Herbaceuticals, Inc. v. Xel Herbaceuticals, Inc., 86 USPQ2d 1572 (TTAB 2008).

OVERTURNED BY: In Re Bose Corp., Opp. No. 91/157,315 (August 31, 2009).

CASE BRIEF

HCI, the opposer, sought to cancel six registrations owned by Xel, the registrant, for various permutations of the mark "XEL HERBACEUTICALS" on the basis of (1) fraud/nonuse and (2) likelihood of confusion with its own mark "HCI HERBACEUTICALS, INC." The Board, in considering HCI's motion for summary judgment on fraud, noted that in response to requests for admissions, Xel had admitted that it was not using in commerce four of its marks in connection with several goods listed in their respective Statements of Use. The Board summarily found that fraud existed as to those four registrations and partially granted HCI's motion for summary judgment (see below for the legal standards applied) thus canceling those registrations. The remaining two registrations survived summary judgment on the basis of Xel's affirmation of use.

The interesting aspect of this case was Xel's argument that statements of use are divisible into "sworn" declaration portions attesting to "use on the goods/services" and "unsworn" portions attesting to "use on all goods/services" on "information and belief." The Board corrected the assertion:

A declaration relates to all statements in the document of which the declarant is a part. Treating statements of use as divided sworn and unsworn sections would encourage applicants to conclude that they could make misrepresentations willfully and without penalty. We reject Xel's contention that use of the wording "all goods and/or services" in the body of the statements of use and "the goods/services" in the supporting declaration gives the respective phrases different meanings. In the declaration for each statement of use, Xel's attorney averred that Xel was "using the mark in commerce or in connection with the goods/services identified above." The goods identified above in the body of the statements of use are "all goods and/or services listed in the application or Notice of Allowance." Accordingly, the wording at issue is synonymous.

Full text available here.

COMMENTARY

You can always count on the TTAB to provide a useful rehashing of case law on the matter at hand. By assembling a few such "rehashings", you can create a great legal road-map regarding fraud against the U.S. Trademark Office:

Fraud in procuring a trademark registration occurs when an applicant for registration (1) knowingly makes (2) false, (3) material representations of fact in connection with an application to register. (numbered elements added) See Torres v. Cantine Torresella S.r.l., 808 F.2d 46 (Fed. Cir. 1986). A party making a fraud claim is under a heavy burden because fraud must be proved by clear and convincing evidence, leaving nothing to speculation, conjecture, or surmise. Any doubt must be resolved against the party making the claim. See Smith International, Inc. v. Olin Corporation, 209 USPQ 1033 (TTAB 1981).

If fraud can be shown in the procurement of a registration, the registration is void in the international class or classes in which fraud based on nonuse has been committed. See General Car and Truck Leasing Systems, Inc. v. General Rent-A-Car Inc., 17 USPQ2d 1398, 1401 (S.D. Fla. 1990), affig General Rent-A-car Inc. v. General Leaseways, Inc., Canc. No. 14,870 (TTAB May 2, 1998).

(1) As to the knowledge of the applicant/registrant:

In Board inter partes proceedings, proof of specific intent to commit fraud is not required, rather, fraud occurs when an applicant or registrant makes a false material representation that the applicant or registrant knew or should have known was false. General Car and Truck Leasing Sys., Inc. v. General Rent-A-Car Inc., supra. The appropriate inquiry is not into the registrant's subjective intent, but rather into the objective manifestations of that intent. See Medinol Ltd. v. Neuro Vasx, Inc., 67 USPQ2d 1205 (TTAB 2003)[finding that "neither the identification of goods nor the statement of use itself was lengthy, highly technical or otherwise confusing, and the applicant who signed the document was clearly in a position to know (or inquire) as to the truth of the statements therein."]

Statements under oath [e.g. Statements of Use] are made with a degree of solemnity requiring through investigation prior to signature and submission to the USPTO. Id.; Patent and Trademark Office Rule 10.18(b)(2).

(2) As to the falsity of a representation made to the Trademark Office: Where the applicant/registrant admits nonuse or another type of material representation (generally through Requests for Admissions, Interrogatories, Depositions, or some other discovery mechanism), the TTAB will analogize Medinol and generally grant a Motion for Summary Judgement on fraud. (finding no genuine issue of material fact on fraud where applicant admitted nonuse in its response to a petition for cancellation).

(3) As to the materiality of a representation made to the Trademark Office:

Statements regarding the use of [a] mark on identified goods and/or services are certainly material to issuance to registration. See Hachette Fillipacchi Presse v. Elle Belle, LLC, 85 USPQ2d 1090 (TTAB 2007) (use alleged for a wide variety of clothing items for men, women and children when mark had not actually been used for any identified items for men or children); Sinclair Oil Corporation v. Kendrick, 85 USPQ2d 1032 (TTAB 2007) (use alleged for retail store services when mark had only been used on small number of product samples, which were given away four years before application); Hurley International LLC v. Volta, 82 USPQ2d 1339 (TTAB 2007) (use alleged for various entertainment and production services, when mark had not been used anywhere in the world for some services); Standard Knitting Ltd. v. Toyota Jidosha Kabushiki Kaisha, 77 USPQ2d 1917 (TTAB 2006) (misrepresentation regarding use of the mark on most of the goods identified in filed applications); First Int'l Serv. Corp. v. Chuckles Inc., 5 USPQ2d 1628 (TTAB 1988) (use alleged on range of personal care products when mark only actually used on shampoo and hair setting lotion).

As long as the general product terminology encompasses the specific product terminology in an identification of goods, and there is use on the specific product, there can be no fraud ... the converse situation, however, is not true. See Tri-Star Marketing, LLC v. Nino Franco Spumanti S.r.l, 84 USPQ2d 1912 (TTAB 2007) (finding "wine" to be a general classification for the more specific "sparkling wine").

Blawging 101

17 U.S.C. Section 105, the U.S. Copyright Act on Government Works, provides that:

Copyright protection under this title is not available for any work of the United States Government, but the United States Government is not precluded from receiving and holding copyrights transferred to it by assignment, bequest, or otherwise.

(emphasis added). Generally, this means there is no copyright protection for "original works of authorship fixed in any tangible medium of expression" which are prepared by an officer or employee of the United States Government as part of that person's official duties. See 17 U.S.C. Section 101. Some common examples include judicial opinions, administrative agency circulars, and congressional reports. The rationale for this rule is simple: the public should not have to bear a double burden in first subsidizing the creation of government works through payment of tax dollars and again in suffering the costs of copyright monopolies over those works.

But why preface the rule with "generally"? Works prepared under contracts or grants with/from U.S. Government may be subject to the work for hire doctrine and validly transferred through assignment, bequest or otherwise. Under such circumstances the U.S. Government could indeed own and enforce a valid copyright.

COMMENTARY

My"Uncle Sam" derivative work above is based on a 1917 publication of "I Want You", by James Montgomery Flagg (1877-1960). See Library of Congress, The Most Famous Poster. But is the original "I Want You" graphic work free from copyright restrictions and essentially in the Public Domain?

Definitely YES. Based solely on the above facts, any scenario ends with the same conclusion, "I Want You" is in the public domain. The quick and dirty explanation is as follows:

(1) Publication Without Notice.

Careful examination of the original "I Want You" graphic work reveals that copyright notice consists of only the author's name, "James Montgomery Flagg." The 1909 Copyright Act contained strict formality requirements, specifically it required (i) notice consisting of the word "copyright", or the copyright symbol, (ii) the name of the copyright owner and (iii) the year of publication. Notice on "I Want You" is clearly deficient on two of these requirements. Such deficiencies were fatal to copyright ownership and generally works published without proper notice were dedicated to the public domain.

(2) Expiration of Copyright Term.

Any conceivable duration of a copyright for "I Want You" has expired. Works published under the 1909 Copyright Act had an initial term of 28 years and a renewal term of 28 years. A work published in 1917 would enjoy its initial term until 1945, and if renewed would enjoy a renewal term until 1973. However, various interim copyright bills preserved existing copyrights around this time until the 1976 Copyright Act took effect in 1978. The 1976 Copyright Act extended such renewal terms to 75 years after the initial publication of the work. Thus, any copyright protection over "I Want You" could at best only extend to 1992.

Kellogg Co. v. National Biscuit Co., 305 U.S. 111 (1938)

CASE BRIEF

National Biscuit Co. ("Nabisco") sought to enjoin Kellogg from manufacturing and selling shredded wheat both under the term "Shredded Wheat" and embodied in a pillow-shape.

The Federal District Court of Delaware held for Kellogg because (a) the name merely described the product (b) no evidence of "passing off" had been proffered and (c) the method patent for creating "shredded wheat" and the design patent for its "pillow shape" expired in 1912. The Third Circuit Court of Appeals reversed and effectuated an injunction against Kellogg which prevented their use of both the term "Shredded Wheat" and the pillow-shape.

The U.S. Supreme Court began by noting that "the name 'Shredded Wheat,' as well as the product, the process and the machinery employed in making it, has been dedicated to the public [as an expired patent]."

As to the term, the Court held that inventors may not retain the generic designation of their inventions. The term "Shredded Wheat" had degraded beyond being merely descriptive and had become generic. Thus, there was no basis for engaging in an analysis of secondary meaning. Applying common law Unfair Competition, Kellogg's only burden was to take reasonable care to inform the public of the source of its product and distinguish its shredded wheat from that of Nabisco. This burden was generally met because Kellogg prominently displayed their company trademark on all packaging.

As to the pillow shape, the Court noted that the original, expired design patent covered the shape as well; when that patent expired, the shape was dedicated to the public. Moreover, the "evidence [was] persuasive that [the pillow-shape] form [was] functional" because the manufacturing costs would increase and the quality would decrease if any other form were substituted.

Full Text Available Here.

COMMENTARY

Notably, this case does not stand for the proposition that all expired patents preclude trademark protection for features of goods or services. The TMEP § 1202.02(a)(iii)(A) provides that:

Functional matter cannot be protected as trade dress or a trademark. 15 U.S.C. §§1052(e)(5) and (f), 1091(c), 1064(3), and 1115(b). A feature is functional as a matter of law if it is “essential to the use or purpose of the product or if it affects the cost or quality of the product.” TrafFix Devices, Inc. v. Marketing Displays, Inc., 532 U.S. 23, 33 (2001); Qualitex Co. v. Jacobson Products Co., Inc., 514 U.S. 159, 165 (1995).

Moreover, TMEP § 1202.02(a)(v)(A) provides that:

Design patents cover the invention of a new, original, and ornamental design for an article of manufacture. 35 U.S.C. §171. A design patent is a factor that weighs against a finding of functionality, because design patents by definition protect only ornamental and nonfunctional features. However, ownership of a design patent does not in itself establish that a product feature is nonfunctional, and can be outweighed by other evidence supporting the functionality determination. In re R.M. Smith, Inc., 734 F.2d 1482 (Fed. Cir. 1984); Caterpillar Inc., 43 USPQ2d at 1339; American National Can Co., 41 USPQ2d at 1843; In re Witco Corp., 14 USPQ2d 1557, 1559 (TTAB 1989)

Thus, it is entirely possible for an ornamental feature of an invention/good to enjoy both design patent and trademark protection concurrently. Indeed, trademark protection may be sought and achieved well after the expiration of a design patent.

Trade-Mark Cases, 100 U.S. 82 (1879)

CASE BRIEF:

The U.S. Supreme Court held that Congress's first attempt at trademark legislation was unconstitutional. The 1870 "Trade-Mark" Act: (1) provided for federal registration of marks, and (2) created a federal infringement cause of action for wrongful use of another's mark without permission.

At the outset the Court noted that the common law of the states had long recognized trademarks, thus their validity was not dependent upon Congress's new act. The Court reasoned that Article I, Section 8, Clause 8 of the U.S. Constitution (the Intellectual Property Clause -- ". . . to promote the progress of science and useful arts, by securing for limited times, to authors and inventors, the exclusive right to their respective writings and discoveries. . .") does not apply to trademarks because trademark rights grow from use in commerce, rather than invention of something novel or creation of something "original ... and founded in the creative powers of the mind." Instead, it is Article I, Section 8, Clause 3 (the Commerce Clause) which grants Congress the power to regulate trademarks.

Thus, the 1870 "Trade-Mark" Act was unconstitutional because it failed to make any reference to commerce with foreign nations, among the several states, or with Indian tribes. Moreover, the Act made no mention of "the character of the trade to which it was to be applied or the residence of the [trademark] owner."

Full Text Available Here.