[00:00:00] Speaker 05: The next case is number 22, the 1212 Great Concepts LLC versus Chudder Inc. [00:00:08] Speaker 05: Okay, Ms. [00:00:08] Speaker 05: Degman. [00:00:09] Speaker 01: May I please support Lauren Degman for Great Concepts. [00:00:12] Speaker 01: The board's first error here is a legal one. [00:00:15] Speaker 01: It exceeded its statutory authority by canceling a registration based on fraud in a Section 15 declaration. [00:00:22] Speaker 01: The language of Section 14 is unambiguous. [00:00:25] Speaker 01: Congress's intent is clear. [00:00:27] Speaker 01: It is spoken to the precise issue at hand. [00:00:30] Speaker 01: And the text, the structure, and the legislative history all show us that under the Lanham Act, a registration cannot be canceled based on fraud or alleged fraud in obtaining the incontestable right to use the mark. [00:00:42] Speaker 01: It's focusing on the statutory language, Section 14, enumerates specific grounds, none of which include. [00:00:48] Speaker 05: But how about Duffy Mott? [00:00:50] Speaker 05: I mean, is that a problem for him? [00:00:51] Speaker 05: I mean, yes, it didn't address cancellation directly, but it says you can't rely on it for any purpose. [00:00:59] Speaker 05: In the patent office, you can't rely on registration purposes in the patent office if there was fraud in the incontestability proceeding, right? [00:01:13] Speaker 01: So in Duffie-Mont, you're correct that it had relief. [00:01:18] Speaker 01: First of all, it was an opposition proceeding, and the defense of unclean hands was pled. [00:01:26] Speaker 01: And based on that defense, in the opposition proceedings, not a cancellation proceedings, the board did determine that it could not be relied on, the registration could not be relied on in those proceedings. [00:01:37] Speaker 01: But as you noted, Your Honor, Duffy Mott did not specifically address this issue. [00:01:42] Speaker 01: And because it wasn't a cancellation proceedings, this is an issue of first impression for this court. [00:01:47] Speaker 05: Under Duffy Mott, what's left of the trademark that can't be enforced? [00:01:53] Speaker 01: So in Duffy Mott, it could not be used in connection with the proceeding before the patent office at that time. [00:01:59] Speaker 01: The registration was maintained and could have been used in litigation. [00:02:04] Speaker 05: And so the relief that was... So they're saying you could still, or your reading is saying they could still use it to bring infringement suit? [00:02:14] Speaker 01: I'm saying that the relief, yes, that was done there was really focused to the proceeding before the Patent Office and then up on appeal. [00:02:24] Speaker 01: But the registration was maintained, and I think it's important to note, nobody thought it could be canceled based [00:02:30] Speaker 01: under section fourteen that was that was not really that was requested that issue was left open I acknowledge that and this is the issue we'd like you to address today. [00:02:39] Speaker 03: So what is the remedy that's available for section fifteen fraudulent. [00:02:45] Speaker 03: declaration. [00:02:46] Speaker 03: Is it simply the loss of incontestability? [00:02:48] Speaker 01: That's exactly right Judge Stork. [00:02:49] Speaker 01: So this incontestability right is something that is available that's used in litigation. [00:02:55] Speaker 01: That is where it is used and that is where Congress has said one can challenge fraud in obtaining the right of incontestability. [00:03:03] Speaker 03: Is there a mechanism within the patent office to eliminate the incontestability status, or could that only happen in litigation subsequent to the fraud? [00:03:16] Speaker 01: So the way I would answer that is that you only get, so first of all, the Patent Office doesn't evaluate it and grant incontestability status. [00:03:25] Speaker 01: You have to meet the elements of the statute, one of which is filing the declaration. [00:03:29] Speaker 03: You have to say you meet them. [00:03:30] Speaker 01: Right. [00:03:31] Speaker 01: And in district court, you actually have to have met them. [00:03:33] Speaker 01: That is the body that will evaluate whether incontestability status is warranted under the statute. [00:03:41] Speaker 01: Your question as to what could the Patent Office do should it accept [00:03:46] Speaker 01: a declaration without knowing it was false and then later on it was false. [00:03:50] Speaker 01: We don't know. [00:03:51] Speaker 01: We have not seen a regulation or proceedings by which it could revoke that acceptance but it seems like it would have that authority should it be brought to its attention simply to revoke the acceptance. [00:04:03] Speaker 03: So if I understand your position then it suggests if we were to adopt your view [00:04:09] Speaker 03: One could file a false Section 15 declaration saying, for example, there's no proceedings pending when there really are. [00:04:19] Speaker 03: The patent office is not going to evaluate that. [00:04:23] Speaker 03: They're just going to accept it. [00:04:24] Speaker 03: And they're going to list your mark as incontestable. [00:04:27] Speaker 03: And the world's going to think it's incontestable unless and until you end up in litigation. [00:04:31] Speaker 03: Is that right? [00:04:33] Speaker 03: And doesn't that seem to open the door to fraud? [00:04:35] Speaker 01: So I think the answer to that question, Judge Stark, is that what the world thinks of whether the mark is incontestable is really immaterial until you're actually in litigation, because there's no benefit until you're in litigation. [00:04:47] Speaker 01: And that is the form where Congress said, one could challenge the incontestability status of the mark. [00:04:54] Speaker 01: And so, you know, maybe Congress could have come up with a different scheme, but this is the one it came up with. [00:04:59] Speaker 01: It thought it was important to have the reasons for canceling the registration after five years to be cabined in, but still left open a procedure to address fraud in connection with obtaining incontestability status. [00:05:13] Speaker 01: And that mechanism is district court litigation. [00:05:19] Speaker 05: Well, doesn't the statute recognize that you can revoke the incontestability determination based on fraud? [00:05:27] Speaker 01: It does. [00:05:28] Speaker 01: That's absolutely right. [00:05:29] Speaker 05: Well, that would seem to suggest that the agency has the authority to do that. [00:05:33] Speaker 01: Well, no, I say the statute section is section 33B, and that is being done in litigation. [00:05:39] Speaker 01: So that is not the authority, that section 33 doesn't give the agency the authority to promote. [00:05:44] Speaker 01: It really gives the district court the authority to do that. [00:05:46] Speaker 01: And I should point out that the district court also is able to cancel registrations, but must also, is limited, by the way, to what the grounds are in section 14. [00:05:57] Speaker 01: So Congress would not have given district courts the remedy [00:05:59] Speaker 01: to cancel the incontestability status if courts also had the remedy to revoke or cancel the registration entirely. [00:06:08] Speaker 01: And so this shows that Congress thought of the issue and determined that the appropriate remedy for fraud in connection with the incontestability status is really just revoking that incontestability and reducing the evidentiary value of a registration and litigation. [00:06:26] Speaker 02: Does fraud, in your view, carry the same Andrea as, let's say, reckless disregard? [00:06:33] Speaker 01: I would say, you know, fraud has this intent to deceive element. [00:06:36] Speaker 01: And this, you said, reckless disregard. [00:06:40] Speaker 01: I think that the rubric here is that reckless disregard is being used in order to prove sort of the intent to deceive. [00:06:48] Speaker 01: Whether they, in terms of the hierarchy of [00:06:52] Speaker 01: mens rea, it does seem like intent to deceive is a higher standard than reckless disregard, although we don't disagree that there's authority out there under the appropriate standard where one could prove intent to deceive or malice based on a reckless disregard for the truth. [00:07:10] Speaker 01: So it's sort of a, I think fraud is higher, but certainly to prove the elements of fraud, there is authority. [00:07:17] Speaker 02: If that's the case, why can't the board find that [00:07:22] Speaker 02: reckless disregard in this case or another case rises to the level of fraud and intent to deceive and cancel the registration. [00:07:32] Speaker 01: Uh, two reasons. [00:07:33] Speaker 01: First, um, the statute, you know, agencies act only within their statutory authority and the statute section 14 does not list fraud in connection with obtaining incontestability status as a reason for cancellation. [00:07:45] Speaker 01: So that stops it right there. [00:07:47] Speaker 01: Secondly, if we want to focus on this case, the findings [00:07:52] Speaker 01: The facts the board accepted do not rise to the level of reckless disregard. [00:07:58] Speaker 01: And to be more specific, the board accepted the fact that Mr. Taylor reviewed the declaration, but not closely enough to see the error. [00:08:07] Speaker 01: The board found he paid little or no attention. [00:08:11] Speaker 02: Do you concede that there could be an instance where reckless disregard rises to a level of fraud, which would warrant the cancellation or registration? [00:08:20] Speaker 01: I do not concede that because canceling registration cannot be done based on fraud in connection with an incontestability declaration. [00:08:28] Speaker 05: OK, but that's your statutory argument. [00:08:29] Speaker 01: That's my statutory argument. [00:08:30] Speaker 01: So if we move past that. [00:08:31] Speaker 01: So if we want to move past that. [00:08:33] Speaker 05: Wait, wait, wait. [00:08:35] Speaker 05: I think the question was assuming that the statute allows the cancellation of the registration. [00:08:44] Speaker 05: And the question is, what constitutes fraud and is reckless disregard if there were no fraud? [00:08:50] Speaker 01: So I think we would say in the abstract, divorced from the facts of our case and the findings the board made under the proper test, which we would say is the subjective [00:08:59] Speaker 01: district reckless disregard test, you could prove out a case. [00:09:04] Speaker 01: You could meet that higher threshold of a high degree of awareness of probable falsity. [00:09:10] Speaker 01: Someone who made a deliberate decision, made conscious indifference to the truth of the matter resorted. [00:09:16] Speaker 01: There was something fishy, and they turned a blind eye. [00:09:19] Speaker 01: We're not saying that there's, you know, what we said, applying the appropriate test, you could meet the threshold in order to have basically [00:09:28] Speaker 01: the intent to deceive, the intent there. [00:09:31] Speaker 01: We're saying, in this case, the facts in the record and as found by the board raise to no higher than negligence or gross negligence. [00:09:39] Speaker 01: The board relied on a should-have-known standard. [00:09:42] Speaker 01: He said he should have read the declaration. [00:09:44] Speaker 02: But you're not asking us to reweigh the decision of the board as to negligence or willful disregard or anything like it, are you? [00:09:51] Speaker 02: I mean, that's not our province. [00:09:53] Speaker 02: We can't make that decision or address that. [00:09:58] Speaker 02: But you seem to have conceded that under certain circumstances it is possible that reckless disregard can rise to the level of fraud, warranting the cancellation of registration. [00:10:09] Speaker 02: If that's your position, then that takes us back to an evidentiary question here, and we can't address that evidentiary question. [00:10:19] Speaker 01: So let me say two things. [00:10:20] Speaker 01: Again, we're under the rubric where the statutory construction is put aside. [00:10:23] Speaker 01: And here, we're still bound or deteriorated to the facts the board found. [00:10:29] Speaker 01: And the board only found he paid little or no attention to the declaration. [00:10:34] Speaker 01: They accepted that he had read it, but just not closely enough. [00:10:37] Speaker 01: And those findings are consistent with a momentary lapse in care. [00:10:43] Speaker 01: There's not more to pull it over beyond the realm of negligence or gross negligence under this court's case law. [00:10:50] Speaker 01: And so we're not asking you to refine the facts. [00:10:52] Speaker 01: We're asking you, under Cheney, to accept the facts as the board put them out. [00:10:57] Speaker 01: And the standard does not. [00:10:58] Speaker 01: And those facts do not rise to the level of reckless disregard, even under the objective standard, but certainly not under the subjective standard. [00:11:06] Speaker 03: Can I bring it back to the statutory point? [00:11:08] Speaker 03: I'm not sure that you clearly raised the argument below. [00:11:12] Speaker 03: I looked at the pages you cited. [00:11:13] Speaker 03: It's sort of maybe suggested. [00:11:15] Speaker 03: If we don't think that you really fairly put this motion in front of the board, can we reach it and how? [00:11:23] Speaker 01: I'm going to accept your premise that if you think that, I disagree. [00:11:27] Speaker 03: You can tell me your best page for it, and I'll be sure to look again. [00:11:31] Speaker 01: Let me do that first then, Judge Stark. [00:11:32] Speaker 01: So I would say if we look at Appendix 1757, which I'm sure you have looked at, we are in fact endorsing Professor McCarthy's argument, which is the same argument we're making today. [00:11:42] Speaker 03: Well, you say it does not necessarily provide grounds for cancellation. [00:11:45] Speaker 03: That's pretty wishy washy. [00:11:47] Speaker 01: But then we also quote him. [00:11:49] Speaker 01: We're quoting the argument and making it our own. [00:11:51] Speaker 01: And then we go on, again, we are in an environment, in our view, that is ultra-virus. [00:11:56] Speaker 01: And then we go on to explain why even the logic of crown wall covering would be insufficient. [00:12:02] Speaker 03: So we think we've made it. [00:12:03] Speaker 03: So if we didn't buy that, can we still reach the issue? [00:12:05] Speaker 01: I think you can, because always waiver of forfeitures is a discretionary issue. [00:12:10] Speaker 01: This is a question of law. [00:12:11] Speaker 01: It's of exceeding importance to the public, especially because, as I said, agencies are creatures of statute. [00:12:19] Speaker 01: And this agency [00:12:20] Speaker 01: has been acting ultra-virus for many, many years, engaging in these sort of cancellations based on fraud in connection with an incontestability, obtaining a contestability status, which is completely outside of the statute. [00:12:34] Speaker 01: It's an extra statutory ground. [00:12:35] Speaker 01: And so we think you absolutely have the authority to address it. [00:12:39] Speaker 01: I am well into my rebuttal time. [00:12:40] Speaker 01: Do you have more questions? [00:12:42] Speaker 05: OK. [00:12:46] Speaker 04: Mr. Barber. [00:12:49] Speaker 04: Barber. [00:12:49] Speaker 04: Good morning, Your Honors. [00:12:50] Speaker 04: Thank you, Bruce Baver, on behalf of each other. [00:12:52] Speaker 04: Your Honors, I'd like to begin with just a few quick points. [00:12:55] Speaker 04: First, the facts of this case, we believe, are both extraordinary and egregious. [00:13:01] Speaker 04: A lawyer subject to the USPTO rules that he is certified... Okay, but how about addressing the statutory issue? [00:13:08] Speaker 04: Absolutely, Your Honor, I'd be delighted to. [00:13:09] Speaker 04: The statutory issue is one that [00:13:11] Speaker 04: based on Duffy Mott and Crown, and then in the Ninth Circuit decision in Roby, and we have a recent Eighth Circuit decision in B&B Hardware versus Hargis, the courts have accepted the view that obtaining registration under the minimum section 14 includes more than just getting a registration in the first instance. [00:13:30] Speaker 04: We know from Bose and Torres in this court, it includes renewals. [00:13:35] Speaker 04: for another 10-year term. [00:13:38] Speaker 04: There are cases that have held you commit fraud in a Section 8 declaration to continue the registration for its full 10-year term. [00:13:45] Speaker 04: That's actionable as a fraud before the Trademark Office. [00:13:48] Speaker 04: And in this case, what we have is one declaration under both Section 8 and 15. [00:13:55] Speaker 04: What the statute contemplates is if you commit fraud in obtaining the benefits of the statute, [00:14:02] Speaker 04: You are subject to having your registration cancelled. [00:14:04] Speaker 05: Well, the trouble is that's not the language of the statute. [00:14:07] Speaker 05: It doesn't say benefits of the statute. [00:14:09] Speaker 05: It says register. [00:14:10] Speaker 04: Yes, Your Honor. [00:14:11] Speaker 04: And counsel makes the argument based on section 33B1, which is the incontestability in court provision, where it specifically references incontestability. [00:14:20] Speaker 04: That's a different provision for a different circumstance entirely. [00:14:24] Speaker 04: Counsel made the argument a few minutes ago that, well, it doesn't matter whether you've made a claim of incontestability until there's litigation. [00:14:31] Speaker 04: That is absolutely not the case. [00:14:33] Speaker 04: Once you file a declaration of incontestability, the PTO adds it to the public database for the mark. [00:14:40] Speaker 04: People searching and assessing marks and assessing risk see that the trademark owner has filed a section 15 declaration and claims it's incontestable. [00:14:48] Speaker 05: Deal with the language of the statute. [00:14:50] Speaker 05: It says registration was obtained fraudulently. [00:14:54] Speaker 05: if you've got the incontestability certificate or whatever it is, how does that fit in the language we're going to registration? [00:15:06] Speaker 04: It fits the same way that a renewal does, your honor? [00:15:09] Speaker 05: Well, renewal or renewal affects the registration. [00:15:11] Speaker 05: There's no lack of direct connection there. [00:15:15] Speaker 05: There's no lack of direct connection if you're talking about a renewal that's related to the registration. [00:15:21] Speaker 04: But a renewal is not obtaining the registration. [00:15:24] Speaker 04: It's simply continuing for another 10 years. [00:15:25] Speaker 04: It's the same registration that you had before. [00:15:28] Speaker 04: You might have a very simple filing, very similar to a Section 8 filing. [00:15:32] Speaker 04: and you get another 10 years packed onto the term. [00:15:34] Speaker 04: It's not a new registration. [00:15:36] Speaker 04: It is not obtaining a new registration. [00:15:38] Speaker 04: It's simply continuing the one you have in effect and getting additional benefits for it. [00:15:43] Speaker 04: Just like a Section 15 gives you additional benefits for that registration. [00:15:48] Speaker 04: and the board in its cases and in the decision below, it accurately told us, what are those benefits that you get from that section 15? [00:15:56] Speaker 04: You get the right to claim it's incontestable in litigation. [00:15:59] Speaker 04: You get the PTO acknowledging that you filed it. [00:16:02] Speaker 04: And importantly, you get the notice on the public website that this trademark owner claims its mark is incontestable. [00:16:09] Speaker 04: We know that the language of Section 14 is not limited to obtaining the mark in the first place. [00:16:15] Speaker 04: We know that from Bose and Torres and all the cases about renewals and other subsequent filings. [00:16:20] Speaker 04: And any other rule, Your Honor, would make it a field day, open, fair game. [00:16:26] Speaker 04: Once you've got that registration issued, there are renewals. [00:16:30] Speaker 04: There are Section 8 and 15 declarations. [00:16:32] Speaker 04: There are motions that you make to amend your registration and claim an earlier date of first use, for example, which can be extremely important. [00:16:39] Speaker 04: And that, according to the appellant, those will all be immune from a claim of fraud because it's not obtaining the registration. [00:16:48] Speaker 03: It's just making a change. [00:16:49] Speaker 03: They're not immune from a claim of fraud. [00:16:50] Speaker 03: They may be immune from losing your registration as a result of those frauds because Congress didn't set out a cancellation proceeding for them. [00:16:59] Speaker 03: If that's what the statute says, we have to follow it, right? [00:17:02] Speaker 04: If that is the meaning of the statute is it is only [00:17:05] Speaker 04: Literally obtaining the registration then yes, then the court would say any other fraud may or may not be actionable But for example the example I just gave a motion to amend the registration post registration issuance That's not referenced in section 33 So there would be no basis no place you could ever raise that claim of fraud according to great concepts you would be immune to [00:17:29] Speaker 04: I'll just start, you asked the question earlier. [00:17:31] Speaker 04: If the law does not provide a remedy for this before the trademark office, which is the office charged with administering the trademark registration process, are you opening the door to claims of fraud? [00:17:44] Speaker 04: The answer would be absolutely. [00:17:46] Speaker 04: And on the fact issues here, allowing a lawyer to file a declaration and testify that he didn't know what it said, that is, [00:17:57] Speaker 04: as the board said, especially reckless. [00:17:59] Speaker 04: Well, he's subject to discipline, right? [00:18:02] Speaker 04: Why isn't that inadequate deterrent? [00:18:04] Speaker 04: Because, Your Honor, that does not adequately protect the registration system. [00:18:10] Speaker 05: You're also taking away, at least in litigation, [00:18:15] Speaker 05: the incontestability certificate. [00:18:18] Speaker 04: Well, but then someone has to prove in court that there was the fraud, and you could have... You could have the fraud somewhere. [00:18:25] Speaker 04: You do. [00:18:25] Speaker 04: And you should be able to go to the trademark office with a Judge Dyke. [00:18:28] Speaker 04: The trademark office is who keeps the register. [00:18:31] Speaker 04: And if we want the register to be correct and only truthful claims of incontestability to be made and posted on the publicly available data of the Trademark Office, we should be able to go back to the Trademark Office to do that. [00:18:44] Speaker 04: And there are situations. [00:18:46] Speaker 04: I think the difference in the language between the two statutory sections can be explained. [00:18:50] Speaker 04: And the legislative history confirms this, I think. [00:18:55] Speaker 04: In litigation, you may need to challenge the incontestability status. [00:19:00] Speaker 04: But you don't care to, or you don't want to, or you don't need to cancel the registration. [00:19:06] Speaker 04: You may want to make an argument in the litigation that is, remember, incontestability in litigation is extremely powerful. [00:19:14] Speaker 04: It makes the mark conclusive evidence, makes the registration, sorry, conclusive evidence of the right to use the mark. [00:19:21] Speaker 04: Now, you may want to argue, no, no. [00:19:23] Speaker 04: I don't think that mark had secondary meaning. [00:19:25] Speaker 04: But you also want to argue, maybe I have secondary meaning first. [00:19:28] Speaker 05: But that sort of suggests that taking away incontestability is a significant sanction. [00:19:34] Speaker 04: It is in litigation. [00:19:36] Speaker 04: But it is not necessarily an either or with cancellation. [00:19:42] Speaker 04: You can do one without the other. [00:19:44] Speaker 04: But the only place where you would need, as a practical matter, to do only incontestability is in litigation. [00:19:51] Speaker 05: So what about these Eight and Ninth Circuit cases that you rely on? [00:19:55] Speaker 05: The reasoning is not, shall we say, extensive in those cases. [00:19:59] Speaker 04: But the reasoning in Roe v. is not extensive. [00:20:01] Speaker 04: But it was after Duffy Mott. [00:20:03] Speaker 04: It was after Crown. [00:20:04] Speaker 04: It endorsed those decisions. [00:20:06] Speaker 04: And I think the Eighth Circuit's decision in the B&B Hardware case, which actually I don't think either party cited it in their briefs. [00:20:12] Speaker 04: It was the B&B Hargis is the case that went up to the Supreme Court and raised the recada effect of board decisions. [00:20:18] Speaker 04: But it then went and came back down. [00:20:19] Speaker 04: And one of the things that had happened in the interim was that they had filed an incontestability declaration. [00:20:25] Speaker 04: And at trial, the defendant, Hargis, wanted to prove that that declaration was fraudulent because the plaintiff was relying on it to claim changed circumstances. [00:20:34] Speaker 04: If you look at the Eighth Circuit's decision, it says it is interpreting the statutory language regarding obtained fraudulently. [00:20:43] Speaker 04: not the separate language about the incontestability statute. [00:20:46] Speaker 04: So that's the closest we have. [00:20:47] Speaker 04: Two sister circuits that have said, yes, you can cancel a registration for fraud in Section 15. [00:20:54] Speaker 04: Your Honor, I'd like to move just very quickly to a couple of points. [00:20:58] Speaker 03: One of the arguments the other side makes is that the intent [00:21:01] Speaker 03: Finding was subsumed by the board erroneously in this sort of reckless disregard Finding where where in fact does the board make a fact finding that when mr. Taylor? [00:21:14] Speaker 03: Acted with reckless disregard. [00:21:16] Speaker 04: He did it with an intent to actually draw up the patent office I think the closest on that is where the board says on page 24 there [00:21:33] Speaker 04: And it's Appendix 26. [00:21:38] Speaker 03: Appendix 26. [00:21:39] Speaker 04: In the Appendix 26. [00:21:40] Speaker 04: Yeah, so Appendix 26. [00:21:43] Speaker 04: Therefore, we find that attorney Taylor's conduct constitutes reckless disregard, which is the legal equivalent of finding that defending great concept had the specific intent to deceive. [00:21:52] Speaker 03: So I read that as [00:21:54] Speaker 03: Great Concepts is right. [00:21:56] Speaker 03: They subsumed it. [00:21:57] Speaker 03: They made no separate finding on intent. [00:21:59] Speaker 03: How do you read it? [00:22:00] Speaker 04: Your Honor, I think the court had just finished a long discussion about Mr. Taylor and his conduct. [00:22:06] Speaker 04: And on page 20, they found that Mr. Taylor, the attorney, was especially reckless. [00:22:14] Speaker 04: And the board also has a statement in its decision. [00:22:19] Speaker 04: which says that the issue that the court left open in Bose in 2009 is whether reckless disregard is sufficient as the intent element. [00:22:29] Speaker 04: The board made a holding that? [00:22:30] Speaker 04: It was. [00:22:30] Speaker 03: So are you agreeing then that the board treated reckless disregard as equivalent to a finding of specific intent to do it? [00:22:38] Speaker 04: Yes, Your Honor, it did. [00:22:38] Speaker 04: And you want us to hold it as a matter of law that that's OK? [00:22:42] Speaker 04: Yes. [00:22:42] Speaker 04: We think we should. [00:22:43] Speaker 04: On the question you reserved and put note to in Bose in 2009, whether reckless disregard is sufficient to be a sufficient level of culpability for a fraud claim [00:22:56] Speaker 04: We think you should answer that in the alternative and affirm the board. [00:22:59] Speaker 04: Thank you. [00:23:04] Speaker 05: Ms. [00:23:04] Speaker 05: Walker? [00:23:06] Speaker 00: May it please the court? [00:23:07] Speaker 05: The board was correct both in its... But before we get into your argument, maybe why don't you answer the question that's been asked a couple of times. [00:23:14] Speaker 05: Is there a remedy before the PTL to revoke the infestability determination if it was fraud and securing it? [00:23:23] Speaker 00: Yes, Your Honor, and it's found in the language that says obtain fraudulently. [00:23:28] Speaker 00: The registration right includes both the initial registration. [00:23:33] Speaker 05: No, I don't think that's quite the question I was asking. [00:23:35] Speaker 05: I was saying, forget about cancellation of the mark. [00:23:39] Speaker 05: Does the board, if there's fraud with respect to the incontestability determination, can the incontestability finding be revoked without reaching cancellation? [00:23:54] Speaker 00: There is no separate statutory basis on which the board could reach a question of removing incontestability, right? [00:24:03] Speaker 00: That the way that the board reached that question here was under section 14 of the act, which is the provision for cancellation. [00:24:09] Speaker 00: We do address in our brief that the board has broad authority and latitude to set the remedy, right? [00:24:18] Speaker 00: So that under section [00:24:21] Speaker 00: 18 of the act, the board can fashion a remedy. [00:24:24] Speaker 00: And the board canceled the registration here under section 14. [00:24:28] Speaker 00: But if this court were to say that the more appropriate remedy was to cancel the incontestability status, that is something that both the board and the court have authority to do under section 18 of the statute. [00:24:42] Speaker 00: But all of that comes under section 14 of the act, which is 15 USC 1064. [00:24:51] Speaker 00: okay i think i understand what you're saying thank you your honor so the board here is correct both in its statutory interpretation addressing reaching the question of uh... whether there was fraud in the [00:25:04] Speaker 00: the procurement of a Section 15 additional registration right, and also in its findings on fraud. [00:25:11] Speaker 00: And I want to address specifically what the board did with respect to fraud and respond to some of the arguments at great content. [00:25:18] Speaker 05: So how is it that the word registration covers contestability? [00:25:22] Speaker 05: Is that because your construed registration is including all benefits of registration? [00:25:28] Speaker 00: Yes, Your Honor, and that's consistent with what this court and its predecessor court did both in Duffymont and in Torres. [00:25:35] Speaker 00: In Torres, this court said that it's not just the procurement of the original registration, right, but also the maintenance of the registration that falls within the statutory language in Section 14. [00:25:44] Speaker 05: That seems like an easier result than the one you're urging here. [00:25:50] Speaker 00: Well, Your Honor, I think it's consistent. [00:25:52] Speaker 00: It's certainly consistent with what the court did in Duffy Mott. [00:25:55] Speaker 05: Now, I understand that the exact... Well, in Duffy Mott, they didn't reach the cancellation question. [00:25:59] Speaker 00: That's correct. [00:25:59] Speaker 00: That's correct, Your Honor. [00:26:00] Speaker 00: But the court, the board and the court did more there than just say that they couldn't rely on the incontestable right. [00:26:08] Speaker 00: either, right? [00:26:09] Speaker 00: That the question, the specific question that's before the court here was not before the court there. [00:26:13] Speaker 00: I will say, too, that I think that the reading of the statute to encompass all registration rights, right? [00:26:21] Speaker 00: All of those rights is very consistent with the statutory language in section 14. [00:26:27] Speaker 00: I recognize that the statutory language in section 33 is different, but I do want to point the court to the fact that the legislative history, I mean, somewhat curiously and I think pretty unusually says that [00:26:38] Speaker 00: that those provisions in section 33 should not give import to any other provisions of the Lanham Act, and the Congress was very clear in that when we cite that legislative history in our brief. [00:26:50] Speaker 00: So really what the Court should be looking at here is section 14 on its own, and this Court has previously held that that language obtained the registration is something broader than just [00:27:01] Speaker 00: the original registration right. [00:27:02] Speaker 00: And here we're talking about additional registration rights that are conclusive evidence of the validity of that registration, which is a very important right. [00:27:10] Speaker 00: And I want to respond to something my friend said, which is that it doesn't matter. [00:27:15] Speaker 00: Incontestability doesn't matter until you're in court. [00:27:18] Speaker 00: And I just don't think that's true. [00:27:20] Speaker 00: Incontestability matters because [00:27:22] Speaker 00: Anybody is able to see the public record and to know that that registrant is relying on an incontestable right and that certainly factors into what happened at that point Does that prevent people from that see that there's an incontestability? [00:27:40] Speaker 02: Marking in the record that prevents third parties from challenging the the [00:27:47] Speaker 00: the trademark yes your honor what it means that it's conclusive evidence of the rights afforded under section seven b of the statute protection it's it's really truly a shield of protection and that very much restricts the defenses that are available in litigation uh... and for example uh... no no defendant could raise the defense that the mark was [00:28:12] Speaker 00: descriptive when it was first obtained. [00:28:15] Speaker 00: So those are the kinds of things that are no longer available, making the position of being a defendant defending against an incontestable registration a much more difficult proposition than might otherwise be the case. [00:28:27] Speaker 03: Could you address this subsuming argument? [00:28:31] Speaker 03: Did the board make a separate finding on actual intent? [00:28:35] Speaker 00: So Your Honor, the two sections of the board's decision that I would point into are APPX 26, which we already looked at, and also APPX 20. [00:28:45] Speaker 00: Now I will say that I don't think that it [00:28:48] Speaker 00: is legal error for the board to have equated intent to deceive here with reckless disregard. [00:28:54] Speaker 00: That is the exact question that this court left open. [00:28:57] Speaker 00: So I don't know that I accept the premise that subsuming is a legal error. [00:29:02] Speaker 00: But I do want to just point to the court to the additional finding on page 20, which was saying, which [00:29:08] Speaker 00: The board said, in other words, Mr. Taylor paid little or no attention to the document he was signing under oath and thereby disregarded the significance of the benefits he was obtaining for his client. [00:29:20] Speaker 03: And so there... Can't you pay little, if any, attention to a document with two different states of mind? [00:29:27] Speaker 03: One, you're just completely utterly careless. [00:29:29] Speaker 03: Maybe you're busy, maybe you're a bad lawyer. [00:29:31] Speaker 03: And the other, [00:29:32] Speaker 03: You know there's something in there that you want to fool the patent office on, so you're just not going to look at it. [00:29:38] Speaker 03: Are those different states of mind? [00:29:40] Speaker 00: I don't believe so in this context, Your Honor, for two reasons. [00:29:45] Speaker 00: One, this was a lawyer who was signing the document. [00:29:47] Speaker 00: And there's also testimony and findings by the board that he was unaware of the relevant law, right? [00:29:54] Speaker 00: That he could have either known the relevant law or just read the document before him. [00:29:58] Speaker 05: But suppose we had a different situation. [00:30:02] Speaker 05: The lawyer testified that he had thought that the relevant law didn't require this, and that he'd done a number of these 20 years ago, and that his memory was that this wasn't the requirement, so he went ahead and signed it. [00:30:18] Speaker 05: That would seem to me to be reckless, but it also doesn't seem to approach having a bad intent. [00:30:24] Speaker 00: We don't have that testimony here. [00:30:26] Speaker 00: And I do think that starts to look more similar to the Bose situation. [00:30:34] Speaker 00: What Bose did was say that a should-have-known standard was not sufficient. [00:30:38] Speaker 00: And I want to be clear that the board did not apply a should-have-known standard here. [00:30:42] Speaker 00: And I also want to get back to a point. [00:30:45] Speaker 05: You seem to be agreeing that not all recklessness is constitutes fraud. [00:30:50] Speaker 00: So I think what I would say to that is that the board relied on cases in which reckless disregard met a willful standard, right? [00:30:58] Speaker 00: That cases use different terms to mean different things in certain cases. [00:31:04] Speaker 00: And so what the board found here was that the facts satisfied the intent to see... Willful blindness? [00:31:11] Speaker 05: You think they found willful blindness here? [00:31:12] Speaker 00: The board did not make a specific willful blindness finding, but it did say that the type of reckless disregard that it was finding was willful, that it was relying on cases in which that was willful, and that the willful standard meets the intent standard for fraud here. [00:31:31] Speaker 00: I just wanted to respond, make one additional point, which is that if anyone can say they just didn't read the document, then the obligations that parties and attorneys have before the office become meaningless. [00:31:44] Speaker 00: The PTO must rely on the factual accuracy of the documents that they sign. [00:31:50] Speaker 00: And if a party can just say, I didn't read the document. [00:31:52] Speaker 05: Nobody's suggesting that you get let off the hook. [00:31:57] Speaker 05: I mean, you should start pointing out earlier, you can be sanctioned. [00:32:00] Speaker 05: and losing the incontestability status could be very significant. [00:32:07] Speaker 00: Well, that's true, assuming that I'm not sure the basis on which you would lose the incontestability status, though, if this doesn't meet the standard of fraud, right? [00:32:17] Speaker 00: That we have to assume that this would meet the standard of fraud in order for it. [00:32:21] Speaker 02: Well, let's say that there's just a misstatement, as a fact. [00:32:25] Speaker 02: Instead of a lawyer who is involved in both of the cases, which is pretty important here, [00:32:30] Speaker 02: let's say it was an associate who signs the declaration, then perhaps that gives rise to something less than cancellation and denial of incontestability. [00:32:45] Speaker 00: I think that the facts, this particular circumstances would matter. [00:32:48] Speaker 00: But we are not saying, nor did the board say, that a mere misstatement of facts, that an unknowing misstatement of facts would be sufficient. [00:32:57] Speaker 00: And that is not the theory on which the board found fraud in this case. [00:33:03] Speaker 00: The court has no further questions we'd ask. [00:33:06] Speaker 00: OK, thank you. [00:33:12] Speaker 01: Thank you, Your Honor. [00:33:15] Speaker 01: I did want to address this issue about obtaining registration being something completely different than obtaining the incontestability status. [00:33:25] Speaker 01: Now obtaining covers, applying for the mark initially, maintaining the mark under Section 8, renewing, excuse me, maintaining the registration under Section 8, and renewing the registration. [00:33:36] Speaker 01: Each of those acts, if you don't do them, the registration is removed from the register. [00:33:41] Speaker 01: So it's really the idea of [00:33:43] Speaker 01: obtaining it again, continuing to obtain it. [00:33:46] Speaker 01: So you don't do those things, it's gone forever. [00:33:48] Speaker 01: So I don't think this idea that you can read in obtaining the registration is so broad to capture obtaining the incontestability status. [00:33:57] Speaker 01: Moreover, Duffy Mott, unless it's a rule, does say that the issue of obtaining incontestability status is different from maintaining. [00:34:06] Speaker 01: So I don't think it's a reasonable interpretation of the language of Section 14 to sweep in anything that touches a registration, especially when Congress knew the difference and was more specific in Section 33 with respect to fraud and connection to contestability and had a very limited grounds for cancellation in Section 14. [00:34:26] Speaker 01: So I wanted to address that. [00:34:27] Speaker 01: I also wanted to address this concept of the public can see on the public register that a registrant believes [00:34:36] Speaker 01: they need the test for incontestability and that somehow has a chilling effect. [00:34:40] Speaker 01: But the public would also know is A, the PTO does nothing to verify the accuracy of that and B, they can challenge that in court to the time where need ever arise. [00:34:49] Speaker 01: So I think we're completely overstating the idea that because the PTO accepts the declaration of face value has some sort of other effect outside of the context of actual litigation where Congress has told us [00:35:01] Speaker 01: A litigant can go after that in congestibility status, and there are severe consequences. [00:35:07] Speaker 01: The last thing I'll say, because I'm really close to time, is you hear that there's almost a per se rule. [00:35:14] Speaker 01: There's been no finding that Mr. Taylor made a deliberate decision to read that declaration, not that closely. [00:35:21] Speaker 01: No deliberate decision to not read it that good. [00:35:26] Speaker 01: And so what we have is a per se rule. [00:35:27] Speaker 01: He should have read it more thoroughly. [00:35:29] Speaker 01: And this collapsing of the mens rea, the intent to deceive, it's a per se rule, and it will necessarily sweep in momentary lapses of care. [00:35:40] Speaker 01: Pure heart, but empty head. [00:35:43] Speaker 01: And that is this test. [00:35:45] Speaker 01: Given the findings the board relied upon with little attention, it's fundamentally, putting aside the statutory construction, it's fundamentally at odds with this court's law on intent to deceive. [00:35:56] Speaker 05: Thank you, Mr. Chairman. [00:35:57] Speaker 05: Thank you to all councillors who have just submitted.