Last week, the U.S. Court of Appeals for the Federal Circuit issued an opinion in Great Concepts, LLC v. Chutter, Inc., No. 2022-1212 (Jan. 10, 2024), reversing the Trademark Trial and Appeal Board’s (“TTAB”) decision canceling Great Concept’s trademark registration based on a false Section 15 declaration submitted to obtain incontestability.
Great Concepts obtained a registration for its mark DANTANNA’S. Chutter’s predecessor petitioned to cancel the DANTANNA’S mark and filed a lawsuit against Great Concepts asserting trademark infringement. The district court granted summary judgment for Great Concepts, which the Eleventh Circuit affirmed. While the appeal and cancellation proceeding were pending, counsel for Great Concepts filed a combined declaration of use (under Section 8 of the Lanham Act) and incontestability (under Section 15 of the Lanham Act). To obtain incontestability, counsel declared that “there is no proceeding involving said rights pending and not disposed of either in the U.S. Patent and Trademark Office or in the courts.” This was false because the appeal and cancellation proceeding were still pending at the time of counsel’s declaration. Chutter petitioned for cancellation of the registration based on submission of a false Section 15 declaration. The TTAB found the declaration was fraudulent and cancelled Great Concept’s registration. Great Concept appealed.
The Federal Circuit reversed. The Court focused on the language of Section 14 of the Lanham Act, which prescribes when a registration may be cancelled. Under Section 14 a petition to cancel a registration may be filed if the “registration was obtained fraudulently.” It does not provide for cancellation based on a fraudulent Section 15 declaration. The Court noted that while the TTAB “has long believed” it had the power to cancel a registration based on a false Section 15 declaration, the language of the statute does not authorize cancellation in such circumstances. The Court explained that “registration and incontestability are different rights” and what Great Concept fraudulently obtained was not registration, but, rather, incontestable status for an already-registered mark. The Court found that Section 33(b) of the Lanham Act further confirmed its decision. In the context of infringement actions, Section 33(b) provides that an accused infringer may challenge incontestability based on fraud with the remedy for such fraud being loss of incontestable status, not cancellation of the registration. Finally, the Court rejected Chutter’s remaining arguments, which raised policy concerns and which invited the Court to approve “an extrastatutory basis for cancellation.” Judge Reyna dissented.
