Maximize your business’ value

The law once said that to file an application for a United States federal trademark registration, an individual or a business had to actually be using the mark in interstate commerce. That individual or business must have actually sold the goods or services to someone in another state, or their sale of the goods or services had to have had an effect on interstate commerce. There was no way to “reserve” a name prior to actual usage. 

In 1989, however, the Trademark Act was amended to allow for an “intent to use” application (ITU) to be filed with the United States Patent and Trademark Office (USPTO). While actual use in interstate commerce is required to issue a registration, the ITU application allows an individual or business with the bona fide, good faith intent to use a certain mark to file an application in advance with the USPTO.

The ITU carries some substantial benefits, including what we trademark attorneys call a constructive use date as of the date of the application. Put simply, under the law you will now be treated as though you had actually started using the mark in interstate commerce as of the date the application was filed, even if the actual use comes much later down the line. Therefore, once your registration issues, you will be considered the senior user and can prevent others from adopting the same or similar mark for the same or similar goods if that user adopted the mark after the date of the ITU filing, even if their date was before you had actual use. 

The constructive use date of the ITU application can be a big advantage for businesses. It allows a company to pick a name (or several possible names) for a new product or service offering, conduct clearance searches to make sure no one else has a better right to the name, and then immediately file an ITU. This can be of special importance in cases wherein a name has been identified but there will be a delay in the rollout of the goods or services. By filing the ITU, the company is assured that it is protected against someone else beating them to the punch and launching first.

While such benefits can be great for a business, an ITU application does come with a few down sides. First, they require more filings with the USPTO so are more expensive. Secondly, ITU applications can only be assigned in very specific circumstances and these restrictions can impact certain business sale transactions depending on how they are structured. 

Additionally, certain types of rejections by the USPTO are harder to overcome with ITU applications, as these applications do not have the opportunity to move onto what is called the Supplemental Registry. The Supplemental Registry is a holding place for in-use applications whose marks have been deemed descriptive; with time and continued use they may be moved over to the Principal Registry.

Supplemental Registry registrations receive a registration number, they have access to federal courts, and they can be cited by trademark examiners against subsequently filed applications. They are not afforded certain legal presumptions (such as ownership and validity) and they do not confer nationwide rights. However, if it comes down to having a registration on the Supplemental Registry or no registration at all, the Supplemental Registry is definitely preferred. If an application receives a final rejection, the applicant must then make the decision whether to appeal (which is a time consuming and expensive process) or abandon the application altogether.

The biggest piece of advice I have for clients filing ITU applications is to always keep their eye on the ultimate goal, which is to achieve sales as soon as possible. Keep in mind that a registration will not issue until you have had sales. Additionally, having sales and filing a notice of use will switch an ITU application to an in-use application. This may come in handy in the event that the application receives a merely descriptive or geographically descriptive rejection, which then opens up the possibility of the Supplemental Registry.

One thing you want to avoid is waiting to launch your product or service until you receive your notice of allowance from the USPTO. While it may be tempting to do so, it really isn’t the best strategy and it only serves to delay the ultimate issuance of any registration. In the worst case scenario, it could lead to a circumstance in which the application has to be abandoned because use cannot be achieved before a rejection is deemed and the USPTO declares the application abandoned.   As long as the clearance search has not identified any previous users that might cause a likelihood of confusion rejection, an applicant’s best bet is to always be diligently working toward use.

Bear in mind, however: Trademark rights are created by your use of those terms to identify your goods or services and are not created by the piece of paper issued by the government.