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UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT

2009-1012(Opposition No. 911162,008)

HUALAPAI TRIBE,

Appellant,

v.

GRAND CANYON WEST RANCH, LLC,

Appellee.

APPEAL FROM THE UNITED STATES PATENT AND TRADEMARK OFFICETRADEMARK TRIAL AND APPEAL BOARD

BRIEF OF AMICUS CURIAE

AMERICAN INTELLECTUAL PROPERTY LAW ASSOCIATION

IN SUPPORT OF HUALAPAI TRIBE AND REVERSAL

Teresa Stanek Rea, PresidentAMERICAN INTELLECTUALPROPERTY LAW ASSOCIAnON

241 18th Street, Suite 700Arlington, VA 22202(703) 415-0780

Susan J. HightowerWilliam G. BarberPIRKEY BARBER LLP600 Congress Avenue,

Suite 2120Austin, TX 78701(512) 322-5200

Counsel for Amicus Curiae

December 17, 2008

UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT

2009-1012(Opposition No. 91/162,008)

HUALAPAI TRIBE,

Appellant,

v.

GRAND CANYON WEST RANCH, LLC,

Appellee.

APPEAL FROM THE UNITED STATES PATENT AND TRADEMARK OFFICETRADEMARK TRIAL AND APPEAL BOARD

BRIEF OF AMICUS CURIAEAMERICAN INTELLECTUAL PROPERTY LAW ASSOCIATION

IN SUPPORT OF HUALAPAI TRIBE AND REVERSAL

CERTIFICATE OF INTEREST

Counsel for the Amicus Curiae, AMERICAN INTELLECTUAL PROPERTY LAW

ASSOCIATION ("AIPLA"), certifies the following:

1. The full name of every party represented by me IS: AMERICAN

INTELLECTUAL PROPERTY LAW ASSOCIATION

2. The name of the real party in interest represented by me IS:

AMERICAN INTELLECTUAL PROPERTY LAW ASSOClAnON

3. All parent corporations and any publicly held companies that own 10

percent or more ofthe stock of the parties represented by me are: None.

4. The names of all law firms and the partners or associates that

appeared for the party or amicus curiae now represented by me in the trial court or

agency or are expected to appear in this court are:

PIRKEY BARBER LLP

William G. BarberSusan 1. Hightower600 Congress Ave., Suite 2120Austin, TX 78701

Dated: December 17, 2008

Teresa Stanek Rea, PresidentAMERICAN INTELLECTUAL

PROPERTY LAW ASSOCIATION


2X1.6..RA-=:~~11 We--Susan J. Hight erWilliam G. BarberPIRKEY BARBER LLP

600 Congress Avenue,Suite 2120

Austin, Texas 78701(512) 322-5200


11

Table of Contents

Certificate of Interest i

Table ofAuthorities iv

Statement ofInterest of Amicus Curiae ix

Summary of Argument 1

Argument 1

I. The Board's Fraud Standards Are Inconsistent with at Least Three of theFive Required Elements of Fraud 1

II. The Critical Element ofIntent 3

A. Fraud Requires Intentional Deception or Reckless Conduct.. 3

B. The Board Has Misapplied this COUlt'S "Knows or Should Know"Language to Find Fraud on Strict Liability or Negligence 8

1. The Medinol Rule Reaches the Same Result for VastlyDifferent Degrees of Culpability 11

2. Torres Involved Knowing Falsehood 14

C. Not All Errors Are "So Reckless" as to Equal Scienter 16

III. The Board's Test for Materiality Is Improper. 20

A. The Board's Reasoning on Materiality Is Circular 20

B. Errors in Statements ofUse May Be Immaterial when aRegistration Properly Covers Highly Related Services 21

IV. Injury Cannot Be Presumed from Erroneous Inclusion of Services 23

Conclusion 24

Addendum 26

Certificate of Service 27

Celtificate of Compliance 28

III

Table of Authorities

CasesAbercrombie & Fitch Co. v. Hunting World, Inc.,

537 F.2d 4 (2d Cir. 1976) 6Albert v. Kevex Corp.,

729 F.2d 757 (Fed. Cir. 1984) 8Aromatique, Inc. v. Gold Seal, Inc.,

28 F.3d 863 (8th Cir.1994) 6Aventis Pharma S.A. v. Amphastar Pharms., Inc.,

525 F.3d 1334 (Fed. Cir. 2008) 10Bart Schwartz Int 'I Textiles, Ltd. v. FTC,

289 F.2d 665 (CCPA 1961) 5, 14Bongrain Int'l (American) Corp. v. Delice de France, Inc.,

811 F.2d 1479 (Fed. Cir. 1987) 21Bose Corp. v. Hexawave Inc.,

88 USPQ2d 1332 (TTAB 2007) vii, 2Clarke v. White,

37U.S.178(1838) 23Copelands' Enters., Inc. v. CNV, Inc.,

945 F.2d 1563 (Fed. Cir. 1991) 8Davis v. C.1.R.,

184 F.2d 86 (1oth Cir. 1950) 4DC Comics v. Gotham City Networking, Inc.,

2008 WL 4674611, Opposition No. 911175,853 (TTAB Sept. 24, 2008) ......... 2, 8Donald F. Duncan, Inc. v. Royal Tops Mfg. Co.,

381 F.2d 879 (ihCir. 1967) 6DuJJ5;-Mott Co. v. Cumberland Packing Co.,

424 F.2d 1095 (CCPA 1970) 13Far Out Prod'ns, Inc. v. Oskar,

247 F.3d 986 (9th Cir. 2001) 6Farmer v. Brennan,

511 U.S. 825 (1994), 16First Int'l Servs. Corp. v. Chuckles Inc.,

5 USPQ2d 1628 (TTAB 1988) 13First Nat 'I Bank ofDecatur v. Insurance Co. ofNorth America,

424 F.2d 312 (ihCir. 1970) 7General Car & Truck Leasing Sys. Inc. v. General Rent-A-Car Inc.,

17 USPQ2d 1398 (S.D. Fla. 1990) 11Grand Canyon West Ranch, LLC v. Hualapai Tribe,

88 USPQ2d 1501 (TTAB 2008) passim

IV


Greeley Nat 'I Bank v. Wolf,4 F.2d 67 (8th Cir. 1925) 4

Greenwood v. Dittmer,776 F.2d 785 (8th Cir. 1985) 7

Hachette Filipacchi Presse v. Elle Belle, LLC,85 USPQ2d 1090 (TTAB 2007) 2, 8, 20

Hawaiian Moon, Inc. v. Doo,2004 WL 1090666, Cancellation No. 92/042,101 (ITAB April 29, 2004) ...... 3,8

Herbaceuticals, Inc. v. Xel Herbaceuticals, Inc.,86 USPQ2d 1572 (TTAB 2008) 2, 8

Hurley Int 'I LLC v. Volta,82 USPQ2d 1339 (TTAB 2007) 3, 8

Imperial Tobacco Ltd. v. Philip Morris, Inc.,899 F.2d 1575 (Fed. Cir. 1990) 9

In re Int 'I Flavors & Fragrances, Inc.,183 F.3d 1361 (Fed. Cir. 1999) 21

In re Seagate Tech., LLC,497 F.3d 1360 (Fed. Cir. 2007) 16

In re Spalding Sports Worldwide, Inc.,203 F.3d 800 (Fed. Cir. 2000) 2

J.E.M lnt'l, Inc. v. Happy Rompers Creations Corp.,74 USPQ2d 1526 (ITAB 2005) 3, 8, 13

Jimlar Corp. v. Montrexport S.P.A.,2004 WL 1294397, Cancellation No. 92/032,471 (TTAB June 4, 2004) ......... 3,8

KangaROOS U.S.A., Inc. v. Caldor, Inc.,778 F.2d 1571 (Fed. Cir. 1985) 3,8,9

Katara v. D.E. Jones Commodities, Inc.,835 F.2d 966 (2d Cir. 1987) 6-7

Kingsdown Med. Consultants, Ltd. v. Hollister Inc.,863 F.2d 867 (Fed. Cir. 1988) 9, 10

Kipling Apparel Corp. v. Rich,2007 WL 1207190, Opposition No. 911170,389 (TTAB April 16,2007)......... 3,8

Knorr-Nahrmittel Aktiengesellschaft v. Havland lnt'l, Inc.,206 USPQ 827 (TTAB 1980) 17

Krause Publ'ns, Inc. v. Krause,2007 WL 549242, Opposition No. 91/160,072 (TTAB Feb. 15,2007) ........ 11, 19

Kuhn v. Chesapeake & 0. Ry. Co.,118 F.2d 400 (4th Cir. 1941) 7

Kur- und Verkehrsverein St. Moritz v. Samsung America, Inc.,Cancellation No. 92/044,412 (TTAB July 18, 2007) 3

v


L.D. Kichler Co. v. Davoil, Inc.,192 F.3d 1349 (Fed. Cir. 1999) 5

LaScola v. u.s. Sprint Commc'ns,946 F.2d 559 (ih Cir. 1991) 7

Lord v. Goddard,54 U.S. 198 (1851) 4

Magee v. Manhattan Life Ins. Co.,92 U.S. 93 (1875) 4

Maids to Order ofOhio Inc. v. Maid-to-Order, Inc.,78 USPQ2d 1899 (TTAB 2006) 19

Marshak v. Treadwell,240 F.3d 184 (3rd Cir. 2001) 5

Medinol Ltd. v. Neuro Vasx, Inc.,67 USPQ2d 1205 (TTAB 2003) passim

Meineke Discount Mt@er v. Jaynes,999 F.2d 120 (5 th Cir. 1993) 6

Metro Traffic Control, Inc. v. Shadow Network Inc.,104 F.3d 336 (Fed. Cir. 1997) 5, 19

Mezini v. Koan, Inc.,2008 WL 885884, Cancellation No. 92/046,748 (TTAB Feb. 14,2008) 2

Miller v. u.s.,120 F.2d 968 (lOlh Cir. 1941 ) 7

Morehouse Manufacturing Corp. v. J. Strickland & Co.,407 F.2d 881 (CCPA 1969) 10

Moss v. Riddle & Co.,5 Cranch 351 (1809) 4

Norton v. Curtiss,433 F.2d 779 (CCPA 1970) 2, 5,8,23

Nougat London Ltd. v. Garber,2003 WL 21206253, Cancellation No. 92/040,460 (TTAB May 14,2003) ..... 3,8

Orion Electric Co. v. Orion Electric Co.,2004 WL 624762, Opposition No. 911121,807 (TTAB March 19,2004) 3

Pennwalt Corp. v. Sently Chem. Co.,219 USPQ 542 (TTAB 1983) 19

Physicians Formula Cosmetics, Inc. v. Cosmed, Inc.,2005 WL 847442, Cancellation No. 92/040,782 (TTAB March 11,2005) ...... 3, 8

Rogers Corp. v. Fields Plastics & Chems., Inc.,176 USPQ 280 (TTAB 1972) 17, 20

Safeco Ins. Co. ofAmerica v. Burr,127 S. Ct. 2201 (2007) 16

VI


SEC v. Capital Gains Research Bureau,375 U.S. 180 (1963) 5

Sierra Sunrise Vineyards v. Montelvini SP.A.,2008 WL 4371318, Opposition No. 92/048,154 (TTAB Sept. 10,2008) 2,8

Sinclair Oil Corp. v. Kendrick,85 USPQ2d 1032 (TTAB 2007) 2-3, 8

Smith Int'!, Inc. v. Olin Corp.,209 USPQ 1033 (TTAB 1981) 17

Standard Knitting, Ltd. v. Toyota Jidosha Kabushiki Kaisha,77 USPQ2d 1917 (TTAB 2006) 3, 13

Star Scientific, Inc. v. R.J. Reynolds Tobacco Co.,537 F.3d 1357 (Fed. Cir. 2008) 10

Sternberg v. St. Louis Union Trust Co.,163 F.2d 714 (8th Cir. 1947) 7

Torres v. Cantine Torresella Sr.l.,808 F.2d 46 (Fed. Cir. 1986) 5, 14, 15

Turbo Sportswear, Inc. v. Marmot Mountain Ltd.,77 USPQ2d 1152 (TTAB 2005) 3

U.S v. Kiefer,228 F.2d 448 (D.C. Cir. 1955) 6

U.S v. Mead,426 F.2d 118 (9th Cir. 1970) 7

United Phosphorous, Ltd. v. Midland Fumigant, Inc.,205 F.3d 1219 (1oth Cir. 2000) 6

Unitherm Food Sys., Inc. v. Swift-Eckrich, Inc.,375 F.3d 1341 (Fed. Cir. 2004) 2, 15,23

Western Farmers Ass 'n v. Loblaw Inc.,180 USPQ 345 (TTAB 1973) 13

Wiscart v. D 'Auchy,3 U.S. 321 (1796) 4

Woodstock's Enters. Inc. (California) v. Woodstock's Enters. Inc. (Oregon),43 USPQ2d 1440 (TTAB 1997) 19

Zobmondo Entm 't, LLC v. Falls Media, LLC,Nos. CV 06-3459 & CV 07-571 (C.D. Cal. Aug. 11,2008) 7

Vll


Statutes37 C.F.R. § 1.56 10

Other AuthoritiesBLACK'S LAW DICTIONARY 1251 (6th ed. 1990) 4J. THOMAS MCCARTHY, MCCARTHY ON TRADEMARKS & UNFAIR COMPETITION

(4th ed. 2008) 1, 2, 10, 17MERRIAM-WEBSTER ONLINE DICTIONARy 22

ArticlesMcLEOD, LINDA K., Knew or Should Have Known, Reckless Disregard

for the Truth, and Fraud Before the Trademark Office,34 AIPLA Q.J. 287 (2006) 10, 11

Vlll

Statement of Interest of Amicus Curiae

Amicus Curiae American Intellectual Property Law Association ("AIPLA")

submits this brief in support of reversal and remand of the Trademark Trial and

Appeal Board's ("Board's") opinion in Grand Canyon West Ranch, LLC v.

Hualapai Tribe, 88 USPQ2d 1501 (TTAB 2008).

AIPLA is a national bar association of more than 16,000 members engaged

in private and corporate practice, in govemment service, and in the academic

community. AIPLA represents a wide and diverse spectrum of individuals,

companies, and institutions involved directly and indirectly in the practice of

patent, trademark, copyright, and unfair competition law, as well as other fields of

law affecting intellectual property. AIPLA members represent both owners and

users of intellectual property and embody a broad cross-section of the intellectual

property community.

The instant case is the latest in a line of Board decisions following Medinol

Ltd. v. Neuro Vasx, Inc., 67 USPQ2d 1205 (TTAB 2003), sustaining oppositions or

canceling trademark registrations on the basis of fraud due to erroneous claims of

use. The Medinol line of cases has been of great interest and concern to AIPLA

members and the trademark bar in general. It is the subject of three resolutions

adopted by the AIPLA Board of Directors setting forth standards for determining

what behavior by trademark applicants and registrants should constitute fraud

IX

before the Patent and Trademark Office ("PTa"), and stating that mistakes made

without any intent to deceive or not having a material effect on the scope of the

registration do not amount to fraud. See Addendum.

With the exception of the pending appeal in Bose Corp. v. Hexawave Inc.,

88 USPQ2d 1332 (TTAB 2007) (nonprecedential), in which AIPLA also submitted

an amicus brief, this case presents the Court's first opportunity to address the

Board's fraud standards post-Medinal. AIPLA urges the Court to adopt a fair and

uniform approach that will appropriately sanction truly fraudulent acts without

stripping trademark owners of their rights due to innocent mistakes.

Appellant Hualapai Tribe has consented to the filing of this brief, but

Appellee Grand Canyon West Ranch, LLC has declined to give its consent.

AIPLA therefore requests leave to file this brief and submits herewith a Motion for

Leave to File pursuant to FED. R. ApP. P. 29(b).

x

SUMMARY OF ARGUMENT

With Medinal and its progeny, including this case, the Board has disregarded

the time-honored elements of fraud and jettisoned the pivotal requirement of

deceptive intent. The Board, furthermore, has failed to give meaningful

consideration to the elements of materiality and injury. AIPLA urges the Court to

remand this case and instruct the Board to apply proper standards for analyzing

when erroneous statements of trademark use constitute fi·aud.

ARGUMENT

I. The Board's Fraud Standards Are Inconsistent with at Least Three ofthe Five Required Elements of Fraud

This case represents the latest in a series of Board decisions invalidating

trademark applications and registrations due to fraud based on inclusion of goods

or services on which a mark was not then in use.'

This Court has delineated the elements of common-law fraud as follows:

1. a representation of a material fact,

2. the falsity ofthat representation,

, Prior to Medinal the Board declined to find fraud in many cases in which a markwas not in use on all goods listed in a registration. 6 J. THOMAS MCCARTHY,MCCARTHY ON TRADEMARKS & UNFAIR COMPETITION ("MCCARTHY") § 31:73, at31-159 & n.5 (4th ed. 2008).

1

3. the intent to deceive or, at least, a state of mind so reckless as to

the consequences that it is held to be the equivalent of intent

(scienter),z

4. a justifiable reliance upon the misrepresentation by the party

deceived which induces him to act thereon, and

5. injury to the party deceived as a result of his reliance on the

misrepresentation.

Unitherm Food Sys., Inc. v. Swift-Eckrich, Inc., 375 F.3d 1341, 1358 (Fed. Cir.

2004) (quoting In re Spalding Sports Worldwide, Inc., 203 F.3d 800,807 (Fed. Cir.

2000)), rev'd on other grounds, 546 U.S. 394 (2006); accord Norton v. Curtiss,

433 F.2d 779, 792-93 (CCPA 1970).

In the instant case, like others in the Medinolline/ the applicant denied an

intent to deceive, but the Board applied an objective "knew or should have known"

2 The elements listed here are from cases concerning Walker Process patent fraudon the PTa. As discussed in the next section, this Court has not explicitly heldthat recklessness may constitute scienter adequate to support fraud in theregistration of a trademark, but instead has stated consistently that a showing ofknowing falsehood is required. Nonetheless, for the purposes of this brief, AIPLAassumes the common-law elements are the minimum standard for proving fraud.See also 6 MCCARTHY § 31 :61 (reciting elements of a prima facie fraud case).3 Other cases in which the Board has cited Medinol and invalidated applications orregistrations based on fraud due to an overbroad use claim include DC Comics v.Gotham City Networking, Inc., 2008 WL 4674611, Opposition No. 91/175,853(TTAB Sept. 24, 2008) (nonprecedential); Sierra Sunrise Vineyards v. Montelvinis.P.A., 2008 WL 4371318, Opposition No. 92/048,154 (TTAB Sept. 10, 2008)(nonprecedential); Herbaceuticals, Inc. v. Xel Herbaceuticals, Inc., 86 USPQ2d1572 (TTAB 2008); Mezini v. Koan, Inc., 2008 WL 885884, Cancellation No.92/046,748 (TTAB Feb. 14, 2008) (nonprecedential); Bose; Hachette FilipacchiPresse v. Elle Belle, LLC, 85 USPQ2d 1090 (TTAB 2007); Sinclair Oil Corp. v.

2

standard to find the use claim fraudulent. The statement was deemed material,

furthermore, because the application would not have been approved in that exact

form but for the representation - even where the mark was properly used on other

highly related services also included in the identification.

For the reasons discussed below, the Board's Medinol approach short-

changes at least the first, third, and fifth fraud elements and thus fails to justify a

finding offraud in this Court.

II. The Critical Element ofIntent

A. Fraud Requires Intentional Deception or Reckless Conduct

"Intent to deceive is a necessary component of common law fraud."

KangaROOS U.S.A., Inc. v. Caldor, Inc., 778 F.2d 1571, 1573 (Fed. Cir. 1985).

Kendrick, 85 USPQ2d 1032 (TTAB 2007); Hurley Int'l LLC v. Volta, 82 USPQ2d1339 (TTAB 2007); Kur- und Verkehrsverein St. Moritz v. Samsung America, Inc.,Cancellation No. 92/044,412 (TTAB July 18, 2007) (nonprecedential); KiplingApparel Corp. v. Rich, 2007 WL 1207190, Opposition No. 91/170,389 (TTABApril 16, 2007) (nonprecedential); Standard Knitting, Ltd. v. Toyota JidoshaKabushiki Kaisha, 77 USPQ2d 1917 (TTAB 2006); Turbo Sportswear, Inc. v.Marmot Mountain Ltd., 77 USPQ2d 1152 (TTAB 2005); J.E.M Int'l, Inc. v.Happy Rompers Creations Corp., 74 USPQ2d 1526 (TTAB 2005)(nonprecedential); Physicians Formula Cosmetics, Inc. v. Cosmed, Inc., 2005 WL847442, Cancellation No. 92/040,782 (TTAB March 11,2005) (nonprecedential);Jimlar Corp. v. Montl'export s.P.A., 2004 WL 1294397, Cancellation No.92/032,471 (TTAB June 4, 2004) (nonprecedential); Hawaiian Moon, Inc. v. Doo,2004 WL 1090666, Cancellation No. 92/042,101 (TTAB April 29, 2004)(nonprecedential); Orion Electric Co. v. Orion Electric Co., 2004 WL 624762,Opposition No. 91/121,807 (TTAB March 19, 2004) (nonprecedential); andNougat London Ltd. v. Garber, 2003 WL 21206253, Cancellation No. 92/040,460(TTAB May 14,2003) (nonprecedential).

3

For centuries, the common law has recognized intent as an essential element

of fraud. See, e.g., Wiscart v. D'Auchy, 3 U.S. 321, 330 (1796) ("fraud must

always principally depend upon the quo animo4,,); Moss v. Riddle & Co., 5 Cranch

351, 357 (1809) (stating that "[f]raud consists in intention"); Lord v. Goddard,

54 U.S. 198, 211 (1851) ("Fraud means an intention to deceive. If there was no

such intention; if the party honestly stated his own opinion, believing at the time

that he stated the truth, he is not liable in this form of action, although the

representation turned out to be entirely untrue."); Magee v. Manhattan Life Ins.

Co., 92 U.S. 93, 98-99 (l875) ("To constitute fraud, the intent to deceive must

clearly appear. The concealment must be wilful [sic] and intentional.") (citation

omitted); Greeley Nat 'I Bank v. Wolf, 4 F.2d 67, 70 (8th Cir. 1925) ("Negligence

and fraud are not identical either in their nature or effect. Negligence is the

absence of proper attention to duty, but fraud is always a positive and willful

device, resorted to with intent to in some manner injure another, in which the mind

concurs with the act."); Davis v. C.I.R., 184 F.2d 86, 87 (loth Cir. 1950) ("Fraud

implies bad faith, intentional wrong doing and a sinister motive. It is never

imputed or presumed and the coutts should not sustain findings of fraud upon

circumstances which at the most create only suspicion.") (footnotes omitted).

4 Quo animo: "With what intention or motive. Used sometimes as a substantive,in lieu of the single word 'animus,' design or motive. 'The quo animo is the realsubject of inquiry.'" BLACK'S LAW DICTIONARY 1251 (6th ed. 1990).

4

The concept of fraud has evolved over time through the courts of law and

equity and the rise of the regulatory state.5 The requirements for fraud may be

lower where there is a fiduciary relationship or where it is asserted as an

affirmative defense of unclean hands.6 But in the context of fraud on the PTO in

obtaining a trademark registration, this Court has stated repeatedly that knowledge

of falsity and intent to mislead must be proven. See, e.g., L.D. Kichler Co. v.

Davoil, Inc., 192 F.3d 1349, 1351-52 (Fed. Cir. 1999) (requiring proof that

applicant "knowingly submitted a false declaration with an intent to deceive");

Metro Traffic Control, Inc. v. Shadow Network Inc., 104 F.3d 336,340 (Fed. Cir.

1997) ("Fraud in procuring a service mark occurs when an applicant knowingly

makes false, material representations of fact in connection with an application.");

Torres v. Cantine Torresella s.r.l., 808 F.2d 46, 48 (Fed. Cir. 1986) ("'[T]he

obligation which the Lanham Act imposes on an applicant is that he will not make

knowingly inaccurate or knowingly misleading statements in the verified

declaration fOlming a part of the application for registration.''') (quoting Bart

Schwartz Int'l Textiles, Ltd. v. FTC, 289 F.2d 665,669 (CCPA 1961)) (emphasis in

original); see also Marshak v. Treadwell, 240 F.3d 184, 196 & n.8 (3rd Cir. 2001)

(construing Metro Traffic and Torres).

5 See, e.g., SEC v. Capital Gains Research Bureau, 375 U.S. 180, 193-94 (1963).6 See, e.g., id.; Norton, 433 F.2d at 793-96.

5

Although not addressing services recitations specifically, several sister

circuits too have required proof of scienter before finding that trademark affidavits

were submitted fraudulently. See, e.g., Far Out Prod'ns, Inc. v. Oskar, 247 F.3d

986,996 (9th Cir. 2001); United Phosphorous, Ltd. v. Midland Fumigant, Inc., 205

F.3d 1219, 1226-27 (loth Cir. 2000); Aromatique, Inc. v. Gold Seal, Inc., 28 F.3d

863, 877-78 (8th Cir. 1994) (Arnold, J., concurring) ("In order to show that an

applicant defrauded the PTa the party seeking to invalidate a mark must show that

the applicant intended to mislead the PTa."); Meineke Discount Muffler v. Jaynes,

999 F.2d 120, 126 (5 th Cir. 1993) ("To succeed on a claim of fraudulent

registration, the challenging party must prove by clear and convincing evidence

that the applicant made false statements with the intent to deceive the licensing

authorities."); Abercrombie & Fitch Co. v. Hunting World, Inc., 537 F.2d 4, 14

(2d Cir. 1976); Donald F. Duncan, Inc. v. Royal Tops Mfg. Co., 381 F.2d 879, 884

(7th Cir. 1967) ("In retrospect, Duncan may have been mistaken in its statements to

the Patent Office that it was entitled to the trademarks, but the evidence falls short

of showing that Duncan's claims to the trademarks were knowingly made in bad

faith, or that its applications were punctuated with false or fraudulent statements.").

These holdings are in line with other circuit courts' more general inclusion

of intent to deceive among the essential elements of fraud. See, e.g., Us. v. Kiefer,

228 F.2d 448 (D.C. Cir. 1955); Katara v. D.E. Jones Commodities, Inc., 835 F.2d

6

966 (2d Cir. 1987); u.s. V. Mead, 426 F.2d 118 (9th Cir. 1970); First Nat 'I Bank of

Decatur V. Insurance Co. ofNorth America, 424 F.2d 312 (7th Cir. 1970); Miller V.

u.s., 120 F.2d 968 (loth Cir. 1941).· Some courts specifY that a person making a

fraudulent statement must know or believe that the representation is false. See,

e.g., LaScola V. u.s. Sprint Commc'ns, 946 F.2d 559 (ih Cir. 1991); Greenwood V.

Dittmer, 776 F.2d 785 (8th Cir. 1985); Sternberg V. St. Louis Union Trust Co., 163

F.2d 714, 718 (8th Cir. 1947) ("An honest mistake of law is not evidence of

fraud."). Fraud, furthermore, "is never presumed, but must be clearly proved."

Kuhn V. Chesapeake & 0. Ry. Co., 118 F.2d 400, 405 (4th Cir. 1941).

With its decision in this proceeding and the Medinolline of cases leading up

to it, the Board has turned its back on this venerable precedent and adopted a

standard that allows fraud to be found on strict liability or, at most, mere

negligence. See, e.g., Zobmondo Entm't, LLC V. Falls Media, LLC, Nos. CV 06

3459 & CV 07-571, slip op. at 12 (C.D. Cal. Aug. 11,2008) (noting that Medinol

altered the Board's fraud-based cancellation standard to "an objective, 'reasonable

registrant' standard").

In this case, Hualapai Tribe (or the "Hualapai") submitted an application that

was entirely accurate in its original form. However, through an examination

process that involved two office actions, at least one phone conversation between

the Examining Attorney and counsel for applicant, and an examiner's amendment,

7

a few inaccurate modes of transportation relating to the Hualapai's tourism

services were introduced into the application. In the Board's analysis, the critical

element of deceptive intent was replaced with the "knows or should know"

standard from Medinol: "[W]hen an applicant or registrant provides false

information as to a critical element of the application or registration, in

determining intent we apply a test of whether the applicant or registrant knew or

should have known that the information in question was false." 88 USPQ2d at

1509.

B. The Board Has Misapplied this Court's "Knows or ShouldKnow" Language to Find Fraud on Strict Liability or Negligence

In Medinol, 67 USPQ2d at 1209, the Board stated: "A trademark applicant

commits fraud in procuring a registration when it makes material representations of

fact in its declaration which it knows or should know to be false or misleading."

Applying this standard, the Board held on summary judgment? that the registrant

? The frequency in which the Board has used summary judgment to findregistrants guilty of fraud following Medinol is extraordinary. See DC Comics;Sierra Sunrise Vineyards; Herbaceuticals; Sinclair Oil; Hachette FilipacchiPresse; Hurley; Kipling Apparel; J.E.M; Physicians Formula; Jimlar; HawaiianMoon; Nougat London. This Court's precedent clearly states that the factualquestion of intent is particularly unsuited to disposition on summary judgment.See, e.g., Copelands' Enters., Inc. v. CNV, Inc., 945 F.2d 1563 (Fed. Cir. 1991);Norton, 433 F.2d at 795-96; see also Albert v. Kevex Corp., 729 F.2d 757, 763(Fed. Cir. 1984) ("Intent is a factual matter which is rarely free from dispute ....Inasmuch as intent may be critical in this case, cutting off Albert's right to a trialon the issue was improper."). In KangaROOS, 778 F.2d at 1573, the COUlt

8

committed fraud on the PTa by submitting a statement of use covering both of the

goods identified in the application (stents and catheters) when in fact the mark was

in use on only one of those goods (catheters). Id. at 1208. The Board rejected the

registrant's claim that the error was inadvertent, concluding that fraud can occur

without subjective intent when an applicant should have known that a statement is

materially incOlTect. Id. at 1209-10. The Board accepted as true registrant's

explanation that it "apparently overlooked" goods included in the application on

which the mark was not in use, but nonetheless wrote: "The appropriate inquiry is

[] not into the registrant's subjective intent, but rather into the objective

manifestations ofthat intent." Id. at 1209.8

The need to determine subjective intent anses consistently in patent

detenninations of inequitable conduct. This Court, ruling en banc in Kingsdown

Med. Consultants, Ltd. v. Hollister Inc., 863 F.2d 867, 876 (Fed. Cir. 1988), made

reiterated that good faith, intent to deceive, scienter, and honest mistake are allquestions of fact, stating:

A summary judgment of fraud or inequitable conduct, reached whiledenying to the person accused of the fraud or inequitable conduct theopportunity to be heard on the issue, is a draconian result. Summaryjudgment is a lethal weapon, and courts must be mindful of its aimsand targets and beware of overkill in its use.

Id. at 1573-74 (citation omitted).8 One of the cases quoted by the Board is Imperial Tobacco Ltd. v. Philip Morris,Inc., 899 F.2d 1575, 1581 (Fed. Cir. 1990). The main point of the discussion fi'omwhich the quotation is taken, however, is that the type of intent alleged by theregistrant - the intent not to abandon its mark - did not satisfy the statutoryrequirement to prove an intent to resume use of that mark.

9

clear that parties must meet a high bar in proving deceptive intent and that it may

not be inferred from gross negligence by itself. Where an inference is to be made,

"the involved conduct, viewed in light of all the evidence, including evidence

indicative of good faith, must indicate sufficient culpability to require a finding of

intent to deceive." Id. Recently this Court said that such evidence "must still be

clear and convincing, and inferences drawn from lesser evidence cannot satisfy the

deceptive intent requirement." Star Scientific, Inc. v. R.J. Reynolds Tobacco Co.,

537 F.3d 1357, 1366 (Fed. Cir. 2008). Judge Rader recently observed that the

"atomic bomb" of unenforceability should be reserved to only the most extreme

cases of fi'aud and deception. Aventis Pharma S.A. v. Amphastar Pharms., Inc.,

525 F.3d 1334, 1349 (Fed. Cir. 2008) (Rader, J., dissenting). The Kingsdown rule,

which made clear that fraud does not result from every mistake, blunder, or fault,

should apply here as well.

There is no rule in trademark prosecution parallel to the 37 C.F.R. § 1.56

fiduciary-like duty of candor and good faith in patent prosecution proceedings. See

Linda K. McLeod, Knew or Should Have Known, Reckless Disregard for the

Truth, and Fraud Before the Trademark Office, 34 AIPLA Q.J. 287,290-91 (2006)

("McLeod"); see also Morehouse Manufacturing Corp. v. J. Strickland & Co., 407

F.2d 881, 888 (CCPA 1969); 6 MCCARTHY §§ 31:62-65. Nonetheless, Kingsdown

and other inequitable conduct cases from this Court are instructive for the need to

10

recognize appropriate limits on inferences of intent. See McLeod at 292-96. The

application of the "knows or should know" standard must be reserved for the most

extreme cases of fraud where deceptive intent can be inferred from flagrant

conduct demonstrating the appropriate level of culpability.

The Medina! "knows or should know" standard is far too loose to capture

only mental states characterized by recklessness or deceptive intent.9 Instead, this

standard as applied by the Board has cast a wide net that includes negligence and,

by eschewing the requirement of bad faith entirely, has produced essentially a strict

liability regime. 10

1. The Mellinol Rule Reaches the Same Result for VastlyDifferent Degrees of Culpability

Consider two applicants, each of whom signs a statement of use drafted by

outside counsel covering a lengthy list of goods. Applicant A carefully reviews the

statement and confirms use of the mark, but inadvertently overlooks one of the

recited goods. Applicant B makes no attempt to investigate use of the mark and in

9 The case the Board frequently cites in support of the "knows or should know"standard involved an admittedly knowing inclusion of services never provided bythe registrant in both an application and Section 8 and 15 affidavits. Genera! Car& Truck Leasing Sys. Inc. v. Genera! Rent-A-Car Inc., 17 USPQ2d 1398, 1401(S.D. Fla. 1990).10 The authors have found only one opinion post-Medina! in which the Boardrejected a fraud claim despite finding that an identification included goods orservices in association with which the mark was not in use. See Krause Publ 'ns,Inc. v. Krause, 2007 WL 549242, Opposition No. 91/160,072 (TTAB Feb. 15,2007) (nonprecedential), aff'd, No. 2007-1364 (Fed. Cir. Dec. 7,2007).

11

fact was not using the mark on most of the goods. Under the Medinal analysis,

both applicants will be found to have committed fraud, and both registrations will

be canceled in their entireties.

Compare Applicant A with the Hualapai in this case. When the Hualapai

Tribe originally filed its application, it identified its services as "airport services;

air transportation services; an-anging for recreational activities and tours and

providing related transportation," a completely truthful description of its services

(albeit one the examining attorney found indefinite). In response to the

indefiniteness objection, the Hualapai and examining attomey agreed to an

examiner's amendment changing the identification to "airport services; atr

transportation services; arranging for recreational travel tours and providing related

transportation of passengers by air, boat, raft, rail, tram, bus, motorized on-road

and off-road vehicles, non-motorized vehicles featuring bicycles, and domestic

animals." Although the Hualapai Tribe did in fact use the mark for all of the

seemingly highly related services and modes of transpOliation identified in the

amendment except those italicized above (the "disputed services") - and submitted

evidence that it had even offered horseback rides, bicycles, and tractor-based tram

rides prior to filing its application - the Board found the inclusion of the italicized

language fraudulent.

12

In the position of Applicant B, consider Standard Knitting. I I The Board

cancelled three of a clothing manufacturer's registrations on the basis of fraud.

The Board found that many items of clothing recited in the registrations were not

offered for sale in the United States when the applications were signed, and some

never had been. The Board found registrant's inquiry into whether the goods were

in use "grossly insufficient," and rejected its claim that the mistake was

"innocent." 77 USPQ2d at 1927. See also First Int'l Servs. Corp. v. Chuckles

Inc., 5 USPQ2d 1628, 1636 (TTAB 1988) (sustaining opposition where applicant

admitted he did not look at the language in the application, and finding "the same

type of cavalier attitude toward statements in affidavits that the Court of Customs

and Patent Appeals has said should be deterred through sanctions") (citing DujJj;-

Matt Co. v. Cumberland Packing Co., 424 F.2d 1095 (CCPA 1970)); Western

Farmers Ass 'n v. Loblaw Inc., 180 USPQ 345, 347 (TTAB 1973) (finding fraud

where applicant included goods on which mark had never been used both in

application and in Section 8 affidavit filed five years later).

"Grossly insufficient" investigations of use under some circumstances may

rise to the level of recklessness, but honest mistakes, inadvelience and the like

cannot. A standard that puts Applicants A and B in the same position is not

grounded in common-law fraud or common-sense proportionality.

II Also consider J.E.M, in which the mark was not in use on more than 100 of 150recited goods, including the first nine listed.

13

2. Torres Involved Knowing Falsehood

The Board frequently cites this Court's Torres decision in support of the

"knows or should know" standard it has applied in the Medinolline of cases. See,

e.g., Medinol, 67 USPQ2d at 1209. The language of Torres, however, has been

stretched to cover fact patterns involving far lower levels of culpability.

In Torres, the Court explained the fraud standard as follows:

Fraud in procuring a trademark registration or renewal occurs when anapplicant knowingly makes false, material representations of fact inconnection with his application. . . . "[T]he obligation which theLanham Act imposes on an applicant is that he will not makeknowingly inaccurate or knowingly misleading statements in theverified declaration forming a part of the application for registration."

808 F.2d at 48 (quoting Bart Schwartz, 289 F.2d at 669) (emphasis in original).

The mark at issue in Torres appeared as follows:

IIILAS TORRES

Registrant Miguel Torres admitted that five years before filing a renewal

application, he changed the mark from LAS TORRES to TORRES. Id. He also

altered the three-tower design, which apparently moved from appearing above to

below the word "Torres." Id. at 47. Nonetheless, he submitted a specimen label

on which the LAS TORRES mark as registered was displayed, although it was not

then in use. Id. at 47-49. The Court's opinion does not reveal whether Torres was

aware when he filed the renewal application that the specimen label he submitted

14

was not then in use. The opinion does state that Torres knew the mark was in use

only on wine, although he submitted an affidavit falsely stating that the mark was

in use on wine, vermouth, and champagne. Id. at 49.

The Court stated: "The problem of fraud arises because Torres submitted a

label that he knew or should have known was not in use that contained a mark

clearly different from the one in use." Id. The COUlt continued:

If a registrant files a verified renewal application stating that hisregistered mark is currently in use in interstate commerce and that thelabel attached to the application shows the mark as currently usedwhen, in fact, he knows or should know that he is not using the markas registered and that the label attached to the registration is notcurrently in use, he has knowingly attempted to mislead the PTO.

Id. (emphasis added).

Thus, the Torres case involved at least one knowing falsehood in the

renewal applis;ation statement of goods (i.e., the opinion states that the registrant

knew the mark was not in use on all the goods listed in the application), as well as

the false submission of a label that was not in use. Under these circumstances and

all of the evidence in Torres, it very well may have been proper to infer that the

registrant intended to deceive the PTO. To the extent, however, any of the "should

know" language in Torres has been relied on as lowering the scienter requirement

for fraud below "the intent to deceive or, at least, a state of mind so reckless as to

the consequences that it is held to be the equivalent of intent," Unitherm Food Sys.,

375 F.3d at 1358, this Court should disavow it.

15

C. Not All Errors Are "So Reckless" as to Equal Scienter

If the Court concludes that recklessness satisfies the intent element of fraud

in the identification of services context, it is important to consider precisely what

mental state must be proved. The Supreme Court has stated: "The civil law

generally calls a person reckless who acts ... in the face of an unjustifiably high

risk of harm that is either known or so obvious that it should be known." Farmer

v. Brennan, 511 U.S. 825,836 (1994); accord Safeco Ins. Co. ofAmerica v. Burr,

127 S. Ct. 2201,2215 (2007) ("While 'the term recklessness is not self-defining,'

the common law has generally understood it in the sphere of civil liability as

conduct violating an objective standard: action entailing 'an unjustifiably high risk

of harm that is either known or so obvious that it should be known. "') (quoting

Farmer, 511 U.S. at 836).12

The Board itself has long recognized that not all false statements equate to

fraud:

Fraud implies some intentional deceitful practice or act designed toobtain something to which the person practicing such deceit would nototherwise be entitled. Specifically, it involves a willful withholdingfrom the Patent and Trademark Office by an applicant or registrant ofmaterial information or facts which, if disclosed to the Office, wouldhave resulted in the disallowance of the registration sought or to bemaintained. Intent to deceive must be "willful". If it can be shownthat the statement was a "false misrepresentation" occasioned by an"honest" misunderstanding, inadvertence, negligent omission or the

12 Cited in In re Seagate Tech., LLC, 497 F.3d 1360 (Fed. Cir. 2007) (en banc),cert. denied, 128 S. Ct. 1445 (2008).

16

like rather than one made with a willful intent to deceive, fraud willnot be found. Fraud, moreover, will not lie if it can be proven that thestatement, though false, was made with a reasonable and honest beliefthat it was true or that the false statement is not material to theissuance or maintenance of the registration.

Smith Int'l, Inc. v. Olin Corp., 209 USPQ 1033, 1043-44 (TTAB 1981) (citations

omitted); see also Knorr-Nahrmittel Aktiengesellschaft v. Havland Int'!, Inc., 206

USPQ 827, 834 (TTAB 1980); Rogers Corp. v. Fields Plastics & Chems., Inc., 176

USPQ 280, 283 (TTAB 1972) ("[T]here is a material legal distinction between a

'false' representation and a 'fraudulent' one, the latter involving, as indicated

above, an intent to deceive, whereas the fonner may be occasioned merely by a

misunderstanding, an inadvertence, a mere negligent omission, or the like."), afJ'd,

496 F.2d 880 (CCPA 1974); 6 MCCARTHY § 31 :66, at 31-147-49.

The Board seems to have lost sight of this critical distinction. In light of the

high evidentiary standards that must be applied to establish fraud, the Board's

finding in this case that the Hualapai Tribe committed fraud cannot stand. As

explained above, there is no dispute that the identification of services originally

submitted by the Hualapai was accurate, and thus the Hualapai obviously did not

start this process with some nefarious scheme to defraud the PTO. Furthermore,

even the Board recognized that the Hualapai have been using the mark in question

for tourism services for nearly 20 years, and that the mark has developed

significant secondary meaning. 88 USPQ2d at 1507.

17

Although these

circumstances of course should not insulate an applicant from fraudulent acts

committed later during the examination process, such circumstances should be

considered highly relevant in determining the applicant's intent.

In addition, the Hualapai submitted evidence (albeit disputed) that they

actually provided travel services by horseback, bicycle, and tractor-based tram

prior to filing their application; may have been offering bicycles and bike trails for

visitor use at the time they filed the application; and had been negotiating to offer

rail service. The Board apparently never considered this evidence when ruling on

the Opposer's motion for partial summary judgment based on non-use of the mark

in connection with transportation of passengers by rail, tram, bicycle, and

domesticated animals. Instead, the Board concluded that by moving to amend its

application to delete the disputed services, the Hualapai "essentially agreed to

accept judgment with respect to those services" - even though they never conceded

non-use. Board Order of March 17, 2006, at 7. Thus, the Board entered judgment

against the Hualapai Tribe on the ground that it did not make use of its mark in

connection with the challenged services. Id. at 8. After Opposer amended its

notice of opposition to allege fraud (at the specific suggestion of the Board, id. at 7

n.5), the Board found in its final ruling that:

At this stage of this case we are bound by our earlier determinationthat, at the time applicant filed this application, applicant was notusing the mark in commerce in connection with "providingtransportation of passengers related to recreational travel tours by

18

means of rail, tram, non-motorized vehicles featuring bicycles, anddomestic animals" even though applicant claimed such use.

88 USPQ2d at 1508.

Thus, the Board appeared to bootstrap the Hualapai Tribe's motion to amend

its application into a concession of non-use and then a finding of fraud, with no

real inquiry into whether the mark was actually being used in connection with the

challenged services, or whether the Hualapai had a good-faith basis for believing

that it was. Cf Maids to Order of Ohio Inc. v. Maid-to-Order, Inc., 78 USPQ2d

1899, 1907 (TTAB 2006) (finding applicant's good-faith belief that it was using its

mark in interstate commerce sufficient to negate an inference of fraud, whether or

not that belief was mistaken); Metro Traffic Control, 104 F.3d at 340-41;

Woodstock's Enters. Inc. (California) v. Woodstock's Enters. Inc. (Oregon), 43

USPQ2d 1440, 1444 (TTAB 1997), aff'd, 152 F.3d 942 (Fed. Cir. 1998); Pennwalt

COlp. v. Sentry Chern. Co., 219 USPQ 542, 550 (TTAB 1983); Krause Publ'ns,

Inc. v. Krause, 2007 WL 549242, Opposition No. 91/160,072, at 35-36 (TTAB

Feb. 15,2007) (nonprecedential), aff'd, No. 2007-1364 (Fed. Cir. Dec. 7,2007).

There is simply no evidence suggesting (let alone establishing by clear and

convincing evidence) that the Hualapai Tribe had any desire or motive to deceive

the PTa at any point in time, or that it was improperly trying to expand the scope

of its trademark lights by amending the application to include the few additional

modes of transportation in question in this case. To the contrary, the evidence

19

strongly suggests that the Hualapai committed an honest (or at most, careless) error

having a negligible effect on the overall scope of the application. Cf Rogers

Corp., 176 USPQ at 283 ("A recitation of potential but not actual uses of the

[recited goods] may embrace the concept of a 'false statement' but it certainly does

not constitute a 'fraudulent statement."').

III. The Board's Test for Materiality Is Improper

Fraud requires a false representation regarding a material fact. In this case,

as with others in the Medina/line, the Board gave the materiality requirement short

shrift.

A. The Board's Reasoning on Materiality Is Circular

The word "material" does not even appear in the Board's opinion in this

case, although the Board states that the identification of services is a "critical

element of the application." 88 USPQ2d at 1509. In other cases in the Medina/

line, the Board has taken the position that "[s]tatements regarding the use of the

mark on goods and services are certainly material to issuance of a registration

covering such goods and services." See, e.g., Hachette Filipacchi P,'esse, 85

USPQ2d at 1093. Under this reasoning, any inclusion of a service not in use - no

matter how minor or insignificant to the registration's overall scope of coverage

is automatically deemed material.

20

The element of materiality bears much closer scrutiny than the Board has

provided in these cases. A rational approach would require specific evidence and

analysis, not assumptions, regarding whether the erroneous inclusion of goods or

services is material in any meaningful sense to the specific trademark registration

at issue.

B. Errors in Statements of Use May Be Immaterial when aRegistration Properly Covers Highly Related Services

The ultimate purpose of the trademark register of the PTO is to provide the

public notice of marks that are in use in the United States. See In re Int'l Flavors

& Fragrances, Inc., 183 F.3d 1361, 1367-68 (Fed. Cir. 1999) ("By providing

notice to potential users of the same or a confusingly similar mark, federal

registration promotes the purposes of trademark law."); Bongrain Int'l (American)

COlp. v. Delice de France, Inc., 811 F.2d 1479, 1485 (Fed. Cir. 1987) ("One of the

policies sought to be implemented by the [Lanham] Act was to encourage the

presence on the register of trademarks of as many as possible of the marks in actual

use so that they are available for search purposes."). Members of the public rely

on the register in various ways, such as when deciding whether use of a new mark

will conflict with the prior rights of another. Thus, it is at least as important to

consider the effect of an overbroad identification of services on the public as any

effect on the PTO, the only measure considered by the Board in the Medinolline of

cases.

21

In this case, it is undisputed that Hualapai Tribe uses the GRAND

CANYON WEST mark for the following services identified in the application:

"airport services; air transportation services; arranging for recreational travel tours

and providing related transportation of passengers by air, boat, raft, bus, and

motorized on-road and off-road vehicles." It also included rail, tram, non-

motorized vehicles featuring bicycles, and domestic animals in the list of the

modes oftransportation it provides to passengers, which the Board held to be false.

In view of the high degree of overlap, similarity, and relatedness among these

services and modes of transportation, inclusion of the disputed services in the

Hualapai's amended application would not appear to be material in any meaningful

sense. 13 Given that the Hualapai unquestionably use the GRAND CANYON

WEST mark for tour and passenger travel services by several means of land, air,

and water transportation, it is difficult to see how including those same services by

means of rail, tram, bicycle, and horseback significantly expanded the scope of the

rights claimed in the application, or how the public suffered any real harm by their

inclusion.

The Board wrote: "The clear message of the cases involving false claims of

use of the mark on goods or services, wherever they may appear, is that these

13 Merriam-Webster defines "material" as "having real importance or greatconsequences." MERRIAM-WEBSTER ONLINE DICTIONARY (available athUp:llwww.merriam-webster.com/dictionatylmaterial) .

22

statements are essential to the integrity ofthe application and registration process."

88 USPQ2d at 1509. Yet the Board's position that any overinclusion of goods or

services in a use statement is inherently material is unjustified. In view of the

public notice function of the trademark register, AIPLA suggests that materiality

instead should be judged based on how related the non-used services are to other

services properly included in the registration, and whether the inclusion of those

non-used services had any significant impact on the public. 14

IV. Injury Cannot Be Presumed from Erroneous Inclusion of Goods

The fifth and final element of fraud is "injury to the party deceived as a

result of his reliance on the misrepresentation." Unitherm Food Sys., 375 F.3d at

1358. "In equity, as at law, fraud and injury must concur to furnish ground for

judicial action; a mere fraudulent intent, unaccompanied by any injurious act, is

not the subject of judicial cognizance." Clarke v. White, 37 U.S. 178, 196 (1838).

The element of injury - which is closely related to materiality - has essentially

been ignored by the Board in the Medinolline.

It is true as an abstract matter that fraud weakens and injures the patent and

trademark system. Cf Norton, 433 F.2d at 796 ("Where fraud is committed, injury

to the public through a weakening of the Patent System is manifest."). However,

14 At the very least, an enoneous inclusion of closely related goods or services thatgain the applicant few or no additional rights should be probative on whether theapplicant intended to deceive the PTO.

23

because the Board has not articulated its reasoning on this element post-Medinal,

one can only speculate as to any perceived injury the PTO has suffered in cases

involving an overly inclusive recitation of services. As discussed above, however,

the public may not suffer any real injury when a registration properly covering

various services inadvertently includes another highly related service on which the

registrant was not using the mark at the time. Like materiality, the focus of the

injury element should be the effect on the public, whose interests the PTO's

register is intended to serve.

CONCLUSION

The Board found that the Hualapai Tribe committed fraud by amending its

application to specify four means of transportation closely related to the several it

already offered, three of which there was evidence that it had previously provided.

Conspicuously absent in the Board's decision are any findings that the Hualapai

acted with an intent to deceive (or so recklessly as to be equivalent to an intent to

deceive), that the types of transportation or services at issue are so different or

unrelated to the other services in the Hualapai's application that including them

expanded the scope of the application in any material way, or that such inclusion

injured anyone. The Board's findings as articulated in the opinion are inadequate

to establish fraud, and the case should be remanded to the Board to reconsider the

fraud issue under the proper standards determined by this Court.

24

Dated: December 17,2008

Teresa Stanek Rea, PresidentAMERICAN INTELLECTUAL

PROPERTY LAW ASSOCIAnON


Respectfully submitted,

~IM, ~~~HSusan J. Hi towWilliam G. BarberPIRKEY BARBER LLP

600 Congress Avenue,Suite 2120

Austin, TX 78701(512) 322-5200


25

410-01

ADDENDUM

TRADEMARKS AND UNFAIR COMPETITION

Trademark - Prosecution

RESOLVED, that the American Intellectual Property Law Association (AIPLA)believes, in principle, that misstatements in the identification of goods and/orservices in filings before the U.S. Patent and Trademark Office occasioned by anhonest mistake, carelessness, inadvertence, oversight, language difficulties,misunderstanding of the law, or the like, and not made with an intent to deceive,should not constitute fraud.

(Board ofDirectors' Meeting - May 9, 2007)

410-02 Trademark - Prosecution

RESOLVED, that the American Intellectual property Law Association (AJPLA)favors, in principle, that a trademark application or registration that contains amisstatement in the identification of goods and/or services occasioned by an honestmistake, carelessness, inadvertence, oversight, language difficulties,misunderstanding of the law, or the like, and not made with an intent to deceive,should be permitted to be amended or restricted under Section 18 of the LanhamAct, 15 U.S.C. § 1068 to amend or delete the excess goods and/or services, andshould not result in the entire application being voided or the registrationcancelled.

(Board of Directors' Meeting - May 9, 2007)

410-03 Trademark - Prosecution

RESOLVED, that the American Intellectual Property Law Association (AIPLA)believes, in principle, that where a trademark applicant or registrant erroneouslystates in filings before the U.S. Patent and Trademark Office that it is using themark in commerce on or in connection with particular goods and/or services, suchmisstatement alone should not be deemed "material" for purposes of analyzingwhether the applicant/registrant committed fraud on the Office if (1) the party wasin fact using the mark in commerce on or in connection with other similar orrelated goods or services identified in the application or registration as ofthe filingdates for an application under Lanham Act Section lea), an affidavit under LanhamAct Section 8, a renevial under Lanham Act Section 9, a Statement of Use, or anAmendment to Allege Use; and (2) the applicant/registrant would have beenentitled to a registration covering those other goods or services.

(Board ofDirectors' Meeting - May 9, 2007)

26

CERTIFICATE OF SERVICE

I hereby certify that I filed the foregoing BRIEF OF AMICUS CURIAEAMERICAN INTELLECTUAL PROPERTY LAW ASSOCIATION INSUPPORT OF HUALAPAI TRIBE AND REVERSAL on December 17,2008by mailing the original and eleven (11) copies thereof and an electronic version byovernight courier service, Federal Express, via Priority Overnight service (fordelivery on December 18, 2008) to:

Clerk of the CourtU.S. Court of Appeals for the Federal Circuit

717 Madison Place, N.W. - Room 401Washington, DC 20439

Facsimile: (202) 633-9623

And that copies of the foregoing were served by Federal Express OvernightDelivery (for delivery on December 18,2008) on each of the following:

Michael F. CampilloVENABLE CAMPILLO LOGAN1938 East Osborn RoadPhoenix, AZ 85016Telephone: (602) 631-9100Facsimile: (602) 631-4529COUNSEL FOR ApPELLANTHUALAPAl TRIBE

Eric R. OlsenGORDON & SILVER, LTD.3960 Howard Hughes Parkway, 9th FloorLas Vegas, NV 89169Telephone: (702) 796-5555Facsimile: (702) 369-2666COUNSEL FOR ApPELLEEGRAND CANYON WEST RANCH, LLC

2MbO;-=- ~/~~Susa J. HI wer

Office of the General CounselUnited States Patent and Trademark Office

Madison Building East, Room IOB20600 Dulany Street

Alexandria, VA 22314

And by Express Mail sent December 17,2008 to:Acting Solicitor Sydney O. Johnson, J1'.Office ofthe SolicitorP.O. Box 15667Arlington, VA 22215

27

CERTIFICATE OF COMPLIANCE

Pursuant to Rule 32(a)(7)(C) of the Federal Rules of Appellate Procedure,

the undersigned certifies that:

1. This brief complies with the type-volume limitation of FED. R. App. P.

29(d) and 32(a)(7)(B) because this brief contains 6,670 words, excluding the parts

of the brief exempted by FED. R. APP. P. 32(a)(7)(B)(iii), as detennined by the

word processing system used to generate the brief.

2. This brief complies with the typeface requirements of FED. R. APP. P.

32(a)(5) and the type style requirements of FED. R. ApP. P. 32(a)(6) because this

brief has been prepared in a proportionally spaced typeface using Microsoft Office

Word 2003 in Times New Roman font, 14 point.

Dated: December 17, 2008

Teresa Stanek Rea, PresidentAMERICAN INTELLECTUALPROPERTY LAW ASSOClATlON


St..6o-~~ II J o~. Q

Susan J. Hi tow'William G. BarberPIRKEY BARBER LLP600 Congress Avenue,

Suite 2120Austin, TX 78701(512) 322-5200


28