THOMAS G. FARIA CORP. v. COMPLETE INNOVATIONS, 92050168 (TTAB 9-26-2011)
Cancellation No. 92050168United States Patent and Trademark OfficeTrademark Trial and Appeal Board
Mailed: September 26, 2011Page 1
Daniel J. Klau of McElroy, Deutsch, Mulvaney Carpenter, LLP for Thomas G. Faria Corporation.
Timothy T. Huber of the Law Offices of Timothy T. Huber for Complete Innovations, Inc.
Before Quinn, Kuhlke and Bergsman, Administrative Trademark Judges.
Opinion by Bergsman, Administrative Trademark Judge:
Thomas G. Faria Corporation (hereinafter petitioner) filed a petition to cancel Registration No. 3203469 for the mark WatchDog, in standard character form, for “devices for wireless radio transmission, mobile radios, radio pagers, radio receivers and two-way radios,” in Class 9.[fn1]
As the ground for cancellation, petitioner pleaded fraud. Specifically, petitioner alleged that respondent committed fraud in the application process because respondent “was notPage 2
marketing goods bearing the mark in interstate commerce on December 1, 2005 [date of first use in commerce] as alleged in its application,” because respondent “was not marketing goods bearing the mark in commerce on April 21, 2005 [date of first use anywhere] as alleged in its application,” and that respondent “did not submit a proper specimen showing the use of the mark on the goods being sold in commerce in the United States.”
In its answer, Complete Innovations, Inc. (hereinafter respondent) denied the salient allegations of the petition for cancellation.
Preliminary Issues
A. Whether petitioner’s application has been properlyintroduced into evidence?
Petitioner alleged that it filed an application for the mark WATCHDOG for “computer software and equipment for reporting global positioning of vehicles and vessels, namely mobile transmitters, displays, antennas, mounts, cables and user interfaces,” in Class 9 (Serial No. 76675846) and that the USPTO refused to register petitioner’s mark because it was likely to cause confusion with the mark WatchDog for “devices for wireless radio transmission, mobile radios, radio pagers, radio receivers and two-way radios” in Registration No. 3203469.Page 3
During its testimony period, petitioner took the deposition of Mark O’Brien, the Vice President and General Manager of Faria Watchdog, Inc., the successor-in-interest to petitioner, and formerly the Vice President of Marketing and Sales for petitioner. Mr. O’Brien authenticated petitioner’s Exhibit 2, his December 9, 2009 affidavit with attached exhibits, including a copy of the file history of petitioner’s application Serial No. 76675846 for the mark WATCHDOG.
Q. Would you tell me what this document [the affidavit] is in general?
A. I believe that we put this together kind of outlining the history of our filing of the Faria WATCHDOG trademark.[fn2]
* * *
Q. Now, sir, at the time you made the statements that appear in this affidavit, were they in fact true and correct to the best of your knowledge and belief?
A. Yes.[fn3]
* * *
Q. And as you sit here today, are there any errors that you believe appear in any paragraph of the affidavit?
A. No, not to the best of my knowledge.[fn4]Page 4
* * *
Q. Paragraph 21. And before you answer the question, also please take a look at Exhibit 3, which is a large exhibit [petitioner’s application].
A. As to the best of my knowledge, it’s all accurate.[fn5]
Respondent cross-examined Mr. O’Brien.
In its brief, respondent objected to the introduction of O’Brien’s affidavit on the ground that it is hearsay and, therefore, “[p]etitioner has failed to properly admit its application into evidence.”[fn6]
“‘Hearsay’ is a statement, other than one made by the declarant while testifying at the trial or hearing, offered in evidence to prove the truth of the matter asserted.” Fed.R.Evid. 801(c). There is no hearsay problem inherent in Mr. O’Brien’s testimony because Mr. O’Brien admitted that he made the statements in the affidavit and that they were true and correct. We find that during his testimony deposition, Mr. O’Brien adopted the statements in his affidavit and he was subject to cross examination. In view of the foregoing, respondent’s objection is overruled and petitioner’s application is part of the record.Page 5
B. Whether the issue of restricting the description ofgoods in respondent’s registration was tried by impliedconsent?
As indicated above, the only ground petitioner pleaded for cancelling the registration was fraud. Nevertheless, petitioner argued that “the registration must be restricted to reflect that the WATCHDOG mark is not in use in commerce on the tracking response device.”[fn7] Respondent argues that “these issues are not properly before the Board and were never pleaded as grounds for cancellation.”[fn8] We must, therefore, determine whether the issue of restricting respondent’s description of goods was tried by implied consent.
Implied consent to the trial of an unpleaded issue can be found only where the nonoffering party (1) raised no objection to the introduction of evidence on the issue, and (2) was fairly apprised that the evidence was being offered in support of the issue.
TBMP ? 507.03(b). See also Morgan Creek Productions Inc.v. Foria International Inc., 91 USPQ2d 1134, 1138 (TTAB 2009); H.D. Lee Co. v. Maidenform Inc., 87 USPQ2d 1715, 1720-1721 (TTAB 2008); Long John Silver’s Inc.v. Lou Scharf Inc., 213 USPQ 263, 266 n. 6 (TTAB 1982) (applicant’s objection to the introduction of evidence regarding an unpleaded issue obviated the need to determine whether the issue had beenPage 6
tried by implied consent); Boise Cascade Corp. v.Cascade Coach Co., 168 USPQ 795, 797 (TTAB 1970) (“Generally speaking, there is an implied consent to contest an issue if there is no objection to the introduction of evidence on the unpleaded issue, as long as the adverse party was fairly informed that the evidence went to the unpleaded issue”).
The question of whether an issue was tried by consent is basically one of fairness. The non-moving party must be aware that the issue is being tried, and therefore there should be no doubt on this matter.
Morgan Creek Productions Inc. v. Foria InternationalInc., 91 USPQ2d at 1139.
In reviewing the depositions of all the witnesses, it is not clear that petitioner was seeking to restrict respondent’s description of goods through a Section 18 partial cancellation, and we find that respondent was not aware that petitioner was, in fact, seeking to restrict its registration. There was no reason for respondent to object to petitioner’s questions regarding the use of respondent’s mark because that is an important fact in determining the fraud issue. The first time respondent knew that petitioner was seeking to restrict respondent’s registration was when petitioner referenced that claim in its brief. Accordingly, we find that petitioner’s request to restrict respondent’sPage 7
registration was not tried by implied consent and, therefore, we will not consider that issue.
The Record
By operation of Trademark Rule 2.122, 37 CFR ? 2.122, the record includes the pleadings and the registration file for the marks sought to be cancelled. The record also includes the following testimony and evidence:
A. Petitioner’s Evidence.
1. Petitioner’s August 4, 2009 Rule 30(b)(6) discovery deposition of Richard Huber, respondent’s Vice President and part owner, with attached exhibits;
2. Petitioner’s December 1, 2009 testimony deposition of Richard Huber with attached exhibits; and
3. Testimony deposition of Mark O’Brien, the Vice President and General Manager of Faria Watchdog, Inc., the successor-in-interest to petitioner, and formerly the Vice President of Marketing and Sales for petitioner, with attached exhibits.
B. Respondent’s Evidence.
1. Respondent’s December 1, 2010 testimony deposition of Richard Huber with attached exhibits; and
2. Respondent’s December 1, 2010 testimony deposition of Robert O’Sullivan, respondent’s Vice President of Sales, with attached exhibits.
StandingPage 8
As indicated above, through the testimony of Mark O’Brien, petitioner introduced into evidence its trademark application Serial No. 76675846 for the mark WATCHDOG for “computer software and equipment for reporting global positioning of vehicles and vessels, namely mobile transmitters, displays, antennas, mounts, cables and user interfaces.” The USPTO refused to register petitioner’s mark on the ground that it was likely to cause confusion with the mark WatchDog for “devices for wireless radio transmission, mobile radios, radio pagers, radio receivers and two-way radios” in respondent’s Registration No. 3203469. This is sufficient to show that petitioner has a real interest in this proceeding and, therefore, has standing. Lipton Industries, Inc. v. RalstonPurina Company, 670 F.2d 1024, 213 USPQ 185, 189 (CCPA 1982) (“Thus, to have standing in this case, it would be sufficient that appellee prove that it filed an application and that a rejection was made because of appellant’s registration”).
Fraud
A party may petition to cancel a registered trademark on the ground that the “registration was obtained fraudulently.” 15 U.S.C. ? 1064(3). “Fraud in procuring a trademark registration or renewal occurs when an applicant knowingly makes false, material representations of fact inPage 9
connection with his application.” In re BoseCorp., 580 F.3d 1240, 91 USPQ2d 1938, 1939 (Fed. Cir. 2009), quoting, Torres v. Cantine Torresella S.r.l.,808 F.2d 46, 48, 1 USPQ2d 1483, 1484 (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, 153 USPQ2d 749, 750 (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 (TTAB 1981); see also Asian and Western Classics B.V. v.Selkow, 92 USPQ2d 1478, (TTAB 2009).
The Court of Customs and Patent Appeals explained that, before the PTO, “[a]ny ‘duty’ owed by an applicant for trademark registration must arise out of the statutory requirements of the Lanham Act,” which prohibit an applicant from making “knowingly inaccurate orknowingly misleading statements.” BartSchwartz Int’l Textiles, Ltd. v. Fed. Trade Comm’n,289 F.2d 665, 669, 129 USPQ 258, 260 (CCPA 1961) (Emphasis in the original). Therefore, the court stated that, absent the requisite intent to mislead the PTO, even a material misrepresentation would not qualify as fraudPage 10
under the Lanham Act and warrant cancellation. KingAuto., Inc. v. Speedy Muffler King, Inc., 667 F.2d 1008,1011 n. 4, 212 USPQ 801, 803 n. 4 (CCPA 1981).
The Court of Appeals for the Federal Circuit, our primary reviewing court, has noted that there is “a material legal distinction between a ‘false’ representation and a ‘fraudulent’ one, the latter involving an intent to deceive, whereas the former may be occasioned by a misunderstanding, an inadvertence, a mere negligent omission, or the like.” In re Bose Corp., 91 USPQ2d at 1940, quoting, Kemin Indus., Inc. v. Watkins Prods.,Inc., 192 USPQ 327, 329 (TTAB 1976). In other words, deception must be willful to constitute fraud. In re BoseCorp., 91 USPQ2d at 1940. Thus, a trademark registration is obtained fraudulently only if the applicant knowingly makes a false, material representation with the intent to deceive the USPTO. In re Bose Corp., 91 USPQ2d at 1941. In this regard, the Federal Circuit stated the following:
Subjective intent to deceive, however difficult it may be to prove, is an indispensable element in the analysis. Of course, “because direct evidence of deceptive intent is rarely available, such intent can be inferred from indirect and circumstantial evidence. But such evidence must still be clear and convincing, and inferences drawn from lesser evidence cannot satisfy the deceptive intent requirement.” [Internal citation omitted]. When drawing an inference of intent, “the involved conduct, viewed in light of allPage 11
the evidence . . . must indicate sufficient culpability to require a finding of intent to deceive.”
In re Bose Corp., 91 USPQ2d at 1941.
The court framed the issue presented by a fraud claim as whether applicant’s misstatements “represent ‘a conscious effort to obtain for his business a registration to which he knew it was not entitled.'” In re Bose Corp., 91 USPQ2d at 1942, quoting Metro Traffic Control, Inc. v. Shadow NetworkInc., 104 F.3d 336, 41 USPQ2d 1369, 1373 (Fed. Cir. 1997).
There is no fraud if a false misrepresentation is occasioned by an honest misunderstanding or inadvertence without a willful intent to deceive. [Internal citation omitted] . . . Unless the challenger can point to evidence to support an inference of deceptive intent, it has failed to satisfy the clear and convincing evidence standard required to establish a fraud claim.
In re Bose Corp., 91 USPQ2d at 1942.
Respondent filed an application to register the mark WatchDog, in standard character form, on April 21, 2005. While it claimed Section 1(b) (intent to use) as its filing basis, respondent also claimed first use of the mark at least as early as April 21, 2005 and first use in commerce at least as early as December 1, 2005 (a date seven months after the filing date of the application).
Q. . . . [T]he next line down says filing basis and then there’s a first use anywhere date and it says at least as early as 04/21/2005. Do you see that?Page 12
A. Yes.
Q. Did you put that date in the online application?
A. Yes, I did.
Q. What was the basis on which you selected that date to state the first use anywhere?
A. The first use anywhere, it was based on the trade show at FDIC in April of 2005 where the booth that’s pictured in Exhibit B was displayed and the show was in Indianapolis.[fn9]
* * *
Q. The next line down on page A22 has a first use in commerce date of December 1, 2005. Do you see that?
A. Yes.
Q. Do you know why that date was selected?
A. That date was selected because that’s when we actually shipped the sample to a customer.
Q. And who was that customer?
A. That customer was MW Communications.
Q. Is that Mr. Milcarek’s company?
A. Yes.[fn10]
* * *Page 13
Q. So I’d like to know how you could put a date for use in commerce, how could you come up with the date December 1, 2005? When you filed this application on April 21, 2005, on that date how did you make a prediction about the first use in commerce date?
A. That is an interesting question. I don’t remember how that date got there. That was our projected date.
Q. When you filed this application on April 21, 2005 what was the factual basis for projecting the December 1, 2005 date?
A. We had, that was the projected dated for ? let’s see. That’s a very difficult question. We had a working sample in April. It would be normal to expect we’d be shipping the product by the end of the year.[fn11]
* * *
Q. But if I understand you now, your testimony in response to my questions is that the December 1, 2005 date represented a ?
A. An estimated ?
Q. We call it a ? go ahead.
A. Yeah. I think we would call it a predicted time when we would be shipping the product.
Q. Okay. Now, let me ask you this. Prior to submitting this trademark application, the one April 21, 2005, had you personally filed any other trademark applications?Page 14
A. Are there any other trademark applications before 2005?
Q. I’m just asking whether you had personal experience filing trademark applications prior to this one?
A. With the United States Patent and Trademark Office, no. I had never done one before.
Q. This was your very first application that you filed with the PTO?
A. USPTO, that’s correct.[fn12]
In the November 21, 2005 Office Action, the examining attorney noted that respondent asserted as its filing basis both an intent-to-use the mark and actual use of the mark. The examining attorney advised respondent that it may not base its application on both actual use and intent to use. If respondent elects to base the application on actual use, then because the respondent did not submit a specimen showing the mark in use, the examining attorney required respondent to submit a specimen showing the use of the mark at least as early as the filing date of the application.
On April 26, 2006, respondent filed a photograph of an electronic device displaying the mark with a declaration that the specimen was in use at least as early as the filing date of the application. Mr. Huber identified thePage 15
electronic device in the photograph as a “tracking response system.”[fn13]
In the June 20, 2006 Office Action, the examining attorney again noted that respondent had claimed both intent-to-use and use as its filing basis and required respondent to select one. Mr. Huber called the examining attorney on August 22, 2006 regarding how to complete the application process.[fn14]
Q. And what was the purpose of you calling Mr. Nelson?
A. I talked to Mr. Nelson about what else was needed. I understood that Mr. Nelson’s explanation that I could not have an intent to use trademark and an actual use at the same time. I described to Mr. Nelson the use of the product by taking it to trade shows and I understood him to have explained to me that the description I gave to him demonstrated actual use in commerce so I should delete the intent to use as a basis for filing the trademark.
Q. Hold on. In this conversation with Mr. Nelson did he explain to you that you could not have an intent to use the WatchDog name and an actual use at the same time?
A. Yes. That’s what he said.
Q. Did he ask you about what [respondent] was doing with respect to the product at that time?Page 16
A. Yes, he did. We had discussion [sic] about that. He actually helped me determine what was the proper way to continue with this trademark application.
Q. Was it Mr. Nelson’s suggestion that you delete the intent to use basis?
A. Yes. Based on what we discussed and he recommended to me that it sounded to him like that was the best thing to do was to do an actual use rather than an intent to use.
Q. As a result of that did you withdraw the intent to use as a basis for filing?
A. Yes, I did.[fn15]
* * *
Q. Am I correct in understanding that your testimony as a result of your conversation with [Mr. Nelson] he in essence told you that the presentation of the WatchDog product at the Indianapolis trade show constituted a quote, use in commerce, closed quote?
A. Well, I wouldn’t say that that’s what he said precisely.
Q. Okay.
A. But ?
Q. Can you tell me to the best of your recollection and I know it’s a number of years have passed, can you tell me to the best of your recollection what he said.
A. Well, I explained to him what was going on with the trademark and,Page 17
you know, that we had shown it at the show, and where we are in the process when we did the revision, and we discussed what had happened and this is what he recommended.
Q. Did he give you a legal opinion that the demonstration or the presentation of a model of the device at the Indianapolis trade show constituted a use in commerce of the device?
A. I’m not sure. Well, let’s see. To the extent that he can give me a legal opinion without actually being my attorney.
Q. Right. Fair enough.
A. So, you know, we had a discussion and he indicated to me that from what I described to him which was what actually happened and that you’ve heard in this testimony was sufficient to use first use in commerce as transporting the product across state lines.
Q. As a result of your conversation with Mr. Nelson you modified or amended your application, correct?
A. That is correct.[fn16]
On August 22, 2006, the examining attorney entered an “Examiner’s Amendment” into the application file noting that respondent withdrew the “intent to use” basis and “[t]he application is based on Section 1(a) of the Act (only)).”
Petitioner argues that the evidence demonstrates that respondent’s false statements were “knowingly false.”Page 18
[Respondent] fraudulently misrepresented that a specimen bearing the WATCHDOG mark was used in commerce prior to April 21, 2005, the filing date of the application. In fact, the presentation of a specimen of the tracking response system at a single tradeshow in mid-April 2005 does not constitute a use in commerce, a fact [respondent] knew was true because it had originally stated that the first use in commerce would not occur until many months after it actually filed its application.[fn17]
* * *
The clear and convincing evidence is that Mr. Huber knew that his statement was false. Indeed, when he originally filed the application he represented that the first use in commerce was not anticipated to occur until many months after the filing date. Clearly, he knew that simply showing the device a [sic] single trade show did not meet the legal standard for use in commerce. (Emphasis in the original).[fn18]
We disagree. As indicated above, a trademark registration is obtained fraudulently only if the applicant knowingly makes a false, material representation with the intent to deceive the USPTO. In re Bose Corp., 91 USPQ2d at 1941. Mr. Huber’s testimony makes clear that Mr. Huber disclosed the purportedly “false statements” to the examining attorney in their August 22, 2006 telephone conference in order to figure out how to complete the application process. Based on the purportedly false statements, the examining attorney concluded that respondentPage 19
had made use in commerce and suggested that respondent delete the intent-to-use filing basis and rely on use in commerce. Respondent had absolutely no intent to mislead the Office.
In view of the foregoing, we find that respondent did not commit fraud on the Patent and Trademark Office during the prosecution of its application for registration.
Decision: The petition for cancellation is dismissed with prejudice.
[fn1] Issued January 30, 2007. [fn2] O’Brien Dep., p. 7. [fn3] Id. at p. 8. [fn4] Id. at p. 9. [fn5] Id. at p. 15. Paragraph No. 21 of the affidavit reads as follows: “The Trademark Office has since iterated its refusal of registration based upon likelihood of confusion. The file history of our application to register WATCHDOG is appended as Exhibit 3.” [fn6] Respondent’s Brief, pp. 3-4. [fn7] Petitioner’s Brief, p. 9. [fn8] Respondent’s Brief, p. 4. [fn9] Huber Testimony Dep., pp. 7-8 (December 1, 2010). [fn10] Huber Testimony Dep., pp. 8-9 (December 1, 2010). [fn11] Huber Testimony Dep., pp. 23 (December 1, 2010). [fn12] Huber Testimony Dep., pp. 25-26 (December 1, 2010). [fn13] Huber Testimony Dep., pp. 28-29 (December 1, 2010). [fn14] Huber Testimony Dep., p. 12 (December 1, 2010). [fn15] Huber Testimony Dep., pp. 12-13 (December 1, 2010). [fn16] Huber Testimony Dep., pp. 26-28 (December 1, 2010). [fn17] Petitioner’s Brief, p 6. [fn18] Petitioner’s Brief, p. 9.