Monday, August 31, 2009

Bose WAVE -- no evidence Bose intended to deceive the Trademark Office

Hexawave sought a federal registration for its trademark HEXAWAVE. Bose opposed that application, arguing a likelihood of confusion with Bose's prior registered trademarks, including WAVE. Hexawave then attempted to cancel Bose's registration, arguing that Bose committed fraud on the Patent and Trademark Office by claiming use on all goods listed in its registration, even though Bose had stopped manufacturing and selling certain of those goods.

Hexawave prevailed with the Trademark Trial and Appeal Board, which cancelled Bose's WAVE registration. Bose appealed to the Federal Circuit.

Evidence of "fraud"

Hexawave's evidence that Bose committed fraud was the combined Section 8 affidavit of continued use and Section 9 renewal application, filed in 2001, wherein Bose's general counsel stated that the WAVE mark was still in use on various goods, including audio tape recorders and players. As it turns out, Bose stopped manufacturing and selling audio tape recorders and players between 1996 and 1997 and Bose's general counsel knew this when he signed the declaration.

Fraud on the Trademark Office

“Fraud in procuring a trademark registration or renewal occurs when an applicant knowingly makes false, material representations of fact in connection with his application.” Torres v. Cantine Torresella S.r.l., 808 F.2d 46, 48 (Fed. Cir. 1986). A party seeking cancellation of a trademark registration for fraudulent procurement bears a heavy burden of proof. W.D. Byron & Sons, Inc. v. Stein Bros. Mfg. Co., 377 F.2d 1001, 1004 (CCPA 1967). Indeed, “the very nature of the charge of fraud requires that it be proven ‘to the hilt’ with clear and convincing evidence. There is no room for speculation, inference or surmise and, obviously, any doubt must be resolved against the charging party.” Smith Int’l, Inc. v. Olin Corp., 209 USPQ 1033, 1044 (T.T.A.B. 1981).
The Court went on to explain that the deception must be willful in order to be fraud, and that the deceiving party must intend to deceive the Patent and Trademark Office. Here, Bose's general counsel testified that because Bose continued to repair audio tape players and recorders, he believed Bose was still using the mark in commerce on those goods. As such, he had no intent to deceive the PTO. As stated by the Federal Circuit:
There is no fraud if a false misrepresentation is occasioned by an honest misunderstanding or inadvertence without a willful intent to deceive.
Decision reversed (with instructions for the Board to reinstate Bose's trademark with the registration updated to reflect that the WAVE mark is no longer used on audio tape recorders and players).

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