Source: http://www.vegastrademarkattorney.com/2007/09/is-your-trademark-at-risk-of-being.html
Timestamp: 2019-04-22 01:59:55+00:00

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Is your trademark at risk of being canceled for fraud?
One of the most significant developments in trademark law over the past four years which impacts all trademark owners and trademark attorneys relates to the issue of fraud.
Many trademark applicants in the past have filed trademark applications with many different classifications which incorporate nearly every type of good or service within a given classification.
When an Section 1(a) use-in-commerce application is filed (or the allegation/statement of use for Section 1(b) intent-to-use applications), the applicant must swear that all of the goods or services listed are “in-use.” But what if the trademark was not actually being used on one of the goods described in the application at the time of the application – even though it is a similar type of good and even though it may have been used later on that exact good. The Trademark Trial and Appeal Board ("TTAB") has held in several decisions that claiming that the trademark is in-use for a particular good when in fact it was not constitutes “fraud.” The real shocker, however, is that the fraud on this one particular good will destroy the entire application – including all other classes in the application. If you have an application that has 7 different classifications of goods and services, all a potential infringer must do is show that a single one of the goods and services in one of those 7 classes was not actually in use when the application stated it was in the original application. The whole trademark registration will be canceled on the grounds of fraud. A pretty harsh remedy.
The trend started back in 2003 with the TTAB’s decision in Medinol Ltd. v. Neuro Vasx, Inc., Cancellation No. 92040535 (T.T.A.B. May 13, 2003). In that case, Neuro Vasx filed an intent-to-use trademark application identifying the goods on which the trademark would be used as "stents and catheters." Unfortunately, Neuro Vasx only used the mark on catherters, but did not delete “stents” from its application when the company filed its statement of use before the mark could be registered. The PTO registered the mark listing both goods. Medinol sought to cancel the registration on the grounds of fraud. Neuro Vasx argued that it was an unintentional error on its part and even sought to delete stents from the registration description. Nonetheless, the TTAB canceled the entire registration finding that fraud when a trademark applicant makes a statement about its use of a mark that it knew or should have known was false. The TTAB’s rationale is that facts about use of a trademark are within the applicant’s control and the applicant knows that the PTO will rely upon any such statements when examining the application. As such, any false statements of fact, however minor, creates a fraudulent registration. Furthermore, because applicants are required to swear (under penalty of fine or imprisonment) to the use of a mark in commerce as part of the application process, they cannot later claim an inadvertent mistake.
So while this issue of fraud is not new, the TTAB recently has shown a greater willingness (more so than in the past) to cancel trademark registrations where the applicant’s description of goods and services was overly broad, including at least three precedential decisions this year. See Standard Knitting, Ltd. v. Toyota Jidosha Kabushiki Kaisha, Opposition No. 91116242 (T.T.A.B. Jan. 10, 2006) (registrant committed fraud by claim use of the mark on certain clothing items that were never sold by registrant); Hurley Int'l LLC v. Volta, Opposition No. 91158304 (T.T.A.B. Jan. 23, 2007) (specimen of use submitted had not been used in commerce); Hachette Filipacchi Presse v. Elle Belle, LLC, Cancellation No. 92042991 (T.T.A.B. April 9, 2007) (fraud found when use of mark was limited to women’s clothing and never used on men’s or children’s clothing); Sinclair Oil Corp. v. Sumatra Kendrick, Opposition No. 91152940 (T.T.A.B. June 6, 2007) (applicant committed fraud by claiming use of mark for services that were never offered).
In short, rather than invoke a more traditional test of fraud which examines the intent of the applicant, the TTAB is invoking a strict liability standard for any statements of fact in the prosecution of a trademark. The fallout from this new strict liability standard regarding fraud is that trademark applicants must be very careful with respect to any statements made to the PTO during prosecution, especially with respect to the identification of goods and services for which registration is sought and the dates of use in commerce for such goods and services.
In addition, from now on, trademark applicants that wish to obtain a trademark registration for various good and services would be smart to file separate applications for each classification of goods. After all, the PTO does not give you a filing fee discount for putting all classifications of goods and services into a single application. Filing a single application with 10 classifications costs the same as filing 10 different applications. But with 10 separate applications, you get 10 separate registrations, so that if one of those registrations is later canceled, the other 9 will not be impacted.
For those with trademarks that have not yet been published for opposition, a footnote in the TTAB’s Hurley decision offers some hope. In footnote 5 of its opinion, the Board states the following: “We note, however, that a misstatement in an application as to the goods or services on which a mark has been used does not rise to the level of fraud where an applicant amends the application prior to publication. See Universal Overall Co. v. Stonecutter Mills Corp., 154 USPQ 104 (CCPA 1967).” This suggests that so long as any misstatements are corrected before the application is published for opposition, such misstatements before publication will not be deemed fraud. The TTAB in a subsequent non-precedential decision found that an applicant could have avoided a finding of fraud in a Section 1(a) trademark application had the misrepresentation regarding use of the mark been corrected prior to publication. See Kipling Apparel Corp. v. Rich, Opposition No. 91170389 (T.T.A.B. April 16, 2007) (not precedential).
Finally, trademark holders may also want to conduct what has been referred to as a “fraudit” of their trademark portfolio to assess any risk of cancellation of any registered trademarks on the basis of fraud, and consider reapplying now for the same mark with the misstatements corrected.

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