Friday, September 21, 2007

TM/SM versus ® --- State versus Federal Trademark Registration

Several years ago, I was speaking with the publisher of a local Las Vegas restaurant guide “Taste of Vegas” (Disclaimer: the communications were not as attorney-client, but rather … well that’s a longer story for another time).

Maybe it’s the natural instinct of a trademark attorney, but when I saw the ® symbol next to his logo TASTE OF VEGAS, my first instinct was to go online to the USPTO’s TARR database to view the registration. To my surprise, the PTO did not have any records of any such trademark registration. The closest registration was A TASTE OF LAS VEGAS, which is owned by Ethel M. Chocolates and covers the goods “candy.” When I spoke to the publisher again, I inquired about his trademark registration. He informed me that he did file a trademark registration. After further inquiry, I figured out that what he had done was register the mark TASTE OF VEGAS with the Nevada Secretary of State and not the USPTO. He was confused when I explained to him that obtaining a state trademark registration does not provide the same benefits as filing for a federal registration – most notably, a trademark owner cannot use the ® symbol unless the mark is federally registered.

I thought about this business owner when I came across a recent article written by Paul E. Thomas, an attorney with Manatt, Phelps & Phillips, LLP , entitled “Unclean Hands Accusation Makes Trademark Owner Take Notice.”

The article describes a trademark opposition by Barbara’s Bakery, Inc., which holds the registered mark BARBARA’S (and design) for bakery goods (note: Barbara’s Bakery in its recent Section 8 filing cancelled the remaining goods that remained in IC 29 as well as some goods in IC 30, leaving only bakery goods), BARBARA’S for food products in two different classes, and has a pending application for BARBARA’S BAKERY (and design) for potato chips and processed organic foods. Barbara’s Bakery filed an opposition against Barbara Landesman, who was seeking registration of the trademark BARB’S BUNS BAKERY, INC. for printed recipes, recipe books, and newsletters containing recipes.

While Barbara’s Bakery, Inc. successfully opposed Landesman’s registration (see the TTAB decision here; see also John Welch’s TTABlog entry on the decision here), one interesting argument raised by Landesman was that Barbara’s Bakery, Inc. had “unclean hands” through its misuse of the ® symbol on its BARBARA’S BAKERY mark before it had been registered.

The evidence tended to support Landeman’s argument, including the fact that the original drawing that Barbara’s Bakery submitted with its application contained the ® symbol rather than the TM symbol for unregistered trademarks where owners believe they have common law trademark rights. On September 29, 2002, the PTO informed Barbara’s Bakery that the ® symbol “may not be used until a valid registration is obtained” and instructed Barbara’s Bakery to provide a new drawing without the ® symbol, which it subsequently did.

The PTO thereafter suspended prosecution on the application on May 8, 2003 while the opposition was pending (which was not decided until January 23, 2007). Landesman also submitted evidence that Barbara’s Bakery was still using the BARBARA’S BAKERY mark with the ® symbol on the packaging in grocery stores in 2004 and 2005.

Barbara’s Bakery argued that the misuse of the ® symbol was not a deliberate attempt to mislead the public or to create the misimpression that Barbara’s Bakery had a registered mark when it did not. Barbara’s Bakery maintained that the mistake arose because Barbara’s Bakery has a federal registration for the word mark BARBARA’S, which was part of the design mark at issue. The TTAB accepted this explanation and ruled that Landesman failed to show that Barbara’s Bakery had deliberately misused the ® symbol.

On the one hand, I agree with the TTAB’s decision because if you look at the design mark, the ® symbol is clearly after the name BARBARA’S and not anywhere indicating that the whole logo itself is registered. Looking at it myself, I did not have the impression that the whole design was registered, but rather just the name BARBARA’S. On the other hand, Barbara’s Bakery was put on notice in 2002 about the impropriety of the ® symbol in that location, and yet continued to use it on its packaging. Can the company maintain that it was just a mistake to continue to display the design mark with the ® symbol even after being put on notice by the PTO’s office action (and later by the TTAB proceedings) that it was wrong to have it there.

If Barbara’s Bakery indeed corrected the problem, as its Vice President of Sales & Marketing told the TTAB it would, the company likely incurred great expense when it had to correct all of the printed packaging that had the ® symbol. I say “if” because a quick look at the design mark on the company’s website suggests that they never corrected this “misuse.” A close look seems to reveal that the ® symbol is still in the same location as the sample of the mark first submitted to the PTO. As of today, the BARBARA’S BAKERY (and design) mark has still not been registered, although it was published for opposition on July 31, 2007, so it should be registered sometime soon (unless some other company decides to start their own opposition).

So what are the lessons learned in the above stories.

First, state trademark registration is not the same as federal registration. While every state issues their own trademarks, getting a state trademark does not buy you much in the way of protection of your mark. While the process is often faster than federal registration, the state registration will only serve as evidence of use of the mark in commerce and the geographic area of use. If another party gets a federal registration, then such registration is constructive notice that the registrant has the right to use the mark throughout the entire country (even if the registrant is not using it in a specific geographic area) and can prevent others from using the same or similar mark anywhere in the U.S. unless the mark was in use before the date of first use of the registered mark, in which case the prior user may have some rights to use the mark but limited to a certain area. State registrations can serve as evidence for a prior user to help establish rights to the mark in those states where such a registration was obtained.

Second, the ® symbol can only be used when the trademark owner obtains a FEDERAL trademark registration, and not after receiving a state trademark registration and not after simply filing a federal trademark application. Instead, a trademark holder must continue to use the superscript TM or SM (for service marks), the same as would be used if there was no registration at all and the owner wished to proclaim to the world that the owner consider the mark to be a trademark protected under common law. In addition, “[d]eliberate misuse [the ® symbol] can have serious consequences. It can lead to the PTO’s final refusal to register a mark. It can give rise to claims of false advertising. And it can seriously injure a trademark owner’s enforcement rights in an infringement action: misuse of the ® symbol has led courts to deny requests for injunctions or damages. In most cases, however, both the TTAB and federal courts have been reluctant to divest trademark owners of rights and, absent persuasive evidence of a deliberate intent to deceive, have accepted reasonable explanations for inadvertent misuse of the ® symbol.” Thomas, supra.