Property, intangible

It’s pretty official at this point, once a trademark registration is “mature,” that is, more than five years old, the registration cannot be challenged on the basis that the original application was not filed by the then-owner of the mark. The 6th Circuit, in an unpublished opinion, reached this conclusion and we now have the same in the Western District of Texas.

It’s a confusing fact pattern, in part because the relevants facts begin in 1968 for a trademark in use since 1919. The challenged registration, the one that the plaintiff claimed was not filed by the then-owner, registered in 1987. I’ll convey only those facts relevant to this particular issue, but its far more complicated that what I’ll describe.

The original business associated with the trademark RITTER, including an older registration, was for both medical and dental products. The owner, who we’ll call Liebel-Farsham to reduce confusion, decided to split the businesses and on November 18, 1986 it assigned the RITTER trademark for the non-dental medical products to defendant Midmark.¹ By agreement between Liebel-Farsham and Midmark, six days later Liebel-Farsham filed the trademark application in dispute.² In 1988, after the trademark was registered, Liebel-Farsham assigned the registration to Midmark.

Fast forward to 2015 when SPFM filed its declaratory judgment suit and Midmark counter-claimed alleged infringement of the registration in question. SPFM filed a motion for summary judgment that the registration was invalid because the application wasn’t filed by the owner of the trademark. The district court held, as had the 6th Circuit, that this was not a basis for cancellation:

Although a party’s registration of a trademark with PTO’s principal register shall be prima facie evidence of the registrant’s ownership of the mark, a party does not acquire ownership of a trademark through registration. Pointedly, a trademark application that is not filed by the owner is void. While most cases speak in terms of fraudulent procurement, rendering the registration void makes it unnecessary to establish fraud. If Liebel-Flarsheim was not the owner of the RITTER mark when the it filed for the ‘997 Registration, the ‘997 Registration is void.

That that being said, Midmark contends, and SFPM does not dispute, that the ‘997 Registration achieved incontestable^[3] status pursuant to Section 15 of the Lanham Act after 5 years of registration (in 1992). 15 U.S.C. § 1065. While it would appear that a void registration could be cancelled at any time, such does not appear to be the law. Title 15 U.S.C. § 1064 of the Lanham Act limits the ability to challenge a mark that has been registered for five years. Under § 1064(3), petitions for cancellation of a mark registered for five years may be brought only for a limited set of reasons, including fraudulent registration or if the mark has become generic. NetJets Inc. v. IntelliJet Group, LLC, 678 Fed.Appx. 343, 348 (6th Cir. 2017). Void ab initio, the basis of SPFM’s summary judgment claim, is not one of these reasons; thus, no basis exists for cancellation of the ‘997 Registration, at this point, based upon the fact that Liebel-Flarsheim did not own the RITTER mark applied for the trademark. See id.

(Some internal quotation marks, ellipses and citations omitted.)

It has been suggested that Section 14 should be amended to allow cancellation at any time on the basis that the application was void ab initio. I disagree. A registration can still be cancelled at any time if the registration was procured fraudulently, a challenge that is still pending in this case. So the inability to challenge the registration because it was filed by the wrong entity is only where it was an innocent (or at least non-fraudulent) error. Further, if any Declaration of Continuing Use was filed by the wrong entity, the registration lapses, so the ownership error has to be corrected within the first six years. Even further, if the trademark registration being asserted isn’t presently owned by the registrant, then the person wrongly claiming to own it doesn’t have standing for the infringement claim. So allowing a challenge on the basis that the application was filed by the wrong entity will only capture cases where there was a non-fraudulent error, the error was corrected within the first six years, and the current owner is the owner of the underlying rights.

In this case the error was made 30 years before the challenge and the registration has been renewed twice by the correct owner. Surely there must be some point in time where an innocent error in an application should not be a basis for cancellation. This is perhaps even more reasonable than the other bases for which Section 14 forecloses a challenge: likelihood of confusion, merely descriptive or deceptively misdescriptive, primarily geographically descriptive or primarily geographically deceptively misdescriptive, and primarily merely a surname. Those bases have far more to do with protecting public interest than initial ownership, but also can’t be used to challenge a mature registration. A challenge to an innocent error corrected long ago is a waste of resources.

HT to John Welch for the case.

SPFM L.P. v. Midmark Corp., No. SA-15-CA-00124-FB (W.D. Tex. July 31, 2017).

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