Fraud on the PTO
LEDO PIZZA SYSTEM, INC. & LEDO PIZZA CARRYOUTS, INC., Plaintiffs,
v.
LEDO’S INC., Defendant.
No. 20 CV 7350.
United States District Court, N.D. Illinois, Eastern Division. March 7, 2024.
The defendant’s fraud claim fails even to get out of the starting blocks, because the defendant has failed to adequately establish standing to assert the claim.[5] A petition to cancel a mark must “be filed . . . by any person who believes that he is or will be damaged, including as a result of a likelihood of dilution.” 15 U.S.C. § 1064. The party must “demonstrate a real interest in the proceeding and a reasonable belief of damage.” Australian Therapeutic Supplies Pty. Ltd. v. Naked TM, LLC, 965 F.3d 1370, 1374 (Fed. Cir. 2020). A party can establish a reasonable belief of damage, “by producing and selling merchandise bearing the registered mark.” Id. at 1375; see also Cunningham v. Laser Golf Corp., 222 F.3d 943, 945 (Fed. Cir. 2000) (“A belief in likely damage can be shown by establishing a direct commercial interest.”). Here, the defendant alleged only that “Ledo’s has been and will continue to be damaged as a result of Plaintiffs’ fraudulent conduct before the USPTO.” Am. Answer & Countercls. ¶ 109, ECF No. 113. Although standing is a “low-threshold, intended only to ensure that the plaintiff has a real interest in the matter,” the petitioner still carries the burden to plead or prove facts “showing a `real interest’ in the proceeding.” DRL Enterprises, Inc. v. N. Atl. Operating Co., Inc., 301 F. Supp. 3d 824, 834 (N.D. Ill. 2018) (internal citation omitted); Int’l Ord. of Job’s Daughters v. Lindeburg & Co., 727 F.2d 1087, 1092 (Fed. Cir. 1984). The defendant’s statement that it “has been and will continue to be damaged” is insufficient to establish a “reasonable belief of damage” such that the defendant has standing to petition for cancellation, particularly where the defendant operates in a distant geographic territory from the plaintiff. Id.