In re Bose Corp. (Fed. Cir. 2009)
When renewing its trademark registration for the word-mark WAVE, Bose stated that the mark was still be used in commerce on various goods "including audio tape recorders and players." By that time (2001), Bose had stopped making and selling audio tape recorders and players. The discrepancy was not picked-up until a few years later when Bose attempted to oppose registration of the HEXAWAVE mark filed by Hexawave, Inc., and Hexawave filed a counterclaim asking the PTO to cancel the registration for WAVE.
Willful Fraud in trademark prosecution is found when an applicant "knowingly makes false, material representations of fact in connection with his application." The elements of fraud must be proven with clear and convincing evidence. Notably, the "knowingly" requirement excuses false representations if "occasioned by a misunderstanding, an inadvertence, a mere negligent omission, or the like." Here, the court goes on to hold that it is insufficient to show that an applicant "should have known" that its statements were false.
The TTAB improperly applied a should-have-known-better standard in this case.
By equating "should have known" of the falsity with a subjective intent, the Board erroneously lowered the fraud standard to a simple negligence standard.
Because there was no subjective evidence of willful intent, the Federal Circuit found that the fraud charges could not stick. However, the court authorized the TTAB to limit the coverage the mark based on the fact that it is no longer in use on audio tape recorders and players. "[T]he registration needs to be restricted to reflect commercial reality."