United States: Under The Sea: Sneaky Trademark Filings For Cautious Companies

Last Updated: January 14 2019
Article by Joshua S. Jarvis

The general rule of thumb for trademarks in the U.S. – and everywhere else, for that matter – is "the earlier, the better." It's almost always the right move to file a trademark application as early as possible, and well in advance of a product or service announcement, both to (a) minimize the possibility of conflicting marks and filings; and (b) mitigate the potential for attempted trademark and domain name "squatting" that inevitably follows a well-publicized product/service announcement. This is why a federal intent-to-use (ITU) application is so valuable. Provided a company has the requisite bona fide intent, an ITU filing allows a company to secure a constructive trademark priority date years before the company begins shipping products or providing services in U.S. commerce.

But what if a company wants the benefits of an ITU application without revealing its business plans to the world? One possible solution is a "submarine" filing.

Tensions Between Business Goals and Trademark Best Practices

Despite the legal benefits of an ITU filing, there's a potential downside: it essentially telegraphs a company's intentions. Because U.S. federal trademark applications are made available for public inspection (e.g., via the USPTO's TESS database) almost immediately after filing, a trademark filing could disrupt a company's carefully crafted marketing push leading up to a key announcement or important product unveiling. This is especially the case if the trademark is highly suggestive, such that the mark combined with the descriptions of goods/services leave little mystery.

This can be frustrating, and illustrates the tension between a company's legal strategy and PR/marketing strategy. On the one hand, it's a competitive world, and a "poorly timed" trademark application may well reveal a company's heretofore confidential plans to unveil a new product, announce new platform feature, or even take on an entirely new industry. Indeed, analysts, enthusiasts, and competitors – especially in the technology, entertainment, automotive, and game industries – routinely scour various trademark registries for clues as to a company's next move. On the other hand, as discussed above, time is always of the essence in the world of trademarks, and waiting too long could conceivably result in a more complex road to securing trademark rights, complications related to social media and domain name strategies, or a need to rebrand entirely. So what's a company to do if it desires the comfort of a U.S. federal application, but also wants to keep its plans under wraps for just a while longer?

Shell Company Shenanigans

One option a company can employ is to file a trademark application in the name of a separate entity – for instance, a "shell" subsidiary or affiliated entity not known to be connected to the interested company, and possibly one created for the express purpose of "disassociating" the trademark filing from the true party of interest. Corporate/tax considerations aside, in theory this can be a viable strategy, but in the U.S. it's one fraught with complications; first, there's a question of whether the holding entity has a bona fide intent to use the mark, and second, transferring the inchoate trademark rights and the underlying ITU application could require some fancy footwork due to the Lanham Act's anti-trademark-trafficking prohibitions. These complications could result in an application or a resulting registration being vulnerable to challenge on the basis of it being void ab initio (invalid from the outset), or abandoned via improper transfer – potentially serious consequences that may not manifest until a dispute arises years later.

"Submarine" Filings

For these reasons, U.S. trademark filers desiring some stopgap stealth may prefer a different approach. Enter the so-called "submarine" trademark filing. A submarine filing is a trademark application filed in a relatively obscure trademark registry that, unlike many national registries, does not have a widely accessible online database of pending applications, such that an application is not easily available for public inspection. Popular destinations for such applications include the island nations of Jamaica, Mauritius, Saint Lucia, Tonga, and Trinidad and Tobago – none of which currently make trademark applications available to public scrutiny via an online database.

How, you might ask, does filing for your trademark in a relatively obscure registry like Mauritius help you secure trademark rights in U.S.? Well, it's because Mauritius on the one hand, and the U.S. and most other countries on the other hand, are signatories to the Paris Convention for the Protection of Intellectual Property – an intellectual property treaty dating back to 1883 which, among other things, provides for trademark "priority" for identical trademark filings filed in treaty countries within six months of the original application. In the U.S., the Paris Convention priority benefit is codified in Section 44(d) of the Lanham Act. This means that – except in the very rare situation where your company can't claim any treaty country as its "country of origin" – you could file in Mauritius on February 1, 2019, and wait to file in the U.S. up to August 1, 2019, and your "priority" date for the U.S. application would be February 1, 2019. In other words, your relative rights – your rights vis-à-vis third-parties claiming or seeking rights in confusingly similar marks – would be assessed as if you filed your U.S. application in February, but because you waited for a few months you enjoyed the strategic benefit of keeping your trademark hidden, "underwater," until your U.S. application was actually filed.

Here's an example of a submarine trademark strategy in action. Mobile game publisher Zynga filed an application to register the mark GIFS AGAINST FRIENDS in Trinidad and Tobago on March 13, 2017. The U.S. ITU application was filed on April 19, 2017, and the game was announced and released just a day later, on April 20, 2017. In this case, the submarine filing likely gave the company some peace of mind, but allowed it to hold off on a more public trademark filing until it was ready to announce the game. You'll note that Zynga filed the U.S. application a day before announcing the game, but it could have also waited until the day after, or almost another five months later, with no loss of trademark rights.

"Submarine" Benefits and Risks

One benefit of the submarine filing strategy is that there are no eligibility requirements, other than that (a) the initial application be filed in a Paris Convention jurisdiction, and (b) the applicant have a country of origin that is also a Paris Convention member (any member – e.g., this would work for a Swiss company filing in the U.S.). Beyond that, a trademark applicant claiming priority under 44(d) can file a standard ITU or use-based trademark application in the U.S., and need have no connection to the "underwater" registry. (The broad availability of the submarine strategy under 44(d) should not be confused with a mark registered under Lanham Act Section 44(e), which is available only where the same mark is duly registered in the trademark owner's "country of origin.") Further, there's little risk. Once the U.S. application is filed, the fate of the submarine application cannot affect the U.S. application's priority date – even if the submarine application is eventually abandoned entirely.

Beyond the relatively modest cost of engaging local counsel to file the initial trademark application abroad, the possible downside to submarine filings is their relative uncertainty. Although certain trademark registries currently don't provide online databases such that it's difficult to identify new trademark filings, trademark search vendors are increasingly keeping even "obscure" registry databases updated and available to their subscribers. This means that it may be difficult to keep determined and curious snoopers ignorant for long. That said, while a submarine filing isn't a 100% waterproof bet to avoid public scrutiny, it does increase a company's chances of securing trademark rights while also maintaining some control of the "buzz" leading up to a surprise product announcement, especially if the lead time is relatively short.

To mitigate this uncertainty, some companies double up on the strategies discussed above, and create shell companies expressly for the purpose of holding and filing submarine applications, though my earlier admonition to tread (water) carefully apply.

To view Foley Hoag's Trademark and Copyright Law Blog please click here

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
Events from this Firm
4 Mar 2019, Other, Boston, United States

Hear from industry leaders on the latest trends in PE investments from 2018 and predictions for 2019.

13 Mar 2019, Webinar, Boston, United States

Foley Hoag will present a 60-minute webinar on Wednesday, March 13 at 12:30 pm EST, covering a range of traps and tips related to IP licenses.

22 Mar 2019, Other, Boston, United States

The New England Electricity Restructuring Roundtable has been meeting bimonthly since 1995 to discuss current topics related to important changes in the electric power industry in Massachusetts and throughout New England.

 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Sign Up
Gain free access to lawyers expertise from more than 250 countries.
 
Email Address
Company Name
Password
Confirm Password
Position
Industry
Mondaq Newsalert
Select Topics
Select Regions
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