Wednesday, January 09, 2013

Foreign Trademark Owner Stumbles over U.S. Bona Fide Intent Requirement

In an article published a few years ago, entitled "Unfriendly Shores: Recent Developments in U.S. Law May Trouble Foreign Trademark Owners," Ann Lamport Hammitte and I asked whether, in light of then-recent developments, foreign trademark owners were sailing into some rough waters vis-a-vis the issue of bona fide intent under U.S. law. A recent decision from the U.S. District Court for the Southern District of New York brings that issue to the fore. Sandro Andy S.A. v. Light, Inc., Civil Action No. 12 Civ. 2392 (HB) (S.D.N.Y. Dec. 27, 2012).

An applicant who seeks registration under Sections 44(d), Section 44(e), or Section 66(a). of the Trademark Act must verify that he/she/it has a bona fide intent to use the mark in commerce. The TTAB applies the "same objective, good faith analysis" as it applies under Section 1(b) for a U.S. applicant. See Lane Ltd. v. Jackson Int'l Trading Co., 33 USPQ2d 1351, 1355 (TTAB 1994).

We wrote that foreign applicants may be particularly vulnerable to a claim of lack of bona fide intent, since foreign applications and registrations that form the basis for Section 44 and 66 filings often include long lists of goods and/or services for which the mark in question has never been used anywhere. A foreign owner may have a difficult time producing documentation or other evidence that would substantiate its stated bona fide intention to use its mark in this country. [Moreover, how many foreign trademark owners are even aware of this potential problem?]

In Sandro Andy, plaintiff, a French company, ran into trouble when it tried to enforce its Madrid Protocol-based registration for the mark SANDRO, a registration that listed some 250 items in several classes. Sandro Andy sells clothing in the U.S., but its registration was not so limited. The defendant counterclaimed, seeking a declaration that Sandro Andy “lacked a bona fide intent to use the mark in connection with the goods listed in the application” and requesting cancellation of the SANDRO registration in its entirety. The court, citing the TTAB's Wet Seal decision, declined to invalidate the entire registration, but instead directed Sandro Andy to "amend its International Registration and to cull from the list the unused goods and classes. In the alternative, Sandro Andy may file a motion to amend its certificate of extension." This was a setback for Sandro Andy, but apparently not a fatal one in the litigation.

Marty Schwimmer discusses the problem, and the Sandro Andy case, here at his Trademark Blog.

Post your comment here.

TTABlog comment: The court also discussed the Spirits decision, which seems to say that lack of bona fide intent as to any item in the identification of goods would invalidate the entire registration. The district court noted, however, that in Spirits, "applicant failed to respond by amending or dividing the registration or by producing evidence."

Text Copyright John L. Welch 2013.


At 10:15 AM, Anonymous Matthias Berger said...

This is a long awaited decision! I have been telling my European clients for years about the bona fide intent to use problems when they extend their International Registrations to the US but not all are taking this issue seriously.

At 10:29 AM, Anonymous Joe Dreitler said...

This exercise simply shows how unfortunate it is that we have pretty much removed fraud from trademark law, so there is no incentive for applicants to change their bahaviour. The problem is that these registrations continue to issue, they become of record, and most clients do not have the money or desire to engage in litigation to knock out 247 of the goods, only to be sunk by the remaining 3 and the federal registration. We have a trademark register filled with garbage that those who advocated intent to use never envisioned, so there was no practical remedy in the TLRA to get rid of these applications. In 2013 we have lots of these registrations "blocking" people from adopting marks that should be registered, but no cost-effective and simple means of removing this type of registration. It is a fault with the existing statute that needs to be remedied. Of course, there are a lot of things that have occurred in the world impacting trademarks since 1988 that cry out for another trademark review commission to deal with as a whole, rather than Band Aid approaches that have been enacted in the past 20 years. Just my 2 cents.


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