Trademark Assignments & Intent-To-Use Applications
All trademark assignments must transfer the good will that is associated with the use of the mark for a particular business. Section 10 of the Trademark Act (Lanham Act) requires any trademark application or registration be assigned in writing along with the good will of the business symbolized by the trademark. To review the basic principals for trademark assignments, see our web page entitled, Trademark Assignments. If you have questions pertaining to the United States Patent & Trademark Office's procedures for recording an assignment, see our web page entitled, Recording Trademark Assignments And The Specific Rules That Govern. This page will cover issues involving trademark assignments and intent-to-use applications.
If a trademark application is filed under Section 1(b) of the Trademark Act, there are different rules for assigning applications based on whether or not the Applicant has commenced use of the mark in commerce with the goods or services identified in the application. If there has been use, then an Allegation of Use or a Statement of Use must be filed with the United States Patent & Trademark Office ("USPTO"). Once the use statement is filed, then the assignment rules will be the same as those that apply to use applications or trademark registrations. Conversely, if the Applicant has not started to use the mark in commerce yet, an assignment can only be made to a successor to the business (or a portion of the business). In other words, under these circumstances, a trademark assignment must transfer the mark and the good will of the business, along with part of or all of the ongoing and existing business associated with the mark. See 15 U.S.C. § 1060(a)(1).
A trademark applicant must strictly adhere to the statutory provisions, if an assignment is made prior to filing an Allegation of Use or a Statement of Use. This means that the actual language in the Assignment should specify that the trademark application is being assigned as part of the entire business or as a portion of the business to which the mark pertains, along with the goodwill of the business symbolized by the trademark. In addition to the language being concise, there must be an ongoing or existing business pertaining to the mark to transfer as well. The reason for strict adherence to the statutory provisions is that a trademark applicant will want to insulate itself from challenges questioning the validity of the assignment.
If a challenge based on transferring an intent-to-use application before filing a use statement is successful, the trademark application will be deemed void. The Trademark Trial and Appeal Board (the "Board" or "TTAB") or a court will look to determine if the assignment is part of a larger transaction between the assignor and the assignee. See Central Garden & Pet Co. v. Doskocil Manufacturing Co., 108 U.S.P.Q.2d 1134 (TTAB 2013), where the Board cancelled a trademark registration because the intent-to-use applicant assigned a mark before filing a Statement of Use, and did not transfer a portion of the ongoing business to which the mark pertained. Even though in this case, the mark was in use by the time the assignment was filed, the Board held that use in commerce was not a factor, since the filing of the Statement of Use had not occurred prior to the assignment.
The Board issued a very different decision in Philip Restifo v. Power Beverages, LLC substitued for Paul Kidd (aka Ishmael Hassan), Opposition No. 91181671 (September 21, 2011) [not precedential]. The Board noted that in this case, although there was no specific language utilized in the assignment document that the ongoing business to which the intent-to-use application pertained was transferred, evidence showed otherwise. The record indicated that additional assets other than the mark, and the good will associated with use of the trademark were assigned. These cases highlight the special rules that apply to intent-to-use applications. Practitioners should pay close attention to the facts surrounding a trademark assignment if it will occur prior to a Statement of Use is filed and to use concise language in the assignment document. If you have questions pertaining to trademark assignments or other trademark related inquiries, kindly contact our office for a courtesy consultation.