December 2014
CIPA Journal
Authored by B. Brett Heavner and Morgan E. Smith
Traditionally, in the United States, trademark rights are established through use of a mark, rather than through registration with the United States Patent and Trademark Office ("USPTO"). Indeed, as a prerequisite for trademark registration, U.S. law requires that U.S. citizens and U.S.-based companies submit evidence that the applied-for mark is being used in U.S. commerce.1 The public policy behind U.S. trademark law's "use in commerce" requirement is that trademark rights, and the USPTO trademark registry, should reflect the actual marketplace. In other words, a business should only be accorded trademark rights for the products and services consumers would actually use to identify those products and services.
Non-U.S. trademark owners, on the other hand, may avoid the "use" prerequisite for a U.S. registration by employing the Paris Convention2 or the Madrid Protocol3 to register their trademarks with the USPTO. Thus, foreign trademark applicants may circumvent the keystone "use" requirement of American trademark law and still obtain a U.S. registration. Obviously, the treaty obligations embodied in the Paris Convention and the Madrid Protocol thwart the policy goal of tying trademark rights to actual market conditions. However, U.S. law developed a remedy that would eventually fit U.S. registrations obtained under the Paris Convention and Madrid Protocol into the U.S.'s "use-based" trademark system. Specifically, by the sixth anniversary of any registration date, and again at the filing of each renewal, all registrants (whether U.S. or foreign) must submit to the USPTO a sworn declaration that the trademark is being used in U.S. commerce, and must also submit specimens evidencing use of the mark for each class covered by the registration.4 Failure to file the declaration of use and specimens will result in cancellation of the registration.5 Thus, while foreign trademark owners have a significant advantage over U.S. trademark owners during the application process and for the first few years after registration, they too will ultimately be required to establish use of their marks in the U.S. to maintain their trademark registrations.
Because many foreign trademark owners are accustomed to receiving broad registrations at home without proving use, they have difficulty understanding and complying with the post-registration use requirements imposed under U.S. trademark law. Often, failing to understand the importance of the sworn declaration of use, foreign trademark owners will submit false or inaccurate declarations stating that their trademark is being used in U.S. commerce for all of the goods and services listed in the registration, when in truth the trademark is not used in the U.S. at all, or is only used for a small subset of the listed goods and services. In some cases, foreign trademark owners submit specimens of use that have never circulated in U.S. commerce or are out of date and no longer being circulated in the U.S. When that occurs, the registrant is able to maintain a U.S. trademark registrations to which they are not legally entitled covering goods and services that they are not offering in the U.S. These improper or overly broad trademark registrations are frequently referred to by the USPTO as "deadwood" that should be pruned from the U.S. trademark registry.
Such "deadwood" registrations pose a serious issue for the USPTO. Not only do they continue to frustrate the U.S. policy of having the U.S. trademark registry parallel actual marketplace conditions, but they effectively clog the entire trademark system. These broad foreign registrations are often cited as a basis to refuse other applications on likelihood of confusion grounds. This places a significant burden on the junior applicant, who will have to determine whether the registered mark is actually being used for all of the listed goods and services and, if not, commence a lengthy cancellation action to narrow the registration to the actual goods and services the owner is offering in the U.S. For example, in SaddleSprings Inc. v. Mad Croc Brands Inc., 104 USPQ2d 1948, (TTAB 2012), SaddleSprings' CROCTAIL for wines and spirits was refused by the USPTO on the due to an overlap with Mad Croc's CROC-TAIL Madrid Protocol registration for alcoholic beverages. SaddleSprings therefore had the burden to cancel Mad Croc's registration on the ground that it covered goods that Mad Croc did not actually offer under the mark in the U.S. In denying Mad Croc's motion to dismiss, the USPTO Trademark Trial and Appeal Board ("TTAB") noted, "Trademark rights are acquired and maintained in this country through use in commerce . . . In the absence of justifiable non-use, Section 66(a) registrations which have never been used, or for which use has been discontinued with no intent to resume use, may be subject to cancellation for abandonment even if the international registration remains valid and subsisting."6 Unfortunately for SaddleSprings, the cancellation proceeding is still ongoing, Mad Croc's registration remains in force, and SaddleSprings' application cannot mature to registration.
These overly broad registrations also make conducting clearance searching difficult for new marks because the actual scope of the owners' trademark rights cannot be determined from the list of goods and services. Finally, these overly broad trademark registrations can weaken similar marks owned by others by making it appear that multiple similar marks co-exist in a particular product or service field when in fact, only a few or perhaps even one such mark is being used for goods and services in that field.
Submitting false or inaccurate sworn declarations of use to the USPTO also places the foreign trademark owner in serious jeopardy. U.S. declarations of use to support trademark applications and registrations are accompanied by a sworn statement with the following warning: "willful false statements and the like are punishable by fine or imprisonment, or both, under 18 U.S.C. § 1001." Violations of 18 U.S.C. § 1001 are punishable by fine or imprisonment up to five years.7 This declaration is not merely an administrative checkbox and, those signing it swear, on threat of criminal liability, to its truth.
In the United States, a registration may be cancelled at any time if it was obtained fraudulently or contrary to 15 U.S.C. § 1054.8 Fraud in procuring a registration involves an applicant knowingly making false, material representations of fact in connection with an application with the intent to deceive the USPTO.9 The TTAB recently voided an application because the applicant submitted a fraudulent declaration of use.10 In Nationstar, the applicant filed a sworn statement that he began using his mark in commerce in April 2005 for real estate and mortgage brokerage services.11 However, the claim regarding the 2005 first-use date was a lie. During a subsequent opposition proceeding, the evidence showed that the applicant did not incorporate its business until May 2006 and was not licensed to engage in business as a mortgage broker until October 2006.12 Further, the applicant could not provide documentary proof and could not recall detailed facts about the promotional materials he claimed had been created in 2005. After being caught in these lies, the TTAB found that the applicant had committed fraud on the USPTO and voided his application in its entirety.13 The applicant's false declaration constituted fraud because he was aware of the importance of reading and verifying the accuracy of his sworn statements and was aware of the clear distinction between his actual services and the services listed in his application.14
Overbroad registrations are also vulnerable to full or partial cancellation if the applicant lacked a bona fide intent to use the mark in U.S. commerce on each of the listed goods. For example, in Sandro Andy, S.A. v. Light Inc., No. Civ. 2392 (HB), 2012 WL 6709268 (S.D.N.Y. Dec. 27, 2012), the plaintiff petitioned to cancel a French company's Madrid Protocol registration on the grounds it was obtained fraudulently because the company did not have a bona fide intent to use the mark on the some 250 goods listed in the registration.15 In reality, the defendant only used the mark in connection with apparel.16 The court therefore ordered the French company delete the unused goods and services from its U.S. extension of the International Registration.17
The USPTO has for many years questioned the effectiveness of the post-registration use filings with respect to U.S. registrations obtained under the Paris Convention and Madrid Protocol. To gauge the seriousness of the problem of "deadwood" registrations, the USPTO instituted a two-year pilot program in 2012 that was completed in July 2014. During the program, the USPTO randomly selected 500 registrations18 for which declarations of use had just been filed in order to test the truthfulness of those sworn declarations. The selected registrants were required to submit additional specimens of use for two of the other listed goods and/or services for each class. If the selected registrant could not meet these requirements, the registration would be partially cancelled with respect to the goods and/or services for which it was unable to submit a specimen of U.S. use. Furthermore, should the registration be partially cancelled after an inaccurate initial sworn declaration was submitted, the USPTO could require the selected registrant to submit a specimen of use for each and every product or service listed in the registration. Further partial cancellation of the registration would occur for any products or services for which the registrant could not prove use in the United States. If a registrant did not respond to the pilot program inquiry at all, the entire registration was cancelled.19
The results of the pilot program indicate that a substantial majority of foreign registrants, 73% under the Madrid Protocol and 65% under the Paris Convention, have submitted false declarations of use and have therefore received trademark protection to which they are not entitled in the United States. While most were able to salvage a part of their registrations through deleting the goods that were not in use, a significant number of Madrid Protocol and Paris Convention registrations were cancelled in their entirety. The USPTO delineated these results based on the original filing bases of the registrations:20
Basic for Registration | Percentage of Registrations Deleting Goods/Services Queried Under Pilot Program |
Percentage of Registrations Receiving Notices of Cancellations |
Original Use-Based Registrants |
27% | 18% |
Paris Convention Registrants | 58% | 7% |
Madrid Protocol Registrants | 59% | 14% |
Combined Bases for Registration | 63% | 13% |
Foreign applicants can expect the USPTO to carefully scrutinize declarations of use in the future and should submit declarations only for the goods and/or services in connection with which they actually use the mark in the United States. The USPTO has suggested four potential changes in USPTO practice going forward:
1. Creating a streamlined expungement procedures, similar to Canadian procedures, for parties to request that owners prove use for certain goods and/or services. If the owner complies, the procedure ends. But if the owner fails to prove use, any goods and/or services for which the owner does not provide proof of use would be deleted from the registration
2. Require registrants to submit specimens for all goods and/or services listed in the registration when filing their first declarations of use. Alternatively, require registrants to submit specimens for all goods and/or services listed in the registration when filing their first declarations of use, and require that the specimen be a photograph showing use of the mark in conjunction with the goods and/or an advertisement for the services.
3. Increase the solemnity of the declaration by (1) requiring the registrant state that he/she understands the seriousness of the oath or (2) require a statement accompanying a declaration of use detailing the steps taken to verify use.
4. Conduct random audits of declarations of use; require registrant to file a Section 7 request (with fee) to delete any goods and/or services queried by the USPTO for which the registrant cannot prove use after filing its declarations of use.
The USPTO will accept public comment or other suggestions sent to TMPolicy@uspto.gov and is holding a roundtable discussion on December 12, 2014, focusing on the pilot program data compiled through October 15, 2014.21 Although the USPTO has not yet made any specific decisions regarding "deadwood" registrations and false declarations of use, foreign trademark registrants should expect some sort of use-verification procedure to be instituted in the future.
Now that the USPTO has concrete results confirming its suspicions, trademark applicants and registrants in the U.S.—particularly those basing their U.S. registrations on the Paris Convention and Madrid Protocol registrants—should closely scrutinize the goods and/or services enumerated in any declaration they sign. Foreign registrants cannot simply sign off on broad descriptions of goods and services because doing so could result in a finding of fraud and criminal liability. To avoid the problems associated with submitting false and overbroad declarations of use, foreign registrants should determine exactly what goods and services they use their mark in connection with in the United States before submitting declarations of use. Foreign registrants could also consider collecting specimens of use for each of the goods and services listed in their U.S. registrations to ensure they will be able to prove use for all goods and services, should the USPTO request it. Going forward, foreign registrants must keep the centrality of "use" to the U.S. trademark system in mind when preparing declarations of use to ensure that they accurately and fairly represent how their marks are actually being used in the United States.
Endnotes
1 See 15 U.S.C. § 1051; Trademark Manual of Examining Procedure ("TMEP") §§ 903, 904.
2 15 U.S.C. § 1126(d), (e).
3 15 U.S.C. § 1141.
4 15 U.S.C. § 1058; TMEP § 1604.
5 15 U.S.C. § 1058(a).
6 SaddleSprings Inc. v. Mad Croc Brands Inc., 104 USPQ2d 1948, 1952 (TTAB 2012).
7 18 U.S.C. § 1001.
8 15 U.S.C. § 1064(3).
9 See In re Bose Corp., 530 F.3d 1240, 1245 (Fed. Cir. 2009).
10 Nationstar Mortg. LLC v. Ahmad, 112 USPQ2d 1361 (TTAB 2014).
11 Id. at 1363.
12 Id. at 1367.
13 Id. at 1370, 1375.
14 Id. at 1375.
15 Sandro Andy, S.A. v. Light Inc., No. Civ. 2392 (HB), 2012 WL 6709268, at *3-4 (S.D.N.Y. Dec. 27, 2012).
16 Id. at *4.
17 Id. at *4-5.
18 This represents approximately 1% of the total number of declarations of use usually processed during a typical 6-month period.
19 Changes in Requirements for Specimens and for Affidavits or Declarations of Continued Use or Excusable Nonuse in Trademark Cases, 77 Fed. Reg. 30,197-208 (May 22, 2012) (to be codified at 37 C.F.R. pts. 2 and 7).
20 October 15, 2014 Post Registration Proof of Use Pilot Program Status Report available at: http://www.uspto.gov/trademarks/notices/roundtable_ensuring_accuracy_tmregister.jsp.
21 See http://www.uspto.gov/trademarks/notices/roundtable_ensuring_accuracy_tmregister.jsp.
Originally printed in CIPA Journal. This article is for informational purposes, is not intended to constitute legal advice, and may be considered advertising under applicable state laws. This article is only the opinion of the authors and is not attributable to Finnegan, Henderson, Farabow, Garrett & Dunner, LLP, or the firm's clients.
June 10-12, 2024
San Francisco
Lecture
Patent Protection for Software-Related Inventions in Europe and the USA Training Course
June 5, 2024
Hybrid
10th Annual Georgia Asian Pacific American Bar Association Gala
May 29, 2024
Atlanta
Due to international data regulations, we’ve updated our privacy policy. Click here to read our privacy policy in full.
We use cookies on this website to provide you with the best user experience. By accepting cookies, you agree to our use of cookies. Please note that if you opt not to accept or if you disable cookies, the “Your Finnegan” feature on this website will be disabled as well. For more information on how we use cookies, please see our Privacy Policy.
Finnegan is thrilled to announce the launch of our new blog, Ad Law Buzz, devoted solely to breaking news, developments, trends, and analysis in advertising law.