Written by: Mark Terry

It’s an issue that comes up often. A manufacturer makes a widget and sells it to a U.S. importer, who registers the mark associated with the widget. The manufacturer later claims it owns the mark and seeks to cancel the importer’s trademark registration. As a Florida Trademark Lawyer, this is a situation I’ve seen more than once and I’m constantly looking for the courts’ and the Trademark Trial and Appeal Board’s (TTAB’s) take on this issue. The TTAB’s recent decision on this issue in the ZYTNIA vodka case affirms the widely held stance that it’s usually the registrant that wins.

As originally reported in the Property Intangible blog, strike one against the manufacturer was that it brought the cancellation action almost 11 years after the mark was registered, well after incontestability is established. Incontestability means, of course, that there are limited bases for cancelling a registration, and incorrect ownership isn’t one of them. The manufacturer therefore had to rely on fraud as its basis for cancellation, i.e., the manufacturer. The court stated:

“claims that respondent fraudulently obtained the registration by asserting that it was the owner of the mark when, in point of fact, petitioner owned the mark. Because petitioner has alleged and attempted to establish a willful withholding of ownership information by respondent when it prosecuted the underlying application that matured into the involved registration, the ownership question may be addressed, but only in the context of fraud.”

(italics in original.) Fraud has to be “proven to the hilt,” showing that a statement was false, the falsity was intentional, and that the false statement was material to obtaining or maintaining a registration.

Lessons Learned: There’s more than one lesson to be learned here. First, ownership of the mark is not a premise for cancelling an incontestable mark. Second, fraud on the USPTO is really hard to prove, since the Bose case.