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ITU Trademark Applications: What’s Intent Got To Do With It?

February 20, 2017TTAB Proceedings

It doesn't matter what I believe. It only matters what I can prove.
So don't tell me what I know or don't know. I know the LAW!
- Lieutenant Daniel Kaffee in A Few Good Men

In 2015, the Federal Circuit examined what is required for a trademark applicant to prove that it had a bona fide intention to use a trademark in commerce when filing a trademark application on an intent-to-use ("ITU") basis under 15 U.S.C. § 1051(b)(1). M.Z. Berger & Co., Inc. v. Swatch AG, 787 F.3d 1368 (Fed. Cir. 2015). In reviewing the legislative history of the Trademark Law Revision Act of 1988 ("TLRA"), the Federal Circuit held that an applicant's subjective belief is not enough. In other words, a trademark applicant cannot satisfy the standard by just submitting a declaration or otherwise testifying that "at the time I filed the trademark application, I did truly intend to use the trademark." Yet most ITU applicants, and their counsel, don't know or consider what may be required to prove a bona fide intention to use should the issue ever be litigated in a Trademark Trial and Appeal Board ("TTAB") proceeding or in court. Let's take a look at what principles we can extract from M.Z. Berger and subsequent cases.

Lack of Intent Is a Proper Basis to Challenge a Trademark

The first question addressed in M.Z. Berger was whether lack of a bona fide intent is a proper statutory ground to challenge a trademark application or registration. Id. at 1375. The Federal Circuit held it was a proper ground because an opposer is entitled to rely on any statutory ground that negates an applicant's right to registration:

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.

Id. Of course, this is not news—just a confirmation of what the TTAB has held for a long time.

Standard of Proof is Preponderance of Evidence

A party seeking to oppose a trademark application or cancel a trademark registration on the grounds that the applicant lacked a bona fide intent to use the mark at the time of filing bears the burden of proof. The burden of proof requires the party to prove lack of intent by a preponderance of the evidence. Beer v. Beer, 2016 TTAB LEXIS 571, *8 (TTAB 2016) (non-precedential).

Intent Must Be Proven by Objective Evidence, Not Subjective Believe

In M.Z. Berger, the Federal Circuit examined the meaning of the phrase "bona fide intention" referenced in 15 U.S.C. § 1051(b)(1). Although the statute doesn't define "bona fide," the court held that the intent must be "under the circumstances showing the good faith of such person." M.Z. Berger, 787 F.3d at 1375-76. This phrase was then interpreted to mean that the applicant's intent must be demonstrable and more than a mere subjective belief based in large part on the following legislative history in the Senate Report:

In connection with this bill, "bona fide" should be read to mean a fair, objective determination of the applicant's intent based on all the circumstances.

Id. Supported by the legislative history, the Federal Circuit set forth its conclusion on the issue:

Accordingly, we hold that whether an applicant had a "bona fide intent" to use the mark in commerce at the time of the application requires objective evidence of intent. Although the evidentiary bar is not high, the circumstances must indicate that the applicant's intent to use the mark was firm and not merely intent to reserve a right in the mark.

Id. (citations omitted).

Evidence is Determined on a Case-by-Case Basis Considering the Totality of the Circumstances

The evidence necessary to support a bona fide intention to use a mark will differ in each case, depending on the totality of the circumstances:

The Board considers the evidence as a whole, and any clear interrelationships that exist between the several pieces of evidence of record, to determine whether the evidence, in its totality, establishes a bona fide intent to use the mark for the identified goods. The Board may look to inconsistencies in the record, as well as the general lack of documentary support or other objective evidence.

Tekni-Plex, Inc. v. Selig Sealing Products, Inc., 2015 TTAB LEXIS 501, *5 (TTAB 2015) (citations omitted); M.Z. Berger, 787 F.3d at 1376-77.

Evidence That Does Not Show a Bona Fide Intent to Use

Below our some of the ways a party can put forth evidence that the applicant did not have a bona fide intention to use the mark at the time of filing the application.

A Plaintiff Can Establish a Prima Facie Case By Showing Applicant Has No Documents

A party can establish a prima facie case that an applicant lacked a bona fide intention to use by proving that the applicant has no documentary evidence to support its claim of bona fide intent to use in commerce as of the application filing date. Beer, 2016 TTAB LEXIS 571, at *10-11; Heineken Asia Pacific Pte. Ltd. v. Claypool, 2016 TTAB LEXIS 514, *12-13 (TTAB 2016) (granting summary judgment because applicant has no documentary evidence);Tekni-Plex, 2015 TTAB LEXIS 501, *12  (granting summary judgment because "Applicant has not come forward with evidence indicating, for example, current business plans, ongoing discussions, or promotional activities to corroborate its claim of a bona fide intent to use"). If a party satisfies its initial burden in this manner, the burden of production shifts to the applicant to come forward with evidence adequately explaining the lack of documentation. Id.

Accordingly, in these cases, requests for the production of documents play an important role. If the plaintiff serves document requests seeking documents regarding the applicant's intent and the applicant produces nothing, the plaintiff is set up nicely for summary judgment. However, the record needs to be clear that the applicant failed to produce documents; otherwise, the TTAB may not be willing to shift the burden of production. See, e.g., Smart Closets, LLC v. Produits Forestiers Direct Inc., 2016 TTAB LEXIS 135, *17-20 (TTAB 2016) (opposer failed to make out prima facie case because it was not clear that opposer had inspected the documents that applicant offered to make available for inspection).

An Applicant's Conflicting Stories Are Given Little to No Weight and Credibility

The ability to consider the totality of circumstances has resulted in a cases in which an applicant's claimed intent is dismissed or deemed not credible due to the applicant's conflicting or inconsistent testimony or positions regarding intent. For example, in Swiss Grill, the TTAB concluded that

To be blunt, the record as a whole reveals that Applicant is unable to get its story straight. In fact, its evolving and internally inconsistent story lines read more as after-the-fact rationalizations, than as credible evidence of a bona fide intent to use SWISS GRILLS in the United States for the identified barbeques and outdoor grills. These inconsistencies, combined with "the general lack of documentary support" or other objective evidence of its bona fide intent to use the mark leads us to find that Applicant's intent at the time it filed the application was not a bona fide intent to use the mark in commerce.

Swiss Grill Ltd. v. Wolf Steel Ltd., 2015 TTAB LEXIS 312, *33 (TTAB 2015) (citations omitted); see also M.Z. Berger, 787 F.3d at 1377 (finding Board acted within its discretion in discrediting certain testimony "given the inability of the Berger witnesses to pull together a consistent story on a number of issues").

So ... if you're defending against this type of claim, make sure your client has a consistent and credible story.

Trademark Search and Application Do Not Evidence Intent

This sort of goes without saying, but "filing a trademark application, in and of itself, is not an act that signifies a bona fide intent." Beer, 2016 TTAB LEXIS 571, at *16 n.3. Neither is a trademark search. Heineken, 2016 TTAB LEXIS 514, *12; M.Z. Berger, 787 F.3d at 1377 (discounting Berger's evidence relating to the prosecution of the trademark application).

Self-Serving Subjective Testimony of Intent

Again, a party's subjective testimony that it had a bona fide intent to use is insufficient:

Congress did not intend the issue to be resolved simply by an officer of the applicant later testifying, "Yes, indeed, at the time we filed that application, I did truly intend to use the mark at some time in the future."

M.Z. Berger, 787 F.3d at 1375. Likewise, in Heineken, the applicant's argument that he had a "simple mental memorized plan that is in fact a basic business plan" did not constitute objective evidence of intent. Heineken, 2016 TTAB LEXIS 514, *9.

Bona Fide Intent by Someone Other than the Applicant

An applicant must be careful that the individual or entity listed as the applicant has the bona fide intention to use the mark. Otherwise, if the bona fide intent belongs to someone else, then the required intent can be found lacking. Poker, 2015 TTAB LEXIS 478, *20-21 (TTAB 2015) (discussing Sanders case in which applicant did not have the requisite intent in her individual capacity because she intended to use the mark in partnership with her husband).

Evidence That Does Show a Bona Fide Intent to Use

Here are some categories of evidence that can be used to show intent.

Applicant's History in the Relevant Industry

Courts and the TTAB will consider an applicant's history and experience in the relevant industry related to the goods and services listed in the ITU trademark application. Beer, 2016 TTAB LEXIS 571, at *11-13. Sometimes it's given weight, and sometimes it's not. In Beer, the TTAB noted that the applicant was a board certified dermatologist who had been practicing since 1989 and referenced Applicant's numerous articles and textbook chapters. It appears that the TTAB gave applicant's history and experience serious weight in coming to the conclusion that he did have a bona fide intent to use DERMNOW for "dermatology services."  See also Poker Clothing, 2015 TTAB LEXIS 478, at *26 (noting that "Applicant had experience in the field of RVs and toy haulers"); Carl Walther GmbH v. Herriger, 2015 TTAB LEXIS 216, *12 (TTAB 2015) ("We find that Applicant's training and experience with respect to the goods identified in her application are sufficient to raise a genuine dispute as to whether Applicant had a bona fide intent to use the marks on the identified goods at the time of filing of the applications."). However, an applicant's history and experience in the relevant industry is sometimes discounted and not always sufficient—especially in the face of contradictory evidence. See, e.g., M.Z. Berger, 787 F.3d at 1378 ("We also find unavailing Berger's contention that the Board ignored Berger's history in the watch industry.").

Applicant's Ability to Market or Manufacture the Identified Goods

In evaluating whether an applicant had the requisite bona fide intention to use, "an applicant's capacity to market and/or manufacture the identified goods weighs against a finding that an applicant lacked a bona fide intent to use." Carl Walther, 2015 TTAB LEXIS 216, *11.

Forming a Business Entity

Forming a business entity can be evidence of a bona fide intent to use. Beer, 2016 TTAB LEXIS 571, at *12 ("Applicant registered an entity in the state of Florida in February 2014 under the name 'DermNow, P.A.").

Registering a Domain Name

Although given little weight, registering a domain name can constitute evidence of intent. Beer, 2016 TTAB LEXIS 571, at *14 ("Applicant obtained domain names for and"); Carl Walther, 2015 TTAB LEXIS 216, at *12 n.11 (registration of "entitled to minimal probative weight").

The Enumerated Choices for an Extension of Time to File a Statement of Use

When you go to file an extension of time to file a statement of use (except the first time), the USPTO requires you to specify the ongoing efforts that you have made to use the mark in commerce and provides you with several choices to choose from. These include (i) product or service research or development; (ii) market research; (iii) manufacturing activities; (iv) promotional activities; (v) steps to acquire distributors; (vi) steps to obtain required governmental approval; (vii) training regarding standards (only for collective or certification marks); (viii) steps to acquire authorized users (only for certification marks); (ix) steps to acquire members (only for collective marks); and (x) development of standards (only for collective or certification marks). There is also an "other" box that allows an applicant to insert a description of other ongoing efforts.

an applicant has to check one or more boxes describing its ongoing efforts to use the mark

If an applicant has documentary evidence supporting one of the ten specified grounds for an extension at the time of filing, such efforts should be sufficient to prove a bona fide intention to use. Poker Clothing, Inc. v. Donati, 2015 TTAB LEXIS 478, *25-26 (TTAB 2015) (non-precedential); M.Z. Berger, 787 F.3d at 1376 n.5.  Along these lines, in Beer, the TTAB found that contacting suppliers, staffing companies, and insurance companies constituted evidence of intent. Beer, 2016 TTAB LEXIS 571, at *15.

Entire Class Voided Unless Applicant Cures in Timely Manner

What are the consequences of not having a bona fide intention to use a trademark in commerce? The Eastern District of Michigan tackled this exact question in Kelly Services, Inc. v. Creative Harbor, LLC. In this regard, there are two different scenarios that can arise. The first scenario is one in which the trademark application does not have a bona fide intention to use any of the goods or services in the ITU trademark application. In this situation, the trademark application will be deemed void for lack of a bona fide intention to use. Kelly Services, Inc. v. Creative Harbor, LLC, 140 F. Supp. 3d 611 (E.D. Mich. 2015).

The second scenario is one in which the applicant has a bona fide intention to use some of the goods or services in the ITU trademark application, but not all of them. In this situation, there is an opportunity for the trademark applicant to cure the problem by deleting the goods or services that it lacks a bona fide intention to use from the trademark application. Id. at 619-623.

After comprehensively reviewing TTAB cases on the subject, including some that appeared to conflict with each other, the Court held that, if the applicant cures by deleting the goods or services, then that resolves the issue. Otherwise, the entire class containing the goods or services lacking the required intent is void. Id.

Counseling ITU Clients to Document Their Intent

One takeaway from this blog post (for me too) is that trademark attorneys need to counsel clients who are filing intent-to-use trademark applications that they will need to provide objective evidence of their bona fide intention to use if the issue ever gets litigated. I've made a note to update my ITU trademark letter templates to include language addressing this issue. I've also made a note to myself to share those updated templates with everyone who has subscribed to Trademark Well. If you want to be one of those people, just click here: subscribe

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