Verna Law Video Blog 12: Intent to Use Trademark Applications: Business Plans Needed

Intent-to-use trademark applications.

An intent-to-use trademark application requires some other evidence, if it is challenged in court, to show that the applicant has a bona fide intent to use the mark in commerce.

If you have a trademark or brand to protect, call Verna Law at 914-908-6757 or send us an e-mail to anthony@vernalaw.com.

Why?

“Because a bona fide intent to use the mark in commerce is a statutory requirement of a valid intent-to-use trademark application under Section 1(b), the lack of such intent is a basis on which an opposer may challenge an applicant’s mark.” M.Z. Berger & Co. v. Swatch AG, 787 F.3d 1368, 114 USPQ2d 1892, 1898 (Fed. Cir. 2015). Applicant’s intent must be “firm,” “demonstrable” with “objective evidence of intent” and “more than a mere subjective belief.” Id. at 1897-1898; Swiss Grill Ltd. v. Wolf Steel Ltd., 115 USPQ2d 2001, 2008 (TTAB 2015). The good faith of having a bona fide intent to use a mark must be shown if asked in court. This is done on a case-by-case basis if a challenge is made to the trademark application.

When does this challenge happen?  At the Trademark Trial and Appeal Board level – that’s the federal administrative court of the United States Patent and Trademark Office.  A party that believes it will be harmed by a trademark applicant’s application will file a Trademark Opposition against the applicant.  This party is the Plaintiff or Opposer in the Trademark Opposition proceeding.  The Plaintiff/Opposer will claim that the trademark application is void ab initio (meaning “from the very beginning”) for lack of a bona fide intent to use the trademark in interstate commerce.

The court make an objective determination whether Applicant had a bona fide intention to use the mark in commerce at the time of filing her application, and, in doing so, consider the totality of the circumstances. See M.Z. Berger & Co., 114 USPQ2d at 1898; Swiss Grill Ltd., 115 USPQ2d at 2008. Opposer bears “the initial burden of demonstrating by a preponderance of the evidence that applicant lacked a bona fide intent to use the mark on the identified” services. Boston Red Sox Baseball Club LP v. Sherman, 88 USPQ2d 1581, 1587 (TTAB 2008). Opposer may meet this burden by establishing that there is an “absence of any documentary evidence on the part of [Applicant] regarding such intent.” Commodore Electronics Ltd. v. CMB Kabushiki Kaisha, 26 USPQ2d 1503, 1507 (TTAB 1993).

If Opposer meets its burden, Applicant may “elect to try to rebut the opposer[‘s] prima facie case by offering additional evidence concerning the factual circumstances bearing upon [her] intent to use [her] mark in commerce.” Commodore Electronics Ltd., 26 USPQ2d at 1507 n.11. However, Applicant’s “mere statement of subjective intention, without more, would be insufficient to establish applicant’s bona fide intention to use the mark in commerce.” Lane Ltd. v. Jackson Int’l
Trading Co., 33 USPQ2d 1351, 1355 (TTAB 1994).

 

Enhancing Trademark Applications: Understanding In-Use and Intent-to-Use Trademarks in the United States

In the realm of trademark applications within the United States, two distinct categories come into play:

1. In-use trademarks
2. Intent-to-use trademarks.

In-Use Trademarks

An in-use trademark application is straightforward—it involves a person or business utilizing a trademark linked to goods and/or services already in active commerce. For such applications, the applicant must demonstrate the actual use of the mark in the sale or transport of goods or the provision of services in “interstate” commerce. This refers to commerce conducted between more than one state or U.S. territory or in transactions between the U.S. and another country.

For goods, the mark must be visibly present on the products, such as tags, labels, containers, or associated displays. In the case of services, the mark must be actively employed in the sale or advertising of those services.

Intent-to-Use Trademarks

In contrast, if an applicant plans to use the mark in the future but has not done so yet, they can file a trademark application based on a good-faith or bona fide intent to use the mark in commerce. This implies more than a mere idea but less than being market-ready. Examples of demonstrating a bona fide intent include having a business plan, creating sample products, or undertaking preliminary business activities.

An illustrative case, Lincoln National Corporation v. Kent G. Anderson, Opposition Nos. 91192939 and 91194817 (February 21, 2014) [not precedential], sheds light on establishing a bona fide intent. The Trademark Trial and Appeal Board, in this case, emphasized the importance of a realistic goods/services description. It cautioned against overly extensive lists that may render it “highly unlikely” for the applicant to introduce all listed services during the application’s pendency. In essence, the goods or services listed must align with realistic business plans.

For those contemplating filing a trademark application without current use, it is permissible. However, maintaining a realistic list of goods or services in your business plan becomes crucial.

Watch the following video blog for deeper insights into the necessity of incorporating business plans when filing a trademark application based on an intent to use. This is after the prosecution of the trademark application and before it comes a trademark registration. Trademark protection only comes with use of a trademark. Trademark rights only come in conjunction with use on products or in advertising services in the ordinary course of trade.

 

Case Summaries involving an issue of a bona fide intent to use a trademark:

 

M.Z. Berger & Co., Inc. v. Swatch AG

M.Z. Berger & Co., Inc. v. Swatch AG, decided by the United States Court of Appeals for the Federal Circuit on June 4, 2015 (787 F.3d 1368, 114 U.S.P.Q.2d 1892).

Case Background

M.Z. Berger & Co., Inc. (Berger) filed an application to register the mark “iWatch” for a variety of goods, including watches, clocks, and parts for these items. Swatch AG opposed the registration, arguing that Berger lacked a bona fide intent to use the mark in commerce at the time of the application.

Legal Issue

The main issue was whether Berger had a bona fide intent to use the mark “iWatch” in commerce when it filed the trademark application.

Court’s Analysis

The Federal Circuit reviewed the decision of the Trademark Trial and Appeal Board (TTAB), which had found that Berger did not have a bona fide intent to use the “iWatch” mark. The court considered several factors to assess bona fide intent:

1. Documentary Evidence: The court noted that Berger failed to produce any documents, such as marketing plans, product prototypes, or other business records, that would demonstrate a genuine intent to use the “iWatch” mark at the time of the application.
2. Applicant’s Testimony: The testimony provided by Berger’s representatives was insufficient. The court found that vague assertions about potential future use were not enough to establish bona fide intent.
3. Product Development Efforts: There was no evidence that Berger had taken concrete steps to develop or market products under the “iWatch” mark.
4. Business Practices: The court examined Berger’s business practices and found that it had a history of applying for marks without a clear intent to use them, which supported the lack of bona fide intent in this case.

Court’s Conclusion

The Federal Circuit affirmed the TTAB’s decision, holding that Berger did not have a bona fide intent to use the “iWatch” mark in commerce at the time of the application. This decision reinforced the requirement that applicants must have a genuine and documented intention to use a mark in commerce when they file for registration.

Significance

This case is significant in trademark law as it underscores the importance of having a bona fide intent to use a mark in commerce. Applicants must be prepared to provide evidence of their intent through business plans, development activities, and other relevant documentation. The ruling clarifies that merely having an idea or aspiration to use a mark in the future is not sufficient to meet the bona fide intent requirement under U.S. trademark law.

 

 

Here is a lightly-edited transcript of the video:

 

Most of my clients who come to me for a trademark application are not using the trademark yet. It’s a good idea of course, to start at the very beginning with what we call an intent-to-use trademark
application.

 

That trademark not being in use will not register with the Patent and Trademark Office, if it passes muster, until it is in use in commerce. But, while products are being developed, while finalizations are being made, prototypes
are being created.

 

A lot of companies want to make sure that that trademark is, is at least reserved in the Patent and Trademark Office if the mark is not registered yet.

 

There could be a little snag along the way that a lot of businesses don’t really think of and that is if an intent-to-use trademark application is challenged by a third party during the review process.

If that mark is not in use yet and there are no business plans, then that mark could actually not really be considered an intent-to-use application.

 

In other words, the trademark applicant must have what we call a bona fide intent to use the trademark in commerce or else it’s not really considered an application under the statutory requirements. If a third
party is challenging a mark, we need to make sure that we’ve got a little bit more than just that trademark application. As I said, a lot of businesses have prototypes, have business plans, and I even discussed the importance of
business plans in an earlier blog.

 

Any piece of evidence that discusses that ability to take the trademark and put it into commerce without those business plans, without those prototypes, without whatever those first iterations are, is needed. An
intent-to-use application isn’t actually qualified as an intent-to-use application without that evidence.

 

If we’re going to start at the beginning, and that is, of course, a very good place to start, then we need to make sure that all of the infrastructure is in place in case a third party challenges the mark. This way,
that avenue of challenge is stopped before it is begun.

 

If you have a trademark or brand to protect, call Verna Law at 914-908-6757 or send us an e-mail to anthony@vernalaw.com.