U.S. Trademark Trial and Appeal Board Sustains First Fraud Claim Since In re Bose in 2009

On September 30, 2014, in Nationstar Mortgage LLC v. Mujahid Ahmad, the U.S. Trademark Trial and Appeal Board (Board) sustained a claim of fraud on the U.S. Patent and Trademark Office (USPTO) for the first time since the Federal Circuit issued its 2009 decision in In re Bose, upholding an opposition to the mark NATIONSTAR for various real estate brokerage, mortgage and management services. 

In response to fraud allegations, Ahmad needed to show that he was using the NATIONSTAR mark with each of the services prior to the filing date of his in-use application. Reviewing the evidence, the Board was troubled by Ahmad’s efforts to dodge testimony questions and his inability to testify to the origin of documents.  Accordingly, the Board concluded that Ahmad did not use the NATIONSTAR mark with the recited services prior to his filing date.  Further, based on Ahmad’s lack of credible testimony, the Board also found that the false statements were made knowingly and with an intent to deceive the USPTO.

Since the Federal Circuit’s decision in 2009 in In re Bose, fraud on the USPTO requires that there be an “intent to mislead the USPTO into issuing a registration to which the applicant was not otherwise entitled”.  In essence, a subjective intent to deceive is an indispensable element in showing fraud.

Fraud on the USPTO in trademark cases has been difficult to prove, although it is regularly alleged in Board proceedings. Nationstar makes it clear that, even with the subjective standard of Bose, fraud on the USPTO allegations can be proven with the right facts. Moreover, to avoid the threat of a fraud-based cancellation or opposition, trademark applicants and registrants should make sure that they gather and retain documentary evidence of use at the time any affidavit of use is submitted to the USPTO.

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