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Reckless Disregard for the Truth of a Material Statement Made to the USPTO Is Sufficient for Proving the Intent to Deceive

By Li-Jen Shen, Cory Smith and George C. Chen
January 01, 2022

The Trademark Trial and Appeal Board (TTAB) has finally filled a gap left by the U.S. Court of Appeals for the Federal Circuit in the standard for finding deceptive intent when trying to prove fraud on the U.S. Patent & Trademark Office (USPTO). In Chutter, Inc. v. Great Management Group, LLC and Chutter, Inc. v. Great Concepts, LLC, 2021 USPQ2d 1001 (TTAB 2021), the TTAB held, in a precedential opinion, that a reckless disregard of the truth or falsity of a material statement made to the USPTO satisfies the deceptive intent requirement for finding fraud. The TTAB applied this holding in a cancellation proceeding to invalidate U.S. Trademark Registration No. 2,929,764 because: 1) the registrant's attorney failed to disclose proceedings against the registration pending at the time the registrant filed its Section 15 Declaration to make the registration incontestable; and 2) the registrant's knowing failure to take any remedial action after being informed of the error suggests that the failure to disclose was intentional and, thus, satisfied the deceptive intent requirement to prove fraud.

Discussion By the TTAB

"Fraud in procuring or maintaining a trademark registration occurs when an applicant for registration, or a registrant in a post registration setting, knowingly makes a false, material representation of fact in connection with an application to register, or a post registration document, with the intent of obtaining or maintaining a registration to which it is otherwise not entitled." Id. at *12 (citing In re Bose Corp., 580 F.3d 1240, 1245 (Fed. Cir. 2009); Torres v. Cantine Torresella S.r.l., 808 F.2d 46, 1 USPQ2d 1483, 1484 (Fed. Cir. 1986); Embarcadero Techs., Inc. v. Delphix Corp., 117 USPQ2d 1518 (TTAB 2016)). In deciding whether the registrant committed fraud on the USPTO in connection to the registration at issue, the TTAB applied the Federal Circuit's Bose standard (see, In re Bose Corp., 580 F.3d 1240 (Fed. Cir. 2009)) and easily found all of the elements supported a conclusion of fraud, except for the indispensable element in the Bose analysis — the subjective intent to deceive the USPTO when the false statement was made. Chutter, 2021 USPQ2d at *14-*16. As provided in Bose, the standard for finding subjective intent to deceive is stricter than the standards for finding negligence or gross negligence. Id. at *13. No clear and convincing evidence existed in this case to directly prove the subjective intent, but the TTAB determined that the facts in this case demonstrated more than gross negligence. Indeed, the TTAB determined that the conduct of the registrant's attorney on behalf of the registrant constituted, at a minimum, reckless disregard of the truth or falsity of the statements made in the Section 15 Declaration to the USPTO. Id. at *19-20.

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