United States: Oops! Assignment Of Intent-To-Use Trademark Applications: Easy But Not Simple

Last Updated: August 28 2013
Article by Susan Neuberger Weller

 The language in the Trademark Act is very clear on the issue of assignment of intent-to-use applications.  In a recently issued precedential opinion, the Trademark Trial and Appeal Board has held, once again, that Section 10(a)(1) of the Act really means what it simply states, namely, that prior to filing proof of use at the Trademark Office, an intent-to-use application cannot be assigned "except for an assignment to a successor to the business of the applicant, or portion thereof, to which the mark pertains, if that business is ongoing an existing." So why are registrations still being canceled for violating these terms?

Unlike many other jurisdictions, US trademark jurisprudence is founded on the principle of use. Accordingly, a federal trademark registration will not issue until after proof of use has been filed by a US applicant. The US Trademark Office began permitting the filing of intent to use applications in 1989, requiring that proof of use be filed before a registration based upon such an application would issue. The underlying legislative history for this "new" procedure made clear that there would be no tolerance for warehousing of and trafficking in trademarks. Thus, the law requires an applicant filing an intent-to-use application to sign a declaration under penalty of criminal perjury attesting to the fact that it has a "bona fide" intent to use the applied-for mark in commerce on or in connection with the goods and/or services listed in the application as filed. In addition, the Trademark Act, with limited exceptions, requires that a mark be in use before an application for registration can be assigned to a third-party. Seems simple right?

Well, simple can get complicated under the right circumstances. In the recent TTAB case,Cent. Garden & Pet Co. v. Doskocil Mfg. Co., No. 91188816 (TTAB August 16, 2013), a registration used as a basis for filing an opposition proceeding was canceled on a counterclaim for violating the anti-assignment provisions above. In that case, the application which eventually matured into the canceled registration was filed by a company called All-Glass Aquarium Co., a wholly-owned subsidiary of Pennington Seed. Pennington Seed was a wholly-owned subsidiary of the Opposer in this case Central Garden & Pet Company. While the All-Glass application was pending and before proof of use was filed, All-Glass assigned the application to Central Garden. As anyone who practices before the USPTO knows that documents such as assignments which are filed for recordation at the USPTO are not reviewed for accuracy or validity. Rather, if they are filed in the proper format with the proper filing fee, whatever documents are filed will be recorded without review. Thus, with the recordation of this assignment document, the intent-to-use application was assigned to Central and the Registration eventually issued in its name.

The undisputed facts in the case demonstrated that the assignment was not part of any larger transaction between the companies, that Central was not a successor to All-Glass or any part of it, and that All-Glass continued in business in the exact same manner as it had before the transfer continuing to produce and sell products under the assigned mark. Thus, the only thing which was exchanged in the transaction between these two companies was the mark and the goodwill associated with the mark. Neither all or a portion of the Applicant All-Glass was transferred to Central.

In defending against the counterclaim to cancel the registration for an invalid assignment, Central argued that because All-Glass and Central were "closely related companies" and because the assignment did not cause any "confusion or discontinuity" in the use of the mark, that there was no violation of the statute. The Board disagreed completely. It stated that because "Central owned all of the stock in Pennington Seed, and... Pennington Seed owned all of the stock in All-Glass, which in turn owned the...application [at issue], [that] [i]n one sense, it could be said that Central owned the application all along." However, the Board made clear that since Central chose to structure its business using multiple and separate corporate subsidiaries, each of which counts as a "person" under Section 45 of the Trademark Act, it must live with the fallout from that decision. Although such a business structure may offer certain advantages, it does have some strictures and "the existence of a corporation cannot be turned on or off at will to suit the occasion."  Moreover, even though Central was not trafficking in intent-to-use applications and did not engage in any other type of bad faith conduct, the Board was adamant that, regardless, "it does not follow that either entity should be free from the restrictions of the statute." In other words, the language in the statute is clear, its intent is unquestionable, and it means what it says.

There are several takeaways here. First, related companies are not free to assign intent-to-use applications between them unless they meet the strict language of the statute for doing so. Common ownership and/or control alone are not sufficient to meet the standards for a valid assignment. Second, be very careful when filing an intent-to-use application to ensure that the named applicant should be the applicant until such time as proof of use can be filed. For example, sometimes an individual will file an application in his or her name personally prior to forming a corporate or other entity in order to get the earliest possible filing date. In such a situation, he or she may not be able to assign the application to the later-formed entity until after proof of use has been filed. A potential solution to that situation is to have the individual applicant license the rights to the applied-for mark to the newly formed entity so that the eventual use of the mark by the licensee entity can form the basis for filing proof of use, paving the way for assignment of the application to the company. A written license is highly recommended for this purpose. Of course, if an individual applicant does operate an "ongoing an existing business" to which the mark pertains, and that entire business is transferred to a subsequently created entity, then the pending intent-to-use application may be assigned as well. Finally, be sure title to your issued registration is valid before asserting it against a third party and risking cancellation.

Even seemingly easy and simple can be tricky if you're not paying attention.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Susan Neuberger Weller
Similar Articles
Relevancy Powered by MondaqAI
Lewis Roca Rothgerber Christie LLP
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Lewis Roca Rothgerber Christie LLP
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions