You have a trademark in your home country and are thinking of expanding to the USA. But in the quite recent past we have witnessed pandemic, war, and weather catastrophes, all causing financial insecurity. In short, calamities happen and that planned expansion may take longer than expected. Still, you need to start the process with the USPTO to get the ball rolling, but you want to stretch out the prosecution at the USPTO to allow time for use of the mark to commence in the USA.
Your home application can establish the same filing date in the USPTO, if filed within six months per the Paris Convention for the Protection of Industrial Property (with 178-member nations, yours is probably a member). Then later, you can file a copy of your home registration thereby perfecting a basis for a US registration under Section 44 of the Trademark Act. (Tip: you do not need to file it as soon as it issues if delay is desired. Wait until the next Office Action issues and the allotted time to respond before filing a copy).
Our firm has long advised using Section 44 as one basis when combined with an intent-to-use basis (ITU). Each basis requires a bona fide intent to use the mark in the USA. Under the ITU basis, a Notice of Allowance will issue after the mark is published and then not opposed in the subsequent opposition period, and you then have up to three years with the filing of timely extensions within which to claim use of the mark in the USA. This ITU basis can be deleted with no ill effect at the end of three years (if no use has commenced), and your registration will still issue under Section 44. After the USPTO registration issues, you have a three-year window to again commence use of the mark (abandonment is measured from the registration issuance and three years of nonuse creates a presumption of abandonment). All combined, you then have about one to two years in the initial prosecution stage for your pending USPTO application, three years from the Notice of Allowance and three years from issuance of the registration—at least seven years or more to weather the storms of commerce and begin business with your mark in the USA.
All of the foregoing has long been the practice. Now, the US has the recently enacted the Trademark Modernization Act (TMA). You ask, what is the effect? The TMA has various parts, including expungement and re-examination of registered marks, which will be discussed in future news posts. Today, we examine expungement as it relates to your USPTO registration based on Section 44 (your home registration). As discussed more fully below, we are pleased to advise that the TMA has not negated any of the aforementioned delay advantages of securing a registration under Section 44.
As an initial matter, a discussion of some similarities in expungement and re-examination are in order. Expungement and re-examination are directed at removing so-called “deadwood” – namely, registered marks that are not in use or have not been in use for such time as to forfeit rights. Deadwood may be attacked now in a proceeding at the Trademark trial and Appeal Board (TTAB) relying on abandonment or other non-use, but expungement and re-examination are new procedures enacted to hopefully streamline the removal of deadwood.
Each procedure is initiated by a requestor based upon a verified petition showing a “reasonable investigation” into the use of a mark for certain goods/services in a registration. The petition details the investigation with particulars and must present a prima facie case to the Director of the USPTO (in practice, the Director will hand this off to a designated personnel unit). If the Director is satisfied, the USPTO challenges the use of the mark and the registrant must respond. The USPTO filing fee is $ 400 per International Class. In general, re-examination is aimed at a mark that was not used at a specific time; for instance, when use was claimed in the application at the initial filing or the filing of an amendment to allege use or a statement of use, the latter two to perfect an application based on ITU.
In contrast, expungement is aimed at a mark that was never in use; this covers a mark applied for and registered under Section 44. It also covers a mark issued based on an International Registration through the Madrid Protocol, pursuant to Section 66 of the Trademark Act. (A mark on this basis cannot be combined with ITU so there is less ability to s-t-r-e-t-c-h out the prosecution and thereby delay when use of the mark should be expected to ward off abandonment.) Either expungement or re-examination can be requested anonymously in that a law firm may make the request for an undisclosed client. Either procedure may also be initiated upon the Director’s own initiative.
The TMA established expungement, codified in 15 U.S.C. § 1066A. Subsection (f) thereof provides a key provision as follows (emphasis added):
EXCUSABLE NONUSE.—During an ex parte expungement proceeding, for a mark registered under section 44(e) or an extension of protection under section 66, the registrant may offer evidence showing that any nonuse is due to special circumstances that excuse such nonuse. In such a case, the examiner shall determine whether the facts and evidence demonstrate excusable nonuse and shall not find that the registration should be cancelled under subsection (g) for any good or service for which excusable nonuse is demonstrated.
As noted, under Sections 44 (home registration) and 66 (International Registration), applicants do not need use to establish of a mark in the USA as a condition precedent to obtaining registration. The first boundary of required use is three years after the registration issued to ward off a challenge based on abandonment. Under the TMA, registrations under these provisions receive the additional statutory protection of being able to ward off a claim under expungement based on “excusable nonuse”. This could extend the initial boundary of required use for a Section 44 or 66 to beyond, and perhaps even well beyond, three years after the registration date in an expungement proceeding.
There is yet more benefit to relying on Sections 44 and 66 to secure registration. Expungement has, in effect, also been reflected in amendment to the Trademark Act regarding any cancellation proceeding at the TTAB. In those statutory provisions, 15 U.S.C. § 1064(6), has been amended regarding when cancellation may be brought to state (emphasis added):
At any time after the three-year period following the date of registration, if the registered mark has never been used in commerce on or in connection with some or all of the goods or services recited in the registration: Provided … A registration under sections 44(e) or 66 shall not be cancelled pursuant to paragraph (6) if the registrant demonstrates that any nonuse is due to special circumstances that excuse such nonuse.
The first sentence codifies case law that non-use as a ground for cancellation should be brought only after three years from the date of registration (for those marks not previously claiming use). This was previously clear by reading different portions of the Trademark Act, but I have had to defend registrations when the petitioner failed to recognize this reading. More importantly, even in a cancellation proceeding under this new cause of action, registrations under sections 44 and 66 may receive the benefit of excusable nonuse when appropriate. This echoes the provision above for expungement.
Trademark law has been beefed up to attack deadwood through the expungement procedures of the TMA. Fortunately, registrations under sections 44 and 66 still receive benefits that do not negate the initial advantages of seeking registration under either of these provisions. Importantly, pursuing a USPTO registration on the dual bases of home registration and ITU remains an attractive option for a foreign applicant wishing to cushion the amount of time it may need to begin use of the mark in the USA.
If you have any questions or want to know more about any of the topics above please contact Mike Culver at Culver@MWZB.com