Should Entire Application Be Voided If A Bona Fide Intent To Use Mark Is Lacking?

The Sixth Circuit recently answered this question. See Kelly Servs., et al. v. Creative Harbor, Case No. 16-1200 (6th Cir., Jan. 23, 2017), where the Sixth Circuit remanded the case back to the district court to evaluate all the goods and services in the trademark application and to determine if a bona fide intent existed for some of the goods and services. The parties in this matter both filed a trademark application at the United States Patent & Trademark Office (“USPTO”) for the mark WORKWIRE for mobile software applications in the employment field.

Creative Harbor, LLC (“Creative Harbor”) filed its intent-to-use application on February 19, 2014. The other party Kelly Services, Inc. (“Kelly Services”) filed its intent-to-use application for the mark WORKWIRE on August 13, 2014. Creative Harbor discovered that Kelly Services was using the mark WORKWIRE and sent a Cease & Desist demand. In response, Kelly Services filed a declaratory judgment action challenging Creative Harbor’s claim that it had priority.

The district court held that Creative Harbor lacked a bona fide intent to use the mark in commerce for some of the goods and services identified in the trademark application. The district court voided the entire application and Creative Harbor appealed to the Sixth Circuit. The Circuit Court placed emphasis on the deposition testimony of the CEO of Creative Harbor. The CEO stated that he wanted the intent-to-use application to cover goods and services, not only for the present, but also for the future. He further testified that the identification in the application was to cover goods for future exploration and expansion; “to keep the option open to at some point do that”. The Sixth Circuit concluded that Creative Harbor did not have a firm intention to use the mark with all the goods and services, but instead was reserving a right in the mark in case it ever wanted to expand its commercial line of goods.

Trademark Law does not allow an applicant to reserve a right in a mark. This principle of the law is well settled. The Sixth Circuit affirmed in part and reversed in part. It affirmed the finding that Creative Harbor lacked a bona fide intent to use the mark in commerce with all the goods. It reversed in part, because the Sixth Circuit held that if a trademark applicant lacks a bona fide intent in connection with some of the goods and services but not all, the correct remedy is to remove the goods and services that lacked a bona-fide intent, but not to void the entire application. The entire application should only be voided if the applicant lacked a bona fide intent to use the mark on all the goods or services identified in the application or if fraud was present or other egregious behavior. Therefore, the case was remanded to the district court to review all thirty-six of the goods and services and to make an individual finding for each.

This result is similar to the treatment given to this issue by the Trademark Trial and Appeal Board (“TTAB” or the “Board”), although the Board has not been consistent on this issue. When addressing this issue in the past the Board has held: “an application will not be deemed void for lack of a bona fide intention to use absent proof of fraud, or proof of a lack of bona fide intention to use the mark on all of the goods identified in the application, not just some of them. Thus, we will decide this issue in terms of whether the items, if any, for which opposer has shown applicant’s lack of bona fide intention to use the mark should be deleted from the application.” See, The Wet Seal, Inc. v. FD Management, Inc., 82 USPQ2d 1629 (TTAB 2007) [precedential].

Yet, in another precedential case, see Spirits International, B.V. v. S.S. Taris Zeytin Ve Zeytinyagi Tarim Satis Kooperatifleri Birligi, 99 USPQ2d 1545 (TTAB 2011) [precedential], the Board leaves the door open that possibly the entire class of goods will be removed even if a bona fide intent was demonstrated as to only some of the goods in the class. The lesson to be learned is that a trademark applicant should give serious consideration to its true intentions to use the mark in commerce before filing the application. Thus, the burden is placed on trademark counsel to thoroughly explain what it means under trademark law to possess a bona fide intent-to-use a mark in commerce, so other applicants will not be placed in this position should their application be challenged by a third party. If you have questions, regarding what a bona fide intent means under trademark law, please feel free to contact us for a courtesy consultation.