An equal footing on trademarks - federal trademark legislation

Nation's Business, Nov, 1989

An Equal Footing On Trademarks

The new federal trademark legislation that goes into effect Nov. 16 will give a fairer shake to small business, according to Robin A. Rolfe, executive director of the United States Trademark Association, in New York. "It puts big and small business on an equal footing," she says.

Under current law, businesses have had to use a trademark in interstate commerce before it could be registered. This led companies that could afford it, usually larger firms, to rely on "token use"--such as shipping to another state a small quantity of a product carrying the trademark solely to meet the actual-use requirement for a trademark application. Sometimes this was done long before the product was ready for full-scale distribution, in effect "reserving" the trademark for the company until the firm was ready to use it.

"The new system creates an honest opportunity for small businesses that don't have the mechanisms to create this fictitious use," says Rolfe.

The new law allows businesses to file an application for trademark registration based on a bona fide intention to use the trademark within a reasonable time.

Once an intent-to-use application is approved by the U.S. Patent and Trademark Office, a company has six months to show that the trademark is in use. One automatic six-month extension to make use can be obtained, and as many as four more six-month extensions may be permitted for good cause.

Businesses may still file based on actually having used a trademark in interstate commerce first, but a token sale will no longer be considered use in commerce.

The new law reduces the registration and renewal periods from 20 years to 10 years. However, registrations can be renewed without limitation so long as the trademark is used in interstate commerce.

It also will be easier for businesses to register their trademarks with the assurance that the names they select will be available nationwide when a product or service is ready for market, according to Rolfe. "However, it will also place a greater responsibility on businesses to search the federal trademark register before selecting a new business or brand name in order to assure that someone else has not already applied to register it, even though it is not yet being used," she says.