Client Alert - Abandonment Rules Clarified for Madrid Protocol Extensions to the U.S.
For the first time, the U.S. Trademark Trial and Appeal Board (“TTAB”) has clarified the rules about trademark abandonment claims relating to marks registered in the U.S. under the Madrid Protocol but not used in U.S. commerce.
Background
On average, about 10% of the applications to register trademarks in the U.S. have been based on International Registrations under the Madrid Protocol. Non-U.S. parties generally designate an extension of the International Registration to the U.S. before any use has been made of the mark in U.S. commerce, either interstate or between the U.S. and another country.
When making the U.S. designation, the trademark applicant is required to declare a bona fide intention to use the mark in U.S. commerce. However, there is no requirement that the non-U.S. party actually use the mark in U.S. Commerce before the U.S. registration is issued.
In this respect, an applicant from a non-U.S. country, who bases its U.S. filing on an International Registration (just like a U.S. filing based on another country-of-origin application or registration), is treated better than most U.S. applicants, who generally cannot obtain a U.S. registration before they actually use the mark in U.S. Commerce.
Even though the non-U.S. party can obtain this preferential treatment to obtain a U.S. registration, that does not mean that the non-U.S. party is free forever of any need to use the mark in U.S. commerce, or at least to take steps intended to lead to such use, such as looking for a U.S. licensee or distributor. Failure to take such steps could lead to a finding that the U.S. rights have been abandoned by virtue of the non-use of the mark with an intent not to “resume” (or at least commence) such use.
Under the U.S. trademark law, non-use for three consecutive years is considered prima facie evidence of that intent. Unless effectively rebutted, such non-use could result in abandonment of the mark and cancellation of the U.S. registration.
The Ruling
Until now, the following question has remained unanswered: What is the earliest point in time from which the period of non-use may be measured for an abandonment claim as to a Madrid Protocol extension to the U.S.?
The TTAB has now answered this question in a precedential ruling: A cancellation petitioner making an abandonment claim must allege:
(a) three or more consecutive years of non-use commencing no earlier than the date on which the registration was issued; or
(b) if the period of non-use commencing no earlier than the date of registration and extending to the filing date of the claim is less than three years, facts supporting non-use after the date of registration, coupled with an intent not to resume (or commence) use.
This is the same rule that has been applied to trademark registrations based on country-of-origin applications or registrations.
The Case
The precedential case deciding this question was Dragon Bleu (SARL) v. VENM, LLC, Opposition No. 91212231 (T.T.A.B. December 1, 2014).
Dragon opposed a U.S. application to register the mark VENM (in standard characters) for “dance costumes,” alleging likelihood of confusion with its mark VENUM for various articles of clothing for the practice of martial arts. The applicant counterclaimed for the cancellation of Dragon’s registrations on various grounds. Two of those registrations had been based on Madrid Protocol extensions, but the applicant alleged that those marks had been abandoned for non-use as to at least some of the goods. Dragon moved to dismiss the counterclaims.
The TTAB found that the abandonment claim had been filed less than three years after the date of the registrations, but that the applicant had not pleaded any facts as to the registrant’s lack of an intention to commence use. For this reason, applying the new rule, Dragon’s motion to dismiss the abandonment claim was granted, but the applicant was given thirty days to submit a sufficiently amended abandonment claim.
Practice Pointers
Even though a U.S. registration may be granted pursuant to the Madrid Protocol without any use of the mark in U.S. commerce, the registrant should not assume that its rights are secure. Instead, within three years of the date of registration, it should arrange to use its mark in U.S. commerce, itself or through a licensee or distributor, or at least it should create a written record to support its intention to make such use. This could avoid a successful claim that it has abandoned its mark and that its U.S. registration should be cancelled.
On the other hand, a cancellation claimant should carefully plead either (a) that the non-use has continued for at least three consecutive years after the date of registration; or (b) facts supporting the claims of non-use and of an intent not to commence use.
Of course, as is true of all U.S. registrations, a statement of use (or in rare cases, excusable non-use) must be filed in the U.S. Patent and Trademark Office during the fifth year of the registration plus a six-month grace period. If it is not filed, the U.S. registration will be cancelled.
For further information about trademarks, please contact William M. Borchard or your CLL attorney.