On January 29, 2009, the USPTO Trademark Trial and Appeal Board further clarified the fraud doctrine, holding that fraud committed as to one class in a multiple-class registration requires cancellation only as to that class, and not as to all classes of the registration.
G&W Laboratories, Inc. ("Labs") filed a section 2(d) opposition against G W Pharma Limited's ("Pharma") application for GW PHARMACEUTICALS & Design on the grounds of priority and likelihood of confusion, relying on two registrations, one for G&W in Classes 5 and 35 and the other for G&W & Design in Classes 5 and 35. Pharma thereafter filed counterclaims for cancellation of Labs' registrations in their entireties on the grounds of fraud, alleging that Labs never used either mark in connection with the services in Class 35.
After the counterclaims were filed, Labs proceeded to make its required filings under Section 8 for each registration requesting deletion of the Class 35 services in each registration, and thereafter filed motions to dismiss the counterclaims against Class 35 as moot and the counterclaims against Class 5 for failure to state a claim upon which relief may be granted. Pharma argued, however, that deletion of a class of goods or services procured through fraud during maintenance of the registration does not cure fraud, and that if fraud is proved as to Labs' registrations in Class 35, each registration must be cancelled in its entirety, relying on Medinol Ltd. v. Neuro Vasx Inc., 67 USPQ2d 1205, 1208 (TTAB 2003):
[D]eletion 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.
While Labs admitted that it never used its marks on the Class 35 services, it argued that a claim of fraud directed towards one class of a multiple-class registration cannot render the entire registration void.
The Board denied Labs' motion to dismiss the Class 35 counterclaims, agreeing with Pharma that deletion of services through a Section 8 filing cannot cure fraud. The Board noted that a registrant's request to delete a class subject to a cancellation proceeding in a Section 8 affidavit is governed by Trademark Rule 2.134(a), which provides that a request for such deletion by a respondent in a cancellation proceeding without written consent from every adverse party to the proceeding results in judgment against the respondent. Because no written consent to the deletion of the Class 35 goods was sought or obtained from Pharma, judgment was entered against Labs.
The motions to dismiss the counterclaims as to Class 5, however, were granted. The Board pointed out that all of the cases finding fraud since Medinol involved invalidation of single-class applications or registrations, holding that "fraud as to any goods or services in a single class will lead to a finding that the application or registration is void in the class in which the fraud has been committed", but noted that they had not yet considered fraud in less than all the classes of a multiple-class registration. The Board likened multiple-class applications to a series of single-class applications because they still require a filing fee, date of use, and specimen for each class involved, and because the filer of a multiple-class application is essentially in no different position that if it filed several single-class applications. The Board therefore held that "each class of goods or services in a multiple-class registration must be considered separately when reviewing the issue of fraud, and judgment on the ground of fraud as to one class does not in itself require cancellation of all classes in a registration." The Board reasoned that any other holding would essentially provide an incentive to file single-class versus multiple-class applications.
The decision further clarifies the proper application of the fraud doctrine. While trademark owners must remain diligent in ensuring all information in an application is correct, it is now clear that they do not face a threat of losing trademark rights in an entire multiple-class registration based on errors in a single class.
Vol. 53, June 2010