CAFC Decision Refuses to Expand Statutory Grounds to Cancel Mark

The Trademark Trial and Appeal Board (“TTAB”) ordered cancellation of a trademark registration for the mark DANTANNA’S for restaurant services, finding that the Registrant’s Attorney recklessly executed the Section 15 Declaration of Incontestability and disregarded the truth. See, Chutter, Inc. v. Great Management Group, LLC and Chutter, Inc. v. Great Concepts, LLC, 2021 USPQ2d 1001 (TTAB 2021) [precedential]. The Court of Appeals for the Federal Circuit (“CAFC”) reversed this decision in a precedential split decision, finding that a party is not entitled to use a Section 14 Cancellation Proceeding if another party files a fraudulent Affidavit of Incontestability under Section 15 of the Lanham Act. Great Concepts, LLC v. Chutter, Inc., 2023 USPQ2d XXXX (Fed. Cir. 2023).

To understand the legal requirements and benefits of filing a Declaration of Incontestability under Section 15 of the Lanham Act, see our web page entitled, Incontestable Trademarks. If you qualify to file a Declaration of Incontestability, it will become more difficult for a third party to invalidate your trademark. For example, once your mark registers, it becomes prima facie evidence of the validity of the trademark, but an incontestable trademark shall be conclusive evidence of the validity of the registered mark. Thus, it is more burdensome and difficult to prove invalidity of a registered incontestable mark than a registered mark without incontestable status. Once a mark is incontestable, the grounds to invalidate it will be restricted to those grounds listed in Section 14 of the Lanham Act. To view the restricted grounds, please see our webpage entitled, Challenging Trademark Rights After Five Years of Registration.

This CAFC decision is significant for a couple of reasons. Firstly, it clarifies that fraud in connection with filing and acquiring incontestability status is independent from fraud in connection with filing the application and obtaining registration of the mark. Further fraud in connection with filing a Section 15 Affidavit is also distinct from fraud committed in renewing or maintaining a trademark. And that engaging in fraud while filing a Section 15 Declaration cannot be used as a basis to cancel the registration. Secondly, the CAFC has made it clear that it will not expand the statutory basis under Section 14 of the Lanham Act.

The Court noted that when Congress sets forth a lengthy list of provisions, it will not add to that long list since, the adding could contradict a purposeful omission. However, one can still initiate a trademark cancellation proceeding if fraud is committed while obtaining a registration. Moreover, this CAFC decision also still permits a cancellation proceeding to be initiated if fraud was committed in connection with maintaining a trademark registration. See Torres v. Cantine Torresella S.r.l., 808 F.2d 46, 48 (Fed. Cir. 1986) (“Fraud in obtaining renewal of a registration amounts to fraud in obtaining a registration within the meaning of section 14(c) of the Lanham Act.”).

I tend to agree more with the Dissent of this CAFC decision. The USPTO should be able to exercise its authority without the Court usurping its power. There should be a consequence for the reckless filing of USPTO documents, and for disregarding the truth while seeking an expansion of trademark rights that the registrant was not entitled to receive. On that note, the CAFC did remand the decision to the USPTO to determine what if any sanctions would be implemented against the Registrant or its attorney, so we will have to wait to see if a consequence ensues. This decision is a reminder that it is important to consult with a trademark attorney prior to filing any documents at the Trademark Office, including post registration documents. If you have questions or need assistance with your post registration filing at the USPTO, please contact the firm for a courtesy consultation.