Unisource Discovery, Inc. v. Unisource Discovery, LLC, 1:20-cv-23276

Unisource Discovery, Inc. (Plaintiff) sued Unisource Discovery LLC and Steven Cerasale (Defendants) under the Lanham Act for trademark infringement concerning the "Unisource" mark.
Defendants amended to add a counterclaim (Count I) seeking cancellation of Plaintiff’s federal trademark registration for alleged fraud on the USPTO (material misrepresentations re: ownership, first use date, and whether others had rights to use the mark).
The magistrate had previously allowed the amendment over Plaintiff’s statute-of-limitations objection, relying on the fraud cancellation provision in 15 U.S.C. § 1064.
Plaintiff moved for summary judgment arguing Defendants failed to plead fraud with Rule 9(b) particularity and produced no evidence; Defendants moved for summary judgment seeking cancellation, asserting clear-and-convincing proof of fraudulent statements in the application.
The magistrate found Defendants’ counterclaim pleads fraud with sufficient particularity but held Defendants failed to carry the heavy clear-and-convincing burden of proving subjective intent to deceive as a matter of law; misstatement of first-use date was not fatal because evidence showed actual use before filing.
Recommendation: deny both Plaintiff’s and Defendants’ motions for summary judgment; factual issues (especially intent) remain for resolution by the factfinder.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Rule 9(b) pleading sufficiency for fraud-on-USPTO counterclaim	Counterclaim is too vague; does not identify precise misleading statements	Counterclaim identifies the application statements (owner, first-use date, exclusivity) and filing details	Counterclaim satisfies Rule 9(b); Plaintiff’s MSJ denied
Whether fraud (intent to deceive) is proven as a matter of law to cancel the registration	No clear-and-convincing evidence of subjective intent; summary judgment for Plaintiff warranted	Documents and agreements show Plaintiff knew others had rights and misrepresented ownership/use	Insufficient clear-and-convincing evidence for summary judgment; intent is a jury issue; Defendants’ MSJ denied
Effect of incorrect first-use date in application	Misstated first-use date, but registration valid if actual use occurred before filing	Same (misstatement alleged) but contend it supports fraud/cancellation	Misstated first-use date alone is not fatal when use before filing is shown; cannot invalidate registration as matter of law
Timeliness of fraud-based cancellation counterclaim	Motion to amend was futile as barred by statute of limitations	Fraud exception permits claim to be brought at any time under § 1064	Magistrate previously allowed amendment; statute-of-limitations defense rejected earlier in the case

Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (summary judgment genuine-issue standard)
Ziemba v. Cascade Int’l, Inc., 256 F.3d 1194 (11th Cir. 2001) (Rule 9(b) particularity framework)
In re Bose Corp., 580 F.3d 1240 (Fed. Cir. 2009) (fraud on PTO requires subjective intent to deceive)
Angel Flight of Ga., Inc. v. Angel Flight Am., Inc., 522 F.3d 1200 (11th Cir. 2008) (first-use date misstatement not fatal if mark was used before application)
Sovereign Military Hospitaller v. Fla. Priory, 702 F.3d 1279 (11th Cir. 2012) (heavy burden and resolution of doubts against charging party in fraud claims)
Coach House Rest., Inc. v. Coach & Six Restaurants, Inc., 934 F.2d 1551 (11th Cir. 1991) (standing and grounds required to cancel a trademark)
Kammona v. Onteco Corp., [citation="587 F. App'x 575"] (11th Cir. 2014) (illustrative application of Rule 9(b) elements)