A recent decision of the United States Court of Appeals for the Federal Circuit (M.Z. Berger & Co, Inc., v. Swatch AG  Fed. Cir.) has clarified the standards applicable to determining whether an applicant relying on an “intent-to-use” basis had the required “bona fide intention” to use the mark in commerce when the application was filed. Lanham Act § 1(b).
Prior to amendment of the Lanham Act in 1988 to permit intent-to-use filings, U.S. law required proof of use in commerce at the time of filing the application. For such use-based applications, the applicant must show a “bona fide use of a mark in the ordinary course of trade.” Lanham Act §§ 1(a), 45. However, an intent-to-use applicant must only have “a bona fide intention, under circumstances showing the good faith of such person, to use a trademark in commerce” at a later date.
The Lanham Act does not define “bona fide intention” or set forth any evidentiary standard of proof, nor does it indicate whether objective or subjective evidence of intent is required. Congressional reports at the time the intent-to-use basis was added to the Lanham Act indicate that Congress intended an objective standard to be applied. However, Congress did not indicate how much or what type of objective evidence is required to support that intent.
Berger, a manufacturer, importer, and seller of watches, clocks, and personal care products, applied to register the mark iWATCH for over 30 goods falling into those categories. Swatch opposed the application based on the confusing similarity of iWATCH to its SWATCH mark and also on Berger’s lack of bona fide intent to use the mark in commerce at the time Berger filed its application. Berger presented testimony of its intent to use its mark through its owner, the paralegal who filed the application, its vice president of merchandising, and several other employees.
The Trademark Trial and Appeal Board found that testimony to be conflicting and chose to believe the owner’s statements that Berger never intended to use the mark on any goods other than watches, and that the documentary evidence presented to the Board was created solely to overcome objections by the examiner during prosecution of the application. Although there was some evidence that Berger intended to sell watches under the mark, there was no evidence about the types of watches or any features of the watches, nor did Berger have any history of making and selling “smart” watches at the time of filing. The Board sustained the opposition, even though it found no likelihood of confusion, because Berger’s evidence demonstrated a lack of bona fide intent to use the mark in commerce.
On appeal to the Federal Circuit, Berger argued that some of its evidence, if viewed in isolation, was sufficient to establish the minimal standard for intent, and that the Board had erred in considering all of the circumstances rather than that supporting evidence alone.
The Court first determined that lack of bona fide intent is a ground for opposition. Although the bar for showing a bona fide intent is not high, the Court held that the Board correctly considered all of the circumstances regarding Berger’s intent, including the inconsistent testimony of its employees, the failure to decide on the nature of the watch, and the lack of supporting documents concerning the watch outside of prosecution papers.
USPTO rules specifying the type of ongoing efforts necessary to support a request for a time extension to file a Statement of Use can also be used to evaluate whether an applicant had a bona fide intent to use the mark at the time of application. These include “product or service research or development, market research, manufacturing activities, promotional activities, steps to acquire distributors, steps to obtain governmental approval, or other similar activities.”
It remains to be seen whether the Board and courts will similarly interpret the requirement to state an intention to use the mark in U.S. commerce in applications based on foreign registrations. Applicants from other countries often file U.S. applications containing the same long lists of goods found in their foreign registrations, without any supporting documentation or other objective evidence of their intent to use their marks for all of those goods. That may make their applications vulnerable in an opposition, although they are not required to file a Statement of Use to obtain a registration.