The CAFC has again remanded the GALPERTI case
to the TTAB, concluding for the second time that the Board erred in
dismissing Petitioner Galperti, Inc.'s (Galperti-USA) claim of
fraud. Respondent Galperti S.R.L. (Galperti-Italy), in seeking
registration based on acquired distinctiveness under Section 2(f),
averred that its use of the mark had been "substantially
exclusive" for the five preceding years. Gaoperti-USA alleged
that this averment was false and fraudulent. In the first appeal
[TTABlogged
here], the court held that the Board erred in
failing to consider, on the question of falsity, whether use of
GALPERTI by others was substantial or inconsequential. On remand,
the Board again dismissed the fraud claim, but the CAFC found that
the Board had committed legal error when it ruled that (1) in order
for Galperti-USA's own use of the mark to count, it had to show
that it had acquired rights in the GALPERTI mark via secondary
meaning, and (2) Galperti-USA could not rely on third-party use of
GALPERTI because there was no proof of privity between Galperti-USA
and the third-party users. Galperti, Inc.
v. Galperti S.R.L., Appeal No. 2021-1011 (Fed. Cir.
November 4, 2021) [precedential].
The CAFC pointed out that "even marketplace users of a term lacking secondary meaning for the users are among the uses" that must be counted in assessing whether a mark has been in "substantially exclusive" use. See, e.g., De Walt, Inc. v. Magna Power Tool Corp., 289 F.2d 656, 661 (CCPA 1961); In re Boston Beer Co., 198 F.3d 1370, 1373 (Fed. Cir. 1999). In short, "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 Board's ruling regarding privity between Galperti-USA and third-party users was also contrary to the court's precedent. See Otto Roth & Co. v. Universal Foods Corp., 640 F.2d 1317, 1320 (CCPA 1981); Converse, Inc. v. Int'l Trade Comm'n, 909 F.3 (Fed. Cir. 2018).
.
And so the CAFC vacated the decision and remanded the case to the Board. "Further analysis of the falsity issue must proceed in the absence of the legal errors we have identified. We do not address the intent aspect of the charge of fraud, which the Board has not addressed."
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