Intent-To-Use Trademark Application Problems: What can go wrong?

What are some Intent-To-Use trademark application problems?

Intent-To-Use trademark applications are great. You get to file an application to register a trademark that you have not yet used. No specimens required. No dates of first use. What’s not to love? In fact, I often recommend ITU trademark applications for startups and businesses at an early stage of product development. As much as we like them, there are traps for the unwary when you attempt to register a trademark that you have not yet used.

Let’s look at what can go wrong in an ITU trademark application.

Can an Intent-To-Use trademark application be assigned to a new owner prior to filing a Statement of Use?

An Intent-To-Use (ITU) trademark application cannot be assigned to a new owner prior to the original applicant filing evidence of use. In other words, the original applicant of an ITU must first use the trademark in connection with the goods or services identified in the trademark application. The applicant must then submit such evidence of trademark usage to the USPTO by filing an Amendment To Allege Use or a Statement of Use depending upon the stage of the application.

Only after filing such proof of usage can the original applicant assign the ITU application to a new entity. But, what if the original applicant desires to transfer ownership of an ITU application prior to submitting evidence of use to the USPTO? Can it be done?

How to transfer ownership of ITU trademark applications

There is one exception that would allow for the transfer of an ITU application to a new owner. An ITU trademark may be transferred if the prospective assignee (new owner) is the successor to the business of the original applicant to which the trademark pertains, and that business is ongoing and existing [15 USC Section 1060(a)(1)]. In this situation, the trademark assignment should be properly drafted. Language should be included in the assignment to reflect the fact that the mark is being assigned as part of the entire business or portion thereof to which the mark pertains.

What is a successor to the business of the original applicant?

Assigning an ITU application to a successor to the business can get tricky. How do we know if the prospective new owner (“Assignee”) is a successor to the business? One way to tell is whether the original applicant still continues that particular line of business even after the assignment. If the original applicant (“Assignor”) continues to sell the same products at issue even after the assignment, an argument can be made that the business of the original applicant has not been transferred to the assignee.

Treating ITU applications like domain names

Thus, ITU trademark applications should not be treated like domain names. Unlike a domain name, an ITU trademark application cannot be easily sold and transferred. Except for applications based on foreign registrations, the USPTO takes the use requirement seriously, and generally expects ITU applicants to follow up with evidence of use.

Can a trademark license agreement establish use for an ITU trademark application to be assigned?

Trademark license agreements might be able to establish use for a trademark owner who, in and of itself, has not yet used the mark in commerce. Assuming the license agreement is properly drafted and the subsequent transactions reflect what is in the written agreement, then an applicant may establish use of a trademark by virtue of the use by a licensee which inures (goes) to the benefit of the licensor/applicant. Maintaining quality control is a key factor in trademark ownership.

Chicken and egg problem: First incorporate or file trademark application?

To avoid the ITU assignment trap, entrepreneurs can form a new company before filing a trademark application. The ITU application can then be filed on behalf of the new company, thereby avoiding the assignment problem. Before incorporating, however, cofounders should check the USPTO trademark database to see if their desired corporate name might cause conflicts later.

Identifying an unrealistically high number of goods or services

One of the benefits of an ITU application is the freedom to identify as many goods and services as you want. Without the need for specimens of use or dates of first use, it can be tempting to list too many items. Is that a problem? It can be if the applicant did not have a bona fide intent to use the trademark on all the goods or services.

Need to file an Intent-To-Use trademark application the right way?

Reach out to patent and trademark attorney Vic Lin by email or call (949) 223-9623 to see how we can help you file a proper Intent-To-Use trademark application. Save time and money by avoiding these ITU traps for the unwary.

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