<em>Great Concepts, LLC v. Chutter, Inc.</em>

90 F.4th 1333 (Fed. Cir. 2024)

In Great Concepts, LLC v. Chutter, Inc., Chutter challenged the validity of Great Concept’s mark, claiming “DANTANNA’S”  confuses their mark “DAN TANA,” challenging incontestability, and arguing that “DANTANN’S” was obtained by a false affidavit, so Great Concept’s mark is therefore fraudulent.  

Introduction & Facts

In Great Concepts, LLC v. Chutter, Inc., Chutter claimed that the mark “DANTANNA’S” was confusingly similar to their mark “DAN TANA.” Chutter challenged that , making the argument that the mark was obtained fraudulently , as it was obtained by use of a false affidavit. The Federal Circuit court had to determine “whether Section 14 of the Lanham Act…” permitted “the Board to cancel a trademark’s registration due to the owner’s filing of a fraudulent Section 15 declaration.”

Great Concept’s trademark “DANTANNA’S,” was challenged by Chutter. Chutter claims that the fraudulent affidavit found in the Lanham Act Section 15 filing for incontestability of a registered mark, and the Lanham Act Section 8 filing for continued registration, indicate that Great Concept’s mark “DANTANN’S” should be canceled. On March 8, 2010, Great Concept’s former attorney, Frederick Taylor, filed for both the “DANTANN’S” Section 8’s continued registration, and Section 15’s incontestability of the mark, with the PTO. The issue of fraud arises from a falsehood in the Section 15 filing. Mr. Taylor 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 false statement in the affidavit eventually led to the appellate case of Great Concepts, LLC v. Chutter, Inc.

Prior to this case, Chutter’s “predecessor-in-interest,” “Tana,” had petitioned to remove Great Concepts trademark, citing confusion with “DAN TANA.” These proceedings were suspended as Tana brought a suit against Great Concepts to the Northern District Court of Georgia. On September 15, 2009, summary judgment was granted to Great Concepts, which was then “affirmed by the Eleventh Circuit on July 15, 2010.” The cancellation proceeding was dismissed due to Mr. Tana’s “apparent loss of interest.” Later, Chutter, in July of 2015 “petitioned the PTO for cancellation of Great Concepts’ ‘DANTANNA’S.’” The Board found fraud in Mr. Taylor’s Section 15 affidavit and cancelled Great Concepts’ trademark registration. Great Concepts appealed the TTAB’s decision. This case was then brought before the Federal Circuit Court of Appeals after Great Concepts, LLC appealed a decision by the Trademark Trial and Appeal Board. The Trademark Trial and Appeal Board had canceled Great Concept’s trademark “DANTANNA’S.” This occurred after Great Concepts filed to have their trademark receive incontestable status.

The Federal Circuit court decided “whether Section 14 of the Lanham Act… permits the Board to cancel a trademark’s registration due to the owner’s filing of a fraudulent Section 15 declaration.” The Federal Circuit found that Section 14 permits third parties to seek a cancellation of registration if “the ‘registration was obtained fraudulently.’” However, the Federal Circuit ruled Section 14 does not permit a cancellation of the mark’s registration “when the incontestability status of that mark is obtained fraudulently.” The Court finds an issue with the incontestability status of the registered mark, the fraudulent affidavit,  does not make the registration of the mark itself void.

The Court considered what was obtained through Mr. Taylor’s fraudulent Section 15 declaration. The Court reasoned that the Section 15 declaration only pertains to the incontestable status. The court’s analysis looked at the plain statutory language, rejecting that a Section 8 continued registration filing can taint a Section 15 incontestability filing. The issue of whether the mark “DANTANNA’S” is incontestable, is not set in stone. The Court points out that a prerequisite to obtaining incontestability under Section 15 is to first obtain the registration for the trademark. Thus, “fraud committed in connection with obtaining incontestable status is distinctly not fraud committed in connection with obtaining the registration itself.” Section 14(3) proscribes how a third party could seek cancellation of the registered mark and “fraud committed in connection with an incontestability declaration,” is not a means by which this can be achieved.

Chutter made a strong point that the Ninth Circuit found that “[a]ny false statements made in an incontestability affidavit may jeopardize not only the incontestability claim, but also the underlying registration. In particular, filing a fraudulent incontestability affidavit provides a basis for canceling the registration itself.” In the dissent, Judge Reyna views  a Section 15 declaration of incontestability as optional and says that the fraud goes against “the spirit” of intellectual property protection.,” Judge Reyna would hold that “it is the obligation of the applicant and registrant to refrain from any form of inequitable conduct.” While the court recognized the point Chatter made, it went against the earlier reasoning. It was not enough to persuade the majority. Chutter made a policy argument that fraud should not be encouraged. The Federal Circuit Court agreed generally that fraud should not be encouraged.  In this case though,  the fraud was not rewarded, as Great Concepts’ incontestability status still must be separately resolved. As a result of this, the court sided in favor of Great Concepts, holding that the TTAB erred in canceling Great Concept’s trademark “DANTANNA’S”. The court remanded the Board’s decision, “so that the Board may consider whether to declare that Great Concepts’ mark does not enjoy incontestable status and to evaluate whether to impose other sanctions on Great Concepts or its attorney.” While Great Concepts’ registration is safe from cancellation, it may face issues surrounding its incontestability status or consequences due to the prior fraud.

Conclusion

Thus, the court found that Section 14 does not permit the Board to cancel a registration due to fraud found in a Section 15 declaration.