As Pandemic Drags On, Trademark Registrants May Face Maintenance Filing Hurdles
Intellectual Property News
Despite the black humor that March 2020 has never actually ended, time does keep marching on and presenting new challenges. As we near the second year of the COVID-19 pandemic, trademark maintenance deadlines in 2021 create new obstacles for registrants. To maintain a federal trademark registration, registrants must periodically file an affidavit of use under Section 8 swearing that the mark is in use in commerce or that the registrant has an acceptable excuse for nonuse. The registrant may also be blocked from making the usual declaration of incontestability under Section 15 after five years’ use. Registrants and their attorneys should take caution with these filings, particularly when the registrant’s business activity has been severely interrupted by the pandemic and related lockdowns.
Section 8 Filing Requirements
In the United States and many other foreign jurisdictions, a trademark must be “used in commerce” for the owner to obtain a registration. For U.S. purposes, “use in commerce” means that the trademark is used in connection with a sale of identified goods or services in the context of interstate commerce — mere advertising outside of a sale or offer sale is not sufficient. After registration, a registrant must periodically file a Section 8 affidavit of use to maintain the trademark registration on the register. Failure to file a Section 8 affidavit or to satisfy the requirements for its acceptance results in cancellation of the registration. A Section 8 affidavit is required as of the sixth anniversary of the registration date, the 10th anniversary of the registration date, and every 10 years thereafter. These deadlines also have a six-month grace period in which the filing may be made with payment of a late fee.
As part of a Section 8 affidavit of use filing, the registrant must:
- Make a verified statement that the mark is being used in commerce, or the registrant has an excusable reason for nonuse, for each class of goods or services listed;
- In each class of goods or services, identify the specific goods or services listed in the registration for which the mark is still in use (or for which there is excusable nonuse);
- Delete goods or services that are no longer in use; and
- For each class of goods or services remaining, include a specimen showing how the mark is used in commerce (if relying on use).
COVID-19 Business Interruptions and Effect on Use
The COVID-19 pandemic presents many potential complications to meeting the Section 8 affidavit requirements.
First, and most drastically, a registrant may be barred from operating due to local or state lockdown orders and business restrictions. Alternatively, even if a government order is not currently in place, the threat of such actions or the imposition of social distancing or other business requirements may make operating the business at this time a difficult proposition, and the registrant may be forced to suspend operations for a time. Or, perhaps the business owners and employees have themselves caught COVID-19 and the business is closed at the moment. These possibilities seem mostly likely to affect restaurants, bars, small hotels, and others in the hospitality and tourism industries.
Second, even if the business is operational, it may not be selling or providing all the goods and services listed in the registration due to supply shortages, supply interruptions, or a business decision to focus on a smaller set of goods and services at this time.
Third, even if the business is fully operational, travel restrictions may affect a business’ ability to state that the trademark use is in interstate commerce. Consider a single-location restaurant that relies heavily on sales from interstate tourism for meeting the interstate commerce requirement of use. Travel restrictions and the general reduction in travel over the last year may make it more difficult for the restaurant to prove if challenged that its marks have been used in connection with tourists traveling interstate, rather than just local business.
As a result, where registrants might have been able to easily attest to the Section 8 use requirements a year ago, they now should consider each good or service listed in the registration and determine if they do in fact have use in interstate commerce at the time of filing the Section 8 affidavit and in view of changed circumstances from the pandemic.
USPTO Is NOT Accepting COVID-19 Pandemic or Lockdown Orders as a General Excuse for Nonuse
An investigation and individual consideration of a good or service listed in the registration for use or nonuse is necessary because the USPTO is not accepting the COVID-19 pandemic or resulting government lockdown orders as an acceptable general excuse for nonuse. Instead, the USPTO is currently requiring registrants to provide specific details on a case-by-case basis to probe the sufficiency of the excuse for nonuse.
Generally speaking, the USPTO accepts Section 8 filings on the basis of excusable nonuse if the lack of use arises from outside the owner’s control or the nature of the business in question. For example, the Trademark Manual of Examining Procedure identifies a lack of use due to a trade embargo as excusable nonuse. Another example is a product that cannot be produced quickly or in large numbers, such as airplanes. However, merely having decreased demand or a business decision within the owner’s control are exemplary instances where nonuse is not excusable.
The interplay of these considerations makes the sufficiency of the excuse for nonuse particularly complicated during the pandemic. We have identified about a dozen instances since March 2020 where an applicant asserted that the pandemic or lockdown restrictions were the excuse for nonuse at the time of filing the Section 8 affidavit, and the USPTO issued a first office action rejecting that excuse. From these office actions, it is clear that the USPTO is reviewing each case individually, requesting details about the reasons for nonuse, and seeking proof that the decision was truly out of the owner’s control.
As a particularly prominent example, Registration No. 4407422 for DOC MARTENS, listing both footwear and various non-footwear apparel as the covered goods, came due for proof of use in March 2020. The owner filed a Section 8 affidavit of use in the registration that claimed use as to the footwear and excusable nonuse as to the remaining non-footwear apparel. As its excuse, the owner stated that the worldwide pandemic had interrupted sales in the U.S. and that its retail sales outlets were closed by a decision from the registrant on March 18, 2020, in view of the pandemic and various local, state, or federal restrictions or orders.
Although this may seem to be good evidence of excusable nonuse as to the non-footwear apparel, the USPTO was not convinced. On May 29, 2020, the USPTO issued an office action stating that the information provided by the registrant stated that goods were still available for purchase online. The USPTO also inquired why the mark was still apparently in use for footwear in the U.S. but not for the remaining goods. The USPTO stated, “Providing evidence of use in the mark in connection with any of the goods identified in the registration seems to contradict the registrant’s claim that use is not possible due to the pandemic due to the closure of the registrant’s retail stores while simultaneously claiming that goods are available online.” To add insult to injury, the USPTO then designated the registration as selected for a maintenance audit and requested proof of use for two of the listed items of non-footwear apparel, or that all goods not then in sale be deleted. (The penalty for ultimately failing such an audit is to have the registration cancelled.) Ultimately, on August 25, 2020, the registrant chose to delete all goods from its registration other than footwear.
Here are additional examples indicating that the USPTO is not accepting a mere statement that the pandemic has curtailed use:
- For Reg. No. 3703690 for PUSCIFER, owned by a touring musician who had not used the mark since 2016, the USPTO in a July 28, 2020, office action stated that the current COVID-19 pandemic did not provide an excuse for nonuse dating that far back, and requested further information. (The registrant responded in January 2021, and the issue remains pending at the USPTO.)
- Boy Scouts of America filed an affidavit of use on May 12, 2020, with respect to Reg. No. 4433132 for retail store services for outdoor gear, apparel, gifts, and souvenirs and asserted excusable nonuse, stating in full, “[R]egistrant’s online retail store is temporarily down due to ramifications of the coronavirus/COVID-19 worldwide pandemic, in particular, restrictions placed on non-essential businesses. Registrant’s store site was taken down, i.e., use of the mark in commerce stopped in April 2020; and registrant is uncertain when use will resume, but the earliest date is estimated to be September 2020.” Nevertheless, the USPTO issued an office action on November 20, 2020, rejecting the proffered explanation and seeking further explanation why the pandemic would have caused an online retail store to shut down. (At this time, the office action remains pending awaiting the registrant’s response.)
- The registrant for Reg. No. 4600078 for WWW.CLEMENTCLIMATE.COM for an online retail marketplace filed an affidavit of use on September 1, 2020, asserting excusable nonuse “due to COVID 19.” The USPTO issued an office action December 20, 2020, rejecting the stated excuse because “the owner must explain how COVID-19 affected the nonuse of the service mark.” (At this time, the office action remains pending awaiting the registrant’s response.)
In most of these office actions, the USPTO has stated that it wants the following information from the registrant explaining the nonuse:
- The date for the last use of the mark;
- Details explaining the special circumstances excusing nonuse;
- The steps being taken to resume use; and
- The approximate date when use is expected to resume.
In particular, the USPTO wants to see how the pandemic has specifically affected a registrant’s own business and how the registrant intends to get up and running again. As can be seen from the examples discussed above, proof that the nonuse is really “beyond the owner’s control” may be difficult when the owner could rely upon online sales or use, or the identified goods or services include express reference to an online retail store or marketplace.
A Strategy for Section 8 Filings
Where a registrant is concerned that some or all of the goods and services are not actually being offered, we provide the following tips for response:
- If possible, delay. The Section 8 affidavit requires that the mark be in use on the goods or services at the time it is filed. If a registrant can wait long enough for goods and services to go back on sale before the final deadline for filing arrives (including the six-month grace period), then wait.
- Alternatively, if a registrant’s goods are in use now but may be shutdown again in the near future, file promptly. This way the registrant can get ahead of any potential interruption in business and make the required verified statement in the affidavit of use in good faith. Section 8 filings may be made up to a year before the actual deadline.
- If you must file at a time when you are not certain about use or excusable nonuse, check each identified good or service individually and determine what is actually in use at that time. Only allege use as to those goods that you can verify are in use when you file. And, confirm that this is use in interstate commerce, not merely local or intrastate use.
- For goods and services that are not in use, determine if that is caused in some way by the pandemic. For example, is a registrant not performing live music because venues are closed? Is a product not being sold because the supply chain is shuttered and goods can’t be shipped? Document these instances and provide an explanation to the USPTO.
- When filing a statement of excusable nonuse, address each of the USPTO’s questions identified above in as detailed a manner as possible. This puts the registrant in the best position for success. And, if the USPTO does have specific concerns, the examining attorney can identify them in the first office action so that the registrant knows what to focus on.
- If the goods and services are not in use simply because of a business decision, the registrant may have to decide to delete those goods or services and simply re-file an intent to use application to regain coverage later.
A Note on Section 15 Declarations of Incontestability
As a final matter, registrants often file a Section 15 declaration of incontestability at the same time the first Section 8 affidavit of use is due. A Section 15 declaration provides stronger protection against cancellation of the registration. To make the declaration in good faith, a registrant must be able to state that the goods or services listed in the declaration have been in continuous use in commerce for the last five years. Excusable nonuse does NOT count towards the five-year period of continuous use for a declaration of incontestability. For many registrants making their first Section 8 affidavit filing, we suspect that the pandemic has interrupted their five-year period of continuous use. In such cases, even if registrants can make a good faith Section 8 filing (based either on current use or excusable nonuse), they cannot file the Section 15 declaration of incontestability.
This will be a live issue not only during current circumstances and the immediate aftermath of the pandemic, but for up to five years in the future as registrations issued in 2018, 2019, and 2020 hit that fifth anniversary and the declaration becomes available.
Conclusion: Talk to Your Attorney About Trademark Maintenance Filings
We strongly encourage registrants to discuss the details of the Section 8 and Section 15 filings with their attorneys so that the explanation of excusable nonuse can be presented in good faith in the best possible light. Bradley’s Intellectual Property team is ready to help in this regard.