Authored by B. Brett Heavner
The Madrid Protocol provides Chinese trademark owners with a vehicle for extending their “home country” trademark protection into the United States through the Chinese Trademark Office, thus eliminating the cost of hiring U.S. counsel. Frequently, however, the peculiarities of the U.S. trademark system create problems for Madrid applicants. Nevertheless, with some understanding of the U.S. trademark system, applicants can avoid these pitfalls.
1. Bona Fide Intention to Use
Madrid applicants are often surprised to learn that, under U.S. law, they are required to have a “bona fide intention to use” their mark in U.S. commerce on all of the listed goods and services. Lack of a bona fide intent to use the mark will void an application and lead to cancellation of any resulting registration.
The applicant must have a “bona fide” intent to use the mark in the ordinary course
of trade and not merely a desire to reserve a mark. The “bona fide” nature of the applicant’s intent is judged objectively and, if challenged, requires applicant to provide evidence of plans or ongoing efforts to use the mark. Failure to produce a plan, schematics, or any documentation of steps to use the mark creates an inference of no bona fide intent.
Madrid applicants should avoid the following situations that have led the U.S. authorities to reject an applicant’s alleged bona fide intent: (a) long lists of unrelated goods falling into many classes, (b) quoting class headings, or (c) listing goods and services that applicant is not capable of manufacturing. When challenged, an applicant can establish its bona fide intent by showing that it is capable of offering the listed goods and services and has a documented plan to do so.
Madrid applicants should avoid problems with the bona fide intent requirement by only designating goods and services for the U.S. extension that they have plans to offer. Rule 9(4)(a)(xiii) of the Madrid Protocol Common Regulations allows for country-by-country limitations on the original goods and services. Indeed, section 10(b) of the application form (MM2) under Madrid Protocol provides a space for a narrower list of goods and services for use in the United States.
2. The Identification of Goods and Services
U.S. examiners frequently reject identifications of goods and services as “indefinite,” despite their previous acceptance by the home country or WIPO examiners. Under U.S. regulations, the identification is to be “specific, definite, clear, and concise,” and “understandable to the average person.” U.S. examiners are notoriously particular about the description of goods and services and will reject language that (a) merely quotes a class heading, (b) covers goods in more than one class, or (c) covers a nonspecific list of items (such as “goods made of rubber” or “all other goods in this class”).
For Madrid applicants, meeting the U.S. examiner’s definiteness requirement is challenging because U.S. extensions cannot expand the home country registration/application, and the classification cannot be changed from the classes assigned by WIPO. For example, “leather goods and imitation leather goods in Class 18” is acceptable in some countries but is indefinite under U.S. standards. While Madrid applicants can specify leather goods falling within class 18, they cannot expand or change to goods that the U.S. places in other classes (such as leather watch bands in class 14 or leather clothing in class 25). Further, if Madrid applicants are required to list specific goods to meet U.S. definiteness standards, they should balance broad coverage with the increased potential for drawing a refusal based on prior-filed applications and registrations (known as “relative grounds” for refusal). A broad description of goods and services is more likely to overlap with an existing registration or application than a specifically tailored one.
To minimize these problems, Madrid applicants should review the U.S. Acceptable Identification of Goods and Services Manual (posted on “www.uspto.gov”) and conduct a brief search of U.S. trademark records to craft language that is both definite and unlikely to draw relative grounds for refusal.
3. The Use in Commerce Requirement
Madrid applicants may obtain a U.S. registration without first establishing that the mark is “used in commerce.” However, Madrid applicants must submit evidence of such use for all listed goods and services between their registration’s fifth and sixth anniversary. Failure to submit such evidence will lead to cancellation of the U.S. registration.
Thus, Chinese trademark owners need to understand what “use in commerce” means under U.S. law. Use of a mark on goods sold, or services rendered, exclusively outside the United States is not “use in commerce.” Further, token sales in the United States also fail to satisfy the “use in commerce” requirement. Rather, for goods, the mark will need to be placed on goods or packaging sold or transported in the U.S. For services, the mark must be displayed in the sale or advertising of the services that are rendered in the U.S.
When submitting evidence of use, the registrant must delete any listed goods or services not being offered in the U.S. Intentional failure to delete goods and services not being offered in the U.S. may be deemed “fraud” and result in cancellation of the entire U.S. registration. Thus, each U.S. maintenance and renewal requires a reevaluation of the identification of goods and services. In addition, for each class of listed goods and services, the registrant must submit one specimen showing the mark as used in the U.S. The specimens submitted must match the registered mark precisely and must have actually been circulated in the U.S.
4. Enforcement Issues
In planning U.S. enforcement strategies, Madrid applicants should bear in mind two peculiarities of the U.S. system.
First, the United States employs a “likelihood of confusion” test to determine whether two marks conflict. When determining the similarity or dissimilarity of goods or services, this test focuses less on whether registrations and applications have overlapping descriptions of goods and services, and instead grants more weight to whether the goods and services are “competitive” or “related.” Non-competitive goods and services are typically considered “related” when they are normally sold by the same companies or sold in the same trade channels. Thus, Madrid applicants need not create an expansive list of goods and services to ensure adequate protection.
Second, although Madrid applicants may obtain a U.S. registration without actual use of the mark, injunctive relief may not be “ripe” until the registrant establishes actual use, impending use, or a reputation in the disputed territory. While U.S. registrations confer nationwide priority on the Madrid registrant, the registrant’s absence from the disputed territory precludes the “likelihood of confusion” necessary for injunctive relief.
To avoid this “ripeness” problem, Madrid applicants should maintain records of actual or planned use of the mark in the U.S. Preparations to lease property, negotiations for local licensees, and advertising in the territory have been held sufficient to show impending entry into, or a reputation in, the disputed territory.
Because the U.S. trademark system places such an emphasis on use of a mark, the Madrid Protocol is not perfectly compatible with the U.S. system. However, the problems created by the differences in the two systems can be managed by the Madrid applicant with some planning. The key to successful use of Madrid in the United States is for applicants to tailor the U.S. extensions to fit their actual plans and activities in the United States.
Copyright © Finnegan, Henderson, Farabow, Garrett & Dunner, LLP. 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.