Synch U.S. Playbook

Get Moving in the U.S.

INTELLECTUAL PROPERTY

Trademarks

Contributed by:

Greg Wrenn of Pragmatica Law LLP

www.pragmaticalaw.com

This article is not legal advice and is provided for general information purposes only.

Trademark law in the U.S. is similar to trademark law in the Scandinavian region. Some key differences include that it is slightly easier to establish rights in unregistered marks in the U.S. from “common law” usage, and that U.S. trademark cases can be heard in all state and federal courts nationwide, whereas in Sweden, for example, you only go to one court. Litigation in the U.S. is very expensive, so here are some practical steps that will reduce the risk of disputes and litigation regarding infringement:

Conduct a clearance search

In the United States, the right to use a trademark for particular goods or services goes to the party with “priority,” and priority is established not just by filing a registration application, it can also be established through unregistered “common law” usage. So, before you start investing in the use of a mark in the United States, you want to do your best to ensure no one else has already established priority. The test for trademark infringement at its core is based on the perspective of consumers, and whether the use of the same or similar marks for the same or similar products and services is likely to cause consumers to believe the products are somehow from the same source or otherwise affiliated or endorsed by the same source (“likelihood of consumer confusion”). So, it is advisable to begin with your own search online to see if others are making use of the same or similar mark in the U.S. using online web directories and any other available databases you have access to (including review of domain names). In the U.S., the similarity of marks is evaluated considering the “sight, sound, and meaning” of the terms, so don’t limit a search to identical terms. In addition to general online information, there is free online access to searching the U.S. Patent and Trademark Office (“USPTO”) database at https://www.uspto.gov/trademark and the World Intellectual Property Organization (“WIPO”) Global Brand Database at http://www.wipo.int/branddb/en/. A trademark attorney can conduct clearance searches for you, and typically an attorney review is helpful in order to understand how the USPTO and U.S. courts would look at a situation, or if there would be other challenges to registering a mark (for example, one that is too descriptive), or to help with more sophisticated searches such as those involving a logo or design. Costs for having an attorney conduct a clearance search and provide a report can run from about US$500 to $1,000 depending on the volume and complexity of the search results, and while it is impossible to identify or predict all risks of using a mark in a new market, a clearance search by an attorney can help reduce those risks and save you time and money in use and registration of trademarks by identifying any clear problems early on.

Register your domain names first

Registering your brand name as part of a top-level domain (“TLD”), if the domain name is available and you meet any requirements that may apply, is quick, inexpensive and does not require a lawyer. Once someone has registered a domain name in good faith it is difficult and expensive, if not impossible, to force a transfer of the domain name later, so it is highly recommended that you first make sure you have any domain names you consider important for your marketing and operations in the U.S. even before you consider trademark registration. Because it is so easy and inexpensive to obtain an unregistered domain, but so difficult to recover it from another user, consider not just the exact domain name you want to use (or think you may want to use), but also any common misspellings or similar terms you would not want other parties to use.

Consider U.S. trademark registration (including foreign priority and “Intent-to-Use”).

While it is not legally required to register a trademark in the United States before using it, there are some important advantages as a practical matter. Recall that the most important factor in U.S. trademark law is the concept of priority. By filing a registration application in the United States, if your application is successful, you are given a priority date at least as early as the filing of the application, and this priority is nationwide. Is it possible someone else is using the mark already who didn’t show up in a clearance search? Yes, and if there is a dispute the other party could be seen as having priority, but if you obtain a registration in good faith it becomes harder for the other party to assert that claim. Further, after five years of registration your ownership of the trademark can become “incontestable” in the United States, which means even if the other party has common law priority, your rights are superior. Because the U.S. and e.g. Sweden are also parties to the major international trademark treaties, if you have an application first filed in Sweden or the EU, and you follow up with a U.S. registration within six (6) months, your U.S. priority date can be based on the earlier foreign filing. In addition, the United States has “intent-to-use” applications, so you can establish priority on a filing date even before you have started actual use in the U.S. market. In the United States, trademark registration filing fees are US$225-$275 for electronic filing per International Class based on the goods and services claimed. While it is possible to file a trademark application online without an attorney, the system is not easy to use and there are details—particularly with respect to the description of goods or services that are reviewed closely by the USPTO with strict standards and other technical requirements or options—that make it advisable to use an attorney to assist in supporting the application to file it correctly and respond to any issues or objections by the USPTO.

Consider insurance

In the U.S., it is possible to obtain business insurance that would cover infringement claims against you for infringement of a third party’s trademark rights. It is important to ask your insurance broker about the particular terms of a policy and the law that governs it, but often trademark infringement claims may be covered under “advertising injury” or “communications & media liability” coverage of an insurance policy. Since litigation itself is so expensive even if you can prevail in a lawsuit, an insurance policy that covers defense costs and damage awards from such claims in the U.S. can significantly reduce the risks of using a new trademark in U.S. operations.

Don’t forget to follow up

Once a mark has been registered in the United States, there are important renewals and filing requirements that start at the 5th anniversary after registration, and also before the end of every 10-year period after registration. Failure to file required statements and pay the nominal renewal fees will result in the registration automatically being terminated and listed as “abandoned.” The first filing is due anytime within a one-year period starting on the 5th anniversary. It not only is the opportunity to renew the registration, but if there are no pending disputes or suits over the validity of the mark, it can be combined with a “Declaration of Incontestability.” The term “incontestability” is a little bit of an overstatement, there are still grounds on which the validity of the registration may be challenged (such as a term that has become “generic”), but the registration is no longer subject to many defenses a third party might assert, such as prior common law use in the United States.

After the first renewal due between the 5th and 6th year after registration, then simple renewals are required in each year between every 9th and 10th year after registration to keep the registration active.

Maintaining your trademark rights in the United States can require more than just filing renewals on time. For example, even an incontestable registration can become invalid and unenforceable if the mark has been abandoned or is not in use (or subject to excusable non-use), or if the trademark owner has failed to maintain control over the nature and quality of products distributed under the mark (“naked licensing”). Many companies have written trademark guidelines and policies for proper display, marking, and permitted use of the company brands for both internal use as well as use by their authorized marketing and distribution partners. These are often publicly posted, such as this one from Adobe: https://www.adobe.com/legal/permissions/trademarks.html.

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