Am I Cured? Trademark Office Opens Door to Correcting Fraud Post-Registration

Since the Trademark Trial and Appeal Board's decision in Medinol Ltd. v. Neuro Vasx, Inc., 67 U.S.P.Q.2d 1205 (TTAB 2003), the board has taken a near strict liability approach to errors in the description of goods or services in federal trademark registrations. The Medinol decision implied that if a trademark owner applies to register for a mark based on use, but it did not use the mark at the time of the application, the registration is subject to cancellation for fraud. One of the most important lingering questions from the case has been whether a trademark owner can cure the fraud after the fact by amending the registration. Last month, in a precedential decision in Zanella Ltd. v. Nordstrom, Inc., 90 U.S.P.Q.2d 1758 (TTAB 2008), the board finally answered that question in the affirmative.

The Zanella Decision

In Zanella, applicant Nordstrom counterclaimed to cancel five registrations asserted by Zanella for the ZANELLA mark. On Nordstrom's motion for summary judgment, the board held that Zanella had committed fraud in connection with one registration by including in its application and Section 8 declaration several types of goods on which it had not used the mark. However, Zanella had corrected the other four registrations by deleting the relevant items on which it had not used the mark. Zanella did this in either a Section 8 declaration or a Section 7 amendment. The board denied summary judgment to Nordstrom with respect to these registrations. The board held that Zanella's "action in correcting any false statements prior to any actual or threatened challenge to the registrations creates a rebuttable presumption that opposer did not intend to deceive the Office."

The Zanella decision, which was issued in October 2008, flew under the radar for a time because it was originally issued as a nonprecedential decision. On May 13, 2009, the board decided to re-designate the decision as a precedent of the board.

Implications for Trademark Owners

The Zanella decision provides a golden opportunity to attempt to repair any registrations that might be vulnerable to attack based on an argument that a trademark owner who isn't using all the goods and services in the description is committing fraud. In today's changing business environment, a company who ceases selling a line of products might face such a challenge if it doesn't amend its trademark filings. While it does not guarantee that such errors are curable, the rebuttable presumption of no intent to deceive puts the trademark owner in a much stronger position to fend off fraud attacks. Because the presumption only applies to corrections made before a challenge is made, trademark owners would be well-advised to carefully review their current portfolios to identify any potentially vulnerable registrations and make any necessary corrections before any fraud issues are raised.