Impact of COVID-19 on US Trademarks
The COVID-19 outbreak has caused disruptions across industries around the world, but one challenge facing businesses today; how to keep their trademarks alive during a pandemic. Commercial activities for non-essential businesses have come to a standstill due to restrictions such as social distancing, lockdowns, travel advisories, or even the business owners and staff themselves succumbing to the coronavirus. Businesses must either transition to online stores or cease operations altogether with no certainty of resumption.
Trademark owners now struggle to maintain their commercial use or find justifiable reasons for non-use, or otherwise risk losing their trademarks.
U.S. Trademark Law Requirements
Under U.S. trademark law, registrants must file affidavits or declarations to maintain their trademarks in the fifth year of a trademark registration term and every ten years thereafter. The Section 8 affidavit proves that a trademark is still in use, meaning that it is associated with the sale of goods and services in the US and other jurisdictions. If sustained discontinuity of trademark use has occurred, what options are available to keep a trademark registration active?
Even in normal economic conditions, the answer to this question is multifaceted. It depends on the industry and market environment for the product sales, type of product, and the length of the period for non-use. In addition, trademark law separates the real use of a mark in U.S. commerce from the goodwill generated by its use among consumers, such as brand loyalty and perceived quality. Since the United States is a “use it or lose it” jurisdiction, non-use of a trademark for three years (or more) will create a ‘presumption of abandonment,’ and the registrant will be required to delete the trademark and associated products.
According to U.S. trademark law, a registered mark needs to be continuously in use, with only a very short break permitted, meaning days or a couple of weeks. Section 71 of the Trademark Act mandates the USPTO to “remove those registrations that have become deadwood” (1), but not to cancel registrations for temporary interruptions. For non-use of the trademark for months or longer, the list of excusable conditions is much narrower. This list is limited to acts of God, illness impacting the operation of the business, trade embargoes, sale of a business or a deficiency in supplies. If the owner intends to keep their trademark, they must demonstrate the specific steps being taken to put the mark back into commercial use.
Reasons are Beyond COVID-19
Trademark owners seeking to keep their registrations active in the face of COVID-19 disruptions must file a Declaration of Excusable Non-Use with the USPTO. This Section 8 declaration is a safeguard to help vulnerable businesses to avoid the cancellation of their trademarks. The declaration must include:
- the date when use of the trademark in U.S. commerce ended;
- the approximate date when such use is expected to resume; and
- description of facts to show non-use of the mark in relation to the goods or services covered by the registration are due to special circumstances that excuse the non-use and are not due to any intention to abandon the trademark.
However, simply stating COVID-19 restrictions as a reason for non-use is not acceptable to the USPTO. Acceptance of the declaration will depend on the particular circumstances surrounding non-use, since the USPTO examines submissions on a case-by-case basis. At this time, the most valid reasons for non-use are the specific state order(s) requiring the closure of a “non-essential” business, and the unprecedented national nature of the pandemic health crisis. No matter the situation, keeping track of the dates and circumstances for terminating the use of a trademark and/or production or sale of a product is paramount.
Section 8 versus Section 15 Filings
Trademark owners often submit a Section 15 Declaration of Incontestability to further protect their trademarks from cancellation. This is available to businesses that have continuous use of their trademarks for the last five years. Trademarks registered in 2018, 2019 and 2020 do not qualify for Section 15 at this time, even though the pandemic has interrupted their use already (2). However, businesses must consider this option when their fifth anniversaries arrive and the Section 15 Declaration becomes available to them. For the highest chance of USPTO approval, a qualified trademark or intellectual property attorney can present a business in good faith and in the best possible light. Trademark owners are advised to discuss their excusable non-use declarations with an IP specialist.