In a change of precedent, the U.S. Trademark Trial and Appeal Board (TTAB) held on September 30, 2021, that reckless disregard of the truth or falsity of a material statement in a trademark prosecution filing is sufficient to establish fraud in matters before the United States Patent and Trademark Office (USPTO). Chutter, Inc. v. Great Management Group, LLC and Chutter, Inc. v. Great Concepts, LLC, 2021 USPQ2d 1001 (TTAB 2021). Previously, the Federal Circuit left open the question of whether “reckless disregard” is sufficient for a finding of fraud. In re Bose Corp., 580 F.3d 1240, 91 USPQ2d (Fed. Cir. 2009).
In Chutter, Inc. v. Great Concepts, LLC, the plaintiff alleged that, in the Combined Declaration of Use and Incontestability filed under Sections 8 and 15 of the Trademark Act, counsel for defendant Great Concepts falsely stated to the USPTO that there were no civil actions or USPTO proceedings pending against the defendant’s DANTANNA’S mark used in relation to a steak and seafood restaurant. The plaintiff also alleged that the defendant made the statements with the intent to deceive the USPTO. At the time that the Combined Declaration was filed, there were two pending proceedings involving the DANTANNA’S mark.
The TTAB held that “it is well settled the inclusion of false statements in a Combined Declaration of Use and Incontestability is material, and if made with the relevant degree of intent constitutes fraud warranting cancelation of the involved registration under Section 14(3) of the Trademark Act, 15 U.S.C. § 1064(3).” Chutter, 2021 USPQ2d at 15. Additionally, the TTAB reasoned “a declarant is charged with knowing what is in the declaration being signed, and by failing to make an appropriate inquiry into the accuracy of the statements, the declarant acts with reckless disregard for the truth.” Id. at 19, 20.
The TTAB found the defendant’s counsel’s conduct to be reckless because he was unaware of the requirements for filing a Combined Declaration of Use and Incontestability, and thus failed to make the appropriate inquiry. Id. at 26. The TTAB then held that reckless disregard is equivalent to finding that the defendant had the specific intent to deceive the USPTO. Id. Consequently, the TTAB granted the petition to cancel the registration of DANTANNA’S on the ground of fraud. Id.