Trademark Corner Update

This Trademark Corner provides an update on two issues addressed in previous articles and columns. 

FRAUD UPDATE

Previous articles have discussed cancellation of trademark registrations for fraud stemming from filing a false Statement of Use. In the seminal case on this subject[1], the Trademark Trials and Appeals Board (TTAB) cancelled a single class registration because the Applicant filed a Statement of Use attesting to use in connection with both catheters and stents, when the mark was only being used in connection with catheters. U.S. trademark application and registration fraud jurisprudence has continued to develop, with some recent TTAB decisions clarifying a number of issues. 

Fraud in a single class does not compel cancellation of a multi-class registration[2]

An opposer, facing cancellation counterclaims for fraudulently claiming use in one of two classes of its registration, attempted to cure the registration by moving to cancel the challenged class and moving to dismiss the counterclaim for the remaining class. Consistent with the well-settled proposition that fraud cannot be cured by deleting the goods or services that are the subject of the fraud claim, the TTAB denied the motion with respect to the challenged class. Equating a multiple-class application to a series of single class applications, however, the TTAB granted the motion to dismiss the counterclaims as to the remaining class. The TTAB held that when considering fraud, each class of goods and services in a multiple class registration must be considered separately, and a finding of fraud in one class does not require cancellation of the entire registration.

Amendment of an identification during prosecution can constitute fraud[3]

Amending an identification of services to adopt language proposed by an Examining Attorney is not a defense to a fraud claim. An applicant, defending against a fraud claim in an opposition, argued a distinction between its over-inclusive description, which originated in an amendment proposed by the Examining Attorney, and over-inclusive descriptions accompanied by a verified statement in a Statement or Declaration of Use. The Board disagreed, holding that an applicant is ultimately responsible for the accuracy of the information contained in the application, and that this responsibility remains throughout prosecution.

Misstatements in applications can be corrected to avoid fraud[4]

Amending an identification of goods to correct an inaccuracy before publication creates a rebuttable presumption that the applicant did not commit fraud. In an opposition of a use-based application in which the original identification included goods later deleted during prosecution, the TTAB denied the opposer’s motion for summary judgment on a fraud-based counterclaim, holding that amendment of the identification during ex parte prosecution created a rebuttable presumption that the applicant lacked the willful intent to deceive.

Errors in registrations can be corrected before validity is challenged to avoid fraud[5]

An opposer/registrant fighting a counterclaim seeking cancellation of its registration for fraud prevailed when the TTAB denied the applicant’s motion for summary judgment regarding registrations corrected before validity was challenged. The TTAB found that the registrant’s “timely proactive corrective action” when filing Declarations of Use to maintain the registrations created the rebuttable presumption that it did not intend to deceive the U.S. Patent and Trademark Office, and left a genuine issue of material fact as to whether it had an intent to commit fraud on the Office in connection with these registrations.

Ramifications

Although at least one recent decision opens the door to the possibility of curing fraud after an application matures to registration, re-filing an accurate application is still the most reliable way to ensure that a mark covered by a vulnerable registration is insulated from challenge. Accordingly, any concerns regarding the accuracy of statements made in connection with registrations or applications for trademarks merit further consideration.

INTERNET KEYWORD DEVELOPMENTS

Our Summer 2008 issue of INSIGHT included a discussion of “Trademark Issues Posed by Internet Keywords.” Search engines use keywords to trigger “sponsored links” by advertisers. Thus, for example, a Google search for “toys” produces sponsored links for a number of toy companies at the top and to the right of the “organic” search results. Disputes arise when advertisers purchase and use competitors’ trademarks as keywords. Until recently, U.S. courts were split on the threshold issue of whether using a trademark as a keyword was “use in commerce” under the Lanham Act, with several decisions from the second circuit, particularly from New York, holding that keyword use, by itself, was not use in commerce, largely because keywords are not seen by the consuming public. 

Accordingly, the Second Circuit Court of Appeals’ recent opinion in Rescuecom Corp. v. Google, Inc.[6] has generated a lot of commotion because of its holding that Google’s sale of RESCUECOM as a keyword to Rescuecom’s competitors constituted trademark use. While this decision brought the Second Circuit in line with the rest of the country on the threshold issue of use, it did not address the underlying concern of whether keyword use actually creates the likelihood of confusion that establishes trademark infringement.

Thus, despite the attention Rescuecom has received, the decision has done nothing to change the ultimate considerations regarding keyword trademark infringement, which have never been inconsistent across the circuits. Even before Rescuecom, New York courts had held it was trademark infringement to use a competitor’s trademark in the text of an ad triggered by using that mark as a keyword.[7] Similarly, even those jurisdictions in which use in commerce was not a threshold issue have not issued any final decisions finding trademark infringement for ads triggered by keywords where the trademark was not in the text of the ad. 

Google’s internal keyword dispute policy in the United States has been generally consistent with such decisions, permitting trademark owners to stop others’ use of their marks as keywords where the triggered ads feature text including their marks. In another recent development on June 15, 2009, however, Google’s policy was modified to permit sponsored links for resellers and informational sites to use others’ trademarks in ad text. This squares Google’s policy with the principle of nominative fair use, which generally permits limited reference to another’s mark when it is the most logical way to identify the goods and services (for example, ticket brokers must be able to advertise sale of “Phillies tickets” rather than “tickets for games featuring the professional baseball team from Philadelphia”). Google’s policy still provides for disabling keyword-triggered ads featuring another’s mark in a manner which is “competitive, critical, or negative.” Thus, Google’s policy is narrowly tailored to permit more flexibility in ad copy (meaning more money for Google from its AdWords program), while minimizing the potential for additional lawsuits.

While these recent developments are not drastic, they slightly affect the balance between the rights of trademark owners and internet advertisers. If any of these changes spark concerns regarding your own marks or practices, please let us know. 


[1] Medinol Ltd. v. Neuro Vasx, Inc., 67 USPQ2d 1205 (TTAB 2003)

[2] G&W Laboratories, Inc. v. G W Pharma Limited, 89 USPQ2d 1571 (TTAB 2009)

[3] Grand Canyon West Ranch, LLC v. Hualapai Tribe, 88 USPQ2d 1501 (TTAB 2008)

[4] University Games Corp. v. 20Q.net Inc., 87 USPQ2d 1465 (TTAB 2008)

[5] Zanella Ltd. v. Nordstrom, Inc., 90 USPQ2d 1758 (TTAB 2008)

[6] 562 F.3d 123 (2nd Cir. 2009)

[7] Hamzik v. Zale, 2007 U.S. Dist. LEXIS 28981 (N.D.N.Y. Apr. 18, 2007)