Physicians Formula Cosmetics, Inc.v.Cosmed, Inc.

Trademark Trial and Appeal Board

Mar 11, 2005

No. 92040782 (T.T.A.B. Mar. 11, 2005)

Greenbaum Mailed: March 11, 2005

Cancellation No. 92040782
PHYSICIANS FORMULA
COSMETICS, INC.

v.
COSMED, INC.
Before Quinn, Walters and Drost, Administrative Trademark
Judges.

By the Board.
Petitioner seeks to cancel Registration No. 2055813 for
PHYSICIANS COMPLEX for various cosmetics.1 As grounds for
cancellation, petitioner alleges that respondent’s mark, as
used on respondent’s goods, so resembles petitioner’s
previously registered mark, PHYSICIAN’S FORMULA,2 for
various cosmetics and skin products, among other things, as
to be likely to cause confusion.
In its answer, respondent denied the salient
allegations of the petition for cancellation.

1 Registration No. 2055813 issued on April 27, 1997, claiming
December 13, 1994 as the dates of first use and first use in
commerce. Section 8 affidavit accepted.
2 Registration No. 1187307 issued on January 26, 1982, claiming
March 13, 1937 as the dates of first use and first use in
commerce. Section 8, 9 and 15 affidavits accepted.
UNITED STATES PATENT AND TRADEMARK OFFICE
Trademark Trial and Appeal Board
P.O. Box 1451
Alexandria, VA 22313-1451

Cancellation No. 92040782
2
This case now comes up on petitioner’s combined motions
for leave to file an amended petition for cancellation, and
for partial summary judgment on the newly pleaded grounds of
fraud. The parties have fully briefed the issues, and we
have considered petitioner’s reply brief.3 See Trademark
Rule 2.127(a).
We turn first to petitioner’s motion for leave to amend
the petition for cancellation to (i) plead as an additional
ground for cancellation that respondent fraudulently
obtained the involved registration, making the entire
registration void ab initio, (ii) substitute Physicians
Formula Cosmetics, Inc., a Delaware, corporation, for
Physicians Formula Cosmetics, Inc., a California
corporation, as the petitioner,4 and (iii) correct
petitioner’s description of its goods in the petition to
reflect the goods identified in petitioner’s registration.
Inasmuch as respondent does not object to the motion
for leave to amend, petitioner has properly pleaded fraud
with particularity, the proposed amendments do not violate
settled law, and entry thereof will not prejudice

3 Respondent’s motion (filed November 15, 2004) to extend the
briefing schedule for the pending motions is approved.
4 Petitioner submitted the declaration of its Chief Financial
Officer in support of the combined motion. With respect to the
motion for leave to amend, the declaration includes sufficient
documentary evidence to establish that the Delaware corporation
is the owner of petitioner’s relied-upon registration, and to
correct the identification of goods identified in said
registration.

Cancellation No. 92040782
3
respondent, the motion for leave to amend the petition to
cancel is granted. The amended petition for cancellation is
now the operative pleading in this proceeding.
We now turn to petitioner’s motion for partial summary
judgment on the newly pleaded ground of fraud. In support
of the partial summary judgment motion, petitioner
submitted, among other things, (i) excerpts from the
discovery deposition of respondent’s president, William
Brewer, and (ii) a copy of the statement of use that
respondent filed in support of the application underlying
the involved registration.5
In its 1996 statement of use, respondent affirmed to
the PTO that respondent had used the involved mark on all of
the listed goods since December 1994. However, during the
Brewer deposition, respondent’s counsel stipulated that
respondent had never used the involved mark in connection
with several products identified in that registration.
Moreover, the following exchange occurred during the Brewer
deposition:
Q: How did, if you know, your brother sign a statement
of use that asserted that there was use of the mark in

5 Petitioner submitted these items as attachments to the
declaration of petitioner’s counsel.

Cancellation No. 92040782
4
connection with certain goods for which it was not in
fact in use?6
MR. SNEED: Objection to the form.
THE WITNESS: It was that we intended to use it.
BY MR. EWING:
Q: As of the time the statement of use was filed?
A: Yes.
Q: But in fact in connection with the goods that your
counsel read, that did not happen?
A: That is correct.
Petitioner maintains that the above explanation for filing a
false statement of use is legally insufficient.
In its response to the motion for summary judgment,
respondent simply states that it “relies on the testimony
provided by its company representative during his
deposition.” Respondent then states that “[f]or purposes of
the present summary judgment motion, Registrant does not
disagree that Petitioner, upon proper substitution as
requested, has standing to assert a fraud claim.”
A party is entitled to summary judgment when it has
demonstrated that there are no genuine issues as to any
material facts, and that it is entitled to judgment as a
matter of law. Fed. R. Civ. P. 56(c). The evidence must be

6 The Board notes that Mr. Brewer's brother signed the statement
of use in his official capacity as Treasurer of respondent.

Cancellation No. 92040782
5
viewed in a light favorable to the nonmoving party, and all
justifiable inferences are to be drawn in the nonmovant’s
favor. Opryland USA Inc. v. The Great American Music Show,
Inc., 970 F.2d 847, 23 USPQ2d 1471 (Fed. Cir. 1992).
It is settled that fraud upon the Patent and Trademark
Office constitutes the willful withholding of material
information which, if disclosed to the Office, would have
resulted in the disallowance of the registration, or, as is
alleged in this case, the disallowance of incontestability
under Section 15. See, e.g., Crown Wallcovering Corp. v.
Wall Paper Mfgrs. Ltd., 188 USPQ 141 (TTAB 1975). An
essential element of such a fraud claim is that the
defendant’s false statements were made willfully, in bad
faith, and with the intent to obtain that to which the
defendant otherwise would not have been entitled. See Id.
False statements which were occasioned merely by a
misunderstanding, an inadvertence, a mere negligent
omission, or the like, are not fraudulent. See American
Speech-Language-Hearing Assn. v. National Hearing Aid
Society, 224 USPQ 798, 805 (TTAB 1984); Rogers Corp. v.
Fields Plastics & Chemicals, Inc., 176 USPQ 280, 283 (TTAB
1972). Moreover, an allegation of fraud must be proven “to
the hilt” with clear and convincing evidence. Smith

Cancellation No. 92040782
6
International, Inc. v. Olin Corporation, 209 USPQ 1033,
1043-44 (TTAB 1981).
Upon careful consideration of the arguments and
evidence presented by petitioner, and drawing all inferences
with respect to the motion in favor of respondent as the
nonmoving party, we find that petitioner has carried its
burden. See Medinol Ltd. v. Neuro Vasx Inc., 67 USPQ2d 1205
(TTAB 2003).
Specifically, the stipulation regarding respondent’s
non-use of certain goods identified in the registration,
combined with the above-quoted testimony of respondent’s
president, establish that when respondent signed the
statement of use, respondent knew, or should have known,
that the averment regarding use of the mark on all of the
goods identified therein was false. See Torres v. Cantine
Torresella S.r.l, 808 F.2d 46, 1 USPQ2d 1483 (Fed. Cir.
1986). Although, as noted above, not all incorrect
statements rise to the level of fraud, in this case, we find
that respondent's averments regarding use in its statement
of use are material misrepresentations of fact that were
knowingly made. Further, we agree with petitioner that the
excuse respondent’s president offered for filing a false
statement of use, namely that respondent intended to use the
mark on the goods set forth in the stipulation, is legally
insufficient. See Medinol, supra. Consequently, we grant
Cancellation No. 92040782
7
petitioner’s motion for partial summary judgment on the
issue of fraud.
Petitioner is allowed until THIRTY DAYS from the
mailing date of this order to inform the Board whether
petitioner wishes to go forward on the remaining grounds in
the petition to cancel, failing which the Board will cancel
the involved registration, and enter judgment against
respondent solely on the grounds of fraud.
Proceedings remain otherwise suspended.