Can the filing of a false Section 15 Declaration provide valid grounds for cancellation of a trademark registration? In the case of Great Concepts, LLC v. Chutter, Inc., the Federal Circuit Court answered no. They did so again in a modified opinion after a petition for rehearing was filed by Chutter and the United States Patent and Trademark Office (USPTO) – see 90 F.4th 1333 (Fed. Cir. January 10, 2024).
The Federal Circuit ruled the USPTO Trademark Trial and Appeal Board (TTAB) did not have the authority to cancel the registration of a trademark made incontestable by the filing of a fraudulent declaration. This court ruling overturned the longstanding TTAB precedent created by Crown Wallcovering Corp. v. Wall Paper Mfrs. Ltd.
How did the court come to this decision?
Tana v. Dantanna’s
The underlying case involved a dispute over the trademark DANTANNA’S, which was registered for restaurant services by a Georgia company – Great Concepts, LLC – in 2005. Complications arose when Dan Tana, an actor and former professional football player who had owned his own restaurant – Dan Tana’s – since 1964 in California, waited to file a trademark application with the USPTO until 2006.
His application was blocked from registration by the application filed by Great Concepts, LLC. Tana filed a petition to cancel the registration owned by Great Concepts based on the likelihood of confusion. The two parties fought in court for several years, with Tana losing on summary judgment and on appeal. The TTAB also dismissed his petition to cancel.
Several years later, in 2010, an attorney for Great Concepts filed a Combined Declaration of continued use and incontestability with the USPTO. The Declaration claimed, “there is no proceeding involving said rights pending and not disposed of either in the USPTO or the courts.” This statement was false, since the cancellation proceeding before the TTAB and the appeal before the Eleventh Circuit court were still pending at the time.
However, the USPTO accepted the combined declaration and granted Great Concepts’ registration for DANTANNA’S, as well as incontestable status, which serves as conclusive evidence of the validity of the trademark and that Great Concepts has the exclusive right to the mark.
Meanwhile, Chutter, Inc. acquired the rights to Tana’s trademark – DAN TANA’S – and in 2015 filed another petition to cancel the trademark registration owned by Great Concepts for DANTANNA’S. This petition to cancel was based on the fraudulent filing for incontestability in 2010. As a result, the USPTO canceled DANTANNA’S registration.
Great Concepts appealed the cancellation to the Federal Circuit, which then applied principles of statutory construction and looked to the language in Section 14 of the Lanham Act for their ruling. According to this language:
“A petition to cancel a registration of a mark…may…be filed as follows by any person who believes that he is or will be damaged…by the registration of a mark on the principal register…(3) At any time if…its registration was obtained fraudulently…” 15 USC § 1064
While the Federal Circuit reasoned no fraud had been committed in connection with obtaining the registration, they did acknowledge that the incontestability status had been obtained fraudulently. This is a big deal, because although the statute lists several reasons why a registered mark may be canceled, there is no mention of using fraud committed in the filing of a Declaration of Incontestability as one of those reasons.
What Does It Mean for the TTAB to Remove a Mark’s Incontestability Status?
Essentially, if a mark’s incontestability status is removed, it means that, if challenged, the mark’s owner will have a harder time preserving the validity of their registered mark.
In their ruling, the Federal Circuit noted that the USPTO is free to create sanctions to address fraudulent conduct such as the filing of a false Declaration of Incontestability. Specifically, the TTAB “may consider whether to declare that Great Concepts’ mark does not enjoy incontestable status and to evaluate whether to impose other sanctions on Great Concepts or its attorney.”
The USPTO has focused much of its efforts on addressing misconduct in the filing of trademark applications in recent years:
“A Section declaration is filed under penalty of perjury, see J.A. 87 (‘The undersigned being hereby warned that willful false statements and the like are punishable by fine or imprisonment, or both, under 18 U.S.C. Section 1001.’) so the attorney filing such an affidavit is vulnerable to penalties that might include criminal prosecution.” 90 F.4th at 1344.
What does this mean going forward?
The decision in this case may encourage the USPTO to review for fraud in the filing of Declarations of Continued Use and Incontestability and potentially sanction registrants and their lawyers. This is something to watch closely, and a good reason to make sure you work with someone who understands the importance of dotting all “i”s and crossing all “t”s when filing trademark paperwork.