Got a registered trademark? Don’t lose it by forgetting to maintain or renew it!

Background & Current Issues.  Trade secrets have historically been an outlier in the area of intellectual p

This blog, part 1 of a 2-part series on the cancellation of federally registered trademarks, focuses on the cancellation of registered trademarks by operation of law.  The maintenance of federally registered trademarks should be part of a strategic planning approach for protecting and enhancing the value of intellectual property rights obtained through hard work, a dream, and perseverance.   For registered marks that are still being used in commerce, failure to renew these marks may well have a detrimental impact on registered mark’s owner strategic business plans including its exit strategy.  This blog discusses: I) the importance of trademark registration renewals; II) the USPTO’s registered trademark renewal schedule; and III) recommendations for monitoring registration due dates.

I. Background on Registered Trademarks & the Ramifications of Non-Renewal

Federally registered trademarks are valuable, monetizable business assets for even small businesses because they promote brand recognition in the minds of target consumers/businesses.   A registered mark may be leased, sold, and even used as collateral. Registered marks help establish the mark owner’s credibility amongst its customer base, whether that base is comprised of consumers or other businesses.  Also, registered marks allow the mark owner to use and enforce the mark throughout the country in which it is registered.  For the United States, the “reach” of registered trademarks includes all 50 states and U.S. territories.

Securing a registered trademark is no small feat.  That’s why registered mark owners need to understand that mark registration does not automatically result in “forever” associated rights under the law.  Continued registration status is contingent upon the periodic renewal of the mark with the United States Patent & Trademark Office (and/or the foreign office(s) in countries where the mark has been registered).  Failure to renew the registered mark will result in cancellation of the mark.  The only way to get the mark “back” is to submit a new application which may or may not be approved.

Failure to renew a registered mark can have serious ramifications including a decrease in a business’s valuation due to the loss of registration status; failure to procure the same registered mark upon submission of a new application; loss of brand awareness and client loyalty; and greater difficulty for a company to protect its goods or services against piracy or counterfeiting.

If a registered trademark loses its registration status and cannot “regain” registration status, the user of the mark will need to depend on common law rights which are generally more difficult and costly to enforce.   Common law trademarks generally only allow the owner to sue for infringement in state court.  Also, whereas federally registered trademark owners may seek injunctive relief, common law trademark owners are generally restricted to receiving monetary damages. Finally, lack of a registered trademark(s) can also interfere with a company’s growth strategy across state lines including growing a franchise.

Once a mark is cancelled, anybody may file an application to register the mark through the USPTO (or other relevant jurisdiction).  This does not mean that the application will actually evolve into a registered mark since the application will be examined on its own merits.  Theoretically, the former owner of the registered mark may also still have common law priority rights in the mark.

II. The USPTO’s Trademark Renewal Schedule

The owners of a registered trademark must periodically renew their registered trademark to maintain the mark’s registered status.  This process of “renewing” a registered trademark is known as post-registration maintenance.  Failure to do so will result in cancellation of the mark. Trademark law imposes the following renewal deadlines:  between the 5^th and 6^th years after the registration date though a Section 8 Declaration, the 9^th and 10^th years after the registration date, and every 10 years thereafter.  The latter two types of renewals involve the filing of a combined Section 8 and Section 9 Declaration. The Section 8 Declaration actually refers to mark maintenance while the Section 9 Declaration refers to mark renewal.

It is important to note that the registrant is asserting that the mark is indeed being used in commerce when submitting the declarations.  Additionally, the registrant must amend the original description of goods and/or services to delete any goods/services no longer being sold or offered in commerce.  Specimens showing use of the mark must also be submitted. In other words, Section 8/9 Declarations require something more than a statement “we’re good to go.” If the registered mark is no longer being used in commerce with at least one of the registration’s specified goods/services, the registrant should not file a Section 8/9 Declaration.

The USPTO provides a 6-month grace period after each of the deadlines for filing the renewal for an additional filing fee.  Failure to at least file the required declaration within the 6-month grace period will result in cancellation of the registered mark.  The registrant may file a petition to revive the cancelled mark within 2 months of the USPTO’s notice of cancellation.  The petition must be accompanied by all necessary declarations and fees.  If more than 2 months have passed since the USPTO’s cancellation notice, a trademark owner will need to file a new application for the same mark.  There is no guarantee that the new application will evolve into a registered mark.

If a registered mark is subsequently cancelled by operation of law (i.e., for failure to renew), the effective cancellation date stated in the USPTO’s record’s publicly viewable records will be the last day immediately preceding the start of the 6-month grace period associated with the renewal period.

III. Steps a Registered Mark Owner Should Take to Monitor Renewal/Maintenance Due Dates

The commentator advises her trademark/IP clients to do the following to not only maintain their registered trademarks but also to enhance their value and the value of all of the registrant’s other intellectual property:

1. For a new registrant, calendar the due date for the 5/6 year Section 8 Declaration. Ideally, file the documentation on the 5^th anniversary date and no later than 6^th year anniversary date even though the USPTO does offer a 6-month grace period following the 6th year anniversary date .  If our law office obtained the registration on behalf of the registrant, our office also calendars the due dates.  It is recommended that the required documentation be filed by an attorney, preferably the original attorney of record to ensure that any required amendments to the original description of goods and services are made.
2. If a Section 8 Declaration 8 is filed as above, calendar the 10th anniversary date and the last date to timely file the Section 8/9 Declarations if the registrant is going to rely on the 6-month grace period.  Keep calendaring the renewal days in 10 year increments.
3. We encourage all registrants to establish an IP portfolio which contains all government-granted IP rights (patents, registered trademarks, and registered copyrights) wherein the portfolio is maintained by a designated authorized representative for business registrants. Such organized records may come in very handy for those businesses which are seeking investors, potentially involved in an M&A, establishing a growth strategy, or considering selling/licensing their IP assets.  It is noted that issued utility patents must also be maintained periodically. Any such patent owner also needs to calendar patent maintenance due dates.
4. If trademark rights are assigned by the registrant, the assignee should plan to take charge of all renewal dates and calendar the due dates.

In Need of Legal Counsel on Trademark Matters?

Trademark law is a complex area of the law.  Contact Susan at 305-279-4740 for a complimentary consultation on trademark law matters as well as matters related to patents, copyrights, and trade secrets.

 

THANK YOU FOR YOUR INTEREST IN THIS BLOG.  AS USUAL THE CONTENT IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT LEGAL ADVICE.

roperty (IP) law because they have not been viewed as “real” IP.  Today they are being increasingly viewed as valuable IP assets.  Indeed Gene Quinn, one of the most influential IP thought leaders in the U.S., has predicted that trade secrets may pass patents in terms of valuation.

Nevertheless, trade secrets have their own unique challenges and characteristics.  The following lists some of the issues currently comprising the trade secret ecosystem.

1. A weakened patent system resulting from the America Invents Act and subsequent court decisions which have both invalidated patents and impacted the issuance of new patents. Trade secret protection either singularly or in connection with patents may be a viable way to reduce patent invalidation risk and and/or strengthen a patent’s commercial viability over the long term.
2. The explosion of AI and Large Language Models (LLMs). Here the issue pertains to controlling what can and cannot be shared. Where the possibility of divulging copyrighted, patented, or trade secrets as the result of generative AI exists, the resulting output could infringe on intellectual property rights, divulge valuable trade secrets, or breach confidentiality obligations (e.g., the need to protect personally identifiable information or to comply with obligations under an NDA).
3. Remote work and employee mobility. Today, more and more potentially valuable business information is “leaving” the office traveling through space so to speak to remote servers, computers, and the “cloud.”   The locked file cabinet with tightly controlled access of years past is fast becoming a relic, being replaced by systems subject to cybersecurity risks 24/7.   Trade secrets are often viewed as a potential liability by companies due to cyber threats and employee “movement”.
4. The move to eliminate non-competes. The Federal Trade Commission is attempting to regulate non-competes out of existence, and some states already have or are in the process of doing so.
5. A patent document, registered copyright certificate, or registered trademark certificate issued by a government agency provides proof that the associated IP rights actually exist. With trade secrets, however, no government agency is involved in establishing the IP right.  Instead, the trade secret owner is tasked with establishing that the confidential information indeed qualifies as a trade secret.  Proof that a trade secret actually exists is required by the courts in any trade secret misappropriation lawsuit.  Requiring proof of documentation establishing the existence of the trade secret is considered a reasonable measure by the court.
6. Trade secrets are protected under state law and federal law. Damages in a misappropriation case often exceed the damages in patent infringement case.  Europe has largely adapted the trade secret law of the United States and trade secret law is seeing global standardization.

Trade Secrets and Confidential Information. Referring to item #5 above, many still assume that confidential company information automatically qualifies as a trade secret.  Trade secrets of course constitute confidential information, but not all confidential information will qualify as a trade secret.  For example, Florida’s Uniform Trade Secrets Law, largely based on the Uniform Trade Secrets Act, defines “trade secret” as “information, including a formula, pattern, compilation, program, device, method, technique, or process that: “Derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means, by other person.”

The unauthorized use of a trade secret is known as misappropriation.  To prevail in a court of law on a trade secret misappropriation claim, the plaintiff must first establish that the misappropriated information is indeed a trade secret and has been handled as a trade secret by the plaintiffs.  Documentary proof is generally the standard required for meeting this requirement.  Contracts such as an employment handbook, NDAs, employee onboarding/exit documentation, trade secret assignment documents, an in-house trade secret policy, etc. are types of acceptable documentation.

Several years ago, the commentator was able to get a motion for summary judgment granted on behalf of the defendants because the plaintiff could provide no documentary proof that he indeed had a trade secret.  Even large companies one would think should know better have lost their trade secret misappropriation lawsuits because of the lack of documentation or poor documentation.  See e.g., California Healthcare Services v. Amgen and Bundy Baking Solutions v. Mallet.  Other helpful factors in establishing trade secrets to the satisfaction of a court include having conducted trade secret audits to evaluate the efficacy of a business’s procedures to protect its trade secrets, using robust cybersecurity efforts, etc.

Non-disclosure agreements (NDAs) can be confusing when it comes to trade secret protection because they are generally limited to protection of exchanged confidential information for a period of only 1 to 3 years following the NDAs’ termination. However, if trade secrets are to be divulged, it is important that any disclosed trade secrets be protected by the receiving party indefinitely and the NDA should state as such.  Otherwise, trade secret protection could be at risk.  Most receiving parties do not want the burden of protecting the disclosing party’s divulged trade secrets indefinitely.   Accordingly, the NDA’s disclosing party should think twice before disclosing a trade secret or insist on adequate provisions in the NDA to protect any divulged trade secrets.

Gearing Up for Trade Secret Protection. Any business, no matter how small, may have valuable trade secret assets which can enhance the business’s value.  A robust trade secret approach may also be attractive to potential venture capitalists and future buyers of the business.   If you aren’t sure is something could be a trade secret, ask yourself the $64,000 question:  What would be the consequences for my business if this confidential information became known by others?

How does one get started in identifying and protecting a trade secret?  Here are some questions to ask to get the process going.

What is the trade secret (e.g., software code, a special recipe, a customer list that the business has spent money and time on developing, certain steps of a manufacturing process requiring tight control, a raw material having “special” requirements, etc.)?

Who will have access to the trade secret (e.g., employee, independent contractor, business partner)?

What documentation should the business have in place to protect the trade secret asset (e.g., employee handbook, code of conduct, onboarding/exit documentation, IP assignment of any developed trade secrets to the business, NDAs, independent contractor agreements, trade secret policy documents, shareholder/partnership/operating agreements, etc.)?

How do we educate employees and independent contractors that it’s a trade secret which must be carefully and diligently protected (e.g., asset notice and acknowledgement documentation)?

How do we train those who require access to the trade secret to protect the trade secret (e.g., ensure they know it’s a trade secret)?

How do we monitor the interaction between those who have access and the frequency of interaction (e.g., by maintaining a privilege or access log which states the people who have access, how the access is provided, and have them document the dates on which they accessed the trade secret)?

Getting Started with a Legal Advisor.   In conclusion, every business, no matter how small, should be looking into trade secrets as a valuable asset, meaning one which can be monetized and form a part of an IP portfolio.   Contact Susan at Troy & Schwartz (305-279-4740) to request a complimentary copy of her trade secret implementation checklist and work with her to perform a trade secret audit, create appropriate documents, etc. or to represent you in trade secret misappropriation matters.  As an IP attorney who practices patent, trade secret, trademark, and copyright law, she is uniquely qualified to address best practices for procuring, monetizing, and enforcing IP rights.

THANK YOU FOR YOUR INTEREST IN THIS BLOG.  AS USUAL, THE CONTENT IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT LEGAL ADVICE.