The Return of Fraud? The TTAB Issues Its First Fraud Finding Since In re Bose

For the first time since the Federal Circuit implemented heightened fraud standards in In re Bose, the Board recently sustained an opposition on fraud grounds. Based in significant part on the “manifest lack of credibility of applicant’s testimony,” the Board found that Applicant exceeded the “limits to what may be claimed in good faith.”

In Nationstar Mortgage LLC v. Mujahid Ahmad, the Applicant, a Virginia real-estate agent, filed a use-based application claiming use of the mark NATIONSTAR for a variety of real-estate services, including real-estate, insurance, and mortgage brokerage services. Opposition No. 91177036 (September 30, 2014) [precedential]. However, Applicant’s testimony revealed that at the time the application was filed, Applicant was not licensed to offer, and thus legally could not offer, many of the services identified in the application. Moreover, Applicant testified that he had not used the NATIONSTAR mark on any business documents, lawn signs, or invoices. He also claimed ignorance regarding whether the company he incorporated to offer the applied-for services had actually earned any income or generated any revenue.

The Board was “particularly struck” by Applicant’s evasiveness and failure to respond directly to straightforward questions. For example, when deposed Applicant could not explain when and who created and printed the business cards, flyers, and other documents that Applicant argued supported his alleged use of the NATIONSTAR mark. The Board characterized Applicant’s testimony as “so lacking in conviction and credibility as to be virtually incapable of corroboration” and “not at all credible.”

Distinguishing the facts here from In re Bose, the Board commented that unlike the situation in that case where the alleged “fraud” was based on the applicant’s misunderstanding of the “use in commerce” requirement, this case involved an applicant knowingly making false statements about his use of the mark to induce the PTO into issuing a registration.

“[T]he conclusion that applicant committed fraud on the USPTO seems, to us, to be inescapable.”