As we discussed here, section 1(b) of the Lanham Act allows a person to file a trademark application prior to using the mark in commerce. 15 U.S.C. § 1051(b)(1). To do so, an applicant must have a bona fide intent to use the trademark in commerce, and, as discussed previously, we typically advise that our clients should be ready to use their mark in commerce within six months. Lack of bona fide intent to use will result in denial.
The question arises, what is a bona fide intent to use? Recent court decisions have provided guidance. As we will discuss below, there are seven (7) factors to be considered in determining the existence of a bona fide intent to use. They are:
- Statements Indicating Mere Intent to Reserve
- Do Products Exist?
- Technological Feasibility
- History With the Particular Product or Similar?
- Have Customers Been Located, Consulted, Identified, Etc.? What is the Market?
- Have Firm Decisions Been Made?
- Have Steps Been Taken Since Filing the Application?
We discuss these in depth below, but let’s look first at some of the history that brought about these seven factors.
Lack of Bona Fide Intent to Use is Grounds for Denial
Lack of a bona fide intent is proper statutory grounds on which to deny or challenge a trademark application. See MZ Berger & Co., Inc. v. SWATCH AG, 787 F. 3d 1368 (Fed. Cir. 2015). For many years, the USPTO has used lack of bona fide intent as a basis for denial and as a basis on which an opposer can challenge an applicant’s registration during the opposition period. The MZ Berger court confirmed the USPTO position.
Case-by-Case and Totality of the Circumstances
The MZ Berger court also held that a determination of bona fide intent is to be made on a case-by-case basis. No bright line rules are to be provided. Further, whether the bona fide element is satisfied, is to be based on the totality of the circumstances. The USPTO and any opposer to the application are free to look beyond the verified statements and other materials provided by the applicant in the application.
Filing an Application is, in Itself, NOT Evidence of Bona Fide Intent to Use
The MZ Berger court also established that the filing of an application is, in itself, not evidence of an intent to use. The USPTO and opposer are free to demonstration that images and information contained in the application were created with an intention to advance the prosecution of the trademark application rather than an intention to use the mark or marks on an actual product in commerce. A prime facie case involves the seven factors discussed below.
What is Bona Fide Intent to Use?
The MZ Berger case is instructive on what factors are considered in determining when bona fide intent exists. In MZ Berger, the applicant was/is a manufacturer, importer, and seller of watches, clocks, and related products. In 2007, it filed an intent-to-use application seeking to register the mark “iWatch” for over thirty different goods covering watches, clocks, clock dials, watch bands, and watch straps. The USPTO approved the application, but in 2008, during the opposition period, a competitor, Swatch AG filed a Notice of Opposition on the basis that “iWatch” is confusingly similar to its mark “Swatch” and that MZ Berger lacked a bona fide intent to use. The Trademark Trial Appeal Board (“TTBA”) agreed with respect to the intent to use argument and denied the application. The TTAB was affirmed by the Federal Circuit. MZ Berger & Co., Inc. v. SWATCH AG, 787 F. 3d 1368 (Fed. Cir. 2015).
The MZ Berger case identified seven (7) factors to be considered in determining the existence of a bona fide intent to use.
Let’s take a look at each of these seven factors more in depth.
1. Statements Indicating Mere Intent to Reserve
According to MZ Berger, the “evidentiary bar is not high” for showing bona fide intent to use. However, some evidence must be supplied and the evidence must be objective.
According to the court, the use of the word “circumstances showing the good faith” means that the applicant’s intent must be demonstrated with objective evidence of intent. Evidence that is “a mere subjective belief” will be insufficient to clear the low evidentiary bar. The objective evidence must show that the applicant’s intent to use the mark was not merely its intent to reserve a right in the mark. The MZ Berger court found against the applicant on this factor.
The case of Kelly Services, Inc. v. Creative Harbor, LLC, 846 F. 3d 857 (6th Cir. 2017) is also instructive here. In Kelly Services, the company testified that it asked its attorney to file the trademark applications in order “to protect this brand … in case the brand got bigger; in case it diversifies a little bit.” (emphasis in original). The court held this to be evidence of an intent to reserve a trademark; not evidence of an intent to use.
2. Do Products Exist?
A crucial factor is whether actual products — or prototypes — exist. The existence of a bona fide intent to use is less likely if the products to be sold are merely theoretical or “on the drawing board.” In MZ Berger, there were no products or prototypes in existence.
3. Technological Feasibility
Along a similar vein, the courts ask: is the product feasible? If no physical examples of the product exist, the courts might still inquire as to technological feasibility. Can the product be produced? Are there technological limitations? How quickly can product be produced and brought to market? In MZ Berger, there was no evidence on these issues.
4. History With the Particular Product or Similar?
In the MZ Berger case, as noted, the court held there to be no bona fide intent to use. In so holding, the court considered MZ Berger’s history in the watch industry. In particular, while MZ Berger had made watches, it had never made a “smart” watch or anything similar to the iWatch described in the application. As such, this factor — lack of history — weighed against finding the existence of a bona fide intent to use particularly in the absence of a prototype.
5. Have Customers Been Located, Consulted, Identified, Etc.? What is the Market?
Next, potential customers are relevant to whether a bona fide intent to use exists. Have customers been located, identified or consulted? If there is no evidence showing such, this is a factor to be used to make an adverse ruling by the USPTO and the courts. Again, in the MZ Berger case, no evidence was produced showing customers had been identified or consulted, etc.
6. Have Firm Decisions Been Made?
In holding that no bona fide intent to use existed, the MZ Berger court also noted that the applicant had not made firm decisions with respect to (i) which type of watch it was planning to bring to market or (ii) whether to use the proposed mark. MZ Berger was deciding between what was called a “technology watch” or an “information watch” or a “smart watch.” But no decision had been made at the time of filing or thereafter. The lack of decision on what type of watch to make weighed against finding bona fide intent to use. But further, statements in the record indicated that there was also no firm decision to use the mark regardless of the type of watch selected. See also Kelly Services, where the evidence showed no “firm” intention to use the proposed mark with respect to several of the goods and services listed in the application.
7. Have Steps Been Taken Since Filing the Application?
Finally, in holding that no bona fide intent to use existed, the MZ Berger court noted that no evidence had been presented showing that MZ Berger had taken any steps to develop or manufacture the product described in the application.
Taken altogether, the Federal Circuit concluded that the USPTO properly sustained the opposition to MZ Berger’s application.
In our experience, filing an intent to use application allows an applicant to avoid the risks associated with arbitrary decisions by USPTO examining attorneys. USPTO examining attorneys are not infallible, and, in our practice, we have received many seemingly arbitrary refusals (and allowances) from examining attorneys. When an applicant files an application based on a current use in commerce, and where that applicant has invested significant resources into its brand prior to filing a trademark registration, a refusal by an examining attorney can be devastating to the applicant’s business. If the applicant files an intent to use application, however, and the USPTO examining attorney refuses the application, the applicant can simply rebrand because it has not yet invested significant financial resources in the trademark.
Contact the Knowledgeable Trademark Attorneys at Revision Legal
As can be seen, legal principles and rules related to trademarks can be complicated and overwhelming if you do not have a lot of experience in trademark law and in intellectual property law. If you need help deciding how to register a trademark or assistance with filing an intent-to-use trademark, retain the services of a knowledgeable trademark attorney like those at Revision Legal today. We can be reached by using the form on this page or by calling us at 855-473-8474.
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