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).
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.
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.