USEFUL NOTES ON TM USE IN THE USA – For Foreign Trademark Owners

All countries have strict trademark use requirements, but few are as fastidious as the USA.

This often comes as a surprise and an inconvenience to foreign trademark owners who want to register their brands in the US.

In all jurisdictions the requirement of use runs like a golden thread through trademark life and law.  Right from the development of a brand until its demise, a trademark right depends on the use made of it.

Universal use-rules include that: –

If you don’t intend to use a trademark, you can’t make valid application to register it.  (You can’t, for example, ‘squat’ on a trademark, register it for the purpose of blocking a competitor from using it, or because it sounds nice and you may or may not in future find a use for it.);

You can only claim a trademark for the goods and services you will be using it on. (If you will use your trademark on wine only, for example, you cannot register it for cheese too.); and

If you don’t use a registered trademark, you stand to lose it. (Unlike the fitness bike that have stood in your garage unused for a few years, you can lose your trademark if it stands fallow on the register for the same period.)

The pointers below help explain and make sense of the strict and particular use requirements in the USA, which often lead to frustration and confusion for foreign brand owners.

 

  1. You cannot get a US trademark registration unless you can prove use in the USA or have a registration in your home country.

 

As a foreign trademark owner, you will be used to countries where you can get registration of your trademark based only on your intention to use the mark.  Not so in the USA, where you cannot get a registration based just on intention to use.  Here you must select one of the following 4 paths toward registration of your trademark with the US Patent & Trademarks Office (USPTO):

 

  1. Actual Use: –

 

If you are the owner of a trademark which is already “used in commerce” in the USA, you are off to the best start.

 

With your application you will have to file a verified statement including the date of your first use of the mark (anywhere), the date of first use of the mark in US commerce, and specimens (examples) of the mark as used.

 

Use in commerce means bona fide use of a mark in the ordinary course of trade, and not made merely to reserve a right in a mark.  A mark is used in commerce on goods when it is placed in any manner on the goods, containers, displays, tags or labels and the goods are sold or transported in commerce.  It is used on services when it is displayed in the sale or advertising of services and the services are rendered in commerce.

Token use for the purpose of filing a trademark application is not bona fide.  A single shipment, the sale of one or a handful of units, or a single transaction over many years are not either.  Mock ups, printer’s proofs and press releases sent exclusively to news media are not acceptable.

 

You must show how you are using your trademark in the US marketplace on all the goods or services specified in your application, and show what consumers see when they decide whether to buy from you under your trademark. Examples include photos, labels or tags, a photo of outdoor signs for services provided at that location (e.g. a storefront), a website where your goods can be purchased or ordered by US customers, or a website advertising your services.  Providing advertising materials is acceptable for services but not for goods.

 

  1. Intention to Use: –

 

If you haven’t started using your mark in the USA yet, but have the good faith intention to start doing so within about a 1 – 2,5 year range, you can make application together with a verified statement saying that you are entitled to use the mark in commerce; that you have the bona fide intention to do so; and  that, to the best of your knowledge , no one else has the right to use the mark.

 

But your trademark won’t be registered until you have filed specimens of the mark together with a further verified statement that the mark is in use in commerce and which specifies the date of first use.

 

You can expect an initial response to your trademark application from the USPTO within about 3-6 months of filing. If it passes the USPTO examination, it will be published in the Official Gazette for opposition purposes.  The open-for-opposition period is 30 days.  If there is no opposition, the notice of allowance of your intent-to-use application should issue about 8 weeks after publication. The specimens and statement must be filed within 6 months after the notice of allowance is issued.

 

One additional 6-month extension is available. After that, the USPTO may, upon a showing of good cause by the applicant, further extend the time for filing the statement of use for periods aggregating not more than 24 months in total.

 

Every filing of a verified statement and a request for extension of time attracts additional official fees, making this basis for filing the most expensive one.

 

If you find, after running out of extensions to file your statement of use and specimens (24-month maximum), that you have not started using yet, the best you can do is to file a new application and start again.

 

  1. Your Home Country Registration: –

 

This basis is useful if you have no US use yet, but you have a registration in your home country.  A US application may be filed and registered based on an existing registration in the applicant’s country of origin.  (Your country of origin is the country in which you have a bona fide and effective industrial or commercial establishment, or if neither of those, the country in which you are domiciled, or (as last resort) the country of your nationality.)

 

For this filing basis you must submit a true copy of the home registration and state your intention to use the mark in US commerce.  Proof of actual use is not required prior to registration. Once registered in the USA, such registration goes forward independent of the foreign registration on which it was based, and it will be subject to ordinary US rules regarding its continued validity and duration (for which use continues to play a part).

 

So here is the one instance where you can get US registration based on intention to use.  But you must have a home registration first.

 

  1. Your Home Country Application: –

 

A foreign applicant who had previously filed an application for registration of the same mark in a Paris Convention country (177 countries are members) shall be accorded the same force and effect as would be accorded to the same application if filed in the USA, on the same date on which the application was first filed in such foreign country, provided that it is filed in the USA within 6 months of the foreign application date, and includes a statement that the applicant has a bona fide intention to use the mark.  But either you have to show use in the US, or the maturation of your home application to registration, before your US application will be allowed on this basis.

 

 

  1. Use Trumps Registration in the US.

 

The USA has a ‘first to use’ system of trademarks.  This means that, to establish trademark rights in the USA, a trademark owner must be the first person to use a mark in commerce on the goods or services. Other countries where prior use trumps registration include South Africa, Australia, Canada, Denmark, Hong Kong, India, Israel, Kenya, Malawi, Malaysia, New Zealand, Singapore, Uruguay and Zimbabwe.

 

In other countries there is a ‘first to file’ system of trademarks, meaning that the first party to register the trademark trumps an earlier user of it.  Such countries include Argentina, Austria, Benelux, Brazil, Chile, China, Colombia, Croatia, Finland, France, Germany, European Union, Greece, Japan, Lithuania, Mexico, Nicaragua, Nigeria, Norway, Peru, Romania, Russian Federation, South Korea, Spain, Taiwan, Uganda, Vietnam and Zambia.  Most of these countries have limitations regarding ‘first user’ rights, and registration of a trademark mostly confers stronger rights than what reliance on prior use would.

 

So, remember where US trademark ownership is concerned, if someone has so-called ‘common law’ rights or earlier use of the mark, even if you have a later registered trademark, you are in the weaker position.

 

 

  1. Be Prepared to Demonstrate Use Continually.

 

Once your trademark is registered, you are not home free where the USPTO is concerned. The federal agency will keep tabs on you.

 

A US trademark registration remains in force for 10 years and is renewable for further 10-year periods.   But between years 5 and 6 of registration, and again within years 9 and 10, and each successive 10 years following that, affidavits evidencing use must be filed by the owner with the USPTO.  The affidavits must state that the mark is in use in commerce; set out the goods and services recited in the registration on which the mark is used; and be accompanied by specimens showing current use of the mark in commerce.  Failure to file these affidavits timeously, and sufficiently, will lead to cancellation of the registration.

 

 

  1. The USPTO May Police Your Use on Its Own Initiative.

 

The USPTO has recently noted growing concern about unused trademarks and trademarks filed in bad faith which are cluttering up the register.  The problem is that applicants have, in increasing numbers, taken to filing fake specimens of use or to making false claims of use.    The USPTO has started going about doing random audits to declutter.

 

Measures that the USPTO may soon put in place to combat this problem include implementing a zero $ fee for amending an over-broad specification of goods and services before an audit commences, but to impose and increased amendment fee if an amendment is made after an audit.

 

Trademark applicants are further forewarned against making false or fraudulent declarations or representations to the USPTO in any form, as it will lead to liability in a civil action by any person injured thereby for any damages sustained in consequence thereof. The USPTO has recently announced that the penalties for false claims of use may be lowered to a negligence standard, making it easier to address false claims of use.

 

 

  1. Non-Use For 3 Years Leads To Abandonment

 

Use it, continue to use it, or you’ll lose it.  Quickly.

If a trademark hasn’t been used for 3 consecutive years in commerce in the US, it is evidence of abandonment. “Use” of a mark means the bona fide use made in the ordinary course of trade, and not made merely to reserve the right.

The US Trademark Trial and Appeal Board (TTAB) reported a 20,5% increase in trademark applications (compared to a roaring China which had a 30% growth in trademark applications with a total of 7,3 million trademark applications filed last year!), a 3,3% increase in appeals, 10,5% in trademark oppositions, and a 21,9% increase in trademark cancellation actions.  This last figure (the biggest increase) shows concern about infirmities in trademark registrations.  A streamlined cancellation process will be piloted by the USPTO and will initially be limited to non-use and abandonment claims (to deal with concerns over constitutional due process rights, and the presumption of the validity of registrations).

 

The USPTO is looking into implementing an ex parte procedure for use by third parties to expunge marks if they can show that they had concluded an investigation and that use of the registered trademark never commenced.

 

 

  1. Get A US Licensed Lawyer to File Your Trademark

 

One of the measures that the USPTO may soon put in place to combat the problem of false claims, resultant clutter and fraud, include requiring that US licensed lawyers must represent all foreign domiciled applicants in filings on the USPTO trademarks register.

 

There is a further concern about the unauthorized practice of law in the US by non-US lawyers abroad.  The phenomenon occurs where a foreign domiciled applicant appears to apply pro se, when in fact there is a lawyer involved in the filing.  The requirement may be instituted that a foreign domiciled applicant is to have a US licensed lawyer and may not be able to file themselves – “US counsel rule”.

 

In the interim the USPTO only allows manual (and not electronic) correspondence to record address changes on register.

 

Furthermore, the USPTO reports that unauthorised assignments and unauthorised consent agreements, have abused the openness of the USPTO online system.  Login for USPTO accounts will be needed soon.  The USPTO is further evaluating a way to address owner information on the open database to limit unsolicited correspondence.

 

 

If an applicant is not domiciled in the USA the applicant may designate, by a document filed in the USPTO, the name and address of a person resident in the US on whom may be served notices or process in proceedings affecting the mark. Such notices or process may be served upon the person so designated by leaving with that person or mailing to that person a copy thereof at the address specified in the last designation so filed. If the person so designated cannot be found at the address given in the last designation, or if the registrant does not designate by a document filed in the USPTO the name and address of a person resident in the United States on whom may be served notices or process in proceedings affecting the mark, such notices or process may be served on the Director of the USPTO.

 

Ultimately you do need an address for service in the USA, preferably that of a trusted lawyer, to be notified of process, and to maintain and defend your right.

 

Plan effectively to use your brand in the US, and lawyer up, to get a firm trademark foothold in the world’s biggest economy.

 

Suzaan Laing

June 2019

 

(Suzaan is a US licensed lawyer.)

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