Bose Trademark Win Good News for Tech

Last week, Bose Corp. won a two-year-old dispute over its Wave trademark, having lost that major piece of intellectual property at one point, which should be welcome news to most industries, including high tech. And the reason can be summed up in one word: Medinol.

In a 2003 decision in a trademark dispute between Medinol Lt. and Neuro Vasx, the Trademark Trial and Appeal Board ruled that Neuro Vasx had to forfeit a trademark because it had incorrectly listed a product to be covered by the mark that the company did not market or make. What surprised IP lawyers, and irritated a good many based on discussions I’ve had about the topic, was that the TTAB ruled that the omission was a case of fraud because the company “knew or should have known” about the problem.

It was a major escalation of the definition of fraud, which generally requires intent to deceive. After that point, any company that filed a trademark application or renewal was in danger if the list of goods or services covered by the trademark was anything less than completely accurate, because a company found to have fraudulently registered a trademark can have it cancelled.

That’s what happened to Bose, whose Wave trademark renewal still showed tape recorders and players, although the company had shifted to using a CD player. Hexawave challenged the Wave trademark with Bose countering that it still serviced the devices and so continued to be in that business. But the TTAB ruled that Bose was not using the mark in commerce with tape recorders and players because it no longer owned the machines.

Bose and its law firm, Fish & Richardson, were “astounded by it,” according to principal Chuck Hieken. They asked the TTAB for a reconsideration, which was refused. So Bose appealed to the Court of Appeals for the Federal Circuit. The CAFC reversed the TTAB decision and sent the case back, effectively slapping the board:

By equating “should have known” of the falsity with a subjective intent, the Board erroneously lowered the fraud standard to a simple negligence standard.

The CAFC went on at length, stating how it had stated in the past that “[m]ere negligence is not sufficient to infer fraud or dishonesty,” and that even gross negligence at times doesn’t rise to a sufficient level of evidence.

And so Bose gets to reargue its case, the TTAB has to make a decision with the full weight of the CAFC rebuke coloring any decision to cancel the trademark, and companies in general can breathe easily, knowing that if they screw up on a trademark application, it’s not necessarily the end of the world … or the end of the mark.