The Impact of In re Bose and Honda v. Winkelmann on US Trademark Registration

October 6, 2009Keith A. Barritt, PrincipalAmy L. Brosius, PrincipalAnthony L. Fletcher, Senior CounselCharles Hieken, PrincipalIrene E. Hudson, Associate

Keith A. Barritt Amy L. Brosius Anthony L. Fletcher

Charles Hieken Irene E. Hudson

Agenda

IntroductionPart 1: In re BosePart 2: Analysis of In re BosePart 3: Honda v. Friedrich WinkelmannPart 4: Lessons of Honda “Bona Fide Intent to Use” CasePart 5: Q&A

Part 1: In re Bose

In re Bose – Background

Bose opposed Hexawave's application for HEXAWAVE in 2003Bose relied on its registrations for WAVE and ACOUSTIC WAVE –in addition to its common law rights

The Fraud Allegation

Hexawave filed a counter-claim alleging fraud by BoseAlleged that Bose made an untrue statement to the PTO when it renewed its WAVE registration Facts:

– Bose renewed WAVE for "audio tape recorders and players" (and other goods) in 2001

– Bose hadn't sold WAVE goods with tape recorders and players since the late 1990's

The Fraud Allegation (cont.)

– BUT: Bose continued to repair the WAVE tape player goods and transport them back to consumers since that time

– Bose believed this was valid "use in commerce"

– Bose General Counsel Sullivan testified that he believed the statements in his declaration supporting renewal were true

The TTAB Decision

Board found Bose's activities did not constitute use in commerce of WAVE for tape player goods (and unreasonable for Bose to believe that it did)

DID NOT find any direct evidence of fraud or finding that Bose intended to deceive the PTO

The TTAB Decision (cont.)

Nevertheless: Board applied Medinol standard Bose "knew or should have known" that its statement was falseRelevant that Bose could point to no legal precedent that said its activities qualified as use in commerceCancelled the WAVE registration

The Federal Circuit Decision

No fraud by BoseMedinol standard too low – not a negligence standardFraud requires clear and convincing evidence of intent to deceive the PTOIntent can be shown through direct and/or indirect evidence In line with patent fraud standardUse in commerce? Assumed that Bose made a material false statement regarding use in commerce

Part 2: Analysis of In re Bose

What Happened Here?

The Medinol Rule:– Alleging “use” or “intent to use” a mark for any good or

service for which the mark is not, in fact, in use or intended to be used, is subject to remedies for fraud, namely, refusal to register the trademark or to cancel any registration that may have issued.

Kaput!

The Effect of Bose

Under Bose it now will be necessary to allege and prove:1. A knowingly false or misleading2. Representation or omission3. Of a material fact (or facts)4. To induce an action5. To the actors detrimentFRCP 9(b) requires pleading of the fraud with particularity

Reason for the Ruling

An innocent act was branded “Fraud”The “Trademark Fraud” the Board found would not have been “Patent Fraud”On equitable ground a truly terrible case for “fraud”

– Terrible because:• Bose was aware of the problem and concluded in good

faith that it had use• Its conclusion was reasonable under the law at the time• The case that may have established that the declaration was

wrong was decided after the declaration was signed and filed

Probable Reasons for the Medinol Rule

A very crowded trademark registerMakes it harder and harder to clear appealing marksA lot of the clutter is “dead wood” – registration of marks for goods after incorrect declarations of use of the mark or for certain goods or servicesSimply correcting the registration to what it should be when the error is discovered furnishes no incentive to get declarations right in the future

A Possible Rational for the Medinol Rule

Fraud, n. 1. A knowing misrepresentation of the truth or concealment of a material fact to induce another to act to his or her detriment…

- Black’s Law Dictionary

– The “knowing” component is very difficult to prove, because real frauds rarely admit to it, and it’s easy to make excuses

– The only thing that has any potential for thinning out the “dead wood” is a strict liability rule that will kill the whole registration if any of it is “dead wood” that was erroneously granted or maintained because of an incorrect declaration or affidavit of use

– Otherwise, there is no incentive to be accurate

Torres v. Cantine Torresella S.r.l

1986 Federal Circuit case which stated:– If a registrant files a verified renewal application stating that his

registered mark is currently in use in interstate commerce and that the label attached to the application shows the mark as currently used when, if fact, he knows or should know that he is not using the mark as registered and that the label attached to the registration is not currently in use, he has knowingly attempted to mislead the PTO. . . . On the facts of this case, we hold that the Board did not err in granting summary judgment, because the record clearly establishes that Torres committed fraud. [1 USPQ2d 1483, 1485] Emphasis added

Conclusions – In re Bose

Justice was done in this case. Branding an innocent mistake as “fraud” was a bad thingThe Medinol rule, except for being couched in terms of “fraud,” could have been a good thing, if one realizes fulfilling statutory goals is a “good thing”All Medinol really asked was that declarants and affiants as to use be people who (i) know or can ascertain if there is use, and (ii) get it right. That seems reasonable.

Conclusions – In re Bose (cont.)

The US register is still cluttered with cords and cords of “dead wood,” and pro se applicants and registrants, and the careless and inept who practice before the PTO remain free to “reserve rights in marks,” inadvertently or otherwise, by filing incorrect statements of use – to the detriment of those of us and our clients who play by the rulesIf there is a way to recapture the good aspects of the Medinolrule, its genesis can be found in Section 38 of the Act (15 U.S.C. § 1120)

Conclusions – In re Bose (cont.)

– Any person who shall procure registration . . . 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.

There are a few provisions in the Trademark Act that penalize fraud – loss of registration or application, loss of incontestability or five year immunity to cancellation – and it is interesting that the most serious, and least employed, attaches the same consequences to both falsehood and to fraud

Conclusions – In re Bose (cont.)

Why should falsehood not be treated equally where fraud is elsewhere punishable?Possible legislation

Part 3: Honda v. Friedrich Winkelmann

Honda v. Winkelmann – Background

Honda opposed application for V.I.C. for vehicles for transportation on land, air or water based on likelihood of confusion with Honda’s registrations and use of CIVIC for automobiles

– Application under Section 44(e) based on German registration, claiming a bona fide intent to use

Opposition sustained because there was no evidence of applicant’s bona fide intent to use the mark in the US to identify the claimed goods

History re No Bona Fide Intent

Factual question of intent is particularly unsuited to disposition on summary judgment. Copelands’ Ent., Inc. v. CNV, Inc., 945 F.2d 1563 (Fed. Cir. 1991)

Trademark Law Revision Act of 1988 Legislative History

Examples of objective circumstances which, if proven, “may cast doubt on” or “disprove … entirely” bona fide intent to use

– Numerous ITUs for same mark for many more new products than are contemplated

– Numerous ITUs for variety of desirable trademarks intended to be used on a single new product

– Numerous ITUs to register marks consisting of or incorporating descriptive terms relating to new product

– Numerous ITUs to replace applications which have lapsed because no timely declaration of use filed

– Excessive number of ITUs that were never used– Etc.

Commodore Elec. Ltd. v. CBM Kabushiki Kaisha, 26 USPQ 1503 (TTAB 1993)

Absence of any documentary evidence (unless other facts are presented which adequately explain/outweigh such absence) is sufficient to prove applicant lacks bona fide intent to use.

Lane Ltd. v. Jackson Int’l Trading Co., 33 USPQ2d 1351 (TTAB 1994)

Trademark Act does not expressly impose “any specific requirement as to the contemporaneousness of an applicant’s documentary evidence corroborating its claim of bona fide intention.”

“[F]ocus is on the entirety of the circumstances, as revealed by the evidence of record.”

The determination is to be “a fair, objective determination based on all the circumstances.”

Honda v. Winkelmann – Discovery

No business plansNo strategy or arrangements or methods No ongoing discussionsNo promotional activitiesNo identified channels of tradeNo activities in the United StatesNothing else to corroborate claim of bona fide intent to use

Honda v. Winkelmann – Discovery (cont.)

Interrogatory No. 34: State whether applicant had a bona fide intent to use the mark on or in connection with the goods on the day the application was filed.

– Answer: Yes

Interrogatory No. 36: If the response to ROG 34 was affirmative, identify any all evidence supporting applicant’s claim of bona fide intent to use mark for identified goods.

– Answer: Not Applicable

Documents sufficient to identify the following did NOT exist:– All intended uses of mark on or in connection with claimed

goods– Products of applicant associated with applicant’s mark – Documents applicant intends to use to promote, advertise,

publicize or sell goods under mark

Honda v. Winkelmann – Discovery (cont.)

Honda v. Winkelmann – “Evidence” of Intent

Documents applicant DID produce:– Printouts from applicant’s website (in German)– Copies of German, European and WIPO registrations– US PTO correspondence

What applicant claimed the documents showed/evidenced:– the types of vehicles applicant intends to promote,

advertise, sell, etc.– advertising/promotional means of applicant– applicant’s intent to use

Honda v. Winkelmann – Other “Evidence”

Declaration from applicant’s US and European attorneys– TTAB: Do not include any objective facts in support of

applicant’s intent; not afforded much weight

Argument that Honda did not object to registration of V.I.C. outside the United States

– TTAB: Not relevant

The Holdings of Honda v. WinkelmannApplicant “must rely on specific facts that establish the existence of an ability and willingness to use the mark” to identify goods at filing

“While the evidence necessary to support a bona fide intent to use may differ depending on the circumstances of each case, the evidence that applicant relies upon through its foreign registrations and Internet printouts does not demonstrate trademark use for the claimed goods.”

The Holdings of Honda v. Winkelmann (cont.)

Documents also “do not show that applicant has an intent to use the mark in the United States.”

Mark seems to be used to identify car care packages or dealerships, not the “vehicles for transportation”

Part 4: Lessons of Honda “Bona Fide Intent to Use” Case

Recap of Legal Standard

Mere absence of documentary evidence of bona fide intent is itself sufficient to prove lack of such intent, unless applicant can show other facts that “explain or outweigh”applicant’s failure to provide documentary evidence

Impact of Honda on Applicants

Document your intent prior to filing application!What non-documentary evidence might be relevant?Be careful how you respond to discoveryWarning to foreign trademark applicants

Bona Fide Intent? Really?

IC 001. US 001 005 006 010 026 046. G & S: Chemicals used in industry and science; photographic chemicals; chemical preparations for use in agriculture, horticulture and forestry namely, chemical preparations for the treatment of seeds; unprocessed artificial resins; unprocessed plastics; manures; fire extinguishing compositions; metal tempering preparations; soldering chemicals; chemical products for the fresh-keeping and preserving of food; tanning agents for use in the manufacture of leather; adhesives used in industry IC 002. US 006 011 016. G & S: Paints, varnishes, lacquers; rust preservatives in the nature of a coating; wood preservatives; colorants; mordants for general industrial use; raw natural resins; metals in foil and powder form for painters, decorators, printers and artists IC 003. US 001 004 006 050 051 052. G & S: Bleaching preparations; and other substances for laundry use, namely, essential oils as perfume for laundry purposes; fabric softeners for laundry use; laundry bleach; laundry blueing; laundry detergent; laundry fabric conditioner; laundry pre-soak; laundry sizing; laundry soap; laundry starch; cleaning, polishing, scouring and abrasive preparations; soaps; perfumery, essential oils, cosmetics, hair lotions; dentifrices

Bona Fide Intent? Really?

IC 004. US 001 006 015. G & S: Industrial oils and greases; all purpose lubricants; petroleum based dust absorbing compositions for use in road building, sweep, dustlaying; dust laying and absorbing composition for use on unpaved roads; granular absorbent oil-based composition for absorbing spills from floors; dust-binding compositions; fuels; illuminants in the nature of candles, candle-making kits, christmas tree candles, perfumed candles, scented candles, tallow candles, candle torches, candles for lighting IC 005. US 006 018 044 046 051 052. G & S: Pharmaceutical preparations for the treatment of heart rhythm disorders, infectious diseases, gastro-intestinal diseases, eye diseases and conditions, damaged skin and tissue, bone diseases, blood disorders, cancer, joint disease, acne, anti-drowsiness, cold sores, coughs, fever blisters, headaches, respiratory diseases and disorders, motion sickness, nausea, pulmonary hypertension, disorders of the nervous system, the immune system, the cardio-vascular system, the metabolic system, the respiratory system, and the musculo-skeletal system, inflammatory disorders, and diabetes; antibiotics, antifungal preparations and vaccines; veterinary preparations for bovine, sheep, horses, cats, dogs, and livestock for treatment of intestinal disorders and pain relief; sanitary preparations for medical purposes; dietetic foods adapted for medical use, namely, dietetic sugar for medical use; food for babies; medical plasters; materials for dressings, namely, bandages for dressings, burn dressings, gauze for dressings, medical and surgical dressings, medical dressings, self-adhesive dressings, surgical dressings, wound dressings, wound dressings, namely, pledgets; material for stopping teeth; dental wax; all purpose disinfectants; preparations for destroying vermin; fungicides, herbicides

Bona Fide Intent? Really?

IC 006. US 002 012 013 014 023 025 050. G & S: Common metals and their alloys; metal building materials, namely, metal countertops for further installation and reinforcing materials of metal for building purposes; transportable buildings made substantially of metal; materials of metal for railway tracks; non-electric cables and wires of common metal; ironmongery, namely, alloyed iron, cast iron, chrome iron ores, crampons, iron and steel for use as raw materials for automobile parts, iron or steel scraps, iron ores, iron pyrites, palletized iron, pig iron, pure iron ingots, sponge iron, wrought iron decorative artwork; small items of metal hardware, namely, pulleys, springs, nuts, washers, carabiners of metal, cable thimbles; pipes and tubes of metal; metal safes; baskets of common metal, boxes of common metal, buckles of common metal, common metal bands for the identification of birds, common metal bands for the identification of pet animals, common metal drawer pulls, common metals and their alloys including stainless steel, figurines of common metal, ingots of common metal, keyrings of common metal, non-electrical cables and wires of common metal, trophies of common metal, works of art of common metal, ores in the nature of chrome iron ores, cobalt, copper, iron, lead, manganese, molybdenum, nickel, tin, tungsten and zinc IC 007. US 013 019 021 023 031 034 035. G & S: Machines and machine tools used for cutting and forming of materials, breaking up road surface material , and removing waste material,; clamps for use in the precision clamping of work pieces; rotary dies for cutting boxes for packaging industry; motors and engines other than for land vehicles; machine coupling and transmission components except for land vehicles; agricultural machines, namely, cultivators, harvestors, disk harrows, seeders, seed planting machines; incubators for eggs

Impact of Honda on Challengers

Discovery may reveal basis for challenge

– Promptly amend complaint if evidence justifies

What makes an application particularly suspect?

– Excessive applications or goods/services

– Unusual groupings of goods/services

What of the Future?

Intent to Use as basis for filing trademark application

– “under circumstances showing good faith”

– “willingness and ability” to use mark at time of filing

– Potentially disproportionate impact on individual applicants

What of the Future? (cont.)

How much of application is at risk?– All, or by class?

When can lack of bona fide intent be raised?– Registration may be challenged only for five years

What of the Future? (cont.)

Should fraud standard apply in cases challenging an applicant’s bona fide intent?

– “Intent to Use” not objectively verifiable

THANK YOU!