®
Official Journal of the International Trademark Association
A Search-Costs Theory of Limiting Doctrines in Trademark Law
By Stacey L. Dogan and Mark A. Lemley
The Trademark Dilution Revision Act of 2006:
Balanced Protection for Famous Brands
By Scot A. Duvall
Literal Falsity by Necessary Implication: Presuming Deception
Without Evidence in Lanham Act False Advertising Cases
By Richard J. Leighton
Sophistication and the Sciences
By Jerre B. Swann
Patents Compared to Trademarks:
The Duty of Candor/The Avoidance of Fraud
By Tamsen Valoir and Professor David Hricik
Phoenix of Broward, Inc. v. McDonald’s Corporation: Judicious
Application of the Doctrine of Prudential Standing, or Unjustified
Abstention from the Proper Exercise of Jurisdiction?
By Griffith B. Price, Jr.
Are Identical Marks in the Same Field of Services Likely to Be
Confused? Omicron Capital, LLC v. Omicron Capital, LLC
By Heather L. Jensen
An Introduction to the
New Trademark Trial and Appeal Board Rules
By James R. Robinson and Kathleen E. McCarthy
Amicus Brief of the International Trademark Association in
adidas AG and adidas Benelux BV v Marca Mode, C&A
Nederlanden, H&M Hennes & Mauritz Nederlands BV and Vendex
KBB Nederlanden BV
Vol. 97
November-December, 2007
No. 6
Vol. 97 TMR
1317
PATENTS COMPARED TO TRADEMARKS:
THE DUTY OF CANDOR/THE
AVOIDANCE OF FRAUD
By Tamsen Valoir∗ and Professor David Hricik∗∗
I. INTRODUCTION
The prosecution of both patent and trademark registration
applications in the United States Patent and Trademark Office
(USPTO) requires more than mere compliance with the relevant
statutes. Also imposed upon applicants is a “duty of good faith” in
all dealings with the USPTO. While similar in principle, the duty
of good faith differs markedly in the patent and trademark
contexts. For example, there is no general “duty to disclose”
imposed on the trademark registration applicant, while every
patent applicant has an affirmative duty to disclose all information
that is material to patentability. This article examines and
compares the contours of the duties of good faith in both contexts,
and provides several steps to help both patent and trademark
registration applicants, and their counsel, comply with this
important duty.
II. PATENTS AND THE DUTY OF CANDOR
There are two related but distinct duties of good faith, or
candor, in patent application practice. One can give rise to
discipline by the USPTO when violated, and the other is an
available defense to the enforcement of a patent.
The duty of good faith that can lead to discipline if violated is
also called a “duty of candor.” It is found in Section 1.56 of Title 37
of the Code of Federal Regulations (also known as “Rule 56”). Rule
56 states that a patent by its very nature is affected with a public
interest, and that the public interest is best served when the
USPTO is aware of and evaluates the teachings of all information
∗ Partner, Baker & McKenzie, LLP, Houston, TX, Associate Member of the
International Trademark Association. She has a J.D. and L.L.M. in Intellectual Property, a
doctorate in molecular biology from Rice University, and her practice is primarily in
intellectual property in the area of biotechnology
∗∗ Professor, Mercer University School of Law. He is the Chair of the Professionalism
& Ethics Committee of the American Intellectual Property Law Association and is an
authority on the topic of legal ethics.
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material to patentability. Thus, the rule imposes a duty of candor
and good faith in dealing with the Office.1
From 1977 to 1992, Rule 56 defined information as “material”
when “there is a substantial likelihood that a reasonable examiner
would consider it important in deciding whether to allow the
application to issue as a patent.”2 Under this rule, if the
information withheld is not as pertinent as that which was
considered by the Examiner, or is merely cumulative to that which
was considered by the examiner, then such information is not
material. As of March 16, 1992, Rule 56 was changed to provide:
[I]nformation is material to patentability when it is not
cumulative to information already of record or being made of
record in the application, and
(1) It establishes, by itself or in combination with other
information, a prima facie case of unpatentability of a
claim; or
(2) It refutes, or is inconsistent with, a position the
applicant takes in:
(i) Opposing an argument of unpatentability relied on by
the Office, or
(ii) Asserting an argument of patentability.
Rule 56 also states who must disclose: “Each individual
associated with the filing and prosecution of a patent application
has a duty of candor and good faith in dealing with the Office.”
Individuals defined as “associated with the filing or prosecution of
a patent application” within the meaning of Rule 56 include:
(1) Each inventor named in the application;
(2) Each attorney or agent who prepares or prosecutes the
application; and
(3) Every other person who is substantively involved in the
preparation or prosecution of the application and who is
associated with the inventor, with the assignee or with anyone
to whom there is an obligation to assign the application.3
Thus, inventors, managers, attorneys and even foreign agents
involved with corresponding foreign applications are subject to the
duty of candor.
The duration of the duty of candor is also defined by Rule 56:
“The duty to disclose information exists with respect to each
pending claim until the claim is canceled or withdrawn from
1. 37 C.F.R. § 1.65.
2. Hoffman-La Roche, Inc. v. Lemmon Co., 906 F.2d 684, 687 (Fed. Cir. 1991).
3. 37 C.F.R. § 1.56.
Vol. 97 TMR
1319
consideration, or the application becomes abandoned.”4 Although
the duty of candor terminates upon the issuance of a patent, it is
reactivated in later proceedings, such as patent reissue,
reinstatement, or reexamination.5
A second aspect of the duty of candor affects the enforceability
of a patent. An intentional failure to comply with the duty of
candor during prosecution of a patent application is known as
“inequitable conduct,” and it is a defense to allegations of
infringement of a patent. Inequitable conduct consists of an
“affirmative misrepresentation of a material fact, failure to
disclose material information, or submission of false material
information, coupled with an intent to deceive.”6
For many years, it was an open question whether the
amendments to Rule 56’s definition of “materiality” in 1992 also
controlled the scope of “materiality” in defining inequitable
conduct. Recently, however, the Federal Circuit addressed that
very issue and held that the question of whether a patent is
enforceable is still measured by the “reasonable examiner”
standard.7 Thus, even if information is not within the narrower
definition of “material to patentability” contained in the post-1992
version of Rule 56, a patent could be held unenforceable if
information was material from the perspective of a reasonable
examiner.
Though a required element, intent need not be proven by
direct evidence.8 Rather, the intent element of inequitable conduct
is generally inferred from the facts and circumstances surrounding
the patent applicant’s overall conduct.9 A finding of materiality
4. Id.
5. See, e.g., M.P.E.P. §§ 2012 (duty of candor issues can arise during reissue), 2280
(duty of candor explicitly required during reexamination), and 2001.03 (duty of candor
required during all proceedings with the USPTO).
6. Molins PLC v. Textron, Inc., 48 F.3d 1172, 1178 (Fed. Cir. 1995).
7. Hoffmann-La Roche, Inc. v. Promega Corp., 323 F.3d 1354, 1368 (Fed. Cir. 2003)
(“Although the current standard was not in effect at the time of the prosecution of this
patent, the new standard was not intended to constitute a significant substantive break
with the previous standard.”); Digital Control, Inc. v. Charles Mach. Works, 437 F.3d 1309,
1312 (Fed. Cir. 2006) (“Because the ‘reasonable examiner’ standard and our case law
interpreting that standard were not supplanted by the PTO's adoption of a new Rule 56,
when reviewing the district court's decision, we will do the same.”).
8. Paragon Podiatry Lab., Inc. v. KLM Lab., Inc., 984 F.2d 1182, 1189-90 (Fed. Cir.
1993) (“‘[S]moking gun’ evidence is not required in order to establish an intent to
deceive. . . .”).
9. LaBounty Mfg., Inc. v. United States Int’l Trade Comm’n, 958 F.2d 1066, 1076
(Fed. Cir. 1992) (“Direct proof of wrongful intent is rarely available but may be inferred
from clear and convincing evidence of the surrounding circumstances.”).
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does not lead to a presumption of intent.10 However, the more
material a withheld reference or misrepresentation is, the lesser
the degree of intent required to prove inequitable conduct.11 For
example, the requisite intent can be shown by proving a high
degree of materiality of a withheld prior art reference and by
proving that the applicant “should have known” of the reference’s
materiality.12 However, gross negligence, by itself, is insufficient to
prove intent.13
One who is alleging inequitable conduct must prove the
threshold elements of materiality and intent by clear and
convincing evidence.14 Inequitable conduct is resolved by the judge
and there is no right to a jury trial thereon,15 although the parties
may consent to a trial by jury.16
A variety of affirmative statements, misleading statements
and omissions have been held to be inequitable conduct in court,
including:
• The “selective” presentation of data;17
10. Allen Organ Co. v. Kimball Int’l, Inc., 839 F.2d 1556, 1567 (Fed. Cir.), cert. denied,
488 U.S. 850 (1988) (“[M]ateriality does not presume intent, which is a separate and
essential component of inequitable conduct.”).
11. Elk Corp. of Dallas v. GAF Building Materials Corp., 168 F.3d 28, 32 (Fed. Cir.),
cert. denied, 528 U.S. 873 (1999) (“. . . we have recognized that the more material the
omission, the less the degree of intent that must be shown to reach a conclusion of
inequitable conduct.”).
12. Brasseler, U.S.A. I., L.P. v. Stryker Sales Corp., 267 F.3d 1370, 1380 (Fed. Cir.
2001) (“Where an applicant knows of information the materiality of which may so readily be
determined, he or she cannot intentionally avoid learning of its materiality, even through
gross negligence; in such cases the district court may find that the applicant should have
known of the materiality of the information.”) (citations omitted); Semiconductor Energy
Lab. Co. v. Samsung Elecs. Co., 204 F.3d 1368, 1374 (Fed. Cir. 2000), cert. denied, 531 U.S.
1190 (2001) (“Proof of high materiality and that the applicant knew or should have known of
that materiality makes it difficult to show good faith to overcome an inference of intent to
mislead.”).
13. Halliburton Co. v. Schlumberger Technology Corp., 925 F.2d 1435, 1439 at n.3 (Fed.
Cir. 1991) (“Kingsdown . . . did not remove from the patent law the requirement to show
threshold levels of materiality and intent prior to engaging in the balancing test . . .
Kingsdown did discard the idea that a finding of gross negligence itself satisfies the intent
threshold.”) (citations omitted).
14. Molins PLC v. Textron, Inc., 48 F.3d 1172, 1178 (Fed. Cir. 1995). See also Akzo N.V.
v. United States Int’l Trade Comm’n, 808 F.2d 1471, 1481-82 (Fed. Cir. 1986), cert. denied,
482 U.S. 909 (1987) (“Materiality and intent must also be considered together: the more
material the omission or misrepresentation, the less intent that must be shown to reach a
conclusion of inequitable conduct.”).
15. Paragon Podiatry Lab., 984 F.2d at 1190 (“The defense of inequitable conduct in a
patent suit, being entirely equitable in nature, is not an issue for a jury to decide.”).
16. General Electro Music Corp. v. Samick Music Corp., 19 F.3d 1405, 1408 (Fed. Cir.
1994).
17. See e.g., Refac Int’l Ltd. v. Forward Reference Sys. Ltd., 81 F.3d 1576 (Fed. Cir.
1996) (holding that the submission of misleading affidavits, which failed to disclose the
affiant’s prior connection to the assignee or his prior knowledge of the invention, was
Vol. 97 TMR
•
•
•
•
•
•
•
1321
Misrepresenting prophetic data as actual data;18
Failure to cite art, allowances, or Office Actions from
related applications;19
Delay20 or failure to promptly disclose21 art;
Failure to disclose the best mode;22
Hiding the true inventorship of a patented invention;23
Filing a partial translation;24
Representing two clients with closely related
technologies where the same prior art is relevant to
inequitable conduct); Merck & Co. v. Danbury Pharmacal, Inc., 873 F.2d 1418 (Fed. Cir.
1989) (upholding finding of inequitable conduct where Merck emphasized the drug’s
freedom from side effects although FDA submissions established the side effect of
drowsiness); Fast Heat Element Mfg. Co. v. Rama Corp., 724 F.2d 802 (9th Cir. 1984)
(holding that misrepresenting the relevance of tests and stating that patentee would
conduct further tests when no additional tests were conducted was inequitable conduct).
18. Novo Nordisk Pharm., Inc. v. Bio-Technology Gen. Corp., 424 F.3d 1347 (Fed. Cir.
2005) (holding patent unenforceable for inequitable conduct where the applicant held out
example 1 as actual data, when it was only prophetic and where the example was important
in determining that the priority document was enabling).
19. McKesson Information Solutions, Inc. v. Bridge Med., Inc., 487 F.3d 897 (Fed. Cir.
2007) (affirming finding that failure to disclose material rejections, art and allowances (that
might have led to a double patenting rejection if the examiner had known) in related
applications was inequitable conduct).
20. Golden Valley Microwave Foods, Inc v. Weaver Popcorn Co., 837 F. Supp. 1444,
1476 (N.D. Ind. 1992), aff’d, 11 F.3d 1072 (Fed. Cir. 1993), cert. denied, 511 U.S. 1128 (1994)
(stating in finding inequitable conduct that “the case law and the . . . (M.P.E.P.) § 2002.03
(a) and § 2003 state that such references must be cited to the Examiner promptly and as
soon as the applicant is aware of the references.”). Cf. Applied Materials, Inc. v. Advanced
Semiconductor Materials America, Inc., 30 U.S.P.Q.2d 1967 (N.D. Cal. 1994) (refusing to
find inequitable conduct where the patentee delayed in submitting material art to the
USPTO and made misrepresentations to the USPTO before the art was provided because
“[o]nce the prior art . . . was disclosed, the Patent Examiner was free to reach his own
conclusion regarding the disclosure in the reference before him.”).
21. M.P.E.P. § 2004.
22. Consolidated Aluminum Corp. v. Foseco International, Ltd., 716 F. Supp. 316, 326
(N.D. Ill. 1989), aff’d, 910 F.2d 804 (Fed. Cir. 1990) (affirming a holding of inequitable
conduct where the patentee failed to provide the preferred slurry composition).
23. Frank’s Casing Crew & Rental Tools, Inc. v. PMR Techs., Ltd., 292 F.3d 1363, 1377
(Fed. Cir. 2002) (holding patent unenforceable for excluding a coinventor and stating, “We
have explained that ‘if unenforceable due to inequitable conduct, a patent may not be
enforced even by ‘innocent’ co-inventors. One bad apple spoils the entire barrel. Misdeeds of
co-inventors, or even a patent attorney, can affect the property rights of an otherwise
innocent individual.’”).
24. Semiconductor Energy Laboratory Co. v. Samsung Elecs. Co., 204 F.3d 1368, 1375
(Fed. Cir. 2000), cert. denied, 531 U.S. 1190 (2001) (affirming the invalidation of the patent
due to inequitable conduct where a Japanese partial translation was found to be misleading
and where the inventor “whose native language is Japanese, understood the materiality of
the Canon reference.”).
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both cases, so that the attorney’s duty of candor directly
conflicts with his duty of confidentiality;25
• Failure to disclose litigation26 about a related patent;27
and
• Burying28 an article in a very large amount of cited
art.29
The usual result of an intentional breach of the duty of candor
is to render the patent unenforceable.30 However, the consequences
can be even more severe. For example, it is possible that an
intentional breach of the duty of candor can infect patent
applications that are related to the offending application.31
25. Molins PLC v. Textron, Inc., 48 F.3d 1172, 1185 (Fed. Cir. 1995) (stating in dicta
that, “The position in which Smith placed himself was one fraught with possible conflict of
interest because Smith’s dual representation of two clients seeking patents in closely related
technologies created a risk of sacrificing the interest of one client for that of the other and of
failing to discharge his duty of candor to the PTO with respect to each client.”). For
additional discussion on this subject, see D. Hricik, The Risks and Responsibilities of
Attorneys and Firms Prosecuting Patents for Different Clients in Related Technologies, Tex.
Intell. Prop. L.J. 8(3): 279-377 (2000).
26. M.P.E.P § 2001.06(c).
27. Critikon, Inc. v. Becton Dickinson Vascular Access, Inc., 120 F.3d 1253, 1255 (Fed.
Cir. 1997), cert. denied, 523 U.S. 1071 (1998) (“Critikon should have disclosed that the
original Lemieux patent was concurrently involved in the present litigation and that claims
of invalidity and inequitable conduct were asserted against the patent. Failure to disclose
. . . the fact that the Lemieux patent was in litigation was done with an intent to mislead or
deceive and rises to the level of inequitable conduct.”); Golden Valley Microwave Foods, Inc.,
837 F. Supp. at 1465-6, 1477 (finding inequitable conduct where the patentee failed to tell
the patent office that the devices of the invention were involved in a suit for patent
litigation, where the patent-in-suit was not otherwise before the examiner, and where the
patentee took a position in litigation that was inconsistent with its position in front of the
USPTO, and stating that patentee had a duty to disclose any “material information” that
might arise in the litigation).
28. M.P.E.P. § 2004.
29. Golden Valley Microwave Foods, 837 F. Supp. at 1477 (“it is likewise a violation of
the duty of candor . . . to disclose a pertinent prior art reference to the examiner in such a
way as to ‘bury’ it or its disclosures in a series of disclosures of less relevant prior art
references . . .”); Penn Yan Boats, Inc. v. Sea Lark Boats, Inc., 359 F. Supp. 948, 965 (S.D.
Fla. 1972), aff’d, 479 F.2d 1328 (5th Cir.), cert. denied, 414 U.S. 874 (1973) (“the purpose of
this misrepresentation was to bury the Wollard patent in a long list of allegedly old prior art
patents . . . Such conduct clearly violates the required standard of candor and fair dealing
with the Patent Office.”); Cf. Molins PLC, 48 F.3d at 1184 (distinguishing Penn Yan because
in Penn Yan the patentee had not only buried the reference, but also mischaracterized it in
an attempt to deceive the USPTO).
30. Molins PLC, 48 F.3d at 1182 (affirming the unenforceability of a patent due to
inequitable conduct).
31. Fox Indus. v. Structural Preservation Sys., 922 F.2d 801, 803-04 (Fed. Cir. 1990) (“a
breach of the duty of candor early in the prosecution may render unenforceable all claims
which eventually issue from the same or a related application.”) (footnote omitted);
Consolidated Aluminum Corp. v. Foseco Int’l Ltd., 910 F.2d 804, 809 (Fed. Cir 1990)
(“Consolidated’s intentional concealment of the best mode and disclosure of a fictitious
inoperable mode during prosecution of the application for the ’917 patent so soiled
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Negative outcomes can also include an award of attorneys’ fees,32
or antitrust claims may lie where a breach rises to the level of
fraud and the other requirements of the Sherman Act are met.33
Finally, a practitioner also may face disciplinary action or even
disbarment from practice at the USPTO for inequitable conduct.34
Although there is a deluge of case law on what does and does
not constitute a failure to comply with the duty of candor under
Rule 56, the easiest way to avoid having to deal with any such
allegation is to follow some practical tips during prosecution of a
patent application. The following are some practical ways to more
fully comply with the duty of candor.
First, send a “duty of candor” letter to every inventor and
assignee, explain the duty of candor in plain English, and give
examples of the types of material information that should be
disclosed. Send the letter to each inventor, the person in charge of
intellectual property for the inventor’s assigns, possibly the
president or division manager, and anyone else involved in the
prosecution of the patent application. Consider also whether the
letter needs to be addressed to key marketing personnel, or
technicians and co-authors involved in the development of the
invention, but who are not themselves named inventors.
Second, if there is a large portfolio of related technology,
consider keeping a separate alphabetical art file. Prior art, all
related co-pending patent applications, and all issued patents can
be included in the index, in table format for easy cross-referencing,
to determine what has been cited in a given patent application.
This precaution helps to eliminate the very common problem of
Consolidated’s hands as to render the [continuation] ’081, ’212 and ’303 patents equally
unenforceable. . . .”).
32. Brasseler, U.S.A.I., L.P. v. Stryker Sales Corp., 267 F.3d 1370 (Fed. Cir. 2001)
(affirming award of attorney fees where materiality of on sale bar proven and intent
inferred from attorney’s gross negligence in failure to investigate the facts surrounding the
bar); Fox Indus., 922 F.2d 801 (affirming an award of attorney’s fees where the patentee had
failed to disclose a highly material sales brochure). Cf. Nobelpharma Ab v. Implant
Innovations, 141 F.3d 1059, 1070 (Fed. Cir.), cert. denied, 525 U.S. 876 (1998) (“Antitrust
liability can include treble damages. In contrast, the remedies for inequitable conduct, while
serious enough, only include unenforceability of the affected patent or patents and possible
attorney fees. Simply put, Walker Process fraud is a more serious offense than inequitable
conduct.”) (citations omitted).
33. Walker Process Equipment, Inc. v. Food Machinery & Chemical Corp., 382 U.S. 172
(1965) (holding that seeking to enforce a patent known to be invalid because it was obtained
by the knowing and willful withholding of information about prior uses could support an
antitrust claim).
34. Jaskiewicz v. Mossinghoff, 822 F.2d 1053 (Fed. Cir. 1987) (recognizing that a
finding of inequitable conduct by an attorney could amount to “gross misconduct” under
Section 32 and noting that disciplinary action could also be taken under the ABA Code of
Professional Responsibility).
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citing prior art in one application, but forgetting to cite it in a
related application.35
Third, take steps to ensure that inventors do not unwittingly
make misrepresentations to the USPTO by neglecting to present or
discuss failed experiments. This is particularly true when
preparing an Inventor Declaration, and in doing so, one should
inquire about all contradictory data and possible conflicts of
interest.
Finally, clean out the files of working papers, notes, drafts,
and non-relevant prior art, as soon as the patent issues. Ideally,
the file should be a replica of the USPTO file with the addition of
formal client correspondence. This avoids providing patent
litigators with what can be portrayed as ready-made, potentially
damaging material.
Occasionally, art is discovered that was not cited to the
USPTO, but arguably should have been. It may be possible to cure
the unintentional breach of the duty of candor by immediate
disclosure of the breach and appropriate corrective action.
Generally, the patent applicant must: (i) expressly advise the
USPTO of the misrepresentation’s existence; (ii) advise the USPTO
of what the actual facts are and make clear that further
examination in light thereof may be required if any USPTO action
has been based on the misrepresentation; and (iii) establish
patentability on the basis of the factually accurate record.36 If
necessary, the application should be withdrawn from issue, or an
issued patent taken to re-issue or re-examination in order to
clarify the record.
III. TRADEMARKS AND FRAUD
In prosecuting a trademark registration application before the
USPTO, there is also a duty of good faith or candor,37 but the duty
35. McKesson Info. Solutions, Inc. v. Bridge Med., Inc., 487 F.3d 897 (Fed. Cir. 2007).
36. Rohm & Haas Co. v. Crystal Chem. Co., 722 F.2d 1556, 1566, 1572-3 (Fed. Cir.
1983), cert. denied, 469 U.S. 851 (1984) (stating that where “material misrepresentations
have been made, as here, a complete “cure” must also be demonstrated by clear,
unequivocal, and convincing evidence”). Cf. Lipman v. Dickinson, 174 F.3d 1363 (Fed. Cir.
1999) (finding a breach of the duty of candor where an attorney filed an appeal brief to have
a client admitted to practice before the USPTO, and the attorney knowingly included in the
appeal brief four affidavits that had been withdrawn and disavowed by the affiants before
the filing of the appeal brief, even where the attorney later informed the USPTO that they
should not rely on those briefs).
37. See e.g., Aromatique, Inc. v. Gold Seal, Inc., 28 F.3d 863, 877 (8th Cir. 1994)
(“Aromatique defended its actions in part by asserting that an applicant for a trademark
owes no duty of candor to the USPTO. This is plainly wrong.”) (citing Copelands’ Enter. v.
CNV, Inc., 945 F.2d 1563, 1567-68 (Fed. Cir. 1991) and Orient Express Trading Co. v.
Federated Dep’t Stores, Inc., 842 F.2d 650, 653 (2d Cir. 1988), as well as legal commentary).
See generally Martin Petrin, Cancellation of Fraudulent Trademark Registrations Under the
Vol. 97 TMR
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is in some respects less burdensome than in the patent context.38
This makes sense if one considers that a trademark registration
does not itself create rights—trademark rights already exist on
first use. Instead, trademark registration only confers certain
procedural rights (such as incontestability) on owners. In contrast,
no analogous rights exist absent an issued U.S. patent, and
therefore, the duty of candor is necessarily more onerous in the
patent prosecution context.39
Although there is a “duty of candor” in prosecuting a
trademark registration application, nowhere has it been codified in
these terms. Instead, the United States Code prohibits “false or
fraudulent” statements in the procurement of a trademark
registration, as follows:
Civil liability for false or fraudulent registration. Any
person who shall procure registration in the Patent and
Trademark Office 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.40
Likewise, the applicable time period for the duty of good faith in
the trademark context is not expressly codified. However, case law
provides that the duty exists throughout the application for
Lanham Act and the European Community Trademark Regulation, 11 Intell. Prop. L. Bull.
161 (2007); Kevin Kramer & Stephanie Goeller, Ethical Issues in Trademark Practice Before
the PTO, PLI Order No. 11167 (Feb. 2007); Siegrun D. Kane, Trademark Update: A Protean
Journey, PLI Order No. 8821 (Sept. 2006).
38. 3M v. Shurtape Techs., 62 U.S.P.Q.2d 1606 (D. Minn. 2002) (“Reliance on patent
cases with respect to fraud in the procurement of a trademark registration is misplaced,
however. As noted in the leading treatise addressing trademark law:
[T]he law of fraud in the trademark registration context has taken a very different
direction that than the law of fraud in the patent procurement process, and for
very good reasons. The fact that the U.S. Patent and Trademark Office (PTO) both
grants patents and registers trademarks is a historical development doubtless
fascinating to the student of the federal bureaucracy. But it is a non sequitur to
conclude from the coincidental fact that the PTO performs both roles that
therefore the law of “fraud” is identical in both contexts. It is quite different.”)
(citing McCarthy On Trademarks And Unfair Competition § 31:62).
39. Morehouse Mfg. Corp. v. J. Strickland and Co., 407 F.2d 881, 888 (C.C.P.A. 1969)
(“There does not exist in trademark cases the fundamental reason for being on the alert to
find fraud on the Patent Office which exists in patent cases. Every right a patentee has is
given to him by the Patent Office. On the other hand, the acquisition of the right to exclude
others from the use of a trademark results from the fact of use and the common law,
independently of registration in the Patent Office.”).
40. 15 U.S.C. § 1120; see also 15 U.S.C. § 1115 (providing a defense against
incontestability if “the registration or the incontestable right to use the mark was obtained
fraudulently”).
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trademark registration, and includes, for example, a duty to
continuously review and amend the first use oath.41
As in the patent context, breach of the duty of candor may
result in the loss of intellectual property rights. A trademark
registration may be cancelled “at any time” if “its registration was
obtained fraudulently.”42 However, although a registration may be
cancelled, suit may still be maintained for infringement of common
law trademark rights.43 Thus, the loss of a trademark registration
for a breach of the duty of candor is less significant for trademarks
than for patents, where the loss is complete, irreversible, and can
even extend to related patent family members.
To make a case for cancellation of a registration, false material
statements and intent to mislead the USPTO must be shown.44
Further, the evidence must be “clear and convincing,”45 and the
issue is one for the jury to decide in litigation,46 though it is
regularly used in cancellation proceedings before the U.S.
Trademark Trial and Appeal Board (TTAB).47 The TTAB has
emphasized repeatedly that there must be nothing left “to
speculation, conjecture or surmise” and any “doubt must be
41. Rosso & Mastracco. Inc. v. Giant Food, Inc., 720 F.2d 1263, 1265 (Fed. Cir. 1983)
(“RM bases its claim of fraud on the ground that Giant had a duty, which it failed to carry
out, to continuously review and amend the oath filed with its application for the registration
sought to be cancelled. We do not doubt that an applicant has that duty.”); see also San Juan
Prods., Inc. v. San Juan Pools, Inc., 849 F.2d 468, 473 (10th Cir. 1988) (where accused
infringer argued, “Appellants sought to cancel Giant Food’s registration ‘on the ground that
Giant had a duty, which it failed to carry out, to continuously review and amend the oath
filed with its application for registration. . .’”).
42. 15 U.S.C. § 1064.
43. Far Out Prods. v. Oskar, 247 F.3d 986, 996 (9th Cir. 2001) (“Moreover, even if
Goldstein knowingly submitted a false declaration such that the appellees’ federal
registration should be canceled, the appellees could (and did) still bring suit alleging
common law trademark infringement. See McCarthy, supra note 38 at 31-109 (noting that
‘it has been held several times that even if defendant succeeds in proving that the plaintiff’s
registration was fraudulently obtained, plaintiff’s common law rights in the mark continue
unabated’ even if the registration is canceled).”).
44. Aromatique, 28 F.3d at 877-78 (“Proof that false statements were made to, or that
facts were withheld from, the PTO, however, is not enough to show fraud for purposes of
canceling a mark because of a party’s fraudulent conduct. In order to show that an applicant
defrauded the PTO the party seeking to invalidate a mark must show that the applicant
intended to mislead the PTO.”) (citations omitted). See also Metro Traffic Control, Inc. v.
Shadow Network, Inc., 104 F.3d 336, 340 (Fed. Cir. 1997) (“Fraud in procuring a . . . mark
occurs when an applicant knowingly makes false, material representations of fact in
connection with an application.”).
45. Metro Traffic Control, 104 F.3d at 340.
46. 3M, 62 U.S.P.Q.2d at 1608 (denying a motion for separate trial on the issues of
fraud and stating “None of the trademark cases cited to the Court by 3M stands for the
proposition that fraud in the procurement of a trademark are issues for the court to
decide.”).
47. E.g., Sinclair Oil Corp. v. Sumatra Kendrick, 2007 WL 1653584 (T.T.A.B. 2007).
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resolved against the party making the claim.”48 It must be, in other
words, “proven to the hilt.”49 Although the cases emphasize that
the showing is high, as noted below, trademark registration fraud
has in some ways become a strict liability offense, and “intent” is
not a required, independent element.
Subjective intent need not be proven: it is enough to show
objective intent based on the facts and circumstances surrounding
the alleged misrepresentation.50 Thus, it is sufficient to infer intent
from materiality in view of the surrounding circumstances. Unlike
patents, courts have used a “reckless” or the broader negligence
“known or should have known” standard to infer intent when the
surrounding circumstances warrant it.51
Indeed, recent cases have cancelled registrations even where
there was no actual evidence of intent or knowledge of the
misstatement. For example, in Kipling Apparel Corporation v.
Michael Rich,52 the TTAB stated that even though the applicant
was not represented by counsel, that “did not shield applicant from
our finding that he knew or should have known that the
representation of fact in his application was false” because it was
“not reasonable for applicant to state use dates in a use-based
48. Id.
49. Bose Corp. v. Custom Elec. Design & Installation Ass’n, 2007 WL 1368976
(T.T.A.B. 2007).
50. Medinol Ltd. v. Neuro Vasx, Inc., 67 U.S.P.Q.2d 1205, 1209 (T.T.A.B. 2003) (“The
appropriate inquiry is therefore not into the registrant’s subjective intent, but rather into
the objective manifestations of that intent. ‘We recognize that it is difficult, if not
impossible, to prove what occurs in a person’s mind, and that intent must often be inferred
from the circumstances and related statement made by that person.’”). See generally Karen
P. Severson, Filer Beware: Medinol Standard Set Forth by the United States Patent and
Trademark Office, 96 TMR 758 (2006).
51. Medinol, 67 U.S.P.Q.2d at 1209-10 (“Respondent’s explanation for the
misstatement (which we accept as true)—that the inclusion of stents in the notice of
allowance was ‘apparently overlooked’—does nothing to undercut the conclusion that
respondent knew or should have known that its statement of use was materially incorrect.
Respondent’s knowledge that its mark was not in use on stents—or its reckless disregard for
the truth—is all that is required to establish intent to commit fraud in the procurement of a
registration.”); Aromatique, 28 F.3d at 877 (“Aromatique’s failure to inform the PTO of its
false claims that its trade dress had been federally registered may also constitute fraud on
the PTO, or gross negligence and reckless disregard of the law, from which an intent to
deceive the PTO may be inferred.”); Torres v. Cantine Torresella S.r.l., 808 F.2d 46, 49 (Fed.
Cir. 1986) (unpublished opinion) (“The problem of fraud arises because Torres submitted a
label that he knew or should have known was not in use that contained a mark clearly
different from the one in use. In addition, he submitted an affidavit stating the mark was in
use on wine, vermouth, and champagne when he knew it was in use only on wine.”);
Standard Knitting, Ltd. v. Toyota Jidosha Kabushiki Kaisha, 2006 TTAB LEXIS 9, *36
(T.T.A.B. 2006) (unpublished opinion) (“‘proof of specific intent to commit fraud is not
required, rather, fraud occurs when an applicant or registrant makes a false material
representation that the applicant or registrant knew or should have known was false.’”)
(citation omitted).
52. 2007 WL 1207190 (T.T.A.B. 2007).
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application for goods upon which he had no dates.”53 The TTAB
has seemed willing to presume intent from materiality, in other
words, which is not the case in patent practice.54
Various false statements made in obtaining a trademark
registration have been shown to be fraudulent. For example,
fraudulent procurement has been found on more than one occasion
where the applicant declared that the mark was “in use” on one or
more items when it was not in fact in use.55 Further, the TTAB has
held that such a false statement cannot be cured by deleting the
goods for which the mark has not been used.56 Other instances
where fraud was found include cases in which the applicant
claimed to be an owner of a mark, when it was only a licensee.57
However, unlike in patent cases, reporting pending litigation is
apparently not required.58
53. Id.
54. See also Hachette Filipacchi Presse v. Elle Belle, LLC, 2007 WL 1144946 (T.T.A.B.
2007) (“Nor does the misunderstanding on the part of respondent’s attorney preclude our
finding of fraud.”). Some TTAB opinions seem to even shift the burden of proof, requiring
the applicant to establish that it acted reasonably and in good faith, rather than requiring
that the opponent prove it. E.g., Salt Creek, Inc. v. Hikari Sales, USA, Inc., 2007 WL
1022713 (T.T.A.B. 2007) (“fraud will not lie if it can be proven that the statement, though
false, was made with a reasonable and honest belief that it was true.”).
55. Medinol, 67 U.S.P.Q.2d at 1209-10 (finding fraud in statement of use where, “[t]he
undisputed facts in this case clearly establish that respondent knew or should have known
at the time it submitted its statement of use that the mark was not in use on all of the
goods.”); Standard Knitting, 2006 TTAB LEXIS at *34 (unpublished opinion) (canceling a
mark for a fraudulent use statement where “It was not reasonable for Mr. Groumoutis to
believe that if the items of clothing were ever made or sold, even if the last sale took place
20 years ago, it would support a claim that the mark ‘is’ in use on the goods.”); Orion Elec.
Co. v. Orion Elec. Co., 2004 TTAB LEXIS 147, *20-21 (T.T.A.B.) (unpublished opinion)
(“These facts clearly establish that applicant knew or should have known at the time it
submitted its application, and later when it amended its identification of goods by deleting
numerous items, that the mark was not in use on all of the goods listed upon publication,
and, thus, that its sworn statement in the application was materially incorrect.”) (footnote
omitted).
56. Medinol, 67 U.S.P.Q.2d at 1208 (“Most importantly, however, deletion of the goods
upon which the mark has not yet been used does not remedy an alleged fraud upon the
Office. If fraud can be shown in the procurement of a registration, the entire resulting
registration is void.”).
57. Truong Giang Corp. v. Sunny Wong, 1999 TTAB LEXIS 312, *40 (T.T.A.B. 1999)
(unpublished opinion) (“We consequently find that respondent, by advising the PTO that
petitioner was his licensee and claiming under oath that he was the owner of the “Three
Ballerina” mark when he knew or plainly should have known otherwise, made knowingly
false and material representations of fact in connection with his application which induced
the PTO to issue him the subject registration for the “Three Ballerina” mark. Such
registration was accordingly procured by fraud.”); see also Mears v. Montgomery, 2004 U.S.
Dist. LEXIS 7836, *70 (S.D. N.Y. 2004) (canceling mark where a misstatement of ownership
by licensee was made with knowledge of its inaccuracy and was material to the procurement
of the registration).
58. Ocean Spray Cranberries, Inc. v. Société des Produits Nestlé S.A., 1999 TTAB
LEXIS 498, *10 (T.T.A.B. 1999) (unpublished opinion) (“We note initially that while the
Patent and Trademark Office prefers that applicants advise the examining attorney of any
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In addition to loss of registration rights for fraudulent
procurement, attorneys fees may be awarded,59 and although there
are no known examples, an attorney can be disciplined or
disbarred for making fraudulent statements to the USPTO.
As with patents,60 most authority holds that there is no duty
to perform a search prior to making an application for a trademark
registration.61 However, unlike the duty of candor in patent
applications, there is no general “duty to disclose” known thirdparty uses of the mark.62 Only where another user rights are
“clearly established” must this use be disclosed.63 Rights can be
“clearly established,” at least by a court decree, by a settlement
agreement or a trademark registration.64
Although there are as yet fewer instances of fraud
cancellations of trademark registration than inequitable conduct
findings in the patent context, it would be foolhardy to treat lightly
this obligation in a world where a brand name can be critical to a
company’s success or be among its most-valued assets. As with
court action involving marks in pending applications, neither the Statute nor the Rules
requires them to do so. Thus, applicant’s silence on this matter is not actionable.”).
59. Orient Express Trading Co. v. Federated Dep’t Stores, Inc., 842 F.2d 650 (2d Cir.
1988) (affirming cancellation of marks for use of exaggerated and fallacious statements in
the procurement of marks on the eve of litigation and awarding opposing party attorneys’
fees).
60. Frazier v. Roessel Cine Photo Tech, Inc., 417 F.3d 1230, 1238 (Fed. Cir. 2005) (“‘as
a general rule, there is no duty to conduct a prior art search . . .’”).
61. Money Store, 689 F.2d at 671 (“Nowhere does the Lanham Act specifically mandate
a preapplication search by one who seeks federal registration of a mark.”); Shoreline Dev.,
Inc. v. Cendant Corp., 2002 U.S. Dist. LEXIS 7836, *11 (N.D. Ohio 2002) (“The law . . .
places no duty on defendants to conduct a search before selecting a trademark.”) (citation
omitted). But see International Star Class Yacht Racing v. Tommy Hilfiger U.S.A., 38
U.S.P.Q.2d 1369 (2d Cir. 1996).
62. Rosso & Mastracco, 720 F.2d at 1265-66 (“The statute does not, however, obligate
‘one seeking federal registration of a mark to investigate and report all other possible users
of an identical or confusingly similar mark.’”) (citation omitted); see also Bonaventure
Associates v. Westin Hotel Co., 218 U.S.P.Q. 537, 540 (T.T.A.B. 1983) (“the statement of an
applicant that no other person ‘to the best of his knowledge’ has the right to use the mark
does not require the applicant to disclose those persons whom he may have heard or noticed
are using the mark if he believes that the rights of such others are not superior to his.”);
Allen Homes, Inc. v. Weersing, 510 F.2d 360 (8th Cir.), cert. denied, 421 U.S. 998 (1975)
(affirming judgment for plaintiff’s on defendant’s counterclaim because plaintiff’s had no
duty to disclose a similar mark registered in a separate classification and, thus, plaintiff
had not engaged in fraud in acquiring registration).
63. eCash Techs., Inc. v. Guagliardo, 210 F. Supp. 2d 1138, 1149 (C.D. Cal. 2000)
(“Only in the rare circumstance that another user of the same mark’s rights are ‘clearly
established’ must this use be disclosed. In Rosso, the Federal Circuit indicated that rights
may be ‘clearly established’ by ‘a court decree, by . . . a settlement agreement, or by a
[trademark] registration.’ In most cases, the registration applicant has no obligation to
report other users.”) (citations omitted); see also Robi v. Five Platters, Inc., 918 F.2d 1439,
1444 (9th Cir. 1990) (finding a right “clearly established” by an adverse court decision).
64. eCash Techs., 210 F. Supp. 2d at 1149.
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patent application prosecution, there are steps that can be taken to
prevent the occurrence of fraud and the possible loss of registration
rights.
First, send trademark registration applicants a letter about
the registration application oath and the duty of candor,
explaining each in simple language. Because the claim of fraud is
relatively new in the trademark context, but increasing,
trademark owners may not yet be aware of the scope and
importance of the duty of candor in U.S. trademark registration
practice. Send a similar letter again when the first postregistration Declaration of Use under Section 8 of the U.S.
Trademark (Lanham) Act is to be executed, reminding owners that
the mark must be used on each of the listed goods.
Second, keep track of prior trademark uses that arguably
should be reported to the USPTO. One has a duty to disclose prior
uses if it is “clearly established” that another user has rights in the
subject mark. Therefore, bring settlement agreements or court
judgments to the USPTO’s attention.65 Registrations also “clearly
establish” another’s rights, so although mere domain name or
common law trademark uses need not be reported, trademark
registrations should be reported where the registered marks are
identical or confusingly similar.66
Third, if there is apparent confusion as to ownership of the
mark, take additional steps to investigate true ownership. Mere
licensees cannot acquire trademark registration rights.
Finally, there may be an opportunity to “cure” any breach. As
noted above, there is a narrow window of opportunity to “purge”
inequitable conduct in the patent prosecution context. There also
may be a window in the trademark area. The TTAB in one recent
decision included this footnote:
We note that Respondent’s amendment was filed after the
commencement of this cancellation proceeding. Whether an
amendment to correct the description of goods that is
65. Rosso & Mastracco, 720 F.2d at 1266 (“On the other hand, the oath in an
application for registration must be truthful. Thus, in some instances a senior user would be
making a false oath where he fails to acknowledge conflicting rights of a junior user which
are clearly established, for example, by a court decree, by the terms of a settlement
agreement, or by a registration. However, the rights of a junior user must be clearly
established and must be in an identical mark or one so similar as to be clearly likely to
cause confusion,” but holding that there was no fraud for failure to report geographic
restriction settlement where there was no agreement that the concurrent uses were likely to
cause confusion).
66. Id. (“a senior user would be making a false oath where he fails to acknowledge
conflicting rights of a junior user which are clearly established . . . by a registration.”).
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submitted before a cancellation proceeding is filed would cure
or remove fraud as an issue, is not currently before us.67
It may be, as a result, that if an applicant amends its application
prior to an opposition or cancellation proceeding being undertaken,
any breach of the duty of candor may be “purged.”
IV. CONCLUSION
In any practice before the USPTO, the duty of good faith is a
serious one, and one that is often overlooked by inventors,
trademark registration applicants, patent applicants, and
attorneys for any number of reasons, including the mere press of
time. However, it is important not to compromise a trademark or
patent portfolio by failing to take the time to ensure that the duty
of good faith is explained and met in practice.
67. Hachette Filipacchi Presse v. Elle Belle, LLC, 2007 WL 1144946 n.2 (T.T.A.B.
2007).