Opinion ID: 159309
Heading Depth: 2
Heading Rank: 2

Heading: Fraudulent Registration

Text: 12 Midland next argues the evidence was insufficient to support the jury's verdict that Midland fraudulently procured the Quick-Phos trademark registration, therefore the district court erred by denying Midland's motion for judgment as a matter of law. 13 We review de novo the district court's denial of a litigant's motion for judgment as a matter of law filed pursuant to Fed. R. Civ. P. 50(b). We will reverse such a ruling only if the evidence points but one way and is susceptible to no reasonable inferences supporting the party opposing the motion. In our review, we may not weigh the evidence, pass on the credibility of witnesses, or substitute our judgment for that of the jury. Further, we must construe all evidence and the inferences therefrom in the light most favorable to the non-moving party. 14 Kinser v. Gehl Co., 184 F.3d 1259, 1267 (10th Cir. 1999) (quotation marks and citations omitted), cert. denied, 120 S. Ct. 985 (2000). When we review a sufficiency of the evidence claim, our review is limited to determining whether the record viewed in the light most favorable to the prevailing party contains substantial evidence to support the jury's decision. Comcoa, Inc. v. NEC Tel., Inc., 931 F.2d 655, 663 (10th Cir. 1991). The jury, moreover, has the exclusive function of appraising credibility, determining the weight to be given to the testimony, drawing inferences from the facts established, resolving conflicts in the evidence, and reaching ultimate conclusions of fact. Kitchens v. Bryan County Nat'l Bank, 825 F.2d 248, 251 (10th Cir. 1987). 15 Section 38 of the Lanham Act creates civil liability for those who fraudulently procure a trademark registration: 16 Any person who shall procure registration in the Patent and Trademark Office of a mark by a false or fraudulent declaration or representation, oral or in writing, or by any false means, shall be liable in a civil action by any person injured thereby for any damages sustained in consequence thereof. 17 15 U.S.C. § 1120. In order to prove fraudulent procurement, United was required to show: 18 (1) the false representation regarding a material fact; (2) the registrant's knowledge or belief that the representation is false (scienter); (3) the intention to induce action or refraining from action in reliance on the misrepresentation; (4) reasonable reliance on the misrepresentation; and (5) damages proximately resulting from such reliance. 19 San Juan Prods., Inc. v. San Juan Pools of Kansas, Inc., 849 F.2d 468, 473 (10th Cir. 1988). Midland concedes we are concerned solely with the second element for the purposes of this appeal. 20 As part of the trademark registration application, Midland's president, Robert Shockey, signed an affidavit attesting that to the best of his belief and knowledge, no other person, firm, or corporation ha[d] the right to use said mark in commerce, either in the identical form or in such near resemblance hereto as may be likely when applied to the goods of such other person to cause confusion or to cause mistake or to deceive. See 15 U.S.C. § 1051. In determining whether this statement was fraudulent, we focus on the declarant's subjective, 'honestly held, good faith' belief. San Juan Prods., 849 F.2d at 472 (citation omitted). Therefore, United had the burden of proving, by clear and convincing evidence, Robert Shockey signed the oath on Midland's behalf knowing United had the right to use the Quick-Phos mark in commerce. See Stanfield v. Osborne Indus., Inc., 52 F.3d 867, 874 (10th Cir.), cert. denied, 516 U.S. 920 (1995); Beer Nuts, Inc. v. Clover Club Foods Co., 711 F.2d 934, 942 (10th Cir. 1983) (burden of proof is clear and convincing). Mindful of our characterization of this burden as a heavy one, on this record we hold the evidence can support the jury's finding of fraud. 21 When Midland applied for the trademark registration, company representatives knew United had been selling Quick-Phos in the United States for several years. Midland itself had purchased Quick-Phos from United and resold the product in the United States. United had notified Midland that United owned the Quick-Phos name, that Mr. Hibbard had been permitted to use the name by specific agreement, and that Midland should not attach the mark to non-United products. Finally, Midland had already relabeled inferior product under the Quick-Phos mark after initially trying to sell the product under another name, because it became clear the marketplace recognized the superior quality of United's Quick-Phos product. Given these facts, the jury was free to find Midland's representatives knew United owned the Quick-Phos mark and had the right to use the mark in interstate commerce. 2 Midland seems to argue Mr. Fox's and Mr. Shockley's self-serving testimony that they believed Midland owned the mark is dispositive. We disagree and join the district court in pointing out the jury was free to make its own credibility determination and in so doing find these witnesses had none. United was not required to pry an admission out of Midland's representatives on the stand in order to meet its burden of proof. See Global Maschinen GmbH v. Global Banking Sys., Inc., 227 U.S.P.Q. 862, 867 (TTAB 1985) (That the record contains no direct evidence of respondent's intent does not mitigate the fraud nor preclude us from holding that respondent's conduct was fraudulent.); Hank Thorp, Inc. v. Minilite, Inc., 474 F. Supp. 228, 238 (D. Del. 1979). Mr. Shockley's subjective belief United did not have a right to use the mark must be an 'honestly held, good faith' belief. See San Juan Prods., 849 F.2d at 472 (citation omitted); Stanfield, 52 F.3d at 874 (defendant could have reasonably believed plaintiff waived rights to trademark). The jury didn't buy Mr. Shockley's and Mr. Fox's protestations, and we will not disturb the jury's verdict given the facts on the record.