Last week, the U.S. Court of Appeals for the Federal Circuit issued an opinion in Galperti, Inc. v. Galperti S.R.L., 2021-1011 (November 12, 2021), vacating for the second time a decision by the Trademark Trial and Appeal Board (TTAB) in a case involving an attempt to cancel a trademark registration fraudulently obtained.
Galperti, Inc. (Galperti-USA) and Galperti S.r.l. (Galperti-Italy) are unrelated ironmongers that make and sell metal flanges. In 2007, Galperti-Italy applied for registration of the mark GALPERTI. Because Section 2(e)(4) of the Lanham Act prohibits registration of a trademark that is “primarily merely a surname” absent secondary meaning, Galperti-Italy claimed its use was “substantially exclusive.” Under Section 2(f), proof of “substantially exclusive and continuous use” for the statutory five-year period is prima facie evidence of secondary meaning. The registration issued in 2008.
In 2013, Galperti-USA petitioned to cancel the registration, alleging it had been obtained by fraud because Galperti-Italy’s statement of substantially exclusive use was intentionally false. The TTAB dismissed, but the Federal Circuit vacated and remanded with instructions to consider whether Galperti-Italy’s use was “substantially exclusive” by evaluating whether any third-party use was “significant” or “inconsequential.” On remand, the TTAB again dismissed, finding Galperti-USA failed to establish its own proprietary rights in the mark. It also disregarded Galperti-USA’s evidence of third-party uses of the mark.
On a second appeal, the Federal Circuit again vacated and remanded. It held that the TTAB’s decision was bottomed on two faulty premises, that Galperti-USA had to show its GALPERTI mark had secondary meaning to count as “significant” use and that “Galperti-USA could not benefit from third-party use” of the mark. The first premise was incorrect because even significant non-trademark use of a mark undermines an assertion of substantially exclusive use. Thus, “Galperti-USA does not need to establish secondary meaning of its own uses of GALPERTI in order for those uses to be counted in determining the falsity of Galperti-Italy’s claim of substantially exclusive use.” The second premise was also incorrect: “Use by anyone, regardless of relation to the challenger, may undercut a claim of substantially exclusive use.”