Look Behind The Curtain When Acquiring Registered Trademarks

It is a commonly overlooked problem. A person comes up with a new product to bring to market and has the foresight to file an “intent-to-use” U.S. trademark application for the mark XYZ to be used with his new product. Then, before actual use is established, in an effort to get organized, the person sets up a company and assigns all rights, title and interest to the pending trademark application for the mark XYZ to his company. The trademark XYZ eventually becomes registered with the U.S. Patent and Trademark Office (“USPTO”) and is integrated into a portfolio of marks that the company subsequently develops.  Now, the company is offering to sell the trademarks to you.  Here is something to watch out for when evaluating the portfolio. Generally speaking, it is problematic to assign an “intent-to-use” trademark application except to the successor of the business that owns the trademark application.  See  15 U.S.C. § 1060 and TMEP § 501.01(a).  The USPTO does not want people trafficking in trademarks that have not been used in commerce.  In the above example, the individual prematurely assigned his “intent-to-use” XYZ trademark application to his company and as a result, rendered his trademark registration void and subject to cancellation. What could the individual have done in the above example?  He could have filed the application in his company’s name or waited until he had established use before he assigned the application.  Pay close attention to trademarks that originate from individuals versus companies and make sure that the proper steps were followed or face the possible consequence of buying an unenforceable trademark registration.

An Ounce Of Prevention….

Clients often inquire about whether they need to purchase every variation (e.g., misspellings) of their domain names used for their websites in order to prevent others from infringing their trademarks. The short answer is no.   Indeed, there is no requirement to purchase any domain names at all.  Generally speaking, in the U.S., trademark rights are acquired through use.  As long as you have superior trademark rights, you can approach owners of confusingly similar domain names about trademark infringement.  However, this is not the most cost effective approach. It will surely cost a company much more to hire outside counsel to pursue any infringers than paying the annual fees for the most obvious variations of the domain name used for its primary website. Read a discussion on the issue. While it may not be feasible for a company to register a multitude of variations for all of the domain names that it owns, it should consider adopting this approach with regard to the primary domain names (e.g., the domain name used for its primary website) used in connection with its business.  An ounce of prevention in this regard goes a long way toward minimizing future business distractions and keeping a company’s legal bills down.