The federal trademark statute, the Lanham Act, prohibits assignment of intent-to-use applications before the filing of a statement of use, except to an applicant’s successor-in-interest for the business with which the application is associated. Violating this provision leads not only to the invalidation of the assignment but also to invalidation of the application or registration, potentially years after the registration issues. In cases where a trademark owner relies on the filing date of that application or registration to establish its priority, such a result can be devastating to its ability to enforce rights in the trademark and, in some circumstances, even to be able to use the trademark.

To get around this prohibition, companies that are not successors-in-interest to the applicant’s business may enter into agreements to assign an intent-to-use application after statements of use are filed and/or registrations issue. Examples of such situations include joint ventures where the application is filed by one of the partners before the joint-venture entity is formed, new companies for which an individual founder files an application before incorporation, or circumstances where parties agree to transfer a mark to resolve a dispute.

In a rare decision regarding this provision of the Lanham Act (Emerald Cities Collaborative v. Roese), the US Court of Appeals for the Federal Circuit recently set important boundaries for these types of future assignment agreements.

For more information on the case and its impact to your business, read our recent LawFlash on the subject.