Federal Circuit’s View Of Lack Of Bona Fide Intent To Use

A few weeks ago, I posted a blog on a Sixth Circuit trademark case that addressed whether an entire application should be voided if a bona fide intent to use the mark in commerce was lacking. See our blog post entitled, Should An Entire Application Be Voided If A Bona Fide Intent To Use The Mark Is Lacking? In our blog, we discussed the Trademark Trial and Appeal Board’s (the “Board”) position on the issue which was not consistent. Seeking further guidance, we turn to the Federal Circuit, wherein the issue was addressed in Swatch AG v. M.Z. Berger & Co., 108 USPQ2d 1463 (TTAB 2013) [precedential]. Here, the applicant filed for the mark IWATCH in standard character format for watches, clocks and watch accessories. The opposer Swatch AG (Swatch SA and Swatch Ltd.) challenged the application on grounds of likelihood of confusion with its registered mark for SWATCH for watches and lack of bona fide intent to use the mark in commerce.

The Board analyzed the marks IWATCH and SWATCH and determined that the marks differed significantly in sound, meaning, and commercial impression. The claim under 2(d) of the Trademark Act was dismissed and the Board moved on to address the second claim of lack of bona fide intent to use the mark in commerce. Section 1(b) of the Trademark Act, 15 U.S.C. §1051(b), states in part that: “[A] person who has a bona fide intention, under circumstances showing the good faith of such person to use a trademark in commerce may request registration of its trademark on the principal register…” The burden is on the opposer to demonstrate by a preponderance of the evidence that the applicant lacked a bona fide intent to use the mark in commerce at the time it filed the application. There must be evidence in the form of documentation substantiating action taken by the applicant. The inquiry does not delve into the applicant’s subjective state of mind.

One method often implemented by the opposer is to prove that the applicant does not have documentary evidence to support its claim of a bona fide intent to use the mark. Such a showing is typically sufficient to prove lack of intention under Section 1(b) of the Trademark Act. Then, the burden shifts to the applicant to produce evidence explaining the failure to have documentary evidence.

Here, the applicant did produce several documents, but the Board determined the evidence was insufficient. The applicant produced a trademark search, an email summarizing a call with the Examining Attorney wherein there was a discussion that the IWATCH did not have interactive features, and three internal emails showing stylized versions of the mark and an image of a clock and two images of watches featuring the IWATCH mark. However, the images were created to support the trademark application and not for promotional activity. The Board concluded that the documents presented did not establish an intent to use the mark in commerce.

In addition, there was testimony from the applicant that it didn’t intend to use the IWATCH mark for clocks and that the applicant also lacked an intent to use the mark on subsidiary other goods. There was contradictory evidence regarding applicant’s efforts to market and develop an IWATCH brand watch. In the end, the Board found that the applicant’s intent was merely to reserve a right in the mark.

The applicant did not have documents to show a marketing plan, a business plan, product development, product research, contact with manufacturers, distributors, or retailers, manufacturing activity, promotional activity or advertising. The Board dismissed the opposition on the ground of likelihood of confusion and sustained the opposition under Trademark Section 1(b). See our blog post entitled, How Do Intent To Use Trademark Applicants Document Their Bona Fide Intent, for more details on the types of effort the Board and the Courts expect to see when a trademark applicant indicates an intent to use basis as the filing basis. Please feel free to contact our office for a courtesy consultation if you are thinking of filing a trademark application on a bona fide intent to use basis.