Background
Great Concepts, LLC operates a steakhouse restaurant in Atlanta, Georgia under the name “Dantanna’s.” The company obtained federal trademark registration for the mark DANTANNA’S in 2005, covering restaurant services. Five years after registration, under Section 15 of the Lanham Act, a trademark owner may file a declaration of incontestability — a filing that, if valid, makes the mark immune from many types of challenge, including likelihood-of-confusion and descriptiveness objections.
In March 2010, Great Concepts’ former attorney filed a Section 15 declaration attesting — falsely — that there was “no proceeding involving said rights pending and not disposed of” before the USPTO or in court. In fact, both a cancellation proceeding and a related Eleventh Circuit appeal were ongoing at the time. Chutter, Inc., a competitor, discovered the fraudulent declaration and petitioned the TTAB to cancel the DANTANNA’S registration on grounds of fraud. The TTAB agreed, cancelled the registration, and Great Concepts appealed to the Federal Circuit.
The Court’s Holding
The Federal Circuit reversed the cancellation. The court held that, while the Section 15 declaration was undoubtedly fraudulent, the Lanham Act does not authorize the TTAB to cancel a trademark registration based on fraud committed in connection with an incontestability filing. The court parsed the Lanham Act’s cancellation provision, Section 14, which permits cancellation for fraud “in obtaining” a registration — not fraud in obtaining incontestability status after registration. Because the fraud here occurred in a post-registration filing, not in the original application for registration, Section 14’s fraud-based cancellation ground did not apply.
The majority emphasized that Congress has provided other remedies for fraud on the PTO: sanctions against attorneys, criminal statutes, and denial of incontestability status. The remedy for a fraudulent Section 15 declaration is loss of the incontestability benefits — not cancellation of the underlying registration itself. Judge Reyna dissented, arguing that permitting a registrant to retain a trademark registration obtained through a process tainted by fraud creates perverse incentives and undermines trademark law’s integrity.
Key Takeaways
- Fraud in a post-registration incontestability declaration (Section 15) is not grounds for cancellation of the underlying trademark registration under Section 14 of the Lanham Act — the fraud must have occurred “in obtaining” the original registration to support cancellation.
- The consequence of a fraudulent Section 15 declaration is loss of incontestability benefits, not loss of the trademark registration itself.
- Trademark practitioners must ensure that Section 15 declarations accurately represent the state of proceedings involving the mark — false statements expose both the registrant and counsel to sanctions and other penalties, even if cancellation is not available.
- The decision highlights a gap in the Lanham Act’s fraud remedies — one that may invite legislative attention given the dissent’s concern about perverse incentives for post-registration misconduct.
Why It Matters
The incontestability system is a cornerstone of federal trademark law. Once a mark is deemed incontestable, it is largely immune from challenge on the most common grounds used to attack trademark registrations. Fraudulent incontestability declarations therefore carry significant consequences for competitors who lack the ability to challenge the mark’s validity. The Federal Circuit’s ruling clarifies the boundary of the TTAB’s cancellation authority in a way that may surprise many practitioners: fraud in the Section 15 process does not undo the registration itself.
For competitors dealing with marks they believe were made incontestable through fraud, the decision means they cannot use the TTAB to cancel the registration on that basis — they must instead argue that the incontestability declaration is invalid (stripping the mark of incontestable status) and then pursue challenges to the registration on the merits. The ruling also reinforces the importance of monitoring competitors’ trademark filings and acting promptly when fraud is discovered, even if the full remedy of cancellation is unavailable.