Friday, September 27, 2013

USPTO Workshop on Empirical Studies of Trademark Data

Amy Cotton, USPTO, The Use Requirement in U.S. Trademark Law

Use: 1(a), actual use; ITU 1(b)—priority date is filing date, while use is required for registration.  Basis: interstate commerce clause.  Paris: 44(d)—priority date is foreign filing date; 44(e) priority date is US filing date; no use required until 5/6 year.  Basis: treaty obligation.  Madrid, §66, priority date is filing date of international application unless Paris priority is claimed. No use requirement until 5/6 year.  Basis: treaty obligation.

1870 and 1876 Acts had ITU provisions, part of what was struck down in the Trademark Cases.  1953, ex parte British Insulated Callender’s Cables: Paris Convention: we interpreted it to mean that use in commerce couldn’t be required, but national treatment gets confusing.  If we treat foreigners and Americans equally, failing to require allegations of use in commerce treats foreigners better.  Came up with crazy fiction that foreigners have to allege use somewhere, even if not in US, because of the nature of a TM (a symbol that is used to distinguish goods/services).  Thus we can require specimens of use and mode of use, even if not use in commerce.  But you use the specimens to show use in commerce! 1955: changed our mind, no use required by foreigners under the treaty.  1963: another flip flop.  And then another.

So what does national treatment require?  Commentators involved in Paris negotiations insisted that national treatment means that you have to require use of foreigners, because that’s equal treatment.  Other interpretations did violence to the nature of a mark. 

US and 13 other countries signed the Trademark Registration Treaty in 1973, but it blew up at home.  It would have allowed US intent to use as well as foreign nationals; cancellation for nonuse couldn’t commence for three years after, though damages would be limited.  Died because of US industry opposition.

SCM v. Langis, DC Cir. 1976: when you have 44(d) priority—application in Canada for Lemon Tree mark, filed in US claiming Canadian filing date—do you need specimens of use? Didn’t have them in Canada or in US.  What does 44(d) grant—constructive use date or constructive filing date that could be defeated by use?  US company had used mark between foreign filing date and US filing date.  Usually, actual use would defeat filing date—but DC Circuit said no.  Actual use can’t defeat the foreign filing date.  Thus, you end with the conclusion that use isn’t required at all for §44 applicants.

At that point, US businesses quickly recognize the inequality of the use requirements for registration, and ITU for US applicants gets off the ground.  Waiting to file until you have use is really constraining.  First US owners came up with the idea of “token” use to let them file applications.  No one was really happy with that, but we did it anyway to defeat the unfairness. But foreigners were allowed registration without use, and that finally tipped industry into accepting ITUs.  Were still wary/concerned about warehousing, impoverishing language, need to file oppositions to discourage pursuit of contested marks—Cotton suggests that these feared consequences, including more litigation, did in fact arise.  Attempts to eliminate warehousing/deadwood by limiting registration term to 10 years instead of 20, other limits.

American use system has three drivers: constitutional jurisdiction; nature of a mark; policy goal of eliminating deadwood. Global TM system demanded a middle ground/bridge between systems; ITU appeared to be that middle ground. But the specificity of the ID of goods/services is fundamental to figuring out whether there’s a bona fide intent.  Bona fide intent must be challengeable to be real/meaningful; specific IDs allow objective measurement of business plans/ability to launch these goods/services.  So ITU can’t be in a vacuum.  We get criticized for specificity requirements, but they’re a feature of our history.

Roundtable discussion (including discussion of stuff I missed earlier while teaching):

Graeme Dinwoodie, Oxford University

Use/registration isn’t a binary when it comes to deadwood.  TRIPS: you can have a modified use-based system, and a modified registration system, but nobody is pure any more.

Defense of European system: private actors must be alert and defend their own interests, not rely on the TM authority.  Philosophy of European system frames what’s considered a worthy reform. At CTM level, attempt to create a new market reality with a single market—arguably pushes Euro. system to be even more cavalier about use, in the name of free movement.

Reforms considered/rejected to reduce clutter in EU: OHIM doesn’t require intent to use for a CTM or ETM.  UK Office may be enforcing ITU through bad faith ground for denying registration, even if there’s no separate ITU ground.  Another possibility: require affidavit of use for renewal. This was also rejected as inconsistent with international trends—vehement language.  Another option: reduce grace period before abandoment from 5 years to 3.  Also rejected, opposed by TM bar.  Max Planck study: concluded that only small percentage of registered marks are unused; he thought that this number was unrealistically low and their methods of calculation are a bit dodgy (Google searches).

Deadwood problem isn’t simply a function of how many marks are on the register.  Clutter is also a function of size of each mark. 

Do you have to use the mark in all countries?  If you don’t you’re effectively imposing deadwood on the rest of the countries.  Recent ECJ decision: it might be enough in one context but not in others. If you push marks to CTM level and not national level, you create many problems of scope. Deadwood concern might justify demanding standard at European level and less at the national level. This also relates to free movement of goods/creation of unified market.  From that perspective, we want to encourage CTMs.  Ave. # of classes applied for in Europe is one class bigger than in Europe.  Restricting that would restrict size of deadwood.

Biggest mistake in last 10/20 years in European TM was move to prohibit national offices from engaging in ex officio relative registrability inquiries.  Deadwood isn’t a problem if marks are valid. A series of invalid/unused marks is a problem, and relative grounds for refusal is a good way of dealing with that but Europe’s moving to probhibit it.

Barton Beebe, NYU School of Law

Partial to US tradition/nature of mark as giving us a use requirement. Trademark is part of the broader law of unfair competition.  But we do give nationwide priority from local use upon registration.  This creates a hybrid system, and some of the same problems as in Europe—rights in distant territories without use, subject to Dawn Donut principle limiting injunctive relief until registrant is likely to enter the market. Cotton’s presentation gives him new respect for Dawn Donut.

Stuart Graham, Georgia Tech and USPTO

Discussed massive TM dataset now available, showing significant shifts in behavior post-ITU.

Dinwoodie: maybe enhanced fee shifting would produce better results than substantive changes.

Cotton: fees are really hard to get out of TTAB—slows things down a lot.

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