Articles - Federal Trademark Process

From: Gregg R. Zegarelli, Esq.
Subject: Federal Trademark Process

http://www.zegarelli.com/content_generalDocs/TM_Memo_FederalMarkProcess.htm

QUESTION:

You can also register a mark in most states, but this is substantially less protective and valuable than a federal registration; also, state registrations do not permit the use of the "®" symbol. See http://www.zegarelli.com for more articles on trademarks, service marks and the registration process. Following is a very short synopsis of policies and costs relating to federal registration of a mark.

For a federal mark application, the filing fee is usually $275 per class per mark for electronic filings, but can be as low as $225 in certain cases.  Electronic filings require that any evidence specimens of use be submitted by a .jpg picture data file.  There is an exception to the $275 filing fee, discounted to $225 per class, if you can squeeze the description into a pre-defined list, and if every claim is reconciled into a class paid at the time of filing.  We do not budget on this exception, although sometimes we are able to take advantage of it at the point of filing.

Each of a word, slogan and logo (design) would be different marks. Each mark is applied for and registered in one or more specific internationally-recognized class(es) of goods/services. For example, computer software products are in class 9, consulting services are in class 35 or 42, depending upon the nature of the consulting. If your business includes consulting and selling software, you might have three classes available (Class 9 for software, and Class 35 for business consulting and Class 42 for technology consulting. Classifying a mark is required for the administrative convenience of the patent and trademark office (PTO), but it is not determinative for infringement purposes. For example, Apple Computers could arguably infringe on Apple Records even though in different classes, if they both touch on music and confuse the public.

Filing fees add up quickly to the extent that there are multiple marks, each of which mark can be in various classes. For example, if you want to register the plain word "GOGETTERS" and a related stylized logo, each in three classes (eg., for computer software products, business services and computer services), it would be six filing fees; that is, the word mark in three classes [$275x3=$825], and the logo mark in three classes [$275x3=$825] for a total filing fee of $1,650 [$825x2]. Legal time is an additional fee. You do not need to file in every class available to the mark, but you must file (and pay the filing fee) for at least one class per application.

There are two types of Federal mark applications: an actual use application and an intent-to-use application.  The actual use application is filed after an interstate or international use of the mark has been made in each of the classes for which registration is sought.  An intent-to-use application allows an applicant to "reserve" a mark that has not already been used in interstate commerce.  Sometimes an intent-to-use application is used because it is unclear whether a qualifying use has been made.   

The cost for an actual use application per mark per class is usually about $750 to $1,500 per mark, ie usual fee is about $1,275 with filing fee and the usual pre-filing trademark search. Prosecution of the mark takes about 12-18 months and, generally, cannot be expedited. You are protected upon filing, if the mark actually becomes registered.  In addition, we currently quote all trademarks with one year MarkAssure "monitoring service" ($175 per year) that performs automatic notifications of update to the application status, as well as infringement reporting.

The PTO will assign an Examining Attorney to your application. If the Examining Attorney believes that your mark is capable of registration, then the PTO will provisionally approve the mark. The mark is then published in a national publication, the Official Gazette. Anyone has a right to "oppose" the registration of the mark for 30 days after publication. For example, if the PTO provisionally approved "Bonkers-Be-We", "Toys-R-US" might, for some reason, believe it will be injured, and, therefore, file an opposition. If someone opposes the registration, you should consider it to be litigation with the appurtenant costs. You will need to decide whether to fight, switch or settle. These additional costs are, of course, beyond the costs quoted above. The wide margin for the cost of a usual mark application is because even the usual application can have a wide variety of usual issues, which, to a certain extent, can be an accident of the particular Examining Attorney assigned to review the application. Some PTO Examining Attorneys are more exacting than others. For example, the Examining Attorney might initiate a negotiation over the description of the mark or the classifications. The PTO wants the description of goods/services related to the mark to be narrow, we want it broad, like a real property deed description. Whether the Examining Attorney is reasonable or the "hanging judge", or experienced or new, is luck of the draw, and, that fact alone, can affect the cost. We have seen marks registered for as low as $750 and others, with significant PTO negotiations, opposition actions, settlement negotiation, etc., to be more than $10,000. The estimate above, however, is the usual case, and probably 90% of mark registrations are less than $1,500 in legal time (plus class filing fees).

For actual use applications, if no one opposes the registration, then the mark will register in due course.  If the application is an intent-to-use application, if no one opposes the registration, then the PTO will approve the mark, but the registration will not be issued until a statement is filed alleging that an interstate use has actually occurred.  An applicant has 3 years from the date of approval to use the mark.  There is a fee of $150 per class for every 6-month extension of the time to use the mark; that is, to extend the time to use the mark to the full three years would be an additional $750 per class per mark, ie. 5 extensions beyond the first 6 month period.  There is also a fee of $100 per class to allege that the use has occurred.  As a result, a single-class intent-to-use application taking advantage of the full extension could cost $850 more than an actual use application, with the benefit of reserving a mark for the entire period that the mark is in process plus 3 years after PTO approval.  Keep in mind, that the filing fees are per class, and there is the related legal time.  Click here for more information on multi-class costs.

Before filing a mark application, upon request, we perform a limited search to review whether there are traceable prior uses of the mark. Average cost is about $85, but can be significantly more if the mark uses generic terms. It is obviously more efficient to provide multiple marks to search at one time. This quote above presumes that there are a couple of searches required to get a feel for whether the mark will be able to be registered. If the mark is problematic, e.g., there are several prior uses, the mark searches themselves can get expensive. Mark research never guarantees that a mark will be registered; there are far too many variables to ever predict whether a mark will be registered. Therefore, prior to a registration, you always must proceed with the understanding that the mark may not be capable of registration. In fact, even after registration, your mark is still subject to challenge and cancellation under certain circumstances.

There may be incidental work which you require as part of the process, such as work related to making sure your artist has conveyed legal title to artwork and/or filing a copyright registration (which is a completely different protection). For example, if you created Mickey Mouse, you would own the copyright, but you could license the work to Disney for use as a trademark. The copyright would protect you as the author, and the trademark would protect Disney’s commercial reputation. In many circumstances, the copyright owner and the trademark owner are/should be the same person.

For a small business, the cost is not necessary inexpensive, but: depending upon the client and the mark, we will often take only a $750 retainer upon being engaged, then we bill on time and materials; therefore, the cash flow over the course of the year or so can be more effectively managed.

For more information on the costs of maintaining a registered trademark, click here.

This is very powerful protection. In fact, we generally will not incorporate someone without fully discussing trademark issues and doing a national and international trademark search. Once you are filed, everyone in the U.S. is on record notice of your claim, and subsequent users of the mark should have to cease and desist. If you don’t file the federal application, you only get common law rights where you actually use the mark (assuming, of course, you have done sufficient research to ensure that you are not an infringer on someone else’s registration). If you sell your company, extreme goodwill can be built up into the mark. If you need international registrations, we need to know that fact immediately, and the costs for those registrations depend upon the countries at issue.

Closing Notes:

• We have been through trademark issues multiple times as it relates to the domain name disputes, etc.
  

• Use the "tm" and "sm" symbols for trademarks and service marks, respectively, until federal registration, at which time you use the "r-in-a-circle", ®, symbol.
  

• You cannot obtain a federal registration of a mark unless you have or intend to do business internationally or between two or more states (you need federal jurisdiction). However, you can file early and protect your mark for as long as three years prior to your federal use.
  

• Generally, mark registrations after 1988 are good for 10 years and must be renewed.  However, you need to file a document between the 5th and 6th year after the first registration to indicate that you are still using the mark.  For more information on the costs of maintaining a registered trademark, click here.
  

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