United States Trademark Registration Process: Five Potentially “Fatal” Mistakes Commonly Made by Foreign Applicants

United States Trademark Registration Process: Five Potentially “Fatal” Mistakes Commonly Made by Foreign Applicants

Seeking United States trademark registration protection is full of traps for the unwary. Not only for pro se applicants (those that represent themselves without the assistance of trademark counsel) but also for attorneys that step outside of their every-day specialties. This post focuses on five trademark traps that many foreign trademark applicants fall victim to when seeking trademark registration protection in the United States.

1. United States is not a first to file country. Because many foreign trademark applicants are domiciled in countries that grant exclusive trademark rights to those that file first, they fail to understand that trademark rights in the United States are created based upon trademark use and not federal trademark registration. Thus, just because there are no pending trademark applications or registrations on the United States Patent and Trademark Office (“USPTO”) database for the same or similar mark does not mean that a foreign trademark owner need only file a trademark application (and secure registration) to secure senior trademark rights in the United States.

Example: Company A begins use of the mark APEX in 2008 in San Francisco for insurance services and slowly begins to expand its services in neighboring states. Company A does not seek federal trademark registration. In 2011, a foreign trademark applicant (also applies to US applicant) files a federal trademark application for the mark APEXX for insurance and financial services. Although the foreign trademark owner is the first to file a trademark application with the USPTO for the mark APEXX (or formatives thereof), Company A may still object to the filed application for APEXX via an opposition proceeding or seek cancellation of a resulting registration, within a certain period of time, on the basis of priority of rights. It is well established that the first company to use a mark in the U.S. (on a systematic and continuous basis) has priority not only with respect to use of the subject mark for the associated goods/services and related goods/services (at least in the geographic region within which the mark is used) but also with respect to federal trademark registration.

For that reason, it is imperative that foreign applicants undertake a comprehensive trademark search not only for marks on the USPTO database but also for common law trademarks (those in use but not federally registered) as well as business names to ensure that the proposed mark is available. Failure to undertake such review is risky and may result in thousands, if not hundreds of thousands, of dollars in litigation costs and re-branding efforts.

2. Lack of Bona Fides. Under U.S. trademark law, a brand owner may file a U.S. trademark application after or before its mark has been put to use in U.S. commerce. As long as a brand owner has a bona fide intent to use a mark in U.S. commerce, as of the trademark application filing date, it may file an intent-to-use trademark application under Section 1(b), an application based upon a foreign registration under Section 44(e) and/or an application, via the Madrid Protocol, based upon a foreign application or registration under Section 66(a), of the Trademark Act.

Many foreign applicants secure U.S. trademark registration under Sections 44(e) (based upon a foreign registration) and 66(a) (based upon a foreign registration via the Madrid Protocol), which require that the applicant have a bona fide intend to use the applied-for mark in U.S. commerce. Although securing registration under Sections 44 and 66 do not require a foreign applicant to use its mark in the U.S. as of the application and registration dates, the applicant must still have a bona fide intent to use its mark in U.S. commerce. Lack of a bona fide intent to use a mark in U.S. commerce for the goods/services listed in an application, renders an application and resulting registration vulnerable to attack by third parties. This is problematic for many foreign applicants because many rely upon their home country registration, which may list goods and/or services of which they have no intent to sell under the applied-for mark in the U.S. or in their own country.

Should a foreign brand owner’s “lack of bona fides” be challenged by a third party, its trademark applications or registrations would be vulnerable to cancellation if it’s unable to demonstrate that it had a bona fide intent to use the applied-for mark for the listed goods/services as of the filing date of the application.

For that reason, foreign applicants should list only those goods/services in their U.S. trademark applications that they intend to sell under the applied-for mark in U.S. commerce. To read more about this issue, check out my blog post here.

Furthermore, a foreign applicant may also subject itself to a claim of fraud on the USPTO, as discussed in more detail below in trap #4.

3. Use of Mark in U.S. is Required to Maintain Registrations. As mentioned above, foreign applicants may secure U.S. trademark registration without having used an applied-for mark in U.S. commerce. At a certain point, however, the foreign registrant must show use of a registered mark in the U.S. in order to maintain its registration. During the fifth and sixth year of registration, and at the tenth year anniversary and every ten years thereafter, a trademark registrant must provide evidence of use of the registered mark in the United States. Failure to show valid use of the registered mark in the U.S. during those periods will result in the cancellation of its registration by the USPTO.

Furthermore, a mark not used within the first three years of registration is vulnerable to cancellation on the basis of non-use/abandonment.

4. Failure to Delete Unused Goods or Services in Use Affidavits. Although the issue of fraud on the USPTO may be “all but dead,” registrants should still be cognizant that failure to delete goods and/or services listed in applications or registrations that are not in use as of the filing of use affidavits can result, if challenged by third parties, in the cancellation of the application or registration on the basis of fraud.

Fraud on the USPTO may be found if an applicant or registrant knowingly makes a false representation with respect to use of a mark for the goods and/or services listed in an application or registration with a willful intent to deceive the USPTO. For that reason, foriegn registrants should delete those goods and/or services listed in their applications or registrations that are not in use as of the filing date of use affidavits. Otherwise, they may subject their U.S. trademark applications and registrations to oppostion or cancellation proceedings on the basis of fraud.

5. Specimens of Use Needed to Maintain Registrations. During those periods in which applicants and registrants must evidence use of their respective marks in the U.S. in order to acquire or maintain their registrations, registrants must provide acceptable specimens of use or — in other words — advertising for those services and packaging or labels for those goods listed in an application or registration that bear the trademark. Failure to provide the USPTO with acceptable specimens of use would result in the cancellation of the application or registration.

Specimens of use for services must show a direct connection between the services listed in the registration and subject mark. Also, the services must be rendered within the United States or between a foreign country and United States. Furthermore, if the trademark depicted on a specimen does not match the mark as registered, the USPTO may refuse to accept the use affidavits; thus cancel the registration on the basis the mark, as registered, is not in use.

Specimens for goods must show the registered mark being used on or in connection with the goods listed in the registration. Such use includes tags, labels, packaging, the mark depicted on the goods themselves and point of sale displays. The USPTO would not accept, for example, invoices, bills of lading, advertising or specification sheets.

Accordingly, failure to use a registered mark in the United States in a manner acceptable to the USPTO may result in the cancellation of the registered mark.

Conclusion

Before foreign applicants begin the U.S. trademark registration process, may it be via a national filing or the Madrid Protocol, they should first consult, or request that their local agent consult, with U.S. trademark counsel for a listing of filing and registration requirements and to ensure that the proposed mark is available for use and registration in the U.S.

U.S. Trademark Applications: Forget About Fraud. What About Lack of Bona Fides… the Silent Killer?

Lack of Bona Fides – A Silent Killer for Trademarks and Trademark Applications

Introduction

An aspect of United States trademark law, as it applies to seeking federal trademark registration, that many brand owners have not come to appreciate is the notion of a “bona fide intent” to use a trademark in U.S. commerce.

Under U.S. trademark law, brand owners may file a U.S. trademark application after or before a mark is put to use in U.S. commerce. As long as  brand owners have a bona fide intent to use a mark in U.S. commerce for the goods and services listed in the trademark application as of its application filing date, they may file an intent-to-use trademark application under Trademark Act Section 1(b). 

Foreign trademark owners may also seek U.S. trademark registration based upon a bona fide intent to use their marks in the U.S. under Section 44(e) (based upon a home country trademark registration) and Section 66(a) (an application filed via the Madrid Protocol, which is also based upon a home country trademark registration).  

Lack of Bona Fides Trademark
U.S. Patent and Trademark Office

U.S. Trademark Act Section 1(b) (15 U.S.C. §1051(b)), states that:

“a person who has a bona fide intention, under circumstances showing the good faith of such person, to use a trademark in commerce may apply for registration of a mark.”

Likewise, Trademark Act Sections 44 and 66, which apply specifically to foreign applicants, also require that foreign applicants have a bona fide intention to use their marks in U.S. commerce by the date on which they file their U.S. trademark applications.

What Does Having a “Bona Fide Intent” Mean?

Whether an applicant has a bona fide intention to use a mark in commerce is an objective determination based upon the totality of the circumstances. The evidentiary bar for showing bona fide intent to use is not high, but more is required than “a mere subjective belief.” The objective evidence must indicate an intention to use the mark that is “firm” and “demonstrable.” The absence of any documentary evidence regarding an applicant’s bona fide intention to use a mark in commerce establishes a prima facie case that an applicant lacks such intention as required by Section 1(b).

Such evidence may include business plans, marketing plans, marketing and advertising materials, packaging designs, product inventory depicting the mark, contracts or evidence of discussions with potential customers and/or manufacturers and any other documents that establish steps towards the genuine use of the mark for the goods and/or services listed in an application as of the application filing date.

There are several reasons why domestic and foreign brand owners file “intent to use” trademark applications instead of waiting until their marks have been put to “use” as defined by the Lanham Act.

One reason is to “reserve” their “marks” with the United States Patent and Trademark Office prior to actual trademark use while they, for example, create branding strategies, finalize contracts with manufacturers, complete product research and product development and negotiate with licensees and distributors.

Also, filing an intent-to-use trademark application well before a mark’s launch can provide time for filing a back up application for another mark in the event the Office rejects a mark’s registration based upon substantive grounds (i.e., likelihood of confusion with a third party mark and/or non-distinctiveness).

In any event, U.S. (and possibly foreign) trademark owners relying on the intent to use filing basis of Section 1(b) still must put their marks to use before a registration certificate can issue. (See meaning of “use” below)

Foreign applicants relying upon Sections 44(e) or 66(a) to secure U.S. trademark registration may do so without using their marks in United States commerce prior to registration issuance.  However, they must still have a bona fide intent to use an applied-for mark in the U.S. at the time of filing. Furthermore, they must put their registered marks to use by the 6th year anniversary of registration or the registration would be cancelled on the ground of non-use. Also, if they fail to use their registered marks in U.S. commerce within the first three years of registration issuance, the registrations may become vulnerable to cancellation for non-use.

Lack of Bona Fides

What if Brand Owners Do Not Have the “Bona Fide Intent to Use” Pre-Requisite?

Failing to have the prerequisite bona fide intent to use the applied-for mark in U.S. commerce by the date on which an application is filed may result in a third party challenge to the validity of a pending trademark application, an issued trademark registration and even the legal right to use the applied-for mark in the United States.

Third party attacks on the validity of a trademark application or registration – and ultimately potentially on the validity of the mark itself – on the basis of a lack of bona fides may arise in the context of trademark registration opposition and registration cancellation proceedings before the United States Trademark Trial and Appeal Board – the administrative Board for the Trademark Office. Trademark registration opposition and registration cancellation proceedings are similar to federal litigation, not only in terms of procedure but also in terms of expense, which can easily move well into six figures.

Of great importance, and what can be of great concern for brand owners, is the fact that a trademark registration cancellation proceeding may be lodged against a trademark registration on the basis of priority of rights – and a claim for lack of bona fides. Furthermore, that challenge may occur during the first five to six years of registration. Meaning that a third party could potentially successfully cancel a brand owner’s trademark registration during that period, along with the proprietary trademark rights, and possibly compel the discontinuance of the registered mark, which may result in an expensive re-branding initiative.

In short, what does “use” of a mark in the U.S. for trademark registration purposes mean: 

1. For Goods: the mark is depicted on the goods (i.e., depicted on the goods themselves, on packaging for the goods, labels affixed to the goods etc. or properly associated with the goods, including in a “point of sale display“) and the goods depicting the mark are transported in U.S. interstate commerce continuously and systematically in the ordinary course of trade; and

2. For Services: The services are advertised and rendered in association with the trademark and they are rendered continuously and systematically in the ordinary course of trade.

Advertising the goods and services alone, including on a website, without achieving the above steps does not typically constitute “use” of a mark for U.S. trademark registration purposes.

Conclusion

Brand owners that base their U.S. trademark applications on a bona fide intent filing basis must take notice of this issue and take steps required under U.S. trademark law to establish their bona fides – or potentially fall victim to third party challenges that may result in the loss of trademark rights and need to spend tens or even hundreds of thousand of dollars to re-brand their products.

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