Guest Post by James Major.
In a post entitled “Trademark: Registration Void if Completed Prior to Actually Rendering Services in Commerce,” Prof. Crouch asserted that “[o]ne of the traditional benefits of trademark law is that it has fewer disastrous pitfalls for the uninformed (as compared with patent law).” This guest post respectfully disagrees with Prof. Crouch and asserts that trademark law contains administrative traps for the unwary not commonly found in patent law.
Of course, a patent prosecutor and a trademark attorney can each make substantive and procedural errors; creating an estoppel and blowing a deadline, respectively, are just two. But, substantive and procedural errors are hardly unique to patent and trademark law. This post argues that there is the possibility of what I will call “administrative” errors that are unique to trademark law. These administrative errors arise partly because of the ease of submitting documents to the United States Patent and Trademark Office (the “USPTO”) through the Trademark Electronic Application System (“TEAS”), and partly because of the fundamentals of U.S. trademark law.
1) The Risk of Inadvertent Factual Assertions
Imagine the following scenario: the client asks the trademark attorney to submit an application for U.S. trademark registration based on a bona fide intent to use the trademark in commerce. The trademark attorney completes the form on TEAS, signs where instructed, and submits the form. Simple as that, right? In a way, yes. But, there’s a problem here: in submitting the intent‑to‑use application, the trademark attorney has just asserted that he or she knows the client has a bona fide intent to use the trademark in commerce. Does the trademark attorney have first‑hand knowledge of that? Is there evidence of “circumstances showing the good faith” of the client? A deposition would resolve those issues nicely. And, the opposing party in a dispute could move to disqualify the trademark attorney and his or her firm from representing the client to boot. After all, the trademark attorney is now a fact witness.
The TEAS system has a neat way round this administrative problem: the trademark attorney can e‑mail the application to the client to sign electronically. And, the signatory will hopefully have the first‑hand knowledge necessary to make the assertion under “circumstances showing the good faith” of the client.
2) Use of the U.S. Acceptable Identification of Goods and Services Manual Can Be Dangerous
Now imagine the trademark attorney is working on behalf of a client that performs trademark searches, and only trademark searches. The client instructs the trademark attorney to prepare an application for U.S. service mark registration of the client’s service mark, XXXXX. The U.S. Acceptable Identification of Goods and Services Manual helpfully gives the trademark attorney plenty of options as to what recitation of services to choose, including:
- “Legal services”;
- “Legal services, namely, trademark searching and clearance services”; and
- “Legal services, namely, intellectual property consulting services in the field of identification, strategy, analytics, and invention.”
So, the trademark attorney chooses recitation (2), e‑mails the application to the client for signature, and ultimately submits the application. After all, the USPTO has approved all of these recitations. But, the USPTO states:
You must ensure that statements made in filings to the USPTO are accurate, as inaccuracies may result in the cancellation of a trademark registration. The lack of a bona fide intention to use the mark with all goods and/or services included in an application, or the lack of use on all goods and/or services for which you claim use, could jeopardize the validity of the registration and result in its cancellation.
Because the client is not using the XXXXX service mark in commerce in connection with “trademark clearance services,” the client has made an inaccurate statement that could be grounds for cancellation of any service mark registration.
This administrative error may come as a surprise to patent attorneys, who typically write as broader claims as possible. But, in U.S. trademark registration practice, there is a danger in unwitting over‑breadth.
Neither point (1) nor point (2) is a criticism of TEAS overall, nor should either be deemed so. In some ways, TEAS is a victim of its own success. In making trademark filing and prosecution so straightforward, it is easy to forget that one is submitting a legal document.
3) The Joys of Good Will
Patents have the attributes of personal property. So do trademarks, inasmuch as the owners can buy them, sell them, transfer them, securitize them, etc. So, the trademark attorney take a patent assignment form and simply replace the word “patent” with the word “trademark,” right? Wrong again, because, by making an administrative error with the form, the trademark attorney has just separated the trademark from the good will. Prof. McCarthy defines good will as “a business value that reflects the basic human propensity to continue doing business with a seller who has offered goods and services that the customer likes and has found adequate to fulfill his needs.” And, it’s the good will that gives the trademark value. An assignment that transfers trademark ownership but leaves the good will behind is a naked assignment that effectively destroys the value of the trademark.
The solution to this administrative problem is relatively straightforward: use a form that assigns the trademark and the associated goodwill.
4) More Assignment Antics
Now, the trademark attorney has the correct form, and assigns the intent‑to‑use application to a third party. But, again, there’s a problem: in most cases, the statute forbids the assignment of intent-to-use applications.
Given its statutory origin, there is no easy way to circumvent this administrative problem. But, this problem is certainly an issue in trademark due diligence.
This post describes some of the administrative traps for the unwary trademark attorney. There are probably others, only I haven’t found them (or worse, fallen into them). But, to say that “[o]ne of the traditional benefits of trademark law is that it has fewer disastrous pitfalls for the uninformed (as compared with patent law),” hasn’t been my experience, at least on the administrative level.
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 Dennis Crouch, Trademark: Registration Void if Completed Prior to Actually Rendering Services in Commerce, Patently-O (Mar. 2, 2015), https://patentlyo.com/patent/2015/03/trademark-registration-rendering.html.
 U.S. Patent & Trademark Office, http://www.uspto.gov/trademarks-application-process/filing-online (last visited Mar. 9, 2015).
 See 15 U.S.C. § 1051(b) (2012).
 See generally Trademark/Service Mark Application, Principal Register, U.S. Patent & Trademark Office, 1‑21, http://www.uspto.gov/sites/default/files/documents/new_teas.pdf (last visited Mar. 9, 2015) [hereinafter TEAS Regular Form] (providing a preview of a “TEAS Regular” form).
 15 U.S.C. § 1051(b).
 TEAS Regular Form, supra note 4, at 18‑19.
 U.S. Patent & Trademark Office, U.S. Acceptable Identification of Goods and Services Manual (ID Manual), http://tess2.uspto.gov/netahtml/tidm.html (enter “legal services”) (last visited Mar. 9, 2015).
 TEAS Regular Form, supra note 4, at 15 (underlining added).
 35 U.S.C. § 261.
 See 1 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition § 2:14 (4th ed. 2014).
 Id. § 2:17.
 Id. § 2:15 (“Trademarks, unlike patents and copyrights, have no existence independent of the good will of the products or services in connection with which the mark is used.”).
 15 U.S.C. § 1060(a)(1).