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Sovereign Military Hospitaller Oder v. Florida Priory of the Knights Hospitallers

By David Lilenfeld on January 28, 2016

This case has been a long-standing trademark battle between two religious organizations with long and similar names:

(1) Sovereign Military Hospitaller Order of Saint John of Jerusalem of Rhodes and of Malta and Florida Priory of the Knights Hospitallers of the Sovereign Order of Saint John of Jerusalem, Knights of Malta, the Ecumenical Order.

(2) Sovereign Military Hospitaller Order of Saint John of Jerusalem of Rhodes and of Malta

The 11th Circuit Court of Appeals overruled a district court’s decision that one branch of the Knights of Malta committed fraud when it filed its federal trademark application in 1958. Another branch of the Knights of Malta sued for trademark infringement alleging false advertising under the Lanham Act, 15 U.S.C. § 1051 and state law claims for Florida Deceptive and Unfair Trade Practices Act (FDUTPA), Fla. Stat. § 501.201. Fraud requires a showing of the registrant’s awareness of competing marks.

The district court found the plaintiff’s federally registered trademark was obtained fraudulently because the plaintiff knew of the defendant’s prior use of the mark. Judge Charles Reginald Wilson of the appeals court first reversed the fraud judgment. According to 15 U.S.C. § 1064 (3), 1119, “a party may petition to cancel a registered mark on the ground that the registration was procured by fraud.” It was held in Angel Flight of Ga., Inc. v. Angel Flight Am., Inc., 522 F.3d 1200, 1209 (11th Cir. 2008) that an applicant commits fraud when he “knowingly makes false, material representations of fact in connection with an application for a registered mark.” Fraud requires a purpose or intent to deceive the PTO. The defendant, the party alleging the fraud, has the burden of proving this claim by clear and convincing evidence.

Furthermore, the appellate court overruled the district court’s finding of fraud because the facts show the person who signed the trademark application did not know about the use of a similar mark. If the declarant believes the applicant has a superior right to use the mark, there is no fraud even if the declarant is mistaken.

Also, the district court found plaintiff’s failure to inform defendant is evidence of willful blindness. To rule on the knowledge element of fraud, the district court relied upon recent case law from Global-Tech Appliances Inc. v. SEB S.A., 131 S.Ct. 2060, 98 USPQ2d 1665 (U.S. 2011) that willful blindness could satisfy actual knowledge as to liability for inducing infringement. The appeals court rejected the effort to apply this case law to a trademark case because the case law is from a patent law case. Courts do not automatically apply a standard from one area of intellectual property law to another area of intellectual property law.

In conclusion, the 11th Circuit found in favor of the plaintiff because a lack of clear and convincing evidence. On remand, the district court misapplied several factors in its analysis of likelihood of confusion, incorrectly assessed the defense of prior use, relied upon testimony that the appellate court previously deemed inadmissible and misinterpreted the 11th Circuit’s instructions about consulting facts outside the record.

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