Protect Your Brands: Conduct a "Fraudit" to Ensure that Your Trademark Registrations are Impervious to Attack
A recent development in U.S. trademark registration practice permits correction of inadvertent mistakes when action is taken before a challenge. In response to this development, Norvell IP recommends that trademark owners take proactive steps to ensure that trademark registrations cannot be cancelled by competitors.
U.S. trademark registration practice has undergone some important changes in the past six years. In the past, a claim of fraud on the U.S. Patent and Trademark Office (“PTO”) was considered a difficult claim to prove. Beginning in 2003, however, the Trademark Trial and Appeal Board (“Board”) of the PTO began canceling challenged U.S. trademark registrations with a “zero tolerance” line of cases. Specifically, these cases hold that a trademark owner commits fraud if an application or renewal lists goods or services that were not actually offered under the trademark at the time of the filing. Mistake or misunderstanding is not an acceptable excuse, and competitors have exploited this development. The result is that many companies are now unexpectedly defendants in trademark cancellation proceedings on the basis of fraud on the PTO.
We are pleased to report that, on May 13, 2009, the Board relaxed its enforcement of the fraud doctrine when a trademark owner proactively corrects an error in a trademark registration prior to a third party challenge to the registration. See Zanella Ltd. v. Nordstrom, Inc., Opposition No. 91177858 (October 23, 2008) (Redesignated as precedential on May 13, 2009). Accordingly, to eliminate the risk that your trademark registrations are cancelled due to fraud, we recommend conducting an audit, or “fraudit”, of your trademark portfolio. The fraudit is not expensive and consists of simply reviewing your company’s trademark portfolio to ensure that your trademark registrations cover only the goods or services actually sold by your company. If some of the goods or services listed are not currently sold, we recommend amending your company’s registrations to accurately reflect the actual use of your trademark(s).
If you have any questions, or would like to discuss this important matter further, please do not hesitate to contact us.
*The foregoing does not constitute legal advice and does not establish an attorney-client relationship. Each trademark owner’s case must be analyzed on an individual basis, and recommendations will vary depending on the circumstances.