Foreign Owners Of U.S. Trademark Registrations Beware – The Medinol Fraud Train Keeps Rolling And Applies To You
By: DEAN R. KARAU
September 2008
In yet the latest Medinol fraud decision from the United States Patent and Trademark Office’s (USTPO) Trademark Trial and Appeal Board (TTAB), an Italian company lost its U.S. trademark registration when it signed a declaration saying it was using its mark on all of the goods in its registration when it was not.
In Sierra Sunrise Vineyards v. Montelvini S.p.A., Cancellation No. 92048154 (September 10, 2008), Montelvini owned a registration for the mark above for use on “wines, spirits, and liqueurs.” The registration was based on its Italian registration for the same mark.
In 2005, when Montelvini was required to file its declaration attesting to its use of its mark in the U.S., its U.S. trademark counsel ask the company whether it was still using its mark “in connection with the goods listed in the Certificate of Registration.” The company said yes, and signed the declaration provided by its counsel, who then filed it with the USPTO.
Sierra Sunrise Vineyards subsequently petitioned to cancel Montelvini’s registration, alleging, among other things, that Montelvini committed fraud by falsely signing the declaration saying it was using its mark on wines, spirits, and liqueurs. In fact, Montelvini was not using the mark on liqueurs in the U.S. As a result, the TTAB cancelled Montelvini’s registration.
Montelvini argued that “there was a failure on the part of the Italians to appreciate the USPTO’s requirement to demonstrate specific actual use of the mark on each of the various goods contained within the larger class.” The TTAB did not buy the argument. Relying on its strict liability fraud standard first enunciated in Medinol Ltd. v. Neuro Vasx, Inc., 67 USPQ2d 1205 (TTAB 2003), the TTAB said that Montelvini
“had an obligation to work with its legal counsel to ensure that no false statements were made before the USPTO. . . . Clearly, [Montelvini] should have known that its allegation of use of its registered mark in connection with ‘liqueurs’ in U.S. interstate commerce was false.”
The TTAB also did not buy Montelvini’s argument that in Europe, wine, and liqueurs are thought of similarly, and language and cultural differences between Europe and the U.S. should be taken into account. Rather, the TTAB said that Montelvini’s president
“was obligated to confirm the meaning and accuracy of the statements contained in the application before signing the declaration and prior to submission to the USPTO.”
The TTAB also refused to let Montelvini amend its registration to delete liqueur, saying that would not remedy the fraud.
In most countries of the world, a trademark owner does not need to use its mark to obtain a registration. As a result, non-U.S. trademark owners are conditioned to include a broad array of goods and services in their applications, even if they are not using or intending to use the mark with all of those goods and services.
However, that could prove fatal to a U.S. application and subsequent registration based on such an expansive non-U.S. registration.
To obtain a U.S. registration based upon a non-U.S. registration, the trademark owner needs to attest to its intent to use its mark in the U.S., but it does not need to have begun such use in order to obtain the U.S. registration. However, the trademark owner must eventually prove up use of its mark, between the fifth and sixth years after its U.S. registration issues, and on each ten year anniversary of the issue date.
The Medinol line of cases means that non-U.S. trademark owners must carefully review the list of goods and services in their U.S. registrations when the time comes to file declarations about their use of their marks in the U.S. If trademark owners are not using their marks on all of the goods and services in their registrations, they must delete from the registrations those goods and services that they are not offering in the U.S. under the marks. Otherwise, if someone subsequently challenges the registration, the TTAB will likely cancel it in its entirety.
This is a draconian result, and there currently is at least one case on appeal seeking to overturn Medinol. However, until that happens, all U.S. trademark applicants and registrants, both U.S. and non-U.S., must be very, very careful or expose themselves to severe consequences.
See the following articles for more on the Medinol line of cases:
“New Precedential TTAB Decision Requires Credible Evidence to Support Bona Fide Intent to Use Mark in the U.S.,” Fredrikson & Byron’s Trademark TopicsSM, May 2008
“Update! Beware When Specifying the Goods Used with Your Trademark, or Risk Losing Your Trademark APPLICATION or Registration,” Fredrikson & Byron’s Trademark TopicsSM, March 2007
“Beware When Specifying the Goods Used with Your Trademark, or Risk Losing Your Trademark Registration Later,” Fredrikson & Byron’s Trademark TopicsSM, January 2007