Opinion ID: 694382
Heading Depth: 2
Heading Rank: 3

Heading: The Section 1125(a) Claims

Text: 30 Plaintiff first claims that defendants violated section 43(a) of the Lanham Act, 15 U.S.C. Sec. 1125(a), 5 which prohibits the false designation of origin of a product and the false description of a product. Because plaintiff abandoned his rights in the Stanfield marks in the 1975 agreement, we must address whether plaintiff alleges an injury sufficient to confer standing to bring a claim under section 1125(a). The issue of standing is jurisdictional in nature. Whether or not raised by the parties, we are obligated to satisfy ourselves as to our own jurisdiction at every stage of the proceeding. Alexander v. Anheuser-Busch Cos., 990 F.2d 536, 538 (10th Cir.1993) (citations omitted). 31 There are two distinct bases of liability under section 1125: (1) false representation in advertising concerning the qualities of goods (false advertising claims); and (2) false representations concerning the origin or endorsement of goods (false association or product infringement claims). Waits v. Frito-Lay, Inc., 978 F.2d 1093, 1108 (9th Cir.1992), cert. denied, --- U.S. ----, 113 S.Ct. 1047, 122 L.Ed.2d 355 (1993); see also Resource Developers, Inc. v. Statute of Liberty-Ellis Island Found., Inc., 926 F.2d 134, 139 (2d Cir.1991). Plaintiff apparently claims that defendant is liable under both prongs of section 1125. 32 Under either prong of section 1125, the plaintiff need not be the owner of a registered trademark in order to have standing to sue. Brunswick Corp. v. Spinit Reel Co., 832 F.2d 513, 517 (10th Cir.1987) (stating that plaintiff need not have a federally registered trademark to bring a false designation of origin claim); DEP Corp. v. Interstate Cigar Co., 622 F.2d 621, 624 n. 3 (2d Cir.1980) (contrasting a section 1125(a) action with a suit brought under section 1114(1), which limits standing to registrants of trademarks); Quabaug Rubber Co. v. Fabiano Shoe Co., 567 F.2d 154, 160 (1st Cir.1977) (stating that a party may have standing to sue for false advertising regardless of whether he is the registrant of a trademark). Nevertheless, standing to bring a section [1125(a) ] claim requires the potential for a commercial or competitive injury. Berni v. International Gourmet Restaurants of Am., Inc., 838 F.2d 642, 648 (2d Cir.1988). Because the standing requirements for the two causes of action differ, we discuss them separately. 33 A false advertising claim implicates the Lanham Act's purpose of preventing unfair competition. See 15 U.S.C. Sec. 1127. Thus, to have standing for a false advertising claim, the plaintiff must be a competitor of the defendant and allege a competitive injury. Waits, 978 F.2d at 1109. In the instant case, plaintiff is not now, nor has he ever been, in competition with defendants. Plaintiff developed the swine heating pad that OII was formed to manufacture. Except for a few samples, plaintiff did not produce the pads for sale. Plaintiff states that he has since developed a modified heating pad that another manufacturer is interested in producing. He concedes, however, that this manufacturer's interest in his new heating pad is in no way dependent on the availability of a Stanfield trademark. Because he does not allege a competitive injury, plaintiff lacks standing to bring a false advertising claim. 34 In contrast to a false advertising claim, a false association claim does not require an allegation of competitive injury. Waits, 978 F.2d at 1109. A plaintiff must, however, have a reasonable interest to be protected in order to have standing to sue. Dovenmuehle v. Gilldorn Mortgage Midwest Corp., 871 F.2d 697, 700 (7th Cir.1989). Those with standing to bring [a false association] claim include parties with a commercial interest in the product wrongfully identified with another's mark, ... or with a commercial interest in the misused mark. Waits, 978 F.2d at 1109. 35 Here, plaintiff argues that he has a commercial interest in the mark allegedly misused by OII. But he abandoned any rights he may have had in the trademark under the 1975 agreement with OII. See Georgia Carpet Sales, Inc. v. SLS Corp., 789 F.Supp. 244, 246 (N.D.Ill.1992) ([A]ny claim under Section 1125(a) for the asserted infringement of any trade name that has been the subject matter of a naked license is doom[ed].) Although plaintiff asserts that he has plans to compete with OII and would like to use his name in a trademark, the mere potential of commercial interest in one's family name is insufficient to confer standing. See Dovenmuehle, 871 F.2d at 700. Thus, he has no reasonable interest to be protected under the Lanham Act. Without a protectible interest, plaintiff lacks standing to bring this claim under section 1125. See id. at 701.D. Fraudulent Registration 36 In Count II of his complaint, plaintiff alleges that defendants fraudulently procured registration of the trademarks in violation of 15 U.S.C. Sec. 1120. To prove a claim of fraud in the procurement of a federal trademark, plaintiff must prove: 37 (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. 38 San Juan Prods., Inc. v. San Juan Pools, 849 F.2d 468, 473 (10th Cir.1988). 39 Plaintiff's inability to prove the second element is dispositive of the claim. A trademark applicant signs an oath declaring that no other person, firm, corporation, or association, to the best of [the applicant's] knowledge and belief, has the right to use such mark in commerce. 15 U.S.C. Sec. 1051. It is, therefore, the applicant's subjective belief that is at issue. San Juan Prods., 849 F.2d at 472. [T]he burden of proving fraudulent procurement of a registration is heavy. Any deliberate attempt to mislead the Patent Office must be established by clear and convincing evidence. Beer Nuts, Inc. v. Clover Club Foods Co., 711 F.2d 934, 942 (10th Cir.1983) (citation omitted). Thus, plaintiff has the burden of proving by clear and convincing evidence that defendant Stanley Thibault signed the oath knowing that it was false;  '[t]here is no room for speculation, inference or surmise, and obviously, any doubt must be resolved against the charging party.'  Oreck Corp. v. Thomson Consumer Elecs., Inc., 796 F.Supp. 1152, 1159-60 (S.D.Ind.1992) (quoting Citibank N.A. v. Citibanc Group, Inc., 215 U.S.P.Q. (BNA) 884, 902, 1982 WL 52144 (N.D.Ala. Mar. 24, 1982)). 40 Plaintiff produced no evidence that defendant knew the oath was false. Affidavits from both Stanley and Ronald Thibault indicate that Stanley Thibault believed that OII had the right to register the trademarks and that plaintiff had assigned any rights in the marks to OII in the 1975 agreement. Plaintiff argues that the 1975 agreement itself is evidence that defendant signed the oath knowing it was false. But our discussion of the agreement shows that Stanley Thibault could have reasonably believed that plaintiff waived his rights to the trademark in that agreement. With no other evidence to contradict defendants' statements, plaintiff has failed to establish the existence of an element essential to [his] case. Celotex, 477 U.S. at 322, 106 S.Ct. at 2552.