Overview
Under Section 15 of the U.S. Trademark Act, a claim of incontestability is available when (1) there has been no final decision adverse to the registrant’s claim of ownership or right to register the mark, (2) there is no such proceeding pending, (3) it is within one year of any five-year period of continuous and consecutive use subsequent to the date of registration, and (4) the mark has not become generic. 15 U.S. Code § 1065. Incontestability is valuable because it shields a registrant from certain challenges to the validity of a mark, notably challenges based on descriptiveness. In a decision now 50 years old, Crown Wallcovering Corp. v. the Wall Paper Mfgs. Ltd., 188 U.S.P.Q. 141 (T.T.A.B. 1975), the Trademark Trial and Appeal Board of the U.S. Patent and Trademark Office held that fraud committed in filing a Section 15 Declaration of Incontestability constituted a ground for cancellation of the registration.
More recently, in Chutter, Inc. v. Great Concepts, LLC (T.T.A.B. 2021), the Board cited Crown Wallcovering in granting a Petition to Cancel the respondent’s trademark registration on the ground of fraud. Respondent, Great Concepts, had filed a combined Declaration of Use and Incontestability under Sections 8 and 15 of the U.S. Trademark Act stating that “no proceeding involving said rights pending and not disposed of in either the U.S. Patent and Trademark Office or the courts exists,” even though a prior cancellation proceeding and civil action were then pending against its right to register and use the mark at issue. Finding that the respondent had acted with “reckless disregard” when signing and filing the declaration, the Board concluded that it had the specific intent to deceive the USPTO and it therefore granted the Petition to Cancel its registration on the ground of fraud.
On appeal, in a split 2-1 decision, the United States Court of Appeals for the Federal Circuit reversed and remanded the Board’s decision. Great Concepts, LLC v. Chutter, Inc., 90 F4 1333 (Fed. Cir. 2024). The Federal Circuit concluded that Section 14 of the U.S Trademark Act, which allows a third party to seek cancellation of a registration when the “registration was obtained fraudulently,” does not authorize cancellation of a registration when the incontestable status of that mark is “obtained fraudulently” (emphasis added). Even though the Declaration of Use and the Declaration of Incontestability were combined and filed together, the Court concluded that fraud in claiming the latter was not tantamount to claiming fraud in the former, and that a Section 14 cancellation of a registration is not an available remedy for a fraudulent Section 15 Declaration.
On remand, in a non-precedential decision, the Board removed the incontestable status of the registration at issue, but it declined to refer the conduct of respondent’s attorney, who signed and filed the declaration, to the Director of the Office of Enrollment and Discipline “given the passage of time and the specific circumstances of [the] case,” citing Chutter Inc. v Great Concept, LLC (T.T.A.B. February 25, 2025). The Board referred the registration at issue to the USPTO’s Post Registration Division for withdrawal of the Notice of Acknowledgement of the respondent’s Section 15 declaration and stated that the registration file should include an indication that the Notice of Acknowledgement has been withdrawn pursuant to its order.
As some commentators have noted, it is conceivable that Great Concepts may file a new Section 15 Declaration when the conditions have been met (e.g., there is no proceeding involving said rights pending in the USPTO or in a court and not finally disposed of). Indeed, as Circuit Judge Reyna wrote in his dissent, the majority opinion means that “the maximum penalty for fraud committed to obtain incontestability is losing incontestability, the very thing the registrant was not entitled to ab initio.” This mere resetting of the status quo arguably deprives the USPTO of a means to sanction fraudulent conduct committed upon it and risks misinforming the public about the incontestable status of registrations. It also unsettles 50 years of case law and the understanding among practitioners that fraud in claiming incontestability risked the validity of the registration.
Professionals
Peter Sloane
Partner
