Which Comes First — the Announcement or the Trademark?
Photo by Samantha Gades
Ever have a great idea for a new brand, project, or business? I suspect we all have — and as soon as we get the notion in our head, we want to share it with others. After all, how else will we know if people like the idea? Just as often, however, entrepreneurs get nervous that someone else will steal their name before they launch, and wonder what they can do to prevent that.
One option is to file an “intent-to-use” trademark application, which is also referred to as a 1(b) (from Section 1(b) of the Trademark Act, 15 U.S.C. § 1051(b)). In doing so, the applicant is verifying that they genuinely intend to use that trademark in the marketplace, but that they just aren’t ready yet. Perhaps they need more time to develop a logo, or are still seeking investors, or even simply had a few obstacles come up which slowed down the launch. This 1(b) application can reserve their place in line (their “priority”) over future applicants, meaning that another party trying to file for the same trademark will find themselves on the waiting list.
The benefit of filing early is that the application is reviewed by the Trademark Office to determine if it can be granted — meaning it doesn’t have problems such as a likelihood of confusion with other marks. If it passes the examination, the Trademark Office issues a Notice of Allowance, stating that the mark can be granted once the applicant shows actual use in the marketplace. Critically, the applicant has up to three years after the Notice of Allowance to file this proof of use, so long as they pay a re-up fee every six months and verify that they still intent to use the mark.
If this is so easy, why don’t more applicants take this route? In our practice, we’ve seen a few major reasons:
Cost. Every six months, the applicant has to pay a government fee and an attorney fee to for another extension. Once they decide to submit proof of use, they again must pay a dual fee. For some applicants, the opportunity which comes with an intent-to-use application isn’t worth the extra expense. Unfortunately, those who find themselves “scooped” by another applicant often regret their delay.
Optimism. Entrepreneurs are hopeful by nature, and often believe their launch is just around the corner. They wait on filing an intent-to-use application because they think it is unnecessary given how soon they’ll have proof of use in the marketplace. In our practice (and in our personal experience as well), however, the distance between idea and reality often gets bigger the closer you get. Unexpected delays come up, and that “launching next month” becomes “launching next year.”
Unawareness. Some business owners just do not know about intent-to-use trademark applications, and haven’t had counsel explain the benefits and options to them. They’ve heard a repeated mantra that you can only get a trademark on something you are actually doing or selling — only one part of a larger question on how to protect a brand.
Privacy. Trademark applications are publicly available, and numerous news stories start from a daily review of trademark filings. For example, look at the launch of the newest American Hockey League team in Palm Springs, California. The Oak View Group has filed six 1(b) applications covering “[e]ntertainment in the nature of hockey games”: SUN, DRAGONS, FALCONS, HAWKS, EAGLES, and FIREBIRDS. Not long after, the media picked up the story. For owners wishing to keep this confidential, a trademark application is not (generally) an option.
Looking this last example, there are some risks to making a major announcement before securing a place in line at the Trademark Office. When owner Robbie Hockey LLC decided to launch a new North American Hockey League team in Wichita Falls, Texas, it went through a name selection, logo design, website creation, and public announcement before filing a trademark application. Notably, the delay between the public announcement and the trademark application was almost two weeks. A competitor could have used this time to file their own application, or a similar enough variant to cause an issue with the team’s ability to use the mark. Even more serious, a party acting in bad faith could have filed an application which would have introduced delay, expense, and confusion into the process — harming the team and its owners along the way.
An intent-to-use trademark application is a powerful tool for growing and protecting a brand — one which business owners should learn about early on.