What Happens When a Trademark Registration Expires?

Searching either the Principal or Supplemental Register of US Trademarks has never been easier.  Clicking on www.uspto.gov and working through the various trademark-related screens produces not only a searchable list of all registered trademarks, the goods and services associated therewith and the trademark owner, but a designator which reads “ALIVE” or “DEAD.”  Similarly, pending and abandoned applications for a listing on either the Principal or Supplemental Register of US Trademarks, also indicates if the trademark registration is currently pending or if it has been abandoned by the applicant.

Those seeking to adopt a new trademark are often elated to find that a registration for the same or similar trademark has been marked DEAD or that the application for its listing as a registered trademark has been abandoned.  However, such elation is often short lived when those seeking to adopt a new trademark learn that because a trademark registration has been marked DEAD, or that an application to register a trademark has been marked abandoned by the applicant, does NOT mean that the trademark in question is now available for use by the first claimant.  An explanation of the reasons why this is so are the subjects of this article.

In the US, exclusionary rights to a trademark are based on the actual use of a trademark in commerce.  Actual use of a trademark in commerce generally means soliciting money from a potential buyer in exchange for the purchase of goods or services.  While there are many good reasons to register a trademark – more properly said: registering a trademark means obtaining a listing of a trademark in the Principal or Supplemental Register of US Trademarks – registering a trademark is entirely optional.  Despite the strong belief of many just starting out in a business or in launching a new product line, there is no requirement for a business owner to apply for a trademark registration.  While a trademark registration can add value to a trademark, can expand the exclusionary rights to a trademark to the entire country, and can provide notice to all of prior exclusionary rights to a trademark, the trademark must actually be used in commerce by the applicant for a trademark registration to be granted by the USPTO.

It does not matter when a business owner thought up a new trademark for a new product or service if the trademark is never actually used in commerce.  Thus, to the surprise of many, obtaining a long-standing reservation of a particular trademark which enables future use of that trademark is purposely made difficult under US trademark law.

But what happens when a trademark owner either seeks a trademark registration for a mark that is actually used in commerce and then the trademark registration application is abandoned?  Or what happens when a trademark owner elects not to file a petition for the renewal of a listing on the Principal or Supplemental Register of US Trademarks?  Many believe that an abandoned trademark registration application or a lapsed trademark registration is akin to lost or abandoned property.  In many cases, this is not correct.  If the trademark owner continues to use the trademark, exclusionary rights in the trademark are retained.  Such rights are often called common-law trademark rights.

What must the adopter of a new trademark do when a search on www.uspto.gov reveals that a trademark registration application has been abandoned or that a trademark registration is marked as being DEAD?  The answer is to keep searching.  The best place to start searching is the internet.  If an internet search produces no results, consider using a professional trademark search firm that specializes in searching out businesses that rely on their common law trademark rights.  If the results from a professional trademark searcher come back clear, then there is a good chance that when a new trademark is launched, it will not infringe the trademark rights of another.  But, time is critical.  A trademark search is only good as of the day it was done.  Thus, if a business obtains a trademark search and the search appears clear, but the business waits to launch its new trademark in commerce, it is advisable to update the trademark search.

Many businesses are willing to relinquish rights in their trademarks as becoming historical relics of past business.  Others are not.  Consider the numeral 8 together with the letter V used by the Ford Motor Company in the 1930s to designate an eight cylinder motor having a one-piece “V” shaped cylinder block.  As other automobile manufacturers adopted 8 cylinder engines, the Ford V-8 trademark fell into disuse.  However, not wanting to see its rights disappear for this iconic American trademark, the venerable V-8 trademark has reappeared on new Ford automobiles.  Specifically, the V-8 trademark is now back in use building up trademark rights for the Ford Motor Company.  Thus, in the mind of the Ford Motor Company, the rights to exclude others from using the iconic mark which was first used nearly eighty years ago continue to live on.

The lesson of this article is that despite what one thinks or one reads on the website of the USPTO, common law exclusionary rights to a trademark may continue to exist even when a trademark registration is declared DEAD or a trademark registration application goes abandoned.

Yes Businesses Can Lose the Value of Their Registered Trademarks

The rights associated with trademarks are dynamic.  Such dynamism applies whether or not a trademark is registered.  Many assume that a trademark is like a copyright or patent registration.  That is, the scope of the rights associated with a trademark registration may be determined in some way by the difference between the registered trademark and the other marks in existence at the time a trademark was registered.  This common assumption is incorrect.  Even with a registered trademark, the rights of the trademark owner in the registered trademark may either increase or decrease over time.  If a trademark is important to business, the key is to assure that the rights associated with a trademark do not decrease over time.  Explaining how to do this is the purpose of this article.

Because trademark rights are based on the first lesson and probably the most important lesson in this article is to continually use the trademark as registered.  If the trademark is registered, use the registered trademark to offer the associated product or services to potential buyers.  Many business owners believe that if a facsimile of a registered trademark is used on goods or services for which a trademark has been registered such use is sufficient.  This is incorrect.  The prudent business owner will treat a registered trademark as valuable property and consistently use a trademark as registered.

Another suggestion is to expand the use of the registered trademarks to goods and services related to the goods and services for which the trademark is registered.  Oftentimes a failure to expand the range of goods and services for which a trademark is used will open the door to the efforts of others to obtain trademark registrations for similar trademarks describing goods and services for which a trademark is registered.  The United States Patent and Trademark Office (USPTO) does not police trademark registrations.  Rather, the USPTO simply applies the rules for registering trademarks to trademark registration applications.  Once a trademark is registered, protection of the registered trademark is up to the trademark owner.

Yet another suggestion is to build a portfolio of trademark registrations based on variations of an important trademark.  Such variations may include the addition of a logo or the use of additional words with a registered trademark.  Such building of a portfolio of trademark registrations about a core trademark has a synergistic effect; that is, the strength of the portfolio becomes greater than the sum of each trademark in the portfolio in that the rights associated with each individual trademark are strengthened.

Where most businesses stumble is that they fail to monitor the efforts of others to obtain a registration on a similar trademark or the use of similar trademarks by others to sell related products.  Such monitoring is important because efforts by others to obtain a trademark registration on a similar trademark or to use a similar trademark in commerce detracts from the trademark owner’s rights in a registered trademark.  Eventually, the unchecked efforts of others to register a similar trademark or to sell products using a similar trademark can reduce the rights in a trademark to effectively zero.  This is because many businesses ignore their portfolio of registered trademarks so that their rights in a registered trademark diminish or possibly even go away.

It is a sad fact of life for many business owners that when a competitor effectively copies a registered trademark, the business owner learns that the rights in their registered trademark are effectively non-existent.  The question is then asked how rights in a registered trademark can go away.  The reason is simple.  Specifically, the reason that trademark rights go away is a failure to recognize that the rights to registered trademarks are dynamic; that is, the right to a registered trademark are continually changing.

Other businesses proudly present their portfolio of registered trademarks when being considered for acquisition.  It is only after a due diligence investigation by the acquiring company that the company being acquired learn that its portfolio of trademark registrations is worth much less than originally thought.

The bottom line is that a trademark registration represents a bundle of rights which must be continually strengthened and protected.  Trademarks are marketing tools.  You need to continually evaluate the effectiveness of trademarks to attract and sell products to customers.  Unused trademarks may be discarded.  Under used trademarks should either be strengthened or discarded.  Important trademarks should either be continuously strengthened by obtaining additional registrations for related trademarks.  But most importantly, when another business encroaches on important trademark rights, efforts should be made to cause the encroacher to move away from the use of a similar trademark.  It is usually best to address such encroachment on trademark rights early when making a change is easy and inexpensive.  The longer a business allows another to use a trademark encroaching in the right of a trademark owner, the more difficult it is to effect a change.

While there are many strategies for going after those who infringe on trademark rights, the most effective strategies encompass three elements; as follows:

1)    Diligently monitor the market place looking for the use of potentially infringing trademarks.
2)    Promptly request termination of the use of infringing trademarks in a non-threatening manner.
3)    Offer to work out a reasonable accommodation to allow the infringer the needed time to transition to another trademark.

Like many things in life, the longer a difficult trademark situation is ignored, the more difficult it becomes to correct the improper use of a trademark by another.

Why Protect a Trademark Outside Of the United States

As of this writing the US is still the world’s largest market for goods and services.  However, as international barriers to commerce continue to fall, it is not unusual for a small US based business to receive purchase orders from customers in Canada, Mexico, and some European countries.  When demand for a product grows, some non-US customers may actually desire to become product distributers in their home countries as the recognition of a trademark or brand associated with a high demand product grows.  Thus, while a small US business may have never considered pursuing international sales, the demand for a product or service outside the US has moved many small US businesses beyond their originally intended markets.

As a brand or trademark gains recognition in the marketplace, so too does its value.  As the value of a trademark increases so too does the need to protect that value.  For trademarks, the best way to protect trademark value is by listing the trademark on the national trademark registry in a country where the trademark is being used.  Unfortunately, there is no global international trademark registry so a small business owner must generally seek listings on national trademark registries on a country-by-country basis.

Because of the cost associated with seeking a trademark registration outside the US, many small businesses delay obtaining trademark registration outside the US until problems occur.  This is a big mistake as waiting to seek trademark registration outside the US can result in a loss of rights to pursue others for trademark infringement.

There are three triggers that should indicate to a small business that consideration as to whether or not to register its trademark outside the US should begin.  The first trigger is an anticipated growth in non-US sales.  If orders from outside the US are a onetime event then the first trigger has not been pulled.  However, if sales outside the US show signs of repeating, then strong consideration should be given to applying for trademark protection outside the US.

The second trigger for applying for a trademark registration outside the US occurs when a business elects to sell products or services using a local business entity in a country other than where the products or services are sold.  The most common example is when a business appoints a distributor for a non-US market.  If a trademark registration is not obtained and the non-US distributor is terminated – without a trademark registration – the distributor may continue to use the trademark even after the distributorship is terminated.  Such a situation can cause significant problems when switching distributors.

The third trigger indicating the need to obtain a trademark registration outside the US is the possibility of counterfeiting.  Thus, if there is a chance that a product and its trademark may be copied in another country, then obtaining a trademark registration may trigger local laws to assist in stopping the operation of the counterfeiters.

Protecting a trademark by obtaining trademark registrations outside the US can be expensive if not properly managed.  Such trademark registration management includes the careful selection of trademarks to be protected, proper listing of goods and services associated with those marks to be protected and identifying those countries in which trademark protection is to be obtained.  Following the selection of trademarks, listing the goods and services to be protected and the identification of the countries, it then becomes necessary to prioritize the efforts to obtain trademark registrations.  Such prioritization can assist in spreading out expenditures over a longer period of time than if multiple applications are filed all over the world at one time.

Unlike the patents or copyrights, trademark protection is a dynamic and continuing process.  Simply obtaining a trademark registration is just the first step.  Once a trademark registration has been registered in an identified country, it is important that local trademark laws be followed to maintain trademark rights.  Generally, this effort requires establishing a relationship with trademark counsel in each country where a trademark is to be registered.  While most US trademark counsel have established relationships with trademark counsel in most of the major industrialized countries, the ultimate responsibility for assuring that trademark rights support marketing plans remains with the business owner.

Managing Invention Disclosures

Businesses are built on ideas.  In fact, baby businesses are often awash in ideas that the founders of the business have accumulated in the months and years preceding the founding of the business.  Once a business is founded, the development of the product or service to be sold generates even more ideas.  Some of these ideas are for even more new products or services.  As new products or services hit the market, feedback from customers generates still more ideas for improved or new products or services.  The problem is how to keep track of who originated the idea and when the idea came into being.  The solution to this problem is a simple one; however, this simple solution is often ignored by most businesses.

Ideas developed in the course of operating a business come in many forms.  Specifically, the ideas may be for new products or services, new ways of doing business or meeting customer needs, or new ways of manufacturing products to achieve greater quality or lower costs.  The generic terms used by intellectual property attorneys for the description of a new idea is “disclosure”. But despite the fact that most human beings spend their lives coming up with new ideas, few understand how to properly record their ideas, particularly those ideas that may merit protection at a later time under the intellectual property protection laws.

In the recording of ideas or the creation of disclosures, there are three essential aspects which must be documented: the idea itself, the creator(s) of the idea, and the chronology of the idea development.  The remainder of this article will focus on how to properly document the idea, its creators, and the date of creation.

Describing the Idea

No one knows where ideas come from.  One philosopher has suggested that ideas originate in the space between thoughts.  Everyone has ideas.  The key is understanding what an idea is.  An idea is a solution to a problem.  Thus, ideas are best understood by understanding the problem solved by the idea.  Accordingly, the first step in recording an idea should be a simple statement of the problem solved by the idea.  In fact, some of the greatest ideas come from simply obtaining a keen understanding of the problem.

Once having described the problem, the solution to the problem must be described.  This description can be either a detailed, narrow, focused description of the problem solution or a broad conceptual solution.  Either is sufficient.  What is documented depends on how the creator of the problem solution thinks.  Some people begin with very specific solutions to a problem and then expand on their ideas.  Others begin by attacking general aspects of a problem and continue working toward a specific solution.  For idea recordation purposes, how the creator of the idea thinks is important.  The key is to record the solution to the perceived problem, either in very narrow terms, in very broad terms, or something in between.

The biggest hurdle for most engineers and scientists seems to be expanding a narrow problem solution to a broad description of an invention.  The important thing is to describe the solution to the problem, be it narrow or broad.

Some inventors are limited by what they feel is a need to describe the scientific or engineering background for their invention.  Such extensive background descriptions are usually unnecessary if the inventor has an idea of how others have solved or not solved similar problems.  A simple description of what has been done that differs from the work of others is often the best way to describe the invention.

Tying the Idea to a Person

Those who come up with ideas often work best alone.  Others create their best ideas by bouncing incomplete ideas off others.  Such interchanges often lead to ideas created by more than one person.  To determine what person or persons created an idea begins with an understanding of the problem.  If the thoughts of multiple people are required to describe the idea which solves the problem. Then there is joint creation of an idea.  If the thought of but one person solve the problem, then there is sole creation of an idea.

Situations in which there is a sole creator of an idea may become quickly confused when another person who hears an idea is quickly triggered into thinking how the idea can be made to operate faster, better, or cheaper.  If an inherent aspect of the problem is to make something faster, better, or cheaper, and another adds to that basic problem solution, then there may be a joint creation of an idea.

While many think that determining who came up with an idea is a simple process, the reality is that it can be extremely difficult.  For idea documentation purposes, the best practice is to record the names of all who were involved in the creation of the idea and, if possible, what part of the idea each person is responsible for.

Creating a Timeline

In the United States, the timing of the creation of an idea is extremely important.  This is because rights to an inventive idea in the United States are based on when the idea was created, not when the idea is sent to a government agency.

United States patent law recognizes that idea creation is a two-step process.  The first step is the conception of the idea.  For many, conception is a long, tedious process of trial and error.  For others, conception may come as a blinding flash.  While human brains are often compared to computers, science still does not allow us to open a person’s head to find just when the parts of an idea came together.  Therefore, humans must take the next best step.  The next best step is to record, in some fashion, the conception of the solution to a problem.  

The second step in the creation of ideas is what the United States patent law calls reduction to practice.  Reduction to practice is what some call proof of principal.  The reason for this second step in the idea creation process is that not all conceptions of how to solve a problem will work.  Sometimes, when the solution to a problem is a simple one, it is quite clear that there is no need for a reduction to practice.  In yet other situations, it is often discovered that a conception of a solution to a problem actually creates still other problems.  The important aspect, from an idea recordation standpoint, is to document the reduction to a practice of a conceived solution to a problem, should a reduction to practice be necessary. 

Often ignored, but very important in the United States, is recording the events between conception and reduction to practice.  The purpose of recording what happened between conception and reduction to practice is to establish diligence by the inventor.  Without diligence on the part of the inventor, it may be argued that the idea has been abandoned.  If abandonment is established, the ability to obtain a protection of the idea can be adversely affected.

Witnessing

The most common question that comes up about the idea disclosure process is witnessing.  Witnessing is important and serves two functions.  The first function is to attest to the fact that a certain creator came up with an idea.  The second function is to authenticate the point in time when the idea was revealed to the witnesses.  Thus, after an idea is recorded, it should be witnessed by the signature of someone who has some understanding of the idea.  And the witness’s signature should be accompanied by a date.

In sum, those businesses who find value from their ideas should document their ideas using disclosures explaining the problem solved, the solution to the problem (often expressed in terms of the differences from the attempted solutions of others), the creator or creators of the solution to the problem, and the date of the solution.  Verification of this information is done by the use of a dated witness’ signature.