Fraud on the Court: Finality and the Ghost of Hazel-Atlas
Patent – Patently-O 2025-01-26
Summary:
by Dennis Crouch
The Supreme Court will soon consider whether to hear an important case about fraud on the court (and the USPTO) and the judiciary's obligation to address it. Marco Destin, Inc. v. Levy, Case No. 24-787. The issue now before the Court asks whether it was proper for the lower court to overlook fraud that affects the judicial process itself in favor of finality of judgment. [Marco Destin Petition]
Fraud cases are typically interesting reads, and this one fits the bill. In 1993, L&L Wings entered into a trademark license agreement with Shepard Morrow for the use of the "WINGS" mark in retail store services -- particularly for use on beach merchandise. L&L Wings made only the initial $10,000 royalty payment under the agreement, then defaulted on the remaining payments. Despite losing its rights to the mark, L&L Wings continued using the mark and even began sublicensing it to others, including Marco Destin (Alvin's Island) in 1998.
In 2007 L&L Wings (owned by respondents Shaul Levy and Meir Levy) sued Marco Destin for trademark infringement in the Southern District of New York. According to the cert petition, L&L's attorney Bennett Krasner knew at the time that L&L Wings had no rights to the mark, having personally negotiated the earlier failed licensing deal with Morrow.