Tag: global trademark registration

Bad Faith Trademark Registration, Duplicate Trademark Filings and Non-Use Cancellations – Oh My!

Bad Faith Trademark Registration, Duplicate Trademark Filings and
Non-Use Cancellations – Oh My!

Bad faith trademark registration may occur when brand owners seek to “re-register” the same trademark for the same goods and services in the same country. A reason for seeking a duplicate trademark registration for the same mark and products in the same country is because an earlier registration may become vulnerable to cancellation for the non-use of the mark.

However, many, if not most, countries do not allow brand owners to “re-register” trademarks if they already own a registration for the identical mark and goods and services. That is so because most country laws give trademark owners three or five years from the date of registration to commercialize the mark and products before registration becomes vulnerable to cancellation for non-use.

Thus, “re-registering” the same mark and products for the purpose of gaining another three or five year “grace period” within which to commercialize the mark and products may be viewed as a “bad faith” attempt to circumvent country laws. For that reason, many countries do not allow a duplicate bad faith trademark registration.

Bad faith trademark registration
U.S. Patent and Trademark Office
Trademark Use ‘Grace Period’

Once trademarks register, most countries grant a three or five year grace period, starting from the registration date, within which to use registered marks before registrations become vulnerable to cancellation for non-use. Accordingly, the grace period provides brand owners with sufficient time to put their registered marks to use and ‘perfect’ their trademark rights and registrations.

However, once that grace period expires, third parties may seek cancellation of trademark registrations on the ground of non-use and, if successful, may secure their own trademark registrations for a same or similar mark and claim ownership. For that reason, it is common practice for brand owners to seek ‘re-registration’ of the same mark and goods/services to reset the non-use “vulnerability clock” or grace period.

Example

If a company secures a Russian trademark registration on January 1, 2020 for ‘Trademark X’ for nutritional supplements, the company automatically receives a three year grace period from that date to commercialize the registered mark for nutritional supplements in Russia.

However, failure to launch those goods in Russian under the registered mark during that three year period renders the trademark registration vulnerable to cancellation for non-use.  Accordingly, if that registration is cancelled, all trademark rights in Russian would be lost.

Specific Country Laws

Many countries do not allow a duplicate trademark registration strategy, including the United States, EU, Philippines and Russia.

United States Does Not Allow Duplication

U.S. trademark law does not permit trademark registration for the identical mark and identical goods/services. However, filing a new U.S. application for the identical mark with modified goods and/or services is permitted, even if the new application lists the same goods appearing in the earlier registration. For example, if the earlier registration lists products A, B and C, the new application for the same mark would be allowed for products A, B, C, and D.

Other Countries Allow Duplication

Conversely, certain countries permit duplicate trademark registrations, including Australia, China and India.  However, while some country trademark offices may issue duplicate trademark registrations, those registrations may still be vulnerable to third party challenges on the basis of bad faith registration, i.e., bad faith intent to circumvent country trademark use laws.

Recent EU Case on Duplicate Trademark Registration

A recent EU trademark decision made that point clear when the European Union Second Board of Appeals cancelled a trademark owner’s trademark registrations (or removed certain duplicative goods/services from later issued registrations) on the basis of bad faith registration. In that decision, the Board stated that trademark owners that seek to circumvent EU trademark use laws by fraudulently “re-registering” their marks to extend the five year non-use grace period do so in bad faith and such practice is an “abuse of law.”

Bad faith trademark registration
Plot a course for “smooth sailing”
Potential Scenarios

Brand owners may encounter numerous duplicate trademark (‘bad faith’) registration scenarios depending on country laws, including the following:

1. Country trademark laws that permit duplicate trademark registrations (identical mark and identical goods/services)

  • For those countries, fire away!

2. Country trademark offices that allow new registrations for the identical mark and same goods and services as long as new goods/services are also added to the application

  • For those counties, make the required modifications and fire away!

3. Countries that do not allow new registrations for the same mark and for the same goods/services listed in an earlier registration even if the new application lists new goods/services within the same class or adds a new class

  • For those counties, brand owners should modify the description of goods/services within a duplicate class in a manner that satisfies country trademark office guidelines and add the new goods/services and classes

4. Country trademark offices that issue duplicate trademark registrations but those registrations may still be vulnerable to challenge by third parties based on bad faith duplicate filing

  • For those counties, best practice may be to modify the goods and services in a manner that satisfies local laws
Madrid Protocol (a/k/a International) Trademark Filing Considerations

Once you introduce the Madrid Protocol into the mix, filing strategies may become even more complicated!

For example, if the existing global trademark registrations posing duplicate trademark registration barriers were filed via the Madrid Protocol and are based on a brand owner’s only existing home country trademark registration(s), the brand owner may not use those same home country filings for new Madrid Protocol filings for counties that do not permit duplicate registrations, duplicate classes and/or duplicate goods/services.

Strategy Considerations

When faced with the reality that certain country trademark registrations and trademark rights are or will be vulnerable to cancellation for non-use, it is prudent to audit those rights and decide which of those rights should be preserved, if possible. Furthermore, the audit should consider whether any of the subject registrations can be perfected by putting a registered mark to genuine use – for at least some of the listed goods/services – or whether new filings should be made.

Lastly, it is also prudent — obviously — to prepare a strategy that contemplates potential duplicate trademark registration barriers on a country-by-country basis, which should include the assistance of trusted foreign counsel.

See related posts here and here about global trademark registration filing strategies.

Conclusion

As brand owners seek to maintain valid and enforceable global trademark rights for, what may be, bona-fide future business opportunities, they must do so strategically. Furthermore, they must do so with the understanding that there are many intricacies of trademark law that must be navigated or they run the risk of losing trademark rights, wasting money and suffering from a severe case of heart burn.

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How to Protect Trademarks Internationally: Part Three of a Three-Part Series

How to Protect Trademarks Internationally:

Part Three of a Three-Part Series

If you have not read parts one and/or two, I recommend that you do so here  (Part 1) and here (Part 2) before reading this third post on international trademark filing strategy and post registration requirements.

Part 3: International Trademark Filing Strategies and Critical Post Registration Requirements

Once brand owners have identified their core marks and products, selected the primary countries of interest, identified which of those countries are members of the Madrid Protocol and European Union, as well as any other country pacts for filing strategy, such as Benelux (covering Belgium, Luxembourg and Netherland), African Intellectual Property Organization and African Regional Intellectual Property Organization, with each covering certain African countries, and undertaken proper trademark clearance in the relevant countries, they are ready to formalize their trademark application filing strategy.

As a first step, brand owners should undertake a cost estimate review for the selected countries and marks.  The brand owner is then ready to prioritize the primary countries and marks based upon its annual budget.  As discussed in Post 1, the filing strategy may consist of a one to three year (or more) “rolling” filing strategy depending upon budget and, as discussed in Post 2, you may spread out the filing costs during the six-month priority period provided by the Paris Convention.  

International Trademark Filing Strategy

I. International Trademark Filing Strategy – Example

Selected countries of interest:

Brazil, Canada, China, Columbia, France, Germany, India, Mexico, Norway, Panama, Poland, Spain, Sweden, Switzerland, U.K., and all of the EU member states if economical

How should the company proceed with trademark protection?  Should the company use the Madrid Protocol? European Union trademark filing? Or national filings? Or possibly all three?

The company should first consider the risks with respect to utilizing the Madrid Protocol and European Union trademark filing systems with the primary risks being those discussed in Post 2.  If the risks are low, the next step is to determine the Madrid Protocol and European Union member countries and the countries requiring national filings.

Madrid Protocol member countries/jurisdictions (based on my example):

  • China, Colombia, France, Germany, India, Mexico, Norway, Poland, Spain, Sweden, Switzerland, U.K., and the EUTM (covers all 28 EU member countries)

EU Member countries (based on my example):

  • France, Germany, Poland, Spain, Sweden and U.K.

Non-member countries requiring national filings:

  • Brazil, Canada, Panama

A few important considerations:

  • Brexit. With the U.K. possibly exiting from the EU, it is absolutely prudent to also file a national U.K. trademark application if a EUTM application is filed in lieu of national EU country filings.
  • China. Although China is a member of the Madrid Protocol, it’s strongly recommended that China not be designated via Madrid application due to the short time period within which a trademark applicant must respond to an office action.  Instead of designating China via the Madrid Protocol, companies should instead file national applications via local counsel.
  • EUTM. If the company is confident that its mark is eligible for registration in all EU member counties (no major potential third party objections or non-distinctiveness issues), or is willing to take the risk in exchange for securing broad trademark protection, the company may elect not to file national EU member country applications (e.g., France, Germany, Poland, Spain, Sweden and U.K.) in exchange for protection in all 28 EU member countries via the European Union trademark, which may be filed via the Madrid Protocol application.
  • Madrid Protocol and EUTM vs. national filing cost comparisons:            
    • Madrid Protocol vs. national filings (for Madrid Protocol member countries) can provide substantial savings.                   
    • In some cases, those savings can be over 40%!
  • EUTM vs. individual EU member national trademark applications:                                                                                                                                
    • Average national filings per country: ~$1700 (assuming no obstacles to registration and covers one class of goods/services)                                                                                                                                                                                 
    • EUTM for ALL 28 countries: ~$3500! (assuming no obstacles to registration and cover up to three classes of goods/services)

International Trademark Filing Strategy

Potential Strategy:

File Madrid Protocol application for:

  • China, Colombia, France, Germany, India, Mexico, Norway, Poland, Spain, Sweden, Switzerland, U.K., EUTM

Requirement: a brand owner must own either a pending home country trademark application(s) and/or registration(s) that would form the basis for the Madrid application.

National trademark applications for:

  • Brazil, Canada, China, Panama

Paris Convention:  If Paris Convention priority is available, the brand owner International Trademark Filing Strategymay opt to file the Madrid application first then file the national applications over several months to spread out the filing costs. 

As you can see, there are many filing considerations and options for seeking global trademark registration protection.  Rather than aimlessly filing global trademark applications on a “hit-or-miss” basis, brand owners should first create a well-crafted strategy, one that minimizes risks and costs while maximizing protection, and then execute that strategy while always maintaining flexibility for change, when necessary.

II. Critical Post-Registration Requirements

Once brand owners secure trademark registration protection for their marks and products, there are certain actions they must take to ensure that their rights remain active and enforceable, including the following:

  1. Use: If registered marks are not used for the registered products for three consecutive years post registration (five in some countries), their registrations become vulnerable to cancellation by third parties for non-use.
  1. Proper Use: Using marks improperly may render them generic terms with all trademark rights being lost.  Did you know that aspirin, escalator and yoyo were all once trademarked terms?  Did you know that the mark Google® is being challenged as being a generic term for searching the Internet?  “You won’t google that! You’ll search the Internet via Google® search engine for that.”  That issue is another post…at another time.
  1. Trademark Licenses: Some countries require trademark registrants to record trademark licenses with their Trademark Offices if registered marks are licensed to third parties for use in their countries.  Failure to record a trademark license in those countries renders a trademark’s registration vulnerable to cancellation for non-use, since absent the recordal, the mark is deemed not in use by the trademark owner. 
  1. Maintenance: After registrations issue, their owners must make periodic maintenance filings and pay periodic maintenance fees to maintain active and enforceable trademark registrations. Failure to make those filings will result in the cancellation of issued registrations, resulting in the loss of trademark rights.

International Trademark Filing StrategyIII. Closing

To summarize, trademark owners must recognize that trademark rights are country specific, there are first to file countries and first to use countries, and trademark registrations are essentially government issued licenses for the right to import and export branded products and conduct business in a country.

Companies should audit their trademark portfolio annually and prioritize their trademarks, products and countries of interest.  Companies should also actively manage their portfolio and implement protocols for trademark clearance and enforcement strategies and – most importantly- develop an overall focused strategy that takes into consideration the budget while minimizing risks and maximizing protection.

Brand owners that fail to implement a coherent and consistent global trademark strategy will likely find that they have failed to maximize brand protection, possess inadequate trademark protection for key brands and products in key markets, have not minimized business and infringement risks and consistently run over budget.

IV. Your Assignment and Action Items

  • Undertake a cost estimate review for your primary country filings;
  • Prioritize the primary countries and marks further based upon the estimated costs for registration vs. the annual budget;
  • Prepare a one to three year (or more) “rolling” filing strategy, if necessary; and
  • Review the strategy every six months or year and remain flexible.

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International Trademark Filing Strategy