Fraud Committed in Seeking Incontestability Status Is Not a Basis for Cancelling Trademark Registration

In Great Concepts, LLC v. Chutter, Inc., No. 22-1212 (Fed. Cir. Oct. 18, 2023), the Federal Circuit reversed the Trademark Trial and Appeal Board’s (“Board”) decision cancelling a trademark registration because a fraudulent declaration was submitted to obtain “incontestable status” of a registered mark.

The applicable statute, the Court observed, limits the Board's authority to cancel registration of a mark where "registration was obtained fraudulently.” Here, the fraudulent statement was made in an incontestability declaration under Section 15 and cannot serve as a basis for a Section 14 cancellation proceeding. The Federal Circuit rejected Chutter’s argument that seeking incontestability status with a Section 15 declaration could be interpreted as obtaining registration for purposes of cancellation. The language of the Lanham Act indicates that obtaining a registration is an entirely distinct right than obtaining an incontestable status. Additionally, Section 14 clearly lists several bases for cancellation and notably omits fraud in obtaining incontestable status, indicating Congress’s intent to limit the remedy for such fraud. The Court thus reversed and remanded. Judge Reyna dissented, stating that cancelling the trademark registration is the appropriate sanction.