A 2003 trademark administrative decision highlights the importance for in-house counsel and trademark managers of verifying the use of a trademark when obtaining or maintaining a U.S. trademark registration. The penalty for overstating the use of a trademark is losing the application or entire registration, which may turn a trademark owner with senior rights into a potential infringer with junior rights. This article will discuss the Medinol Ltd. v. Neuro Vasx case, and offer practical tips to trademark owners on how to satisfy use requirements.
The Medinol Case: Watch What You Say
The cancellation proceeding in the Trademark Trial and Appeal Board ("TTAB") case of Medinol Ltd. v. Neuro Vasx provides the starting point for our discussion (67 USPQ 2d 1205, TTAB, May 2003). The case revolved around whether an earlier trademark registrant, Neuro Vasx ("NV"), filed an accurate Statement of Use in support of its application and the penalty for its being sloppy with the facts. The petitioner in the case, Medinol, filed an application after Neuro Vasx, and when its application was blocked by NV's registration, it challenged the allegation of trademark use. The chronology of important events in the case is as follows:
July 1997: NV files intent-to-use application for NEUROVASX mark covering stents and catheters
June 1999: Medinol files intent-to-use application for NIROVASCULAR mark for stents
Nov. 1999: NV begins using NEUROVASX mark for catheters
Jan. 2000: NV files allegation of use of NEUROVASX mark for stents and catheters
Aug. 2000: NV receives registration for NEUROVASX for stents and catheters
Oct. 2000: Medinol's application for NIROVASCULAR for stents refused
May 2002: Medinol petitions to cancel NEUROVASX registration
Sept. 2003: The petition is granted and NV's registration for NEUROVASX cancelled for filing a fraudulent Statement of Use
The case focused on whether the Statement of Use filed by NV was fraudulent, and what the penalty should be. The Statement of Use, signed by NV's president, stated that the NEUROVASX trademark had been used on both "stents" and "catheters." However, the NEUROVASCULAR mark had only been used on catheters, not stents. Upon realizing that its registration was in jeopardy, NV attempted to correct the inaccurate Statement of Use by requesting that "stents" be deleted from the registration, claiming the inclusion of that item in its Statement of Use was simply an oversight.
The TTAB decided that NV's sudden honesty did not cure the earlier fraud, and that the fraud on the USPTO tainted the entire registration. The TTAB felt that when NV's president signed the Statement of Use, he knew or should have known that the mark was not in use on all of the goods covered by the application, especially since it was a short list of goods (two items). The TTAB noted that the Statement of Use was signed with a declaration acknowledging that false statements might jeopardize the validity of the application or any resulting registration. It admonished trademark applicants to take such oaths seriously and investigate facts thoroughly prior to submission of a Statement of Use to the USPTO. Finding that NV had committed fraud on the USPTO during the application process, the TTAB cancelled NV's entire registration for NEUROVASX, clearing the way for Medinol to register the later-filed NIROVASCULAR mark. Not only did NV lose its registration, it became a junior user - and infringer overnight. Because NV's seniority was based on the filing date of its intent-to-use application, its seniority disappeared along with its application. NV's common law trademark rights (the date of actual first use in commerce) did not begin until after the filing date of Medinol's intent-to-use application, the latter's "constructive use" date.
Why is this case important? If a trademark applicant does not take the time to confirm that a trademark is in use on all of the goods in a traditional filing - whether a Statement of Use, a use-based application, or a declaration of use filed post-registration - it could lose the entire registration and possibly find itself suddenly an infringer of third-party trademark rights.
What Is Trademark "Use"
This discussion leads to an important question raised by many trademark owners and their marketing managers - what kind of trademark use will support a federal registration? Since the Medinol case highlights the importance of confirming whether a trademark has been used in connection with all of the goods or services covered by an application prior to the filing of a Statement of Use, a review of the formal definitions and requirements is helpful.
The Lanham Act or federal trademark law defines "use in commerce" of a trademark to mean the good faith use of a mark in the ordinary course of trade, and not made merely to reserve a right in a mark, which is called "token use." A mark is considered in "use in commerce" with goods when:
Trademark Use on Goods
The mark is placed on the goods, labels, tags, their containers, or displays associated with the goods (or if the nature of the goods makes the placement of the mark impractical, then on documents associated with the goods or their sale); AND
- the goods are sold OR transported in interstate commerce.
Trademark Use with Services
A mark is considered in "use in commerce" in connection with services when:
- the mark is used or displayed in the sale or advertising of services; AND
- the services are rendered in interstate commerce, or rendered in more than one state.
What Isn't Trademark "Use"
A mark is generally not considered in use in commerce when it is put on business cards, letterhead, or shown in presentations to company employees, advertising agencies, investors or possible business partners.
Intrastate and Interstate Commerce: What Counts as "Use"
A purely intrastate use of a trademark is not considered "use in commerce" for federal registration purposes, unless that use affects a type of commerce that Congress regulates. For example, a mark used to promote restaurant services rendered at a single location would be considered "use in commerce," since the restaurant may serve interstate customers. Similarly, services offered via the Internet constitutes "use in commerce" since the services are available to a national audience who must use interstate telephone lines (regulated by Congress) to access the website.
When completing a use-based application, Statement of Use, or Amendment to Allege Use, a trademark owner must provide two dates: the date of first use "anywhere" and the date of first use "in commerce." The date of first use anywhere would be the date that the goods were first sold or transported on an intrastate basis. If the first sale or shipment was interstate, then the date of first use "anywhere" and the date of first use "in commerce" would be the same. The same rule applies to services. The date of first use "anywhere" can never be later than the date of first use "in commerce."
For companies located outside of the U.S., the date of first use "in commerce" may be the date that the products were first sold or shipped between a foreign country and the U.S., if not between two
U.S. states as discussed above. The date of first use "anywhere" would be the date that the owner first began using the mark in its own country or elsewhere.
What If Use Is Partial
Often a trademark owner will file an application with the intent to use a new mark on a range of goods, say apples, oranges, and bananas. As the business plans for the product line evolve, the mark is only used on apples and oranges. When the time comes for the filing of a Statement of Use, the owner would simply file a Statement of Use covering the apples and oranges, with a request that bananas be deleted from the application. Or, if the owner intends to use the mark at a later time for bananas, it is possible to divide the application into two applications, with the goods that are in use proceeding to registration.
Global Perspective: Be the First to File
The United States is one of the few countries worldwide that requires an applicant to provide evidence of use of a trademark prior to obtaining registration. Most countries follow the "first to file" rule, rather than "first to use," allowing the first company or individual that files an application to register a mark to obtain trademark rights. However, even in "first to file" countries, it is necessary for a trademark owner to use the registered mark in order to avoid having the registration become vulnerable to cancellation. Typically, a trademark owner who has not used the mark within a period of three to five years following registration may forfeit the registration if an interested third party seeks to cancel the registration for non-use of the mark.
Practical Considerations for Trademark Owners
To avoid the fate of the registration holder in the Medinol case, trademark owners should review thoroughly the use information for all of the goods and services covered by a federal application. Some tips for trademark owners are:
- Create a checklist of all of the goods or services listed in the application;
- Circulate the checklist to the appropriate marketing or other inhouse personnel that have first hand knowledge of sales of products or services;
- Have the appropriate personnel provide the date of first use of each product or service listed;
- Keep documentation of the date of first use of a mark, e.g. an invoice; and
- If you discover that a product or service listed in a Statement of Use or application was not in fact offered, as was previously thought, let your trademark attorney know as soon as possible; it may be possible to amend the registration by deleting that item.