TRADEMARK: INTENT TO USE
Nobody likes paying legal fees. So it is quite understandable that businesses frequently delay in applying for trademark protection. But a delay in protecting your trademark can give another business an opportunity to take your preferred name or can create costly and lengthy delays in obtaining protection.
WHY DELAY MATTERS PART 1: STATISTICS
To see why delays matter, look at some basic numbers. The U.S. Patent and Trademark Statistics provides some eye-opening data on this topic. In 2015, the PTO received just over 500,000 trademark applications. That’s over 1,300 per day, seven days a week. And that number is growing by about 10% per year. This means that for every day you delay in applying, there are hundreds of new applications that could prevent or delay your application.
IS REGISTRATION NECESSARY BEFORE USE?
Businesses frequently ask whether they have to register their mark before they can use it. No! Until the mark is used, there can be no trademark rights. The first to use the mark is, generally speaking, the person who gets the right. The key step a business should take before using a mark is to conduct a thorough search to make sure that the proposed mark is not already in use. In fact, since many startups choose legal names that they also intend to use as a mark, it is often suggested to do a search before you form your business.
INTENT TO USE APPLICATIONS
Although a trademark cannot be issued until it is used in commerce, it is possible to apply for the mark before use. In the United States, one can express interest in creating a trademark through an “Intent to Use” application, or “ITU”. An ITU is similar to a normal application, except that the applicant does not have to provide evidence of use of the mark in commerce as part of the application. Instead, if the PTO determines that the mark is allowable, the applicant then has up to 30 months to use the mark in commerce. The ITU process is slightly more expensive: applicants must pay an additional $100 fee when submitting proof of use and may have to pay fees for extensions of time. Applicants seem to be aware of the importance of an early filing date: according to the PTO’s statistics, about 50 percent of new applications are intent to use applications.
WHY DELAY MATTERS: USPTO PROCEDURES
If the trademark ultimately goes to the person who used it first, why does an earlier filing date matter? The answer is both simple and arcane: the PTO’s rules give advantages to people who file early. Filing early can save you from a legal nightmare later on!
An example will make this clear. Let’s say that your business was using a mark to sell Tacos in January 2015, but had not applied to register its mark. Another Taco seller comes along in February of 2015 and files an ITU for the same mark. Then, in March 2015, your business applies for its mark, alleging actual use. Since you used the mark first, you should get the mark. But since you delayed in filing, it will now be much harder. The PTO will note the conflict between the two applications. It will suspend your application despite the fact that you used the mark first application and the second applicant has never used the mark at all. You must then wait until the first application is rejected or published for opposition. If it is rejected, then you have merely been delayed. But if it is allowed, you must must file an “opposition” to pursue your prior use claim. You must carefully monitor the application to determine when it is published for opposition, since this triggers the 30-day window during which you must file the opposition. An opposition is essentially a mini-trial, and can be quite expensive.
All this could have been avoided by acting quickly to protect your rights. It is tempting to think that nobody will begin using your name in just a few months. Just remember: thousands of new applications are filed every day. Frequently we see rejections based on likelihood of confusion where the cited marks have been filed in the last year.
The lesson is clear: it pays to act quickly when using adopting a new trademark. Smart businesses do early searches and file Intent to Use (ITU) applications to obtain early filing dates and, hopefully, to avoid being suspended in light of an earlier-filed, similar application. If you have questions about protecting your mark, don’t hesitate to contact us at (808) 339 – 3200.