Federal Circuit considers meaning of 'bona fide intention' to use mark

It is axiomatic under US trademark law that a trademark applicant must have a bona fide intention to use its applied-for mark at the time its application is filed. The US 'intent-to-use' trademark application is not a mechanism by which an applicant may, without a genuine intention to use the mark, merely reserve its right in a trademark. However, the Lanham Act (15 USC § 1051, et seq) does not define 'bona fide intention' to use a mark and thus trademark applicants and practitioners alike have struggled with the meaning of the term how to establish it. 

In MZ Berger & Co Inc v Swatch AG (2014-1219), the US Court of Appeals for the Federal Circuit took on the question of how a bona fide intention manifests itself and concluded that, although the evidentiary bar is not high, answering whether a bona fide intention exists must be based on objective evidence of intent, as shown by circumstances indicating a firm intention to use the mark and not merely an intent to reserve a right in the mark.

Applicant MZ Berger & Co Inc filed an intent-to-use application to register the mark IWATCH for use in connection with over 30 different goods in three general categories: watches, clocks, and goods related to watches and clocks (eg, clock dials, watch bands and watch straps). When the application was published, Swatch AG opposed on the basis that, among other things, Berger lacked a bona fide intention to use the mark on the applied-for goods at the time the application was filed. In defence of its alleged bona fides, Berger put forth testimony from company representatives, as well as documentary evidence in the form of a trademark search, an internal email describing the substance of a conversation between a company paralegal and the trademark examining attorney regarding the application, and a series of internal emails forwarding images of watches and a clock bearing the proposed IWATCH mark. 

The Trademark Trial and Appeal Board was unpersuaded that Berger’s testimony and evidence established the company’s bona fide intention to use the mark on the goods. The board concluded that the testimony relating to the alleged intention to use the mark was conflicting, at best, and that the documentary evidence related only to the prosecution of the trademark application and thus did not evidence a genuine intent to use the mark in commerce as required under the statute. The board also declined to give weight to the fact that Berger had been in the business of making and selling watches for many years, concluding that under the facts presented and testimony of record, the mere fact that the company was in the watch business did not mean that the company had a bona fide intention to use this mark on these goods at the time the application was filed.

The Federal Circuit, in affirming the board’s decision and sustaining the opposition on the basis of no bona fide intent, examined the meaning of 'bona fide intent' in the context of the Trademark Law Revision Act of 1988. The court held that “whether an applicant had a bona fide intent to use the mark in commerce at the time of the application requires objective evidence of intent”. Moreover, although “the evidentiary bar is not high, the circumstances must indicate that the applicant’s intent to use the mark was firm and not merely to reserve a right in the mark”. Such determinations should be “made on a case-by-case basis considering the totality of the circumstances”.

The court agreed with the board that Berger’s evidence did not support a bona fide intent. The documentary evidence related only to the prosecution of the application, and not to the commercialisation of a product bearing the mark. The mere filing of an intent-to-use application is not evidence of a bona fide intention to use the mark.  Similarly, the emails containing images of watches and a clock bearing the mark were generated by Berger for the purpose of satisfying a request from the Trademark Office, not for the purpose of moving towards commercialisation. Further, in light of inconsistent testimony from Berger representatives about the manner in which the mark was to be used, the court deferred to the board’s conclusions on the weight and credibility of such evidence, finding no basis to disturb the board’s findings.  

Berger argued on appeal that the board had applied the wrong standard for bona fide intent, because, according to Berger, the board required “evidence that [Berger] had taken steps to promote, develop and market the IWATCH mark at the time it filed its... application”. The Federal Circuit disagreed. There is no requirement that an applicant actually promote, develop and market its mark as of the time an intent-to-use application is filed and the board did not impose one. Rather, the determination of whether a bona fide intent exists should be made based on all relevant facts and circumstances, including those that may suggest that the applicant lacks intent. Thus, “whether an applicant has a bona fide intent to use a mark in commerce is an objective inquiry based on the totality of the circumstances”.

The Berger decision is significant not only for US-based applicants, but also for anyone who designates the United States in connection with an international trademark filing. Although it is possible under certain circumstances for a trademark application based on a foreign filing to mature into a US trademark registration without the applicant ever showing use in US commerce, it is important to remember that such filings require the applicant to confirm, under oath, their bona fide intention to use the mark in US commerce on or in connection with all of the goods/services claimed in the application. Applicants need to be aware that their bona fides may be challenged when the application is published for opposition and, in light of Berger, they may very well need to provide sufficient substantiation to make clear, under all of the relevant facts and circumstances, that intent to use the mark exists.

Timothy J Kelly, Fitzpatrick Cella Harper & Scinto, New York