Eleventh Circuit Determines That Willful Blindness Standard Is Inapplicable To A Cause Of Action To Cancel A Mark For Fraud Of The USPTO.


Plaintiff Order filed suit against The Florida Priory in July of 2009 asserting infringement and false advertising claims under the Lanham Act, 15 U.S.C. § 1051 et seq., as well as state law claims for unfair competition and violation of the Florida Deceptive and Unfair Trade Practices Act (FDUTPA), Fla. Stat. § 501.201 et seq. The infringement claims were based on The Florida Priory’s alleged use of marks that are confusingly similar to those for which Plaintiff Order has obtained federal registrations. Both parties used the terms “order of St. John” in advertising.
In the false advertising claim, Plaintiff Order charged that The Florida Priory (through its parent) falsely claimed a historic affiliation with Plaintiff Order going back to the eleventh century. The Florida Priory counterclaimed, alleging that Plaintiff Order committed fraud on the United States Patent and Trademark Office (PTO) in applying for its service marks because the Order failed to disclose its knowledge of the domestic presence of other organizations that used similar marks in commerce.

Lower court ruling
The district court ruled in favor of The Florida Priory on all counts of Plaintiff Order’s complaint and The Florida Priory’s counterclaim. The district court explained that the signatory on the USPTO application was personally unaware of the existence of The Ecumenical Order at the time he signed the applications and the accompanying oath.
Nonetheless, the district court canceled Plaintiff Order’s registered word marks based on Plaintiff Order’s failure to disclose the existence of The Ecumenical Order to the PTO. According to the district court, Plaintiff Order knew of The Ecumenical Order’s domestic presence as early as 1983 and had a duty to disclose that fact in the application. The district court based this finding of knowledge on three letters, including one written on The Ecumenical Order’s official letterhead, sent to Plaintiff Order’s headquarters abroad. The district court relied upon a willful blindness standard, and required no actual proof of intent to deceive.

On appeal the Eleventh Circuit affirmed in part, reversed in part, and vacated in part the judgment below. The 11th circuit reversed the fraud on the USPTO finding because there was no proof of a subjective intent to defraud. A declarant of the USPTO application oath requires the signatory’s good-faith, “subjective belief” in the truth of its contents. Because there was no proof that the Plaintiff’s signatory had “awareness” that any other organization was using the marks for which Plaintiff Order sought federal protection, there was no fraud, as the signor could not have intended to deceive the PTO in attesting to an oath that he believed was entirely accurate. The district court’ application of upon a willful blindness standard was therefore erroneous. Rather, the law requires proof of actual intent to deceive. Such proof is seldom direct, and it would appear that constructive knowledge obtained from the declarant’s employment and management of an organization is insufficient.
If the declarant’s had a mistaken but subjective belief that the application has superior right to a mark, the application is not a fraud.

Finally, Plaintiff Order challenged the district court’s finding that its registered design service mark was not confusingly similar to the identifying design used by The Florida Priory. the 11th circuit agreed, and held that the district court failed to apply all of the seven factors analyzed under 15 U.S.C. § 1125. The Lanham Act prohibits the unauthorized use of a mark in commerce that is confusingly similar to a registered service mark. 15 U.S.C. § 1114(1)(a). To prevail on a civil infringement claim brought under 15 U.S.C. § 1125, a plaintiff must establish that (1) its mark is entitled to protection and (2) the defendant “adopted an identical or similar mark such that consumers were likely to confuse the two.” Int’l Stamp Art, Inc. v. United States Postal Serv., 456 F.3d 1270, 1274 (11th Cir. 2006) (per curiam). In determining whether two marks are likely to be confused, the district court must consider seven factors: (1) the type of mark, (2) the similarity of the marks at issue, (3) the similarity of the services the marks represent, (4) the similarity of the parties’ service outlets and customers, (5) the nature and similarity of the parties’ advertising media, (6) the defendant’s intent, and (7) any actual confusion. Frehling Enters. v. Int’l Select Group, Inc., 192 F.3d 1330, 1335 (11th Cir. 1999); Coach House Restaurant, Inc. v. Coach & Six Restaurants, Inc., 934 F.2d 1551, 1561 (11th Cir. 1991). “The extent to which two marks are confusingly similar cannot be assessed without considering all seven factors to ensure that the determination is made in light of the totality of the circumstances.” Wesco Mfg., Inc. v. Tropical Attractions of Palm Beach, Inc., 833 F.2d 1484, 1488 (11th Cir. 1987).

A district court need not “specifically mention each of the seven factors in order to avoid reversal on appeal.” However, the lower court must include sufficient facts to permit meaningful appellate review. Here, the district court described the visual appearance of the two graphics and then stated: “The Florida Priory’s design contains two crosses, whereas [Plaintiff Order]’s registered mark contains only one. [Plaintiff Order]’s mark contains no crown. These marks are easily distinguishable, thus removing any possibility for consumer confusion.” Sovereign Military Hospitaller, 816 F. Supp. 2d at 1301. According to the 11th circuit, this statement illustrated that the district court’s “entire analysis of the likelihood of confusion was based on the visual dissimilarity of the marks—namely that The Florida Priory’s symbol contained a cross and crown that Plaintiff Order’s mark did not. The district court did not make any additional factual findings related to the infringement claim or address the applicability (or inapplicability) of any other factor germane to the infringement analysis.” This lack of analysis required a reversal of the Lanham Act infringement finding and a remand for additional findings as to whether there was confusion created by the Defendant with any of Plaintiff’s four marks.

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