Thankfully, the lowering of the fraud standard by the Board from willful to negligence was recognized and overturned by In re Bose Corporation, Appeal No. 2008-1448 (Fed. Cir., Aug. 31, 2009). The CAFC correctly found that there was "no substantial evidence that Bose intended to deceive the PTO in the renewal process." This finding is consistent with the USPTO's policy of public disclosure, the duties imposed on applicants and the applicants’ common law rights.
WATCHING THE WAVE, IN RE BOSE CLARIFIES THE ISSUE OF FRAUD AND INTENTWritten by Malloy & Malloy
As we help clients navigate through the trademark application process we are careful to always explain the risks as well as the rewards associated with the breath of their registration. Not surprisingly, afterwards we also emphasize the need to routinely maintain and update ones Intellectual Property portfolio because it is after all an investment that should not be neglected. However, when the TTAB decided Bose Corp. v. Hexawave, Inc., 88 USPQ2d 1332 (TTAB 2007), we hoped that the appeal of the decision would result in an interpretation that was more in line with the policies of public disclosure that the USPTO has consistently applied.
Specially, the concern was that the Board had found that Bose’s 2001 renewal of its registration for the word-mark WAVE in connection with audio tape recorders and players was fraudulent because the company no longer manufactured those products. The issue of actual use, however, arose after the renewal when Bose opposed the registration of the HEXAWAVE mark and Hexawave fired back accusing Bose of committing fraud on the PTO. In essence, the Board’s finding of fraud hinged on the determination that Bose “should have known” which in essence established a standard of subjective intent. This finding led to the coining of the term fraudit, which are audits on Intellectual Property portfolios that seek to uncover what the owner “should have known.”