By 1997, Bose Corporation quit making tape recorders and players. Four years later, its general counsel said under oath that Bose still used its "WAVE" trademark "in connection with" such devices.
The Trademark Trial and Appeal Board -- a unit of the U.S. Patent and Trademark Office -- deemed the statement a falsehood and declared Bose's renewal registration of the WAVE mark forfeit.
The Federal Circuit reversed. The court made Abundantly Clear that the Board put too light a burden on the claim that Bose (through its general counsel) did a fraud on the PTO. The Board employed a "should have known" test for fraudulent intent -- as in the GC should have known that ongoing repair work on old WAVE recorders and players didn't count as use of the mark "in commerce". The court, by contrast, required a subjective purpose to deceive -- a test that in this case would've demanded proof that they GC didn't really think repair work amounted to "commerce". It said:
Mr. Sullivan explained that in his belief, Bose’s repairing of the damaged, previously-sold WAVE audio tape recorders and players and returning the repaired goods to the customers met the "use in commerce" requirement for the renewal of the trademark. . . . There is no fraud if a false misrepresentation is occasioned by an honest misunderstanding or inadvertence without a willful intent to deceive. . . . Sullivan testified under oath that he believed the statement was true at the time he signed the renewal application. Unless the challenger can point to evidence to support an inference of deceptive intent, it has failed to satisfy the clear and convincing evidence standard required to establish a fraud claim.
In re Bose Corp., No. 08-2448, slip op. at 10 (Fed. Cir. Aug. 31, 2009).
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