Weekly IP Takeaways

Prepared by Cislo & Thomas LLP Attorney Mark D. Nielsen, Ph.D.

1. The United States Patent and Trademark Office (USPTO), in furtherance of its ongoing efforts to combat fraudulent trademark applications, recently posted a Notice in the Federal Register setting forth administrative procedures for investigating potentially improper trademark applications (brought to the USPTO’s attention through a variety of means as detailed in the Notice), and a mechanism for possible sanctions for rules violations. We have recently highlighted this issue here (Takeaway No. 3) and here (Takeaway Nos. 1 and 2), and it looks like the USPTO is taking even further steps to stop fraudulent, improper trademark filings. The takeaway here, which should not be a surprise to experienced trademark prosecutors, is that specimens, statements of use, and the identification of goods/services in connection with trademark applications and registration renewals need to be real and accurate.

2. The Trademark Trial and Appeal Board (TTAB) recently issued a precedential opinion in which it affirmed a non-use refusal to register a mark under Section 1(a) (a use-based application) based on an internet web page specimen for charitable services. The web page was essentially a placeholder, and even though it had a “Donate” button, the button was inoperative. In other words, the Applicant was preparing to use the mark, but had not yet begun actual use of the mark in interstate commerce. While fraud was not at issue, this is a clear example of the newer level of stringency with which the Trademark Office is scrutinizing allegations of use and specimens. Again, the takeaway here is, have your “ducks in a row” with allegations of use, specimens, and the like. In the context of an application, a Section 1(b) intent-to-use application is available if a mark is in a legitimate preparatory stage, but not yet in use.

3. In a recent opinion from the Third Circuit Court of Appeals, the Court reversed a decision out of the Eastern District of Pennsylvania that had denied that an insurer had a duty to defend a trademark infringement/false claims suit under the advertising injury provisions of the policy. The maker of 5-Hour Energy sued a competitor under the Lanham Act and state law on a variety of claims, including trademark infringement, false designation of origin, false advertising, and other claims. While trademark infringement claims are often subject to policy exclusions, claims pertaining to false statements (or, in this case, false impressions derived from comparative advertising statements or product descriptions) may trigger a duty to defend nonetheless. The Third Circuit also rejected the insurer’s argument that the “gravamen” of the case was trademark infringement, which clearly was not covered. The Court reminded the insurer that the duty to defend is broader than the duty to indemnify, and if one claim is potentially within the scope of the policy, a duty to defend exists. The takeaway here is that when one faces a lawsuit for trademark infringement, copyright infringement, unfair competition, false advertising, or the like, have an attorney review the policy for possible coverage, and tendering of the complaint to insurance. Additionally, when business owners are procuring commercial liability policies, it also behooves them to talk to counsel before buying a policy that excludes matters that may well arise in their businesses.