Federal Circuit Decision Causes Confusion on Trademark Cancellation

by Dennis Crouch

I previously wrote about the trademark case of Great Concepts v. Chutter that involves two restaurants both using the same phonetic name: DANTANNA’S and DAN TANA’S.  In the underlying trademark cancellation proceeding, the TTAB found that one party had committed fraud within its declaration of incontestability; and that fraud justified cancellation of the registration.  On appeal the Federal Circuit reversed — concluding that the statute was very specific that fraud in obtaining the registration can justify cancellation, but says nothing about fraud in establishing incontestability.  The court distinguished with some squirrely precedent finding that renewal counted as “obtaining” for the fraud-cancellation doctrine. Torres v. Cantine Torresella S.r.l., 808 F.2d 46 (Fed. Cir. 1986).

In a recent petition for panel rehearing, the USPTO has asked for the Federal Circuit to tighten up its language.  GreatConceptsRehearingPetition.

The agency particularly focuses on one sentence from the opinion that it foresees might create trouble:

Section 14 lists numerous bases on which a third party may seek Board cancellation of a registered mark, including likelihood of confusion, abandonment, dilution, deceptiveness, and if the mark is merely descriptive or has become generic or functional. See 15 U.S.C. § 1064. Notably absent from this list is fraud committed in connection with an incontestability declaration.

Opinion at 13.   As you can see, the Federal Circuit opinion provides several bases for cancelling a mark, indicating that they are listed within the statute.  Although these are all grounds for cancellation, they are not expressly found within Section 14 of the Lanham Act.  As the PTO writes: “The sentence is incorrect as a matter of law because Section 14 of the Trademark Act does not explicitly reference ‘likelihood of confusion,’ ‘merely descriptive,’ or other bases for cancelling a registration that is less than five years old, which include any ground that would have prevented registration in the first place.”  Rather, the courts have interpreted Section 14 to allow a mark <5 years old to be challenged based upon any ground that would have prevented registration in the first place qualifies.

In its brief, the Federal Circuit argues that the Federal Circuit’s incomplete list could be used in the future to limit the bases for cancellation to only those listed.  “The USPTO is concerned that the opinion text quoted above will result in confusion in later cases about what grounds are available to cancel a registration.”  The court has invited a response from the two parties, and I expect that neither will complain about the slight correction.

Fraudulent Incontestability Declarations: Textual Fidelity vs. Fraud Deterrence