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Hidden Pitfalls in Filing a Statement of Use


Hidden Pitfalls in Filing a Statement of Use

        Beware of a hidden pitfall that the U.S. Trademark Office creates when you file a statement of use to show use of a trademark in U.S. commerce. Filing a statement of use is the last substantive step taken by an applicant to register a trademark based on an intent-to-use application, under § 1(b) of the Lanham Act.[1] The pitfall, which results in abandonment of the application and being ineligible for remedial relief to revive the application, may arise, for instance, where:

 

1)    The statement of use is ultimately found to be defective, which may typically arise from a client’s preparation of a website specimen of trademark use that does not meet often subjective or vague standards relating, for instance, to the prominence[2] of a trademark and its nexus[3] (e.g., proximity) to a product or service; or, as the example discussed in the balance of this article, which may arise from the trademark specimen you submitted differing somewhat from the drawing of the mark submitted with the original application;

2)    By the time you receive an office action from a trademark examining attorney holding that the trademark specimen submitted is not acceptable because it differs too much from the original drawing of the mark, the deadline for filing a statement of use or a request for extension of time[4] has passed; and

3)    You had the belief that, if the statement of use were ultimately determined to be defective, you could revive the application if necessary under the remedial relief provision of paragraph (4) of § 1(d) of the Lanham Act because you proceeded in good faith.

 

The hidden pitfall that the U.S. Trademark Office has created concerns an apparently untutored interpretation of paragraph (4) of § 1(d) of the Lanham Act that inexplicably attempts to equate the reference in paragraph (4) of § 1(d) to “a statement of use under paragraph (1) [of  § 1(d) of the Lanham Act]” (emphasis added) with a “statement of use [which] meet[s] minimum filing requirements before it may be referred to an examining attorney for examination on the merits,“ according to the Trademark Manual of Examining Procedure.[5] As a result, the Trademark Office will declare your application as abandoned and ineligible for relief under § 1(d)(4) of the Lanham Act[6] on the specious basis that a defective statement of use was timely filed.

Case law is cited to show that the Trademark Office’s misreading of paragraph (4) of § 1(d) is unlawful and should be overturned.

 

 

Remedial Relief Standard of paragraph (4) of Lanham Act § 1(d)

           Section 1(d) of the Lanham Act[7] relates to showing use in commerce of a trademark as a prerequisite to obtaining a trademark registration under the intent-to-use basis of § 1(b) of the Lanham Act.[8] That statutory section is now considered in regard to the formulation it provides for remedial relief for an unintentionally delayed statement of use.

 

Paragraph (4) of § 1(d) of the Lanham Act states in relevant part that: “The failure to timely file a verified statement of use under paragraph (1) [of § 1(d) of the Lanham Act] * * * shall result in abandonment of the application, unless it can be shown to the satisfaction of the Director that the delay in responding was unintentional” (emphasis added). Reading paragraph (4)’s reference to “statement of use under paragraph (1)” in the context of the other paragraphs of § 1 of the Lanham Act reveals the following two factors illuminating the meaning of “statement of use under paragraph (1)”:

 

  • First, the triggering of abandonment under paragraph (4) of § 1(d) of the Lanham Act can only sensibly be interpreted as the failure to timely file a substantively valid statement of use. This comports with the intent of § 1(d) as expressed in its heading: “Verified statement that trademark is used in commerce.” Conversely, it would be silly to suggest that abandonment of an application would be triggered from failure to timely file a defective statement of use.
  • Second, paragraph (1) of § 1(d) of the Lanham Act, which is also mentioned in paragraph (4), defines a statement of use with repeated reference to “the mark.” Thus, in regard to showing use in commerce of a trademark, the first sentence of paragraph (1) requires that “an applicant shall file in the Patent and Trademark Office, together with such number of specimens or facsimiles of the mark as used in commerce as may be required by the Director and payment of the prescribed fee, a verified statement that the mark is in use in commerce and specifying the date of the applicant’s first use of the mark in commerce and those goods or services specified in the notice of allowance on or in connection with which the mark is used in commerce” (emphasis added). A reading of “the mark” mentioned in paragraph (1) of § 1(d) of the Lanham Act in the context of associated paragraph (2) of § 1(b) of the Lanham Act reveals that “the mark” is defined by its reference to “a drawing of the mark” required in an application.

Accordingly, a “statement of use under paragraph (1)” appearing in paragraph (4) of § 1(d) of the Lanham Act plainly and unambiguously refers to a substantively valid statement of use. At a minimum, such a statement of use must contain a specimen or facsimile of “the mark” as shown in the drawing of the application.

 

 

 

Denial of Remedial Relief by U.S. Trademark Office

                   Returning to the original example, the U.S. Trademark Office will declare your application abandoned, unless you are able to file a correct statement of use or a request for extension of time by the deadline, by essentially rewriting the foregoing remedial provision of paragraph (4) of § 1(d). Specifically, the Trademark Office ignores the statutory language “a statement of use under paragraph (1) [of § 1(d) of the Lanham Act],” and replaces such language with their administrative version: i.e., a “statement of use [which] meet[s] minimum filing requirements before it may be referred to an examining attorney for examination on the merits.”[9] Although “one specimen of facsimile of the mark as used in commerce” is one of the “minimum filing requirements,”[10] the reality is that the “minimum filing requirements” are not checked by “an examining attorney for examination on the merits” but rather by other Office personnel, which may be a paralegal or clerk.[11] As such, one cannot expect a nuanced and thorough evaluation of adequacy of conformance between a specimen of a complex design mark, for instance, and the drawing of such mark when being reviewed for “minimum filing requirements” by the Trademark Office.

 

Accordingly, the flawed Trademark Office policy, as set forth in a publication of the Trademark Office, is as follows: “If a statement of use is timely filed and meets the minimum filing requirements that a statement of use must meet before it can be sent to an examining attorney for examination under Trademark Rule 2.88(e), Trademark Rule 2.66 does not apply.”[12] It is submitted that the foregoing Trademark Office policy impermissibly deviates from the unambiguously expressed intent of Congress in paragraph (4) of § 1(d), which refers, not to an administrative concept of a statement of use that meets “minimum filing requirements” to be sent to an examining attorney for review, but, as mentioned above, to a substantively valid statement of use.

 

 

 

Trademark Office misinterpretation of “statement of use” should be stricken

           In Shell Oil Co. v. EPA, the U.S. Court of Appeals for the D.C. Circuit in 1991 expressly held that “in formulating rules, the clearly expressed intent of Congress binds agencies as it binds courts.”[13] In 2003, this same court ruled in Kimberlin v. U.S. Dep’t of Justice that “ Congress has directly spoken to the precise question at issue,” we “must give effect to Congress’s ‘unambiguously expressed intent.’”[14] Finally, the next year, the D.C. Circuit held in Public Citizen, Inc. v. National Highway Traffic Safety Admin. that “[t]he court, as well as the agency, must give effect to the unambiguously expressed intent of Congress in adopting rules.”[15]

 

Similarly, in 2008, the U.S. Court of Appeals for the Second Circuit held in New Jersey v. EPA that “[i]t is a fundamental precept of administrative law that an agency action, rule, or regulation cannot overcome the plain text enacted by Congress.”[16] Reaffirming this principle in 2010, the U.S. Court of the Appeals for the Fifth Circuit held in Sierra Club v. Sandy Creek Energy Assoc. that federal agencies are not allowed to contravene the plain and unambiguous intent of Congress in a statute.[17]

 

Accordingly, the above deficiencies in the Trademark Office interpretation of “statement of use under paragraph (1)” in paragraph (4) of the Lanham Act should be remedied according to the foregoing judicial authority.

 

 

 

Conclusion

           The Trademark Office should revisit its rules and other pronouncements on the conditions under which remedial relief is to be granted under paragraph (4) of § 1(d) of the Lanham Act, and conform its rules and pronouncements to the unambiguously expressed intent of Congress.

 

 

 

Appendix

Lanham Act § 1, 15 U.S.C. § 1051 – Application for registration; verification

 (a)                    *                *                *               *                *                *                *

 (b) Application for bona fide intention to use trademark

(1) A person who has a bona fide intention, under circumstances showing the good faith of such person, to use a trademark in commerce may request registration of its trademark on the principal register * * * .

(2) The application shall include * * * a drawing of the mark. [Emphasis added.]

(c)     *                *                *               *                *                *                *

(d) Verified statement that trademark is used in commerce

(1) Within six months after the date on which the notice of allowance with respect to a mark is issued * * * to an applicant under subsection (b)  of this section, the applicant shall file in the Patent and Trademark Office, together with such number of specimens or facsimiles of the markas used in commerce as may be required by the Director and payment of the prescribed fee, a verified statement that the mark is in use in commerce and specifying the date of the applicant’s first use of the mark in commerce and those goods or services specified in the notice of allowance on or in connection with which the mark is used in commerce. Subject to examination and acceptance of the statement of use, the mark shall be registered in the Patent and Trademark Office * * * . [Emphasis added.]

*                *                *               *                *                *                *

 (4) The failure to timely file a verified statement of use under paragraph (1)* * * shall result in abandonment of the application, unless it can be shown to the satisfaction of the Director that the delay in responding was unintentional, in which case the time for filing may be extended * * * . [Emphasis added.]

(e)     *                *                *               *                *                *                *

 



[1] 15 U.S.C. § 1051(b) (2012). Relevant provisions of the Lanham Act § 1 (15 U.S.C. § 1051) are provided in Appendix A for the convenience of the reader. For simplicity, all remaining statutory references in this article are to the Lanham Act.

[2] Whether a website specimen of trademark fulfills the prominence requirement depends on a number of subjective factors, such as the following: (1) “larger font size,” (2) “different stylization than surrounding text,” (3) placing “the mark at the beginning of a line or sentence,” (4) whether the mark is positioned “next to a picture or description of the goods,” and (5) use of a “TM” designation. See USPTO Examination Guide 1-13 for Webpage Specimens as Displays Associated with Goods (2012). Vagueness concerning the prominence requirement is furthered because none of these factors is dispositive; rather, the website specimen “as a whole” must be considered. Id.

[3] Similarly, whether a website specimen fulfills the nexus requirement depends on a number of subjective factors, such as the following: (1) whether the mark appears in the computer browser areas as part of the URL, internet address, or domain name,” (2) whether the mark appears in a location “where marks normally appear,” (3) whether the mark appears “on a webpage only in conjunction with the corporate address, telephone number, and website and e-mail addresses, and/or is placed on the webpage near boilerplate and standard information about the applicant or website, and (4) the presence, nature and location of other marks on the webpage. See USPTO Examination Guide. “[T]he overall impression the webpage creates” should also be considered when assessing the nexus, thus furthering the vagueness concerning the nexus requirement. Id.

[4] You have the option of filing a request for extension of time concurrently with a statement of use. See USPTO, Maximizing Use of Insurance Extension When Filing Statement of Use (2010). However, the point of this article is that under the remedial relief standard of Lanham Act § 1(d) you should be able to revive an application based on unintentional delay in filing a substantively valid statement of use if you proceeded in good faith. As such, the filling of a request for extension of time would be unnecessary.

[5] Trademark Manual of Examining Procedure (TMEP) § 1109.01 Minimum Filing Requirements for a Statement of Use (October 2012) (emphasis added) (referring to 37 C.F.R. § 2.88[e]).

[6] Supra note 1.

[7] Id.

[8] Id.

[9] Supra note 5.

[10] Under 37 C.F.R. 2.88(e) (Aug. 9, 2012), the minimum filing requirements are:

(1) The fee for at least a single class, required by § 2.6;

(2) One specimen of the mark as used in commerce;

(3) A statement that is signed and verified (sworn to) or supported by a declaration under § 2.20 by a person properly authorized to sign on behalf of the applicant that the mark is in use in commerce.

[11] Supra note 1.

[12] Office of Assistant Commissioner for Trademarks, “Changes to Requirements for Petitions to the Commissioner in Trademark Cases, Effective Date: October 30, 1999, available at <http://www.uspto.gov/web/offices/tac/notices/petreq.htm> visited on November 14, 2012 (emphasis added).

[13] Shell Oil Co. v. EPA, 950 F.2d 741 (D.C. Cir. 1991).

[14] Kimberlin v. U.S. Dep’t of Justice, 318 F.3d 228 (D.C. Cir. 2003).

[15] Public Citizen, Inc. v. National Highway Traffic Safety Admin., 374 F.3d 1251 (D.C. Cir. 2004).

[16] New Jersey v. EPA, 517 F.3d 574, 583 (2d Cir. 2008).

[17] Sierra Club v. Sandy Creek Energy Assoc., 627 F.3d 134 (5th Cir. 2010).