M.Z. Berger & Co. v. Swatch AG

Addressing what constitutes sufficient evidence of “bona fide intent” to use a trademark in commerce, the U.S. Court of Appeals for the Federal Circuit affirmed the Trademark Trial and Appeal Board’s (TTAB or Board) decision sustaining an opposition to M.Z. Berger & Co.’s intent-to-use application for the trademark iWatch. M.Z. Berger & Co. v. Swatch AG, Case No. 14-1219 (Fed. Cir., June 4, 2015) (Chen, J.).

Berger applied to register the trademark iWatch for watches, clocks and related goods under § 1(b)(1) of the Lanham Act, which permits an applicant to seek registration of a trademark based on a bona fide intent to use that mark in commerce. Swatch filed a Notice of Opposition to Berger’s iWatch application, claiming that iWatch was confusingly similar to its Swatch trademark. Swatch later added a second claim to its Notice of Opposition—that Berger lacked a bona fide intent to use the iWatch mark at the time Berger filed its intent-to-use application. Relying on testimony of Berger’s chief executive officer and the fact that all physical and documentary evidence concerning Berger’s intent to use the trademark related solely to the trademark application itself, the TTAB sustained the opposition. The TTAB found that the totality of the evidence demonstrated Berger did not have a bona fide intent to use iWatch at the time it filed its application. Berger appealed.

Agreeing with the U.S. Court of Appeals for the District of Columbia Circuit’s decision in Aktieselskabet AF 21. v. Fame Jeans (IP Update, Vol. 11, No. 5), the Federal Circuit first found that the lack of an applicant’s bona fide intent to use a mark in commerce is a proper basis for opposing a § 1(b)(1) application. Reviewing the relevant text of the Lanham Act and the text and legislative history of the Trademark Law Revision Act of 1988, the Court then assessed what constituted sufficient evidence of a bona fide intent to use and concluded that whether an applicant had a bona fide intent to use a mark in commerce at the time of the application requires objective evidence of intent. The evidence must show that the applicant had a “firm” intent to use a mark and that the applicant did not intend to merely reserve a right in the mark. To determine whether an applicant had demonstrated this intent, the Court stated that the Board may consider the totality of the circumstances on a case-by-case basis.

Because substantial evidence supported the TTAB’s decision to sustain the opposition to Berger’s iWatch application, the Federal Circuit affirmed.

Practice Note: This case serves as an important reminder to all intent-to-use trademark applicants. While declarations are sufficient to support the filing of intent-to-use applications, in the event an application is challenged in an opposition proceeding, an applicant must be able to muster objective evidence demonstrating a bona fide intent to commercialize its applied-for trademark at the time the application was filed.