Connect with us

Legal Corner

Sound Decisions

Avatar

Published

on

A common issue seen with increasing frequency is a misunderstanding of the basic requirements for obtaining federal trademark protection in the United States. While federal trademark protection is not available for goods and services that violate the Controlled Substances Act, it is common practice in the cannabis industry to obtain federal trademark protection for ancillary goods and services that are federally legal. But the key to obtaining such trademark protection is that you must either be using the applied-for mark in commerce, or you must have a “bona fide intent” to do so. We’d like to explore what exactly it means to have a bona fide intent to use a trademark in commerce, and what level of proof will be required to substantiate it.

A common scenario is that a cannabis business owner thinks of a name that sounds great—one they would ideally like to use on their cannabis goods and services—but they know they can’t obtain federal trademark protection for anything that is federally illegal. So, they start brainstorming similar goods and services for which they could register, oftentimes looking to large, established companies’ trademark registrations for inspiration. The problem, however, is that the cannabis company often does not have a plan in place for actually selling those goods or services. This can be a big problem.

There are two bases on which one can file a U.S. federal trademark application: Actual use or intent-to-use. An application based on actual use requires proof of that use in the form of photo specimens showing the mark on the goods and a date of first sale. An intent-to-use application, on the other hand, requires “only” that the applicant have a bona fide intent to use the mark in commerce. This is a great tool for start-ups to ensure that their brand is protected while they’re getting their business off the ground. But it also raises the question of what truly constitutes a “bona fide intent” to use a mark?

Section 1(b) of the Trademark Act allows federal trademark applications to be filed based on a “bona fide intent” to use the mark in commerce, and this intent must be stated in the application under penalty of perjury. The Act further states that an intent-to-use trademark filing must be “under circumstances showing good faith.” This language indicates that there must be some objective evidence of good faith, a position that courts have consistently agreed with.

While the United States Patent and Trademark Office does not require that an applicant submit proof of their bona fide intent at the time of application, an application may be challenged on the basis of lack of bona fide intent at the time the application was filed. This is why it is critical to be able to prove your bona fide intent to use the mark in commerce at the time of filing.

Case law, including Honda Motor Co. v. Friedrich Winkelmann, provides some guidance for applicants who are unsure if they’ve met the threshold of having a bona fide intent to use their mark in commerce, and helps us understand what types of objective evidence of a bona fide intent must be shown. The Honda case involved an opposition by Honda to Friedrich Winkelmann’s application to register VIC for “vehicles for transportation on land, air or water” and related goods. The Trademark Office in this case stated that in order to raise a genuine issue of material fact as to its intent to use on a motion for summary judgment, an applicant must rely on specific facts that establish the “existence of an ability and willingness to use the mark in the United States to identify [the goods in the application] at the time of the filing of the application.”

This case, among others, reaffirms the importance of having documented evidence to support your bona fide intent to use your mark in commerce at the time you file. This evidence may consist of business plans, marketing plans, or correspondence with potential manufacturers, distributors or licensees, but there is no bright line test as to how much or what kind of evidence will be sufficient. When filing a U.S. trademark application, it is important to consult with your attorney about the validity of your intent to use your proposed mark. Sometimes, it may make sense to wait to file until you have a business plan in place, or until your intent is easily substantiated.

Continue Reading

Newsletter