The United States of America (US) has for a long time been one of the biggest generators of intellectual property owing to the significant strength and output of its economy, as well as highly developed research & development, legal, and marketing sectors in the country.
For decades, the US had the highest number of domestic filings of patent and trade mark applications – a position which has only in recent years been overtaken by China.
According to statistics produced by the United States Patent and Trademark Office (USPTO), in the year 2020, the USPTO received applications to protect trade marks in a total aggregated number of 738,112 goods and/or service Classes. This measure puts the US in a firm second place behind China in terms of protection sought for different trade marks in the territory. However, according to WIPO IP Facts and Figures 2020, in 2019, the highest volume of International Trade Mark applications, 10,087 – or roughly 15% of all filings - originated from the US.
It is clear that the US is an important territory for most businesses with an international focus and continues to be, in particular, a significant market for Scottish food and drink exports. It is therefore especially delightful that recently the tariffs imposed by the US on Scotch whisky exports have now been suspended.
This article attempts to uncover the "Wild West" of US trade mark law and practice and will hopefully provide businesses with an indication of some of the specifics to be aware of when seeking to make use or register trade marks in the US.
What and who regulates US trade mark law?
The USPTO is the federal agency responsible for examining and registering trademarks. In its work, the USPTO and its examiners are guided by the primary legislation for US trademark law, which is the federal level Trademark (Lanham) Act of 1946 (as amended).
The USPTO has a complex structure which features a significant number of Offices for its various functions. In terms of trade marks in particular, the following offices should be mentioned – 1) The Office of the Commissioner for Trademarks, which is responsible for trademark examination policy, trademark operations, and trademark administration, and 2) the Trademark Trial and Appeal Board (TTAB), which hears and decides adversary proceedings involving: oppositions to the registration of trademarks, petitions to cancel trademark registrations, interference proceedings, and proceedings involving applications for concurrent use registrations of trademarks. The Board also decides appeals taken from the trademark examining attorneys' refusals to allow registration of trademarks.
Decisions issued by the USPTO at the examination stage can be appealed to the TTAB. TTAB decisions may be appealed to a federal court.
The US is also party to the Paris Convention and the Madrid Protocol which means that it will recognise convention priority and can be designated via an International Trade Mark.
Ownership of trade marks – first-to-file or first-to-use basis?
With its legal traditions rooted in the common law, the US trade mark system, save for a few exceptions, recognises the ownership of trade marks on a first-to-use basis. As such, the US trade mark system recognises and provides protection for unregistered (or common law) trade marks.
Unregistered trade marks
As in the United Kingdom (UK), the owner of a distinctive sign used to indicate the origin of goods or services can establish common law rights by using the sign in commerce. In the US unregistered trade marks are enforceable in both state and federal courts based on the Lanham Act.
In any proceedings that the owner wishes to bring relying on its unregistered trade mark, it will be required to prove that it in fact does own a valid unregistered trade mark. Compared to federally registered trade marks, which will be presumed to be valid (unless challenged and proven to be invalid), relying on an unregistered trade mark will often result in an increased evidentiary burden and higher costs.
It must be noted though that except for certain circumstances, unregistered trade marks will be limited in scope and only enforceable in those geographical areas in which the trade mark is used or known by consumers.
Registered trade marks
As already briefly touched upon above, registered trade marks carry significant advantages over unregistered trade marks. In addition to providing the owner with the sole right to a particular trade mark on a US-wide basis, owners of registered trade marks also benefit from the right to use the ® symbol, can license and transfer the ownership of their trade marks with greater ease, and will be able to obtain remedies otherwise not available. Furthermore, a trade mark registration provides a legal presumption of the ownership of a trade mark and acts as a public notice thereof. A valid US trade mark registration is also necessary for recording the trade mark with the US Customs and Border Protection agency to prevent the importation of infringing or counterfeit goods.
On a practical level and perhaps most importantly, due to the USPTO's practice of relative grounds examination, an earlier trade mark application or registration can be cited as a barrier by the USPTO examiner when he or she assesses the registrability of a new application.
The US trade mark system also allows for the protection of Collective and Certification marks.
In the US, some federal level trade marks which do not qualify for the Principal trade mark register may be entered onto the Supplemental Register. The Supplemental register is a secondary list maintained by the USPTO for marks which are objectionable for example on grounds of being descriptive, surnames, or geographical names but may still in some way be able to distinguish the applicant's goods from those of others.
Although trade marks entered onto the Supplemental Register do not receive all the protections afforded to trade marks on the Principal Register, such as an implied right to the exclusive use of the mark, there are still certain benefits to recording trade marks on the Supplemental Register as long as they are in use in commerce in the US. Such benefits include use of the ® symbol, the ability to rely on the registration in countries that offer reciprocal trade mark rights, and the right to obtain injunctive relief, damages or an account of profits, in the event that the owner of a trade mark on the Supplemental Register is able to win an infringement action.
The possession of a registration on the Supplemental Register may also in some instances support a new application for the entry of a trade mark onto the Principal register, if the applicant is able to provide new and additional evidence to demonstrate that the trade mark has become an indicator of commercial source through use.
Use requirements, filing bases, and registration bases
Although it is necessary to indicate a bona fide intention to use the trade mark in respect of the goods and/or services covered by the application in the UK as well, the use requirements are comparatively much more strictly policed in the US and are built into the application and registration processes.
When an application is filed for a US trade mark, the applicant will be required to include one or more of the four "filing bases". Each filing basis has different requirements, which must be met before an application will be able to progress to registration.
The filing bases are:
- Use in commerce basis – the trade mark is already currently in use in commerce in the US
- Intent-to-use basis – the trade mark will be put to use in commerce in the US in the near future, i.e. usually within the timeframe allowed for by the application process
- Foreign registration basis – the applicant possesses a foreign registration for the same trade mark covering the same goods and/or services
- Foreign application basis (foreign priority basis) – the applicant has filed a foreign application for the same trade mark covering the same goods and/or services and claims its priority date for the US trade mark application
A further fifth filing basis (request for extension of protection of an International Registration to the United States) is available for applicants designating the United States via an International Registration.
In addition to the filing bases, the applicant will need to satisfy one of the two registration bases before its trade mark application will be accepted for registration.
The registration bases are:
- Use in commerce basis – the applicant is able to demonstrate that the trade mark is already currently in use in commerce in the US
- Foreign registration basis – the applicant is able to supply evidence of a valid foreign trade mark registration for the same trade mark and goods and/or services covered by the US application or designation.
Depending on the filing basis, the applicant may be required to prove actual commercial use of the trade mark as part of the application process before the application is allowed for registration.
There are some additional differences in the treatment of applications filed under the different bases. For example, designations of International Registrations in the US filed only with the foreign registration basis a do not qualify for entry onto the Supplemental Register.
Once an application is filed before the USPTO, it first undergoes an absolute grounds and relative grounds examination.
Absolute grounds include the following issues that may be raised:
- Non-compliance with filing requirements;
- A lack of distinctive character;
- Being primarily geographically descriptive or deceptively mis-descriptive;
- Being of an immoral or scandalous nature;
- Being disparaging of a person, institution, belief or national symbol;
- Consisting or comprising of a national flag or other protected symbols of states or municipalities;
- Constituting ornamentation (i.e. being merely a decorative feature or part of the "dress" of the goods"); and
- Attempting to protect a function or a functional element;
Furthermore, in the US, goods and services need to be specified according to their common commercial names and in relatively greater detail compared to the UK and the EU. This can lead to specification queries (objections) being raised, especially if the Applicant is designating the US via an International Registration and does not proactively limit its goods.
Relative grounds examination is based on an assessment of a likelihood of confusion with other earlier trade mark registrations or applications. The USPTO Examiner conducts a search of the trade mark database and raises as barriers to registration any earlier rights which may give rise to a likelihood of confusion on the basis of sound, meaning, appearance, or commercial impression with reference to the goods and services covered by the cited mark vis-à-vis the goods and services covered by the application.
If no absolute or relative ground objections are raised, or in the event that these are overcome, the trade mark application will be accepted and published for opposition purposes. The opposition period normally lasts 30 days from the date of the publication, however, this can be extended by interested third parties for up to 90 days without the Applicant's consent. The deadline for filing an opposition can be further extended by an additional 60 days with the Applicant's consent.
If no oppositions are filed at the end of the opposition period, a Notice of Allowance will be issued by the USPTO in applications filed based on Intent to Use. The Notice of Allowance is a key document as it establishes the deadline for filing a statement of use and the Applicant will then be required to demonstrate compliance with the above-mentioned "use in commerce" registration basis.
The deadline for responding to the Notice of Allowance i.e. the deadline to file evidence of use in commerce can be extended for a fee by six months up to five times for a total time period of three years from the date of the Notice of Allowance.
Generally, if no substantive issues arise during the examination process, an application can potentially proceed to registration within six to nine months of its filing date.
Once a trade mark becomes registered, the USPTO issues a registration certificate confirming the particulars of the trade mark and its protection.
A difference that sets the US aside from other jurisdictions is that there is a two-tier approach to revocations whereby different grounds are available during the first five years since the registration, compared to a restriction of the grounds available after the registration has passed its fifth year anniversary.
In particular, (save for some exceptions) it is not possible to rely on relative grounds (i.e. earlier rights) to challenge a registration after it has passed its fifth year anniversary.
Maintaining registrations in force
As in the UK, US trade mark registrations are renewable every ten years upon the payment of a renewal fee.
In addition to this requirement, in order to maintain a registration in force, the owner must file a Declaration of Use, which includes submission of a specimen (in respect of all of the goods and/or service classes to be maintained in the registration) demonstrating current use of the mark in commerce in the US between the fifth and sixth years following registration.
For registrations with a "foreign registration" basis, the filing of a Declaration of Use can be the first time the proprietor is required to demonstrate actual commercial use in the US.
Furthermore, following its first renewal, a Declaration of Use (including a specimen) is required also each subsequent time the trade mark is once again renewed.
The US trade mark system also allows for the filing of a Declaration of Incontestability after a registered trade mark has been put to continuous use for five years. Filing a Declaration of Incontestability is voluntary but can carry benefits for the owner of the registration by making various aspects of the trademark registration (such as the validity of a registration) impervious to challenges by third parties.
When accepted, a Declaration of Incontestability provides conclusive evidence of the validity of the registered trade mark and its registration, the ownership of the trade mark, and the owner's exclusive right to the use of the registered trade mark in commerce (subject to certain defences and exceptions).
Assignment of rights
In the US in order to transfer the ownership of trade marks, these must be assigned in a written document together with the goodwill of the business associated with the trade mark. An assignment of a use-based application is treated like an assignment of a registration, but for intent-to-use applications an assignment must include a transfer of the business pertaining to the mark. This is because there is no goodwill associated with a mark that is the subject of an intent-to-use application, as use of the mark in commerce has not yet begun.
Recordal with the USPTO is recommended and provides advantages over assignments that are not recorded, in particular, should a conflict arise in relation to subsequent assignments.
Power of Attorney requirement
A Power of Attorney is required for US attorneys to be able to act on behalf of their clients. The Power of Attorney does not need to be notarised or legalised.
In some cases, however, the Power of Attorney may be inferred when a document (e.g., a renewal application) is signed on behalf of an applicant, registrant, or party to a proceeding who is not already represented by a qualified practitioner.
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.