A statement of “Substantially Exclusive Use” is not fraudulent just because of infringing and insubstantial use by third parties
Salu, Inc. v. The Original Skin Store, 2010 U.S. Dist. LEXIS 35638 (E.D. Cal, 2010)
Plaintiff owned the mark “Skin Store” on the supplemental register. Plaintiff later filed for and received the mark “SkinStore” on the principal register based on a statement of substantially exclusive use for five years. Plaintiff sued Defendant for the use of “the Original Skin Store.” Defendant sought cancellation of Plaintiff’s mark on the grounds that Plaintiff falsely alleged substantially exclusive use when Plaintiff was aware of other users. The court denied the motion for summary judgment on the cancellation proceeding.
The court noted that the Lanham Act allows cancellation for “fraudulent” statements, not false statements, meaning there needs to be some intent to deceive the USPTO. Furthermore, the act allows registration on the principal register based on acquired distinctiveness based on substantially exclusive use, which means the existance of infringing use and insubstantial do not make the statement false.
Plaintiff enforced its mark against infringement consistently and in the majority of cases, other users ceased use, indicating that such use was infringement and therefore evidence of these other cases were insufficient to support a finding by clear and convincing evidence (summary judgment motion) that plaintiff committed fraud upon the USPTO.