U.S. Trademark Applicants May Now Have More To Prove
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1 Trademark Alert September 2009 U.S. Trademark Applicants May Now Have More To Prove By Darren Cahr and Kristianne Kossler Documentary proof of bona fide intent to use a mark is now being required by the Trademark Trial and Appeal Board. In several recent decisions, the TTAB has held that mere statements of intent are not enough to preserve intent to use applications if challenged on this basis. Companies must instead demonstrate real effort and substantial plans in order to support a claim of bona fide intent. This represents a dramatic change, and may force mark owners to significantly alter their approach to the trademark application process. In view of these recent decisions, companies must preserve early documents proving their bona fide intent to use a mark such as: > detailed business plans > s to third party vendors, and > internal memoranda and regarding specific plans to launch the branded product. Without evidence such as this demonstrating that the applicant had more than a superficial intent to use the mark in the future, companies may now find themselves vulnerable to challenge. Bona Fide Intent Bona fide intent is one of the more slippery concepts in trademark law, and one that is changing rapidly before our very eyes. In several different contexts (most commonly while applying for registrations on an intent to use basis) applicants must allege to the United States Patent and Trademark Office that they have a bona fide intent to use their proposed mark. But what exactly does that mean? In the past, many companies assumed that their claim of intent was sufficient in itself, and applied for marks with only the sketchiest of future plans. Intent, in the mind of many practitioners, was a low hurdle analogous to hope. Thus, bona fide intent slowly morphed into a vague sense that the applicant might, if all went well, use the mark eventually, at some undefined time in the future.
2 Recently that understanding has come under attack from the TTAB and a growing stack of opinions holding that allegations of bona fide intent to use a mark must be supported by clear, detailed documentation. In the past month alone, DC Comics and Marvel Characters, Inc. v. Silver 1 once again demonstrated the TTAB s growing commitment to the stance it adopted in Honda Motor Co. v. Winkelmann, Opposition No. 91/170,552 (T.T.A.B. 2009): bona fide intent has real meaning. If you want to claim that you had a bona fide intent to use a mark, says the TTAB, you need to provide persuasive evidence of that intent. In light of these recent developments, trademark attorneys and owners must reevaluate their standard practices with respect to applications filed on a Section 1(b) intent to use basis. Older conceptions of intent are now officially perilous, and offer genuine risk to those who refuse to abide by the best practices now suggested by these cases. DC Comics and Marvel Characters, Inc. v. Silver In 2006, Michael Craig Silver filed an application to register the mark SUPER HERO on an intent to use basis for use in connection with assorted skin care products. DC Comics and Marvel Characters, Inc. opposed registration of the mark, citing a potential likelihood of confusion with, and dilution of, their previously registered SUPER HERO and SUPER HEROES marks, and further claimed that Silver lacked a bona fide intent to use the SUPER HERO mark in commerce when he filed the application. After their request for summary judgment on the likelihood of confusion claim was denied, DC and Marvel filed a motion for summary judgment on the bona fide intent claim. In the motion, DC and Marvel contended that Silver had failed to produce any evidence demonstrating his intent to use the mark as claimed. Further, they asserted that he had not taken any action in furtherance of bringing the skin care products to market. In support of their claims, DC and Marvel emphasized Silver s responses during the discovery process, in which Silver conceded that (1) at the time of filing the application, he had not formed a business for the production and sale of the goods; (2) he lacks experience in marketing or manufacturing such skin care products; (3) he lacks knowledge of any Food and Drug Administration regulations governing such products; (4) he does not possess any specific educational training that would facilitate his development of such products; (5) he has not contracted with a chemical engineer or a marketing firm for services since he filed the application; (6) he has not performed any surveys or market studies with respect to the SUPER HERO mark; (7) he has not taken any steps to begin production, marketing or distribution of products under the mark; and (8) he has not yet determined pricing for the goods. DC and Marvel further emphasized that Silver did not produce any documents responsive to their requests for, among other items, advertising materials, market studies and promotional expenditures. Finally, DC and Marvel stressed that in response to one document request, Silver admitted that he has no documents concerning any effort to exploit or commercialize any product under SUPER HERO. In response, Silver argued that he is a professional entrepreneur and that his educational background, which includes completion of certain college courses and graduate business 1 Opposition No. 91/176,744 (T.T.A.B. Aug. 21, 2009) [non-precedential]. 2
3 classes, demonstrates his desire and ability to produce and sell products under the SUPER HERO mark. Additionally, Silver stressed that he was able to obtain a license from a trade association to sell certain petroleum-related products under his TEXASTEA mark, even though he had no direct prior experience in that industry. Silver further asserted that he has considered selling the SUPER HERO products through his Waveworks/Maiden Waves apparel company, and he alleged that he has developed a Maiden Waves sunscreen formula that can be at least partially adapted for use with the SUPER HERO products. In support of his arguments, Silver produced four documents: (1) a typed, undated checklist of activities for establishing a business that contains the handwritten word SuperH. in the upper-left corner, (2) an undated description of a formula for Maiden Waves Sunscreen, (3) a handwritten note containing the phrase Maiden Waves Sunscreen formula with an arrow pointing to the phrase SuperHero Name, also undated, and (4) a photograph of a petroleum product featuring the TEXASTEA mark. In his brief, Silver explained that he had only recently realized that the checklist could assist him in his efforts to establish a business for his SUPER HERO products. Silver did not provide any affidavits or declarations with his brief. On August 21, the TTAB entered summary judgment against Silver. According to the TTAB, the evidence demonstrated (1) that Silver had likely considered use of the SUPER HERO mark with skin care goods, and (2) that Silver was certain of his ability to bring the plan to fruition. However, the TTAB held that Silver had failed to establish that he had a bona fide intent to use the mark with the specified skin care products when he filed the application. First, the TTAB stated that because of Silver s lack of applicable experience or training, his statements regarding his ability to produce the goods were unpersuasive. Additionally, the TTAB explained that while Silver may have had a subjective intent to use the mark as claimed when he filed his application, it was clear that Silver had taken no actual steps toward preparing to use the SUPER HERO mark on the identified goods. The TTAB also specifically addressed the four documents produced by Silver. First, the TTAB emphasized that the checklist consisted merely of an undated, unsupported recitation of general tasks to be performed in setting up a business, and further, that there was no indication that Silver had executed any of the tasks. Moreover, the TTAB found that the checklist could not demonstrate the nature of Silver s intent to use the mark at the time the application was filed, as he had only recently realized the value of it. The TTAB also found Silver s plan to sell Maiden Waves-formula sunscreen under the SUPER HERO mark unconvincing, as the formula had never actually been prepared. Further, the TTAB emphasized Silver s failure to establish that the handwritten notice was created at the time of or prior to the filing of the application. The TTAB deemed the photograph of the TEXASTEA product irrelevant. Why should DC Comics matter to you? The DC Comics decision is of note because the TTAB further clarified its position on what it takes to support an allegation of bona fide intent to use a mark, and specifically addressed the question of documentation. However, the decision is also remarkable because the TTAB entered summary judgment on the issue a relative rarity in TTAB decisions. 3
4 In the case at issue, the TTAB noted that the factual question of intent is particularly unsuited to disposition on summary judgment. However, the TTAB also stressed that, once the moving party has met its burden, the non-moving party (here, the applicant) must provide evidence of its bona fide intent to use the mark in commerce, and if the applicant can produce no such evidence, then entry of summary judgment may be warranted. When evaluated together with other recent cases, the TTAB s willingness to enter summary judgment against Silver appears to be further evidence of the TTAB s commitment to its position on documentation evidencing bona fide intent. The Impact: Strategies for Properly Developing and Preserving Documentation The TTAB s stance in DC Comics and other recent cases should significantly impact our view of what should be considered best practices when applying to register with a bona fide intent to use the mark. First, the case demonstrates that applicants should carefully consider what it means, for them, to have an intent to use the mark. What exactly are those plans, and how defined are they? Once an applicant has defined goals and a vision for how to achieve them, the applicant must review the strength of their documentation. If forced to prove their intent to use a mark, how would they do it? To the extent possible, applicants should endeavor to develop clear, dated, detailed documentation. Examples of such documentation could include business correspondence to third parties demonstrating the owner s intent to use the mark, detailed business plans, and clear documentation showing the owner s efforts to begin commercializing the products or services. In short, the DC Comics case should remind us all that the statements we make to the USPTO have consequences. The opinion demonstrates that owners who have filed applications on a Section 1(b) intent to use basis should (1) develop clear, detailed and persuasive documentation as to their business plans, and (2) carefully preserve this documentation in a systematic, consistent fashion. By properly creating and preserving a documentary record, trademark owners can more readily defend themselves against challenges to their bona fides. If you have any questions, or require assistance in determining how to deal with bona fide intent or related issues, please contact one of the authors listed below or your regular contact in the Trademark Practice. Darren S. Cahr (312) Darren.Cahr@dbr.com Kristianne Kossler (312) Kristianne.Kossler@dbr.com 4
5 Other Publications Sign Up /publications /publications/signup 2009 Drinker Biddle & Reath LLP. All rights reserved. A Delaware limited liability partnership Jonathan I. Epstein and Edward A. Gramigna, Jr., Partners in Charge of the Princeton and Florham Park, N.J., offices, respectively. This Drinker Biddle & Reath LLP communication is intended to inform our clients and friends of developments in the law and to provide information of general interest. It is not intended to constitute advice regarding any client s legal problems and should not be relied upon as such. CALIFORNIA DELAWARE ILLINOIS NEW JERSEY NEW YORK PENNSYLVANIA WASHINGTON DC WISCONSIN 5
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