Source: cases/18usc1341/f-supp-2d-912-404-southern-snow-v-snowizard.case
Case source: https://www.neochart.com/catalog/cases/f-supp-2d/volume_912/0404_01/index.html
But, Semiconductor Energy Laboratory Co. precludes a finding that Defendants committed mail and wire fraud on the basis of fraudulent statements to the USPTO.
This position is further buttressed by the general rule that fraud cannot be predicated upon misrepresentations of law.
However, Plaintiffs must still plead a scheme to defraud upon which the predicate acts of mail or wire fraud may be based.
Therefore, since the underlying alleged fraud on the USPTO does not constitute mail or wire fraud, SnoWizard’s representations to customers and competitors regarding its intellectual property rights cannot constitute RICO violations.
Johnson Electric suggests that ordinary infringement claims cannot constitute mail or wire fraud because there is no deceptive element, which is required to establish a scheme to defraud.
Thus, ordinary trademark infringement in conjunction with fraud on the USPTO cannot constitute the scheme to defraud required by the mail and wire fraud statutes.
Therefore, both RICO mail fraud and wire fraud “require evidence of intent to defraud, i.e., evidence of a scheme to defraud by false or fraudulent pretenses.”
The Fifth Circuit requires that the allegations of fraud be plead with particularity, including “the who, what, when, where, and how.”
These allegations are insufficient to plead the requisite “evidence of intent to defraud” with the particularity required to state a claim for RICO mail or wire fraud.
casedsl 1
case /f-supp-2d/912/0404-01
name Southern Snow Manufacturing Co. v. SnoWizard Holdings, Inc.
cite 912 F. Supp. 2d 404 (2012)
court United States District Court for the Eastern District of Louisiana
date 2012-12-14
url catalog/cases/f-supp-2d/volume_912/0404_01/index.html
source ir/caselaw/f_supp_2d_912.jsonl sha1=b42222ba596397f25312b292cbbab390eb1eb260 chars=53067
law 18usc1341
role background
posture civil RICO between competing snowball-supply businesses; Rule 12(b)(6) motion to dismiss the RICO counts for failure to plead predicate acts; mail fraud (with wire fraud, analysed together) is an alleged predicate, not a claim in its own right; motion granted
result claimant-lost
element property : not-satisfied [pleaded]
party United States Patent and Trademark Office (the party deceived)
theory false statements to the USPTO to obtain patents and trademark registrations
variant government-license/patent-or-trademark-registration-obtained-by-false-statements
fact @6184..6406 [supports] | In 2004, Sciortino applied for a patent on the ratchet linkage, allegedly listing only himself as the inventor and failing to disclose the parts’ public use and sale for more than one year before the application was filed.
fact @8504..8732 [supports] | According to Plaintiffs, SnoWizard copied the flavor without authorization, used the flavor with no claim of exclusivity for approximately five years, and then applied for and received federal trademark registration in May 2004.
fact @35115..35287 [supports] | According to Plaintiffs, Defendants made numerous false representations to the USPTO in order to obtain patents and trademark registrations to which they were not entitled.
rule @35909..36266 [quoted] | Even if these allegations are all true, which the Court must assume when deciding a motion to dismiss, controlling authority clearly states that “inequitable conduct before the PTO cannot qualify as an act of mail fraud or wire fraud for purposes of the predicate act requirement,” because such conduct did not “ ‘defraud’ the government of any ‘property.’”
held @38095..38253 | But, Semiconductor Energy Laboratory Co. precludes a finding that Defendants committed mail and wire fraud on the basis of fraudulent statements to the USPTO.
gloss CLAIM ACTUALLY BROUGHT: civil RICO (18 U.S.C. 1962, private action under 1964(c)). Mail fraud is only an alleged predicate act under 1961(1), analysed jointly with wire fraud (1343) ("the same analysis applies to each"); there is no 1341 charge or claim. Case-level role is therefore background: every decided block in this file is a ruling that a RICO predicate was not pleaded, not a 1341 instance.
gloss A patent or trademark registration in the agency's hands is not government property, so lying to the USPTO to get one is not mail fraud (following the Federal Circuit's Semiconductor Energy). Bridge (no first-party reliance needed for RICO causation) does not change the property requirement. Injured competitors are the RICO plaintiffs but not the party deceived.
element scheme : not-satisfied [pleaded]
party customers and competitors (recipients of the representations)
theory asserting the fraudulently obtained patent and trademark rights in the marketplace (advertising, cease-and-desist letters, internet postings)
variant misrepresentation-of-legal-rights/asserting-intellectual-property-rights-against-competitors
fact @4911..5289 [supports] | According to Plaintiffs, SnoWizard filed a patent application for the entirety of the ice-shaving machine in 1942, which was denied; however, the words “patent pending” were displayed on the door of the machines from 1942 to 1984, at which time the molding on the door was altered to read “patented,” and SnoWizard’s promotional literature also claimed the machine was patented.
fact @8117..8238 [supports] | SnoWizard then sent cease and desist letters to manufacturers and distributors on the basis of its registered trademarks.
fact @6637..6837 [supports] | Based on the patents SnoWizard claimed on its ice-shaving machines, Plaintiffs allegedly stopped purchasing, distributing, selling, and using ice-shaving machines that were not of the SnoWizard brand.
rule @37078..37197 | This position is further buttressed by the general rule that fraud cannot be predicated upon misrepresentations of law.
rule @37857..37979 | However, Plaintiffs must still plead a scheme to defraud upon which the predicate acts of mail or wire fraud may be based.
held @36844..37077 | Therefore, since the underlying alleged fraud on the USPTO does not constitute mail or wire fraud, SnoWizard’s representations to customers and competitors regarding its intellectual property rights cannot constitute RICO violations.
gloss The court treats marketplace assertions of IP rights as derivative of the non-actionable fraud on the USPTO, adding that misrepresentations of law cannot ground fraud. It does not separately analyse the allegation that the whole machine was advertised as "patented" when no such patent ever existed, which does not depend on any USPTO filing.
element scheme : not-satisfied [pleaded]
theory infringement of the plaintiffs' trademarks, coupled with fraud on the USPTO
variant deceptive-element/ordinary-trademark-infringement-recast-as-fraud
fact @9199..9470 [supports] | Although the owners of “FLAVOR SNOW” and Southern Snow .claimed a trademark in “SILVER FOX” by affixing a “TM” to the term in promotional materials, SnoWizard began using the “SILVER FOX” trademark in commerce without authorization, claiming it as a “SnoWizard Original.”
fact @38627..38816 [cuts-against absent] | Likewise, the Court notes that Plaintiffs were unable to cite any cases where patent or trademark infringement constituted mail or wire fraud, for purposes of the predicate act requirement.
rule @39149..39336 | Johnson Electric suggests that ordinary infringement claims cannot constitute mail or wire fraud because there is no deceptive element, which is required to establish a scheme to defraud.
held @40022..40184 | Thus, ordinary trademark infringement in conjunction with fraud on the USPTO cannot constitute the scheme to defraud required by the mail and wire fraud statutes.
element intent : not-satisfied [pleaded]
theory displaying a lapsed third-party safety certification (ETL) on machines; Rule 9(b) particularity
variant particularity/lapsed-safety-certification-sticker-still-displayed
fact @13239..13493 [supports] | In 2010, SnoWizard’s ice-shaving machine allegedly fell out of compliance with ETL and its certification lapsed. However, as of August 5, 2011, Plaintiffs maintain that SnoWizard ice-shaving machines still displayed stickers indicating ETL certification.
rule @34755..34914 | Therefore, both RICO mail fraud and wire fraud “require evidence of intent to defraud, i.e., evidence of a scheme to defraud by false or fraudulent pretenses.”
rule @40257..40391 | The Fifth Circuit requires that the allegations of fraud be plead with particularity, including “the who, what, when, where, and how.”
held @40701..40868 | These allegations are insufficient to plead the requisite “evidence of intent to defraud” with the particularity required to state a claim for RICO mail or wire fraud.
gloss Dismissed in one conclusory sentence: lapse in 2010 plus stickers still on machines in 2011 does not plead fraudulent intent with Rule 9(b) particularity. The court does not say what is missing (the defendants had argued no allegation that stickered machines were made after the lapse).
element mails : not-reached
gloss Plaintiffs asserted 41 specific dated mail or wire communications; the court never reaches the mailing element because no scheme to defraud is pleaded.
element furtherance : not-reached
element materiality : not-reached
misfit Predicate use: 1341 figures here only as a RICO predicate act under 18 U.S.C. 1961(1)/1962, in a civil case, at the pleading stage, and jointly with 1343 ("the same analysis applies to each"). The file is therefore `role background` and no block is an instance; the blocks keep their holdings because the court does test pleaded facts against the mail fraud elements. `result claimant-lost` is the dismissal of the RICO claim, and the notation has no cross-law pointer from these blocks to the 18usc1962 racketeering/pattern element they feed.
misfit The court's element list (scheme, use of mails, purpose of executing) folds property, deception and intent into "scheme to defraud"; its rulings were distributed by the annotator over the law file's `property`, `scheme` and `intent` ids. The split is a judgment call: the USPTO ruling is expressly a property ruling (via Semiconductor Energy), the marketplace and infringement rulings are phrased as "no scheme to defraud" (lack of deception / derivative reasoning), and the ETL ruling is phrased as intent.
misfit Known (one basis per block; Rule 9(b)): the ETL block fails for lack of particularity, the others as a matter of law on assumed-true allegations; both are `not-satisfied [pleaded]`.
misfit Victim/deceived-party structure: the party lied to (USPTO), the parties to whom rights were asserted (customers, competitors) and the parties injured (competitor plaintiffs) are three different groups; `party` can hold one free-text value and has no role type. The Bridge third-party-reliance point lives in gloss.
misfit Not recorded: the extortion predicate (Hobbs Act 1951 and La. R.S. 14:66 - cease-and-desist letters and litigation do not "obtain property", Scheidler), a different statute; and roughly a third of the opinion that only recites the parties' arguments (section II), which was read but not quoted as fact or rule.
misfit About 9,000 chars at the end of the IR text are bare footnotes (record cites) with no anchors; quoted authorities in the body cannot be attributed from the body text alone, so `[quoted]` tagging is uncertain (the tagged rule mixes the court's words with two embedded quotations).