United States: Hot Topics in Trademark Law 2015 Series: The Federal Circuit Clarifies Intent To Use – Part 1

You Have To Really Mean It, And Be Prepared To Prove it, When You Declare An Intent To Use A Mark

Note: This blog post is part of a series that reviews and discusses a number of significant trademark-related decisions handed down in 2015, including two from the U.S. Supreme Court and several from the U.S. Court of Appeals for the Federal Circuit and other Circuit Courts. Going forward, these rulings will impact how parties protect their trademark assets, including in particular the strategies that parties will need to employ to maximize their likelihood of success in litigation. To follow the entire blog series, click here.

Prior to the Trademark Law Revision Act of 1988 ("TLRA"), the owner of a mark had to be using his mark when he applied for registration. See Aycock Eng'g, Inc. v. Airflite, Inc., 560 F.3d 1350, 1357 (Fed. Cir. 2009). The TLRA changed this requirement and allowed mark owners to apply for registration before they actually used the mark in commerce, so long as the owner had a "bona fide intention ... to use [the] mark in commerce" in the future. 15 U.S.C. § 1051(b)(1); Lanham Act Section 1(b). While an applicant can file for registration of his mark based on an intention to use the mark in the future, he must in due course either (1) file a verified statement of actual use of the mark in commerce, or (2) convert his application to a use-based application. 15 U.S.C. § 1051(b)(3), (c), (d). Simply put, applicants must show that the mark is being used in commerce in order for the mark to be registered.

Until recently, it was an open question whether a party could oppose registration of a mark on the basis that there was no bona fide intent to use the mark. The Federal Circuit has now confirmed that this is, indeed, an appropriate basis to challenge registration because "[a]n opposer is 'entitled to rely on any statutory ground which negates [an applicant's] right to the subject registration.'" See M.Z. Berger& Co., Inc. v. Swatch AG, 787 F.3d 1368, 1375 (Fed. Cir. 2015) (quoting Lipton Indus., Inc. v. Ralston Purina Co., 670 F.2d 1024, 1031 (CCPA 1982) (citing Warth v. Seldin, 422 U.S. 490, 501 (1975))); see also Aktieselskabet AF 21.Nov. v. Fame Jeans Inc., 525 F.3d 8, 21 (D.C. Cir. 2008) (holding the same).

Having decided that lack of a bona fide intent is an appropriate basis for an opposition, the court turned to the question of what "bona fide intention" means under Section 1(b) of the Lanham Act. Recognizing that there is no statutory definition of "bona fide intention," the Federal Circuit held that "the applicant's intent must be demonstrable and more than a mere subjective belief." Id. (citing 3McCarthy on Trademarks § 19.14, at 19.48 ("Congress did not intend the issue to be resolved simply by an officer of the applicant later testifying, 'Yes, indeed, at the time we filed the application, I did truly intend to use the mark at some time in the future.'")). "[W]hether an applicant had a 'boda fide intent' to use the mark in commerce at the time of the application requires objective evidence of intent." Id. at 1376. "Although the evidentiary bar is not high, the circumstances must indicate that the applicant's intent to use the mark was firm and not merely intent to reserve a right in the mark." Id. This determination is to be made on a case-by-case basis considering the totality of the circumstances. Id.

It will be interesting to watch as the cases develop on this issue, particularly because it is such a fact-intensive inquiry. However, the Berger case itself provides a good beginning point. In Berger, the applicant filed an intent-to-use application for the mark "iWatch" for more than 30 goods, each of which belonged to one of three general categories, namely watches, clocks and goods related to clocks and/or watches (e.g., watch bands, clock dials). Id. at 1370. Swatch opposed registration on the basis that the mark would be confusingly similar to its own "Swatch" mark and later added a claim that the applicant lacked a bona fide intent to use the mark at the time that it filed the application. Id. During discovery, the applicant's CEO testified that the applicant never intended for the mark to be used for any goods other than watches, and the paralegal who filed the application testified that the broad list of goods was "standard" and used to "leave all doors open." Id. at 1371. Moreover, the evidence relating to the "watch" category of goods was inconsistent and incomplete regarding the applicant's intent to commercialize the "iWatch" mark on any watch-related goods. Id. Of particular importance, the applicant's documentary evidence consisted solely of documents relating to the prosecution of the application, rather than anything that would show a bona fide intent to commercialize a product in connection with the "iWatch" mark, e.g., a marketing plan created before the application was filed. Id. The TTAB sustained Swatch's opposition and refused registration of the "iWatch" mark. Id. at 1376-78.

Based on Berger, practitioners must recognize that one day they may have to produce objective evidence showing that a bona fide intent to use the mark in connection with all goods and services identified in the application existed at the time that an intent-to-use application was filed. Thus, practitioners cannot use an intent-to-use application simply to reserve a spot for a mark (or goods or services). After Berger, we anticipate that this issue will arise more frequently in opposition and cancellation proceedings, and may even give rise to inequitable conduct issues. Thus, practitioners should be prepared to address this issue and to produce the necessary evidence, including documents and testimonial evidence, to confirm that the requisite intent to use existed when the application was filed. To ensure that the evidence will be available if needed, applicants and practitioners should consider maintaining the relevant documents and information in the application file, even if they are not submitted to the PTO during prosecution. Failing to present sufficient evidence, or worse – presenting conflicting evidence as the applicant in Berger did – will result in a registration being denied or cancelled.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.