The Honda decision reaffirms how important it is for trademark applicants, if challenged, to have documentary evidence at the time they file that substantiates their bona fide intent to use the mark in US commerce. Such evidence may consist of (but is not limited to) business plans, marketing plans, and/or correspondence with potential manufacturers, distributors, or licensees. There is no “bright line” test for how much is enough, but clearly it is better to have such documentary evidence than not. A vague, skimpy checklist of activities to perform to establish a business, or mere ownership of foreign registrations, will likely not qualify.
It is also important to note that the absence of documentary evidence of the applicant’s bona fide intent is itself sufficient to prove lack of intent. The absence of documentary evidence therefore shifts the burden to the applicant to substantiate its bona fide intent by the “totality of the circumstances.” This puts a premium on having such documentary evidence at the time the application is filed.
While the Honda decision probably reached the right result under the facts of the case, the Trademark Office’s statement that an applicant that avers a bona fide intent to use the mark must be able (if challenged) to demonstrate that at the time it filed the application it possessed an ability to use the mark raises several potential traps for the unwary.
First, foreign trademark applicants should be particularly aware of this heightened focus on documenting an ability to use the mark. It is quite common for foreign registrations to cover a broader scope of goods than those for which the mark owner actually uses the mark.10 Seeking to cover the same goods in the United States, and averring a bona fide intent to use the mark on all the goods (as the applicant must do), could easily result in the applicant unthinkingly averring a bona fide intent to use the mark for goods for which it in fact does not possess such an intent. This would jeopardize the application at least for that particular class of goods, and possibly for the entire application.
Second, the Honda case may hit entrepreneurs and small businesses particularly hard. Such applicants may have an inspired business idea and move quickly to file a trademark application, perhaps before documenting their “ability” to use the mark – indeed, many enterprising trademark applicants may not be able to show they have the ability to use the mark at the time of filing. It generally takes about a year from the time of filing until a Notice of Allowance is issued, after which the applicant has three years to file a Statement of Use to obtain a registration. Many applicants therefore presume that they have approximately four years from the time of filing to arrange for the manufacturing and distribution of the goods covered by the application. The Honda case raises serious questions, however, as to whether such an unwritten but hopeful “business plan” can withstand a challenge.
Perhaps gone are the days when an entrepreneur or a small business–or any business, for that matter–can think of a good trademark for a particular product and immediately file a trademark application for it with confidence that the applicant has the requisite bona fide intent to use the mark. Under the Honda standard, the failure to have any documentation at the time of filing that substantiates that at some point over the subsequent four years the applicant will actually be able to produce the goods under the mark may be enough to kill the application.
Moreover, because the issue is the existence of a bona fide intent at the time the application was filed, even existing registrations may be at risk for cancellation, at least for the first five years of their existence. The filing of a Statement of Use does not by itself demonstrate that at the time the application was filed the applicant had the ability to use the mark. Thus, the Honda case has the potential to cause mischief not only for current applicants but registrants as well.