Why is nonuse of a trademark registration a problem?
The US trademark registration system differs from those of foreign countries which do not require usage of their registered trademarks. In the US, a registered trademark must be used continuously on the goods or services identified in the registration. The problem arises when a trademark owner stops using a registered mark on some or all of the identified goods or services while the registration is still in effect. The nonuse of trademark registrations still in effect creates inequalities and inefficiencies in the US trademark registration system.
Such “deadwood” trademark registrations may block applications of similar marks from registering. This may give registration owners an unfair advantage as a high burden is placed on the applicant to cancel a registered mark.
Why is trademark nonuse a greater risk for foreign owners?
A peculiar risk lies with foreign owners of US trademark registrations. Many non-US owners may have registered their trademarks in the US without use in commerce at the time of the registration date. Not sure if you can call it a loophole, but owners of foreign trademark registrations may apply for USPTO registration of the same mark without showing any prior or current usage of the mark on US soil. This is made possible by Section 44(e) discussed here. Known as the foreign registration basis, an owner of a foreign registered trademark may be able to register the same mark in the US assuming all other requirements are satisfied (e.g., no likelihood of confusion, no mere descriptiveness, etc.).
Currently, there is no set date-specific deadline by which a registered trademark based on a foreign registration must be used in the US. There is the general presumption of abandonment if a mark has not been used for at least three years. Therefore, foreign owners may be tempted to sit on a registration without commencing use in the US for a few years.
What are the new nonuse procedures introduced by TMA?
Under the Trademark Modernization Act, two new challenges have been created to eliminate deadwood registrations. The appropriateness of each procedure depends upon the timeframe of when the alleged nonuse occurred. The purpose of these new trademark nonuse attacks is to streamline the process for removing deadwood registrations.
What is the TMA nonuse procedure if the registered trademark was not used as of certain filing dates?
A reexamination proceeding is the proper procedure for canceling some or all the goods or services in a registration based on nonuse as of certain dates in the examination process. Here are the critical dates of nonuse during the examination:
a) the filing date of a use-based application; or
In other words, a false declaration of use during the examination phase of a trademark application will give rise to a reexamination proceeding. One helpful way to remember this challenge is that “examination” is in the name of this procedure: reexamination.
A reexamination proceeding must be requested within the first five years of registration. Registrations that are 5-years old or older will not be susceptible to a reexamination attack.
Keep in mind that registered trademarks resulting from Madrid Protocol applications and Section 44(e) foreign registration basis need not show use prior to obtaining registration. Therefore, such foreign-based registrations will most likely be immune to a reexamination attack.
What is the TMA nonuse procedure for a registered trademark that has never been used?
If a registered mark has never been used, a third party may file an expungement proceeding to request cancellation of some or all of the goods or services in a registration. The time limit for requesting an expungement proceeding is between 3 and 10 years after the registration date.
Owners of registrations older than 10-years are still susceptible to an expungement proceeding until December 27, 2023. Thereafter, an expungement proceeding may not be requested against any registration older than ten years.
Keep in mind that expungement applies only when a registered trademark has never been used. If a registered mark had been used at one time, but has since been abandoned, an expungement would not be an appropriate attack in this situation.
Is a reasonable investigation required before requesting a reexamination or expungement procedure?
Yes, a petition to request an expungement or institution proceeding must include a verified statement that sets forth the elements of the third party’s investigation. The elements of a reasonable investigation should show that a search for use in relevant channels of trade and advertising for the identified goods or services did not reveal any relevant use. Generally, a single search using an internet search engine likely would not be considered a reasonable investigation.
A requestor’s statement to support a nonuse procedure should specify the sources searched, how and when the searches were conducted, and what information and evidence, if any, the searches produced. In addition to online searches for goods or services offered by registrants, consider looking into any state or federal filings that may provide information on the registrant’s marketplace activities, or lack thereof.
Do third parties participate in expungement or reexamination proceedings?
No, third parties may only request a non-use challenge, but cannot participate in the proceeding once instituted. These non-use proceedings are ex parte, so each trademark nonuse case is conducted between the registrant and the USPTO.
Unlike inter partes proceedings before the TTAB which involve an adversarial battle between the challenger and the trademark owner, an ex parte proceeding significantly reduces costs for the third party petitioner.
What preventive steps should foreign owners take now to protect their US trademark rights?
For foreign owners of US trademark registrations older than 3 years, it would be wise to double-check that such registered marks are currently in use in the US. If there are any registered marks older than 3 years which have never been used in the US, foreign owners may want to file a new US trademark application.
Keep in mind that new applications can still be based on a foreign registration for the exact same mark. This means that foreign owners can still bypass the general requirement of showing use in the US.
What preventive steps should US-based owners take now to protect their US trademark registrations?
If there are registered marks less than 5-years old where the usage was questionable as of the filing date of the use-based application or a Statement of Use, US owners should consider filing a new trademark application.
Thank you for rating my post!
We want to do better.
Could you tell us what was missing in our post?