<em>Galperti, Inc. v. Galperti S.r.l.</em>
17 F.4th 1144 (Fed. Cir. 2021)
The Federal Circuit vacated the Trademark Trial and Appeal Board’s dismissal of Galperti Inc.’s fraud charge against Galperti S.r.l., because Galperti Inc. did not need to establish secondary meaning or privity in demonstrating their competitors’ claim’s falsity.
In Galperti, Inc. v. Galperti S.r.l., both parties’ businesses manufactured and sold metal flanges and related products. The Patent and Trademark Office (PTO) granted Galperti S.r.l’s., an Italian company, application for the mark “Galperti.” Although Galperti is an Italian surname, Galperti S.r.l. showed that its use of the mark was “substantially exclusive” for the five preceding years and had “become distinctive of the applicant's goods in commerce” under §2(f) of the Lanham Act. Galperti, Inc., an American company, challenged the application, arguing that Galperti S.r.l. committed fraud in their application. Galperti Inc. claimed the “Galperti” registration should therefore be revoked. The PTO’s Trademark Trial and Appeal Board (The Board) dismissed Galperti Inc.’s challenge.
Galperti S.r.l. initially received the registration for “Galperti” on April 14th, 2008. Galperti Inc., challenged the registration right before the five-year deadline under §14 of the Lanham Act, 15 U.S.C. § 1064. In Galperti Inc.’s challenge against Galperti S.r.l.’s registration, the American company made three assertions. First, Galperti Inc’s “use of the GALPERTI mark predated Galperti-Italy’s relevant use of the mark(,) and Galperti-Italy’s use was likely to cause confusion.” Second, Galperti Inc. claimed that Galperti S.r.l’s registration was obtained by fraud. Galperti Inc. asserted Galperti-Italy had intentionally made a false assertation by claiming its use of Galperti was substantially exclusive from 2002 to 2007. Lastly, Galperti Inc. asserted “that Galperti-Italy made a false claim of ownership, again invoking fraud.” The Board ultimately judged that Galperti Inc. forfeited their grounds for ownership, and that the two other points raised lacked merit.
Galperti Inc. initially petitioned the PTO, challenging the registration of Galperti S.r.l., for “Galperti.” This initial petition was dismissed. On remand, The Board dismissed the fraud charge again, citing there was no inference of fraudulent intent to deceive the Patent Office..
The Bard determined that Galperti Inc. had failed to show it had proprietary rights to “Galperti” by evidence of secondary meaning. Thus, Galperti Inc. “could not benefit from third-party use of GALPERTI because there was no proven privity.” The Board determined that there was no fraud in Galperti S.r.l.’s registration, as there was no falsity when it said it had substantially exclusively used the mark between 2002 and 2007. The Board ruled that Galperti Inc. could only prevail if it demonstrated it had acquired secondary meaning for GALPERTI, since this mark is a surname. The first federal Galperti court case in 2019 affirmed the board’s decision, concerning “[a]ppellant’s lack of priority in the GALPERTY mark,” but vacated the decision concerning fraud, remanding the case to determine whether the “Appellee obtained its registration through fraud.”
On Galperti Inc.’s second appeal, before the Federal Circuit Court of Appeals , the Federal Circuit found that the Board had made two legal errors. The Board erroneously required “Galperti-USA to establish its own proprietary rights to the mark and disregard(ed) use of the mark by others during the period at issue.” The Federal Circuit vacated and remanded the case. The Federal Circuit deemed Galperti Inc. was unable to demonstrate that it had used the mark prior to Galperti-Italy. However, the Court, “vacated the Board’s determination that Galperti-USA failed … to prove the fraudulent character of Galperti-Italy’s 2007 assertion to the PTO that its use of the mark had been substantially exclusive in the preceding five years.” The Court explained that a court must look at “whether any use by a third party was ‘significant,’ or whether it was merely ‘inconsequential or infringing’” to determine whether “substantially exclusive” use of a mark has occurred. The Board held Galperti S.r.l. did not know of any other “players in the market” using the mark. This does not necessarily mean that there weren’t any other players using the “Galperti” mark though. The Federal Circuit reasoned Galperti Inc., during its attempt to show Galperti S.r.l. made a false representation, need not show that it had used the mark. Galperti Inc. only needed to demonstrate “any use by a third party.”
The Federal Circuit found court precedent indicating that Galperti-U.S. does not need to show that it had acquired secondary meaning for the GALPERTI by showing “regardless of whether the opposer’s use is prior or subsequent to applicant's, …in a descriptive context or in the manner of a mark,… (it)may be sufficient to defeat the applicant's claim that the term is distinctive of its goods or has become distinctive thereof with the meaning of section 2(f) of the Lanham Act.” The Federal Circuit ruled that the Board had made a legal error, because Galperti Inc. did not have to show that it had gained secondary meaning in the “Galperti” mark. The Court also determined Galperti Inc. did not have to demonstrate privity to other uses of the mark between 2002 and 2007. The Federal Circuit ultimately vacated and remanded this case, holding that “use by anyone, regardless of relation to the challenger, may undercut a claim of substantially exclusive use.”
Thus, the Federal Circuit remanded Galperti Inc.’s cancellation petition back to the Board, so the Board can determine the falsity issue in the absence of legal errors.