Lately it seems like every aspect of advertising and marketing
targeting the military is ripe for generating positive public
relations in the name of consumer protection. In a new and
aggressive move, in December, the Department of Veterans Affairs
("VA") announced it had registered the term "GI
Bill" as a trademark or brand with the U.S. Patent and
Trademark Office. Advertisers of education opportunities to Service
members and veterans need to take into account this important
development intended to help protect service members and
veterans.
According to the VA, "this move goes a long way to enforce
accountability to those who would deceive student Veterans for
financial gain." The VA warns "with millions of dollars
up for grabs, schools and marketing firms won't lie down
because of the trademark, so we'll remain vigilant to ensure
Veterans aren't victims of deceptive recruitment."
Background
The VA's trademark application was filed pursuant to
Executive Order 13607, which President Obama issued in April 2012.
The Executive Order focuses on for-profit education issues
affecting the military and addresses a range of issues, including
enhanced complaint collection and improved information sharing
among the various enforcers responsible for oversight of marketing
practices by for-profit educational institutions, including the
Federal Trade Commission ("FTC") and Consumer Financial
Protection Bureau ("CFPB").
The Trademark Office raised only minor issues, which the VA quickly
resolved, and no third parties attacked the application during a
30-day opposition window. Somewhat anti-climatically, the VA said
it would issue terms controlling third-party use of the brand
"within the next six months." It appears the VA was
caught by surprise when the registration issued so quickly, despite
its rush through the registration process.
A trademark is a "mark" that serves as a source
identifier. Although federal registration of a mark is not
mandatory, it has several advantages, including a legal
presumption, effective nationwide, of ownership and exclusive right
to use the mark on or in connection with the goods/services listed
in the registration (in this case, education benefits and
training).
What Does the Registration Mean?
The VA's effort is a reminder that U.S. government agencies
may obtain trademark registrations. Importantly, the GI Bill
registration gives the VA both a sword and shield to use against
others: a presumption of nationwide brand rights. But, it's not
clear how the VA may choose to assert its rights against third
parties that use the term (or receive GI Bill funding). Moreover,
there are four potential weaknesses that may leave the VA
vulnerable.
First, the VA's rights accrue only from the application filing
date of March 30, 2012. Critically, the VA's presumption of
rights will not be effective against third parties using competing
marks in commerce before March 30, 2012. For those parties, the VA,
to the extent it wants to use trademark rights, must rely on its
so-called "common law" rights, i.e., rights based on use
rather than registration. Such rights must be proven in the
geographic area where the rights are asserted. Surprisingly, the VA
asserted in its U.S. trademark application that it first used its
mark in commerce that may be regulated by Congress on March 30,
2012, though it first used the mark anywhere in 1944. This suggests
the use since 1944 was limited, perhaps geographically.
Couldn't Congress have regulated the commerce in which this
mark traveled since 1944? While the VA can prove an earlier date of
first use than March 30, 2012, one would expect challenged parties
to raise that date as ammunition against the VA.
Second, challenged parties could try to rebut the VA's
presumption of rights, and challenge its registration, on the basis
that the GI Bill has lost significance as a brand, or indicator of
source, due to decades of the VA failing to police third-party
use.
Third, the VA disclaimed all rights to the term "GI"
rather than trying to establish that this acronym, while inherently
weak, has acquired distinctiveness for the VA in the context of its
services by virtue of longstanding use. This may provide an opening
for third parties to use GI, but not GI Bill, in a way the VA would
like to police but lack the firepower to do so. For example, a
non-governmental party recently registered GI Money for related
services.
Finally, challenged parties could defend themselves by arguing
their use is "fair use" and that they are not engaging in
false advertising (e.g., saying they provide GI Bill benefits when
they do not). With respect to fair use, trademark law permits use
of others' trademarks, as long as three conditions are met,
qualifying for so-called "nominative fair use."
What to Expect Next?
With the VA saying it will issue guidelines within the next six
months, it's too soon to know for sure what uses of the term GI
Bill the VA will permit by third-party advertisers. But expect the
VA to issue terms trying to control third-party use. For example,
the VA could issue terms that go at least as far as these
conditions:
- users' goods/services are not readily identifiable without use of GI Bill;
- use of GI Bill is not more than is reasonably necessary to identify the parties' goods/services (i.e., the mark is not used in a prominent or repetitive way); and
- users do not engage in additional conduct that suggests sponsorship or endorsement by the VA (e.g., by using the VA's name or seal).
In the meantime, the VA, FTC, CFPB, and others are actively
engaged in examining issues related to education issues affecting
the military. In addition to the working group, the FTC, CFPB, and
Department of Justice share information with state Attorneys
General that have formed a task force aimed at investigating
advertising and marketing practices in the for-profit education
space. Moreover, during the economic downturn, government enforcers
have focused their efforts on advertising and marketing that
targets consumers in financial distress, which have resulted in
several nonpublic investigations and enforcement actions.
Overall, the VA has a new weapon in the
fight against third-party use of the phrase GI Bill. On the other
hand, every weapon can be vulnerable, and the VA may face
battlefield challenges as it tries to assert the registration and
control third-party use. For others, a lesson emerges: seek
trademark registrations when brands are launched instead of waiting
until they are violated, and think strategically during the
application process.
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