A Recent Precedential Fraud Finding

Findings of fraud by the Trademark Trial and Appeal Board (“TTAB” or the “Board”) are rare. A recent precedential Board decision, Look Cycle International v. Kunshan Qiyue Outdoor Sports Goods Co., Ltd., Cancellation No. 92079409 (August 9, 2024) [precedential], held fraud was committed by the registrant either with the intention to deceive the United States Patent & Trademark Office (“USPTO”) or with reckless disregard for the truth. In this case, the Petitioner sought to cancel the registration on several grounds, likelihood of confusion, nonuse and fraud. This article will focus on the nonuse and fraud grounds.

The Petitioner alleged that the Respondent did not use the mark BLOOKE in U.S. commerce on the goods identified in the trademark application at the time it filed its use application with the USPTO. An application based on use of the mark in commerce under Section 1(a) of the Trademark Act, is void ab initio if the mark was not in use in commerce in connection with the goods identified in the application at the time the application was filed. See 15 U.S.C. § 1051(a).

Pursuant to Section 45 of the Trademark Act, “use in commerce” for goods is defined as “the bona fide use of a mark in the ordinary course of trade, and not made merely to reserve a right in a mark.” 15 U.S.C. § 1127. The trademark registration for BLOOKE identifies: “Bicycle brakes; Bicycle chains; Bicycle cranks; Bicycle frames; Bicycle frames and bicycle handlebar grips; Bicycle gears; Bicycle kickstands; Bicycle mudguards; Bicycle parts, namely, forks; Bicycle pedals; Bicycle seat posts; Bicycle tires; Bicycle water bottle cages; Bicycle wheel hubs; Bicycle wheel rims; Bicycles; Electric bicycles; Handle bars for bicycles; Pumps for bicycle tyres; Saddles for bicycles”, in International Classes 12. The evidence showed that none of these goods were in use in commerce with the trademark prior to the application filing date.

The Respondent focused on evidence of use in the U.S. for bottom brackets and headsets (goods not included in the identification). Orders were submitted for these goods, but as mentioned, these goods were not encompassed within the goods identified in the trademark registration. In addition, as part of the specimen, invoices were submitted, but Petitioner proved that the addresses on the invoices for the alleged U.S. consumers did not exist. Respondent could not refute this evidence. The invoices were demonstrated to be false. The other invoices were for goods not listed in the trademark registration for BLOOKE. Therefore, the Petition for Cancellation was granted on the ground of lack of bona fide use in commerce for the goods identified in the application, prior to the filing date of the use-based application.

Next the Board addressed the issue of Fraud. Fraud will be found in prosecuting a trademark application or in maintaining a registration when an applicant for registration, or a registrant in a post-registration submission, knowingly makes a false, material representation of fact in connection with the application, or a post registration document, with the intent of obtaining or maintaining a registration to which it is otherwise not entitled. In re Bose Corp., 580 F.3d 1240, 1245 (Fed. Cir. 2009). Intent can be inferred from indirect and circumstantial evidence. See In re Cohn, 54 F.3d 1108, 1118 (3d Cir. 1995). Intent to deceive can be inferred from recklessness, namely a reckless disregard for the truth. Chutter, Inc. v. Great Mgmt. Grp., LLC, Opp. No. 91223018, 2021 WL 4494251 (TTAB 2021).

The Petitioner has a heavy burden to prove fraud by clear and convincing evidence. In re Bose Corp., 580 F.3d 1240, 1245 (Fed. Cir. 2009). The Board held that the facts of the case demonstrated reckless disregard for the truth, and this was a basis to infer the requisite intent. The Respondent did not dispute that the addresses on the invoices were fictitious. In fact, the false specimens constitute a material misrepresentation. Further, there were documents submitted during discovery alleging an event related to the trademark took place in the United States prior to April in 2021, but this was also false. The evidence proved the event took place in China in 2023. This shows intentional deception or at a minimum, reckless disregard for the truth from which the Board can infer intent to deceive. The Board granted the Petition to Cancel on the fraud ground, in addition to the other two grounds. Statements made in a trademark application must be truthful and accurate. See our webpage entitled, How to Avoid Fraud on the USPTO, for more information on this topic. If you have questions concerning fraud or other trademark application or registration inquiries, please feel free to contact the firm for a courtesy consultation.