Bose Makes Waves In Trademark Fraud

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Alleging fraudulent procurement of a trademark has become a formidable offensive weapon, and defensive tactic, in many trademark disputes since the Trademark Trial and Appeal Board's controversial decision in Medinol v. Neuro Vasx Inc. In Medinol, the Board stated "[f]raud occurs when an applicant or registrant makes a false material representation that the applicant or registrant knew or should have known was false." Medinol Ltd. v. Neuro Vasx Inc. In assessing claims of fraud, the Board went on to say that it would not look to the subjective intent of the applicant but the objective manifestations of that intent. Since adoption of the near strict liability standard announced in Medinol, the TTAB has seen a sharp increase in allegations that a party's trademark was fraudulently obtained. Post-Medinol, the Board had found fraud in nearly every case in which it was alleged, until Bose Corporation recently appealed such a decision and the Federal Circuit torpedoed the Medinol standard.

The Bose Fraud Rule

Bose initiated an opposition against Hexawave Inc.'s. application for the mark HEXAWAVE alleging likelihood of confusion with its WAVE mark. Hexawave counterclaimed, alleging Bose committed fraud when it filed its Section 8 affidavit of continued use and Section 9 renewal application which claimed, among other things, that the WAVE mark was in use on audio tape recorders and players. In fact, Bose had stopped manufacturing tape players but continued to repair those devices. The Board held such repair services were not a "use in commerce," that Bose's claim of use was material, and that it constituted fraud. Consequently, the Board ordered cancellation of Bose's entire WAVE registration. Bose appealed.

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