In Brief: A trademark cannot be cancelled after a fraudulent declaration of incontestability.
Here’s What Happened:
First, a little background about the Section 15 declaration of incontestability for a trademark. Before the fifth anniversary of the registration of a trademark, the registration is prima facie evidence of rights in the mark. So, the USPTO can cancel the registration for any reason that would have prevented registration in the first place. After the fifth anniversary, the registrant can file a Section 15 Declaration of Incontestability. Once the mark becomes incontestable, registration can only be cancelled if the mark becomes generic or is abandoned. Therefore, a registrant has a lot to gain when the mark achieves incontestability.
Now to the matter at hand.
In 2003, Great Concepts LLC applied to register the trademark, “DANTANNA’S” for a steak and seafood restaurant. In 2006, Chutter Inc. filed a cancellation proceeding due to an alleged likelihood of confusion with, DAN TANA, a trademark it acquire from the eponymous owner of a restaurant. The Trademark Trial and Appeal Board suspended the cancellation proceeding because parties were also engaged in litigation in the district court. The district court granted Great Concepts’ motion for summary judgment. The cancellation proceeding was dismissed because Chutter had no rights in the mark after summary judgment in Great Concepts’ favor. Chutter appealed to the Eleventh Circuit Court of Appeals.
While this was going on, Great Concepts’ former attorney filed a combined Section 8 Declaration of Use and Section 15 Declaration of Incontestability. The attorney declared, among other things, “there is no proceeding involving said rights pending and not disposed of either in the U.S. Patent and Trademark Office or in the courts.” This statement was false because of the district court proceeding and the pending appeal resulting from it.
In July 2015, Chutter petitioned the Board for the cancellation of Great Concepts’ “DANTANNA’S” mark due to the false declaration of Great Concepts’ former attorney in the Section 15 Declaration. The Board concluded that the former attorney’s false Section 15 declaration satisfied the “fraudulently obtained” standard that warrants cancellation of the registration. The Board cancelled the registration.
Great Concepts appealed to the Federal Circuit Court of Appeals. A split panel of the Federal Circuit reversed the cancellation of the registration. The majority of court determined that the grounds for cancellation after a Section 15 declaration only “if the registered mark becomes the generic name for the goods or services . . . , or is functional, or has been abandoned, or its registration was obtained fraudulently . . .” In other words, the fraud has to take place during the registration process and not during what comes afterward. The court reversed the Board’s cancellation of Great Concepts’ trademark and remanded the case to the Board to determine the appropriate sanctions for a fraudulent Section 15 declaration.
Why You Should Know This: This decision may not be the last word. Other circuits have held that a fraudulent Section 15 Declaration is a basis to cancel registration. But if this case ends up being the overriding rule, what would the proper sanctions be? Could the Board cancel the Section 15 Declaration? If so, that would put the registration back into pre-Section 15 status and vulnerable to further attacks. So always take care in filing any document with the USPTO, no matter how innocuous or routine they may seem.
Case Information: Great Concepts, LLC v. Chutter, Inc., __ F.4th ___, No. 2022-1212, 2023 WL 6854647, at *1 (Fed. Cir. Oct. 18, 2023)