Westchester Women's Bar Association

How to Avoid Fraud on the USPTO

It is critical to be aware that the statements made in a trademark application must be truthful and accurate. When filing a trademark application with the United States Patent & Trademark Office (USPTO), you are required to declare that you are either using the mark in commerce or have a bona fide intention to use the mark in commerce. Further you must verify that to the best of your belief no third party has the right to use the trademark in commerce on or in connection with the goods or services identified in the trademark application in the identical form or in a similar form as to be likely to cause confusion in the marketplace. Willful false statements are punishable by fine or imprisonment or both. In addition, any such statements may jeopardize the validity of the application or any registration that may result from the application.

In order to avoid attesting to factually inaccurate information, it is important to understand the legal definitions of certain terms before filing a trademark application. In the course of our trademark practice, we are frequently asked what is “use in commerce”, what is the definition of “commerce”, what is a “service”, what is a “bona fide intention” with respect to using the mark in commerce and how does a trademark applicant demonstrate or prove that it has a bona fide intent to use the mark in commerce. A trademark applicant should know the answers to these questions before filing an application with the USPTO.

A trademark is deemed to be in use in commerce with respect to goods when the mark is placed on the product, its container, or the display associated therewith or on the tags or labels affixed on the goods. If it is impracticable to affix the mark to the goods, then on documents associated with the products and the goods have to be sold or transported in commerce. With respect to services, the mark must be used or displayed in the sale or advertising of the services and the services must be rendered in commerce.

The legal definition of commerce for purposes of trademark law includes: interstate commerce, territorial, and commerce between the U.S. and a foreign country. See Trademark Manual of Examining Procedure Section 901.03. Interstate commerce means commerce between two states. This may include customers coming across state lines in response to advertising for services, the applicant’s licensees or franchisees may be located in more than one state and they use the trademark or an applicant can offer services via the Internet. Territorial commerce is commerce within a territory of the U.S. or between a territory of the U.S. and the U.S. Territories of the U.S. include: Guam, Puerto Rico, American Samoa, and the U.S. Virgin Islands. With respect to foreign commerce it must involve the U.S. Use of a trademark in a foreign country does not give rise to rights in the U.S. if the goods or services are not sold or rendered in the U.S.

Regarding services, not every activity is considered a service for the purposes of trademark law. The activity or service must be performed for the benefit of someone other than the applicant. A system, process, idea or method will not constitute a service. For more details on defining a service, see our webpage entitled, What Is A Service Mark And How Can It Be Protected?

A bona fide intent to use the trademark in commerce means that you have a true intention to use the mark and over time you are taking steps to bring the product to market or you are preparing to render the services identified in the trademark application. You cannot simply file an application with the intent to reserve the mark, and not take any measures to manufacture or distribute the goods or render the services. If challenged you must be able to produce documentary evidence to show your bona fide intent. Examples of evidence include: producing the goods, customer orders, customer invoices, promotional literature, marketing material, business plans, documentation of business meetings, licenses, distribution agreements, etc.

In a recent TTAB precedential decision (the first to find fraud since the seminal case of In re Bose), the Board found that the applicant committed fraud on the USPTO by filing a use-based application and not using the mark in connection with the identified services. The Board held that the false statements were made with the intent to deceive the USPTO and refused the applicant’s registration. See Nationstar Mortgage LLC v. Ahmad, Opposition No. 91177036 (Sept. 30, 2014). This decision highlights the importance of understanding the legal definitions of the terms set out in paragraph two of this page. If you need assistance with determining if your activities rise to the level of use in commerce or if you have any other questions related to trademark law, kindly contact our office for a courtesy consultation.

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