Property, intangible

a blog about ownership of intellectual property rights and its licensing

Fraud is Very Popular

John Welch at the TTABlog asks, would you have opposed? It’s another case where a claim of fraud was premised on the theory that the applicant wasn’t the owner of the mark.

The applicant Galaxy Metal Gear, Inc. Direct Access Technology, Inc. (DAT) applied for METAL GEAR for hard drive enclosures.  It had them manufactured by a company, DataStor, that had not previously been making this type of enclosure.  DataStor breached its exclusive arrangement with Galaxy DAT and sold the same enclosures with the same mark to the opposer.  The opposer then alleged fraud in its opposition, claiming, unsuccessfully, that Galaxy DAT wasn’t the owner of the mark but simply a “mere importer and distributor” of the manufacturer’s goods.

The TTAB referred to the relationship between Galaxy DAT and DataStor as “OEM,” a term commonly understood to refer to goods manufactured by one company and sold to another to be retailed under the purchasing company’s brand name.  Indeed, the relationship between the manufacturer and the trademark owner here looks like a standard OEM arrangement to me:

Q: At the time the application was filed, do you believe that Metal Gear was DAT’s trademark?
A: Yes.
Q: How about today?
A: Still is.
Q: Why do you believe it’s DAT’s trademark?
A: Because we came up with the brand name and we contact the manufacturer to manufacture product for us under the brand name.
Q: Who set the specifications for the product?
A: I did. DAT did.
Q: Did you personally come up with the specifications for the product?
A: Yes.

Galaxy DAT also used several manufacturers and instructed them all to put the mark on the goods.

So Galaxy DAT thought up the mark, spec’d the goods, and arranging for manufacturing with several companies – in other words, did what every brand name company who manufactures offshore does.  The opposer then bought unauthorized goods and had the nerve to claim that the cheating manufacturer owned the mark.  I should hope a fraud claim wouldn’t fly.

* Thanks to Anonymous, commenting on the TTABlog, for catching the Galaxy-DAT error, now corrected. Whoops.  Teach me to blog too late at night.

Galaxy Metal Gear, Inc. v. Direct Access Tech., Inc., Opp. No. 91184213 (TTAB August 10, 2010).

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One response to “Fraud is Very Popular”

  1. Glad to be of assistance.

    Didn’t want poor DAT to feel their victory wasn’t being recognized by the legal community.

    – TTABlog’s Anonymous