapter who has an actual written orverbal power of attorney or an implied power of attorney from the owner.

But, again, just because a trademark attorney can sign verified statements with the USPTO on behalfof the trademark owner doesn't make it a good idea. In fact, it should be a last resort for a trademarkowner to have its outside trademark counsel sign verified statements with the USPTO.

As a result, I continue to be amazed how many outside trademark counsel continue to make it aregular practice of signing verified statements on behalf of their trademark owner clients. WhileI fully recognize it may provide a convenience to have outside trademark counsel sign suchstatements, and there may well be times when the urgency of a looming deadline requires it, thefrequency of validity and fraud challenges in trademark oppositions, cancellations, and district courtlitigation, should be enough to encourage trademark owners to first consider these risks:

• The person signing the verified statements becomes a potential fact witness;

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• If outside trademark counsel becomes a witness, he/she may be disqualified and precluded fromrepresenting the trademark owner in a dispute involving the filing;

• Concerning the factual accuracy ofthe statements made to the USPTO, outside trademarkcounsel will rarely have firsthand knowledge and never be closest to the true facts;

• Trademark owners are unlikely to successfully defend any false statements made by theirtrademark counsel that are based on legal misunderstanding (i.e., "bona fide intent to use," "usein commerce," "interstate commerce," "substantially exclusive" use, and misuse ofthe federalregistration symbol); and

• The TTAB appears inclined to adopt "reckless disregard" as sufficient culpability to justify aninference of intent to deceive the USPTO in trademark fraud challenges.

So, can you think of and share any additional reasons not to have outside trademark counsel signingverified statements with the USPTO? Where do you stand on the issue with in-house trademarkcounsel? How about in-house corporate counsel who lacks trademark expertise?

And, what about the reasons in favor of outside trademark counsel signing such documents, are thereany beyond convenience and deadline urgency? Finally, do you agree that outside trademark counselshould be the one designated to sign verified statements only as a last resort?

Tags: Trademark Application, Trademark Attorney, Trademark Cancellation, TrademarkDistinctiveness, Trademark Fraud, Trademark Laws, Trademark Office, Trademark Opposition,Trademark Registration, Trademark Registrations, Trademark Types, USPTO

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Trademark Fraud No More?By Steve Baird on September 21st, 2011

Posted in Law Suits, Trademarks, TTAB

Just over two years ago, we reported on the CAFC's landmark trademark fraud decision of In re Bose,here, here, and here.

In addition, I wrote a piece for Thomson Reuters' Client Times Online called True Lies, TrademarkFraud, and the Medinol Detour: The Federal Circuit Reverses In re Bose."

Our friend, John Welch over at the TTABlog, on the second anniversary of In re Bose,genuinely piqued my interest with his recent and seductive post entitled "TTABlog Special Report:List of Fraud Claims Sustained by TTAB Since In re Bose Corporation."

I thought to myself, what have I missed, but apparently and thankfully nothing, as John explained:

"None. The TTAB has not sustained a single fraud claim in the two years since the CAFCissued its decision in In re Bose Corporation. Nor has it decided whether recklessdisregard for the truth is sufficient to satisfy the 'intent' element."

I'm thinking that at least until the CAFC provides further guidance on the subject or the TTAB goesout on a limb and decides to adopt "reckless disregard" even before the CAFC decides whether thatstandard is sufficient, we'll continue to await decisions that grant successful trademark fraud claims,at least at the USPTO and TTAB.

I'm also thinking that if trademark fraud is an important claim in a case, the client might be bestserved litigating and proving that claim in federal district court, at least for the time being, since thereis at least one federal district court (District of Minnesota) that has sustained ajury's finding oftrademark fraud under the more stringent In re Bose standard, and that decision has now beenaffirmed by the Eighth Circuit Court of Appeals.

Whatever the forum though, why on earth do trademark attorneys continue to sign verified usestatements on behalf of their clients and submit them to the USPTO, when it appears that they are theonly class of human beings capable of committing trademark fraud on the USPTO, at least as far asthe TTAB is currently concerned.

If you want more, please join us at the Midwest IP Institute on Thursday and Friday, more info here.

Tags: Bose, CAFC, Court of Appeals for the Federal Circuit, District of Minnesota, Eighth CircuitCourt of Appeals, In re Bose, Midwest IP Institute, Reckless Disregard, Trademark Attorney,Trademark Fraud, Verified Statments to USPTO

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Trademark Fraud Claims Won't Go Away Despite CAFC's In re Bose Decision I DuetsBlog Page 1 of2

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Trademark Fraud Claims Won't Go Away DespiteCAFC's In re Bose DecisionBy Steve Baird on August 31st, 2012

Posted in Articles, Law Suits, Trademarks, TTAB, USPTO

Trademark fraud claims aren't going away, despite the fact that the Trademark Trial and AppealBoard (TTAB) has not found fraud in a single trademark opposition or cancellation since the FederalCircuit decided In re Bose in 2009, rejecting the prior "knew or should have known" standard in favorof the much more difficult and heightened "specific intent to deceive" the USPTO standard.

We continue to see these claims in the TTAB, but trademark fraud is being raised increasingly infederal district court cases too, perhaps to avoid In re Bose as controlling precedent, and perhapsbecause damage claims are possible under 15U.S.C. 1120, and attorney fees also can be awarded in"exceptional cases" - all remedies unavailable in oppositions or cancellation before the TTAB.

In a trademark case filed just last month in U.S. District Court for the District of Minnesota, RenpureLLC, owner of the RENPURE federal trademark registration (covering personal care items, includinghair care preparations) and recipient of a cease and desist letter from Ren Limited, a Ll.K.entity thatowns an earlier federal trademark registration for REN (also covering personal care items, includinghair care preparations) brought a declaratory judgment action, requesting that the court declare that:(1) the U.K. entity has no valid or enforceable trademark rights in the U.S., and (2) the RENtrademark registration be cancelled due to Ren's alleged fraud on the USPTO. Renpure'scomplaint (pdf here) is also asking for damages resulting from the alleged fraudulently procured RENtrademark registration under 15U.S.C. 1120.

No doubt, this will be an interesting trademark fraud case to follow, and we'll be sure to keep youposted, so stay tuned.

In the meantime, with Renpure fighting with Ren over the Ren trademark for hair care and personalcare products, it makes me wonder about if and when Jeffrey Alan Deane a/k/a Chaz Dean's WENhair care trademark rights might enter the picture? You know, the Wen haircare infomercial folks?

Tags: 15U.S.C. 1119, 15U.S.C. 1120,Declaratory Judgment, Declaratory Judgment Action, Districtof Minnesota, Exceptional Case, Intent to Deceive, Jeffrey Alan Deane, Knew or Should HaveKnown, Minnesota, Ren Limited, Renpure LLC, Should Have Known, Trademark Fraud, U.S.District Court, Wen

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When Intent Matters in Trademark Matters I DuetsBlog Page 1 of2

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When Intent Matters in Trademark MattersBy Steve Baird on October 28th, 2013

Posted in Almost Advice, Articles, Counterfeits, Domain Names, Fair Use, Infringement, Law Suits,Trademark Bullying, Trademarks

One of the unfortunate aspects of trademark practice is the permission that exists in the law tochallenge the motives and intentions of people.

Unfortunate, because this permission is frequently abused, especially by less experienced trademarkcounsel, or perhaps when the strength of a case doesn't seem like enough without injecting anunhealthy dose of emotion into the matter.

Permission to focus on intent is almost ubiquitous in trademark practice.

The fruits of proving intent can be rewarding. When we seek to establish cybersquatting or compelthe transfer of an offending domain name, badfaith intent toprofit is required. And, proving that anadversary lacked a bonafide intent-to-use a trademark can achieve cancellation of the resultingregistration. Invalidating an opponent's trademark for abandonment calls for proof of non-use coupledwith no intention to resume use in commerce and in the ordinary course of trade.

Invalidating a trademark registration for fraud requires a specific intent to deceive. A defendant's badfaith intent is often a gateway for a plaintiff seeking enhanced monetary damages and/or attorneysfees too. And, when a defendant willfully intends to trade on the reputation of a famous mark orwillfully intends to harm the mark's reputation, this opens the door to remedies beyond mereinjunctive relief.

Even the pejorative "trademark bully" label- for which there is presently no specific cause of actionor defense - garners public sympathy while imputing evil intentions to the trademark owner aiming toenforce its rights.

When it comes to proving trademark infringement by balancing the many likelihood of confusionfactors, the defendant's intent can be relevant too, but mostly it ends up being a neutral factor. Havinggood faith does not insulate a defendant from trademark infringement if there is a likelihood ofconfusion. Having said that, many zealous advocates recognize that painting the defendant as a badfaith actor can tend to color the weighing of the other factors in the plaintiffs favor, hence thetemptation to use the hammer of intent in pounding every action as an evil nail.

Yet, a badfaith intent is rarely proven by an open admission or through some other similar PerryMason moment. So, we end up proving the necessary intent through a series of objective facts thatjustify a reasonable inference of the requisite intent. It isn't a perfect situation and unfortunately itmayor may not yield the truth.

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Less emotion and more objective facts should drive decisions on the question of likely confusion. If acase screams bad faith based on the objective facts, fine, make the case, but recognize this is likely arare case.

Here's a thought to ponder: Driving down the highway yesterday, my family was convinced the car inthe lane next to us wanted to enter our lane - the objective fact of the turn signal told us what was onthe driver's mind, or so we thought. After minutes of waiting for the driver's movement into our laneof traffic, it never happened, and eventually he exited the highway in the opposite direction of thesignal, who really knows why?

Imputing motives and intentions to people is a messy, dangerous, and emotional business, trademarktypes should honor the law's permission to to explore proof of bad faith intent, but not abuse it.

Tags: Actual Notice, Inference, Intent to Deceive, Likelihood of Confusion, Perry Mason, SubjectiveIntent, Trademark Infringement

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