Bona Fide Use & Bona Fide Intent to Use in Trademark Law

BONA FIDE USE AND BONA FIDE INTENT TO USE & TRADEMARK LAW

A 'trademark' is a legal term that represents the source of a product or service and includes any name, brand, packaging, logo and sound that causes the consumer to associate the good/service with the source.? Many businesses seek to formerly register their marks through the United States Patent and Trademark Office to enhance the value and geographic reach of their mark(s) in one or more of the fifty states and US territories and thereby obtain a valuable business asset(s).? Trademark protection may also be sought in foreign jurisdictions.

The filing of a trademark registration application may seem relatively straightforward.? However, things can fall apart either during trademark application prosecution through an opposition proceeding or after a registration has been obtained through a cancellation proceeding.?? This is so even where the USPTO’s Examining Attorney concluded the applied-for mark met the threshold requirements for registration: 1) there is no likelihood of confusion with existing marks; and 2) the mark is not merely descriptive or generic.? Either proceeding is commenced before the Trademark Trial & Appeal Board (“TTAB” or “Board”) by a third party.?

This blog explains how failure to comply with the USPTO’s “bona fide” requirements for providing accurate information on interstate-commerce activities involving the application’s identified goods and/or services could trigger a costly opposition or cancellation proceeding.?

Take Home Points

?Applicants and Registrants should develop and retain objective documentary evidence showing the dates of first use anywhere and in commerce as well as continuing-commerce activities for every identified good/service in the original application and any resulting registration.? Such information may prove useful in prevailing in an opposition or cancellation proceeding.? The information may also be useful for establishing the legal viability of a registered mark in the event the registrant plans to sell its registered trademarks as part of an asset sale. ?

As a trademark attorney who files applications on behalf of applicants and represents clients in opposition/cancellation proceedings, I require objective data when providing such information to the USPTO.? The goal is not only to obtain a registered trademark but to also have the mark hold up in any proceeding brought before the Board by a third party and to minimize the possibility of such a costly proceeding in the first place.?

The following detailed discussion is provided for those who wish to know more about the USPTO’s “bona fide” requirements. ?Conclusions are provided in Part E.

??????? ?

A.?????????? Comparison of 1A and 1B Trademark Applications

1A applications apply to those marks which are already being used in interstate commerce for the application’s identified goods and or services at least as early as the application’s filing date.? The applications must specify both the dates of first use anywhere and the date of first use in interstate commerce.? By filing a 1A application, the applicant is representing that all of the application’s identified goods/services are in bona fide use in interstate commerce as of the application’s filing date.?? Specimens must be provided showing use of the mark in commerce.

What if the 1A applicant is not actually using the mark on or with all of the application’s identified goods/services at the time of filing??? The applicant may cure the deficiency by timely amending the application’s basis to a 1B application. ??

1B applications, known as intent-to-use applications, serve as a means to “reserve” the mark and have it undergo preliminary evaluation while the applicant is developing the goods and/or services which are to be offered under the mark in interstate commerce.? The 1B applicant must have a bona fide intent to use the applied-for mark for all of the goods and/or services identified in the application.? If the 1B mark receives a Notice of Allowance, the applicant’s next step is to file a Statement of Use (SOU) alleging that the mark is being used in commerce for all of the application’s identified goods/services. ?The SOU must include specimens and specify the dates for first use anywhere/first use in commerce.? The use in commerce must be bona fide. ?

With both types of applications, the mark will be published for opposition in the Official Gazette upon approval of the mark by the USPTO examining attorney.?? A third party may file an opposition proceeding with the Board to try and prevent registration of the mark. ?The two opposition grounds pertinent to this blog are:

1.???? There was no bona fide use of the defendant’s mark in commerce prior to the filing date of the 1A application or, for the 1B?application, within the expiration of the time for filing an SOU (TBMP 309.03(c)(4)).? The TBMP provides the procedures for practicing before the Trademark Trial and Appeal Board which are very similar to Federal Rules of Civil Procedure.

2.???? That defendant did not have a bona fide intent to use the mark in connection with the identified goods/services as of the filing date of the 1B application (TBMP 309.03(c)(3)(5)).

Even if an application “flies” through the registration process, a registered mark may be subject to a cancellation proceeding.? A cancellation proceeding may be commenced within 5 years of the mark’s registration date on any ground that an opposer could have claimed in opposing registration of the mark including the above two stated opposition grounds.? After the 5-year period, the cancellation grounds are more limited.? Two additional procedures are also now available for contesting registered marks: 1) Expungement Proceedings within the 3rd and 10th year of registration for marks which are allegedly never used; and 2) Reexamination Proceedings within 5 years of registration wherein the registered mark was allegedly not used on or before a particularly relevant date. ??? ??????????????????????????????????????????????? ??????????????????????????????????????????????????????????????????????? ???????????????????????????????????????????????????????????

B.???????The Importance of Engaging in Bona Fide Use to Avoid an Opposition Proceeding Involving an Application or a Cancellation Proceeding Involving a Registered Mark

For both 1A and 1B applications, the alleged use in commerce must be bona fide meaning real, genuine, legitimate and on-going commerce.? The standard applies to each and every good/service identified in the application.? “In commerce” means that the mark is being used with goods that can purchased and transported across state lines.? For service marks, the services must have actually been rendered in the US and/or its territories.? Objective documentary evidence showing bona fide use of the mark with respect to all of the listed goods/services should be retained.? Such evidence includes documents such as sales contracts, invoices, advertising expenditures, etc.?

An opposition/cancellation proceeding based on a third party’s claim of lack of bona fide use may include a claim for fraud.? If fraud is proven, an application will be declared void ab initio as to the “offending” classes of goods/services or the registration will be cancelled as to the offending classes.? This is so even if the fraud is found to pertain to only one of the goods or services listed its associated classification for goods/services. ??Since the Federal Circuit Court of Appeal’s 2009 decision in In re Bose Corp. , however, fraud associated with bona fide usage/bona fide intent to use has become exceedingly difficult to prove with the clear and convincing evidence standard.? Despite this decision, which has been roundly criticized, the author reiterates that anyone engaged in providing information to the USPTO has an obligation to provide accurate information to the USPTO.

If fraud is not proven or in the absence of a fraud claim, a 1A applicant who bases the application on use in commerce as of the filing date but who was not using the mark on some or all of the goods or services identified in the application as of the application’s filing date may “cure” this problem by amending its original 1A filing basis to a 1B filing basis.? Grand Canyon West Ranch, LLC v. Hualapai Tribe, 78 USPQ 2d 1696 (TTAB 2006) (precedential).? Upon this amendment, the opposer obtained leave to add a fraud claim wherein the Board sustained the opposition on that ground.? This decision was before the In re Bose decision raised the bar proving fraud.?

C.?????Bona Fide Intent in 1B Applications

The bar for establishing bona fide intent is not high but does require something more than “mere subjective belief.”? Trademark Act Section 1(b)(1), 15 U.S.C. § 1051(b)(1).? M.Z. Berger, 114 USPQ2d at 1897–98, Swiss Grill, 115 USPQ2d at 2008.? Generally, the examining attorney will not question an applicant’s bona fide intent declaration.? That is, the applicant’s declaration within the 1B application is sufficient to support the filing of an intent-to-use application. ?

Generally, the examining attorney will not question an applicant’s bona fide intent declaration.? That is, the applicant’s declaration within the 1B application is sufficient to support the filing of an intent-to-use application. ?

However, the issue may be raised in an opposition/cancellation proceeding brought by a third party. ?Whether an applicant has a bona fide intention to use the mark in commerce is an objective determination based on the totality of the circumstances. See M.Z. Berger & Co. v. Swatch AG, 787 F.3d 1368, 114 USPQ2d 1892, 1898 (Fed. Cir. 2015); Swiss Grill Ltd. v. Wolf Steel Ltd., 115 USPQ2d 2001, 2008 (TTAB 2015). 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 at the time the 1B application was filed that is “firm” and “demonstrable.”

What about allegations of an applicant’s fraud in an opposition/cancellation proceeding to prevent registration of a mark? ?As stated above, the “Bose” standard for proving fraud is a tough hurdle to meet.? A finding of fraud on bona fide intent to use with respect to the goods/services cited for a particular class of goods/services in an application/registration is still a serious matter post-Bose because it renders any application/resulting registration void as to that entire class.? This is so even if the fraud is found to pertain to only one specified good or service in a particular class where the description for the class comprised numerous associated goods or services.? See Saul Zaentz Company dba Tolkien Enterprises v. Joseph M. Bumb, Opposition No. 91170589.

On the other hand, where fraud is not found or there was no fraud claim by the plaintiff in an opposition/cancellation proceeding, any finding of bona fide intent by the Board will apply to only those goods/services for which no bona fide intent to use is found.? That is, the TTAB will require the goods/services for which there was no bona fide intent to be deleted from the application/registration.

To be able to address any future proceeding involving an allegation of lack of bona fide intent to use, all applicants should have objective proof of such intent at the time the application is filed. A business plan, NDA, website developer contract, registered domain name, patent application or patent grant, copyright registration/product prototype, etc. existing as of the application’s filing date will provide actual evidence of the applicant’s bona fide intent should a third party ever challenge a registration.? 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). ?The applicant may counter with facts that adequately explain or outweigh its failure to provide documentation.? Documentary evidence, however, is still the best proof.

D.??? When a 1B Application Becomes Subject to the Bona Fide Use Standard

Upon the filing of the Statement of Use (SOU) , the applicant is representing that all of the listed goods and services are in bona fide use. ?The SOU provides the applicant with the opportunity to delete any goods/services that are not in bona fide use at least as early as the SOU’s filing date. ?The applicant should do so to avoid a future allegation of lack of bona fide use in commerce. ??Any deleted goods/services will be forever deleted from the application.? Any resultant registration will only list the remaining goods/services.

Alternatively, the 1B applicant may file a request to divide the application into two applications (the parent and child applications).? The request to divide may involve a dividing of goods/services within a classification such that certain of the goods/services from the classification are now transferred to the new application.? Where the application has at least two classes of goods/services specified, another option is to “transfer” an entire class of the specified goods/services to a new application.? Eventually, an SOU will also need to be filed for these “transferred” goods/services.

The request to divide is a mechanism for allowing the applicant additional time to get the originally listed goods/services in commerce while retaining the filing date of the original application. ?Otherwise, the applicant would have to file a new application to obtain a registered trademark on any of the deleted goods/services. ?

E.????Conclusions???????????????????????????????????????????????????????????????????????????????????????????????? ?????????????????????????????????

1.??????? When filing an intent-to-use (1B) application, applicants should have a demonstrable bona fide intent to use the mark in commerce – i.e., to use it in a commercial setting. ?

2.???????? Applicants need to make sure they understand what bona fide use in commerce means under trademark law.? The use must be verifiable, real, genuine, legitimate and on-going at the time a 1A application is filed or at least as early as a 1B application’s Statement of Use.? For registered marks, whether emanating from a 1A or 1B application, the registered mark must be in bona use for the identified goods and services to retain the registered mark’s “active” state.?

3.???????? ?Registrants should retain documentary evidence showing the continuing use of the mark in commerce for the registered mark’s identified goods/services.? If the registrant ceases to provide one or more of the goods/services in commerce, the registrant’s trademark renewal documents should reflect as such.? Registered marks are expected to be in bona fide use for the original identified goods/services and the goods/services identified in registered mark maintenance documents.

4.???????? Sometimes a registrant may stop providing the goods/services for a period of time.? An example might be where the registrant suffers a business interruption as the result of a fire or storm.? The registrant should retain documentation showing when business operations ceased and then resumed.? The USPTO allows the registrant to stop using the mark on excusable neglect grounds for up to three years.? Such documentation may be crucial for defending against a cancellation proceeding brought for non-use of the mark.?

5.??????? Although fraud on the USPTO is very difficult for the plaintiff in an opposition or cancellation proceeding to prove under In re Bose, applicants and registrants should not assume that that the plaintiff will never prevail.? If fraud is established, the applicant/registrant’s entire application and registration will be at risk. ??

?In Need of Legal Counsel on Trademark Matters? Trademark law is a complex area of the law.? Contact Susan at 305-279-4740 for all matters related to trademark law from registration to proceedings before the Trademark Trial & Appeal Board and courts of law.

THANK YOU FOR YOUR INTEREST IN THIS BLOG.? AS USUAL, THE CONTENT IS FOR????????? INFORMATIONAL PURPOSES ONLY AND IS NOT LEGAL ADVICE.

? 2024 by Troy & Schwartz, LLC

?

?

?

?

?

?

?

?