While the United States Patent and Trademark Office (USPTO) provides online forms that appear to make it easy to file a trademark application, there are several portions of the application that can trip up an inexperienced applicant. One of those areas is the owner portion. The USPTO requires that the correct owner of the trademark be specified in the application to register the trademark. This sounds easy but in many cases it is not, as will be shown below.
Individual and Partnership Owner Problems
Take the case of American Forests v. Barbara Sanders, 1999 TTAB LEXIS 529 (TTAB 1999). In this case, Barbara Sanders filed a trademark application to register LEAF RELEAF to be used with the goods of leaf bag equipment. The application named herself individually as the owner/applicant.
Later another company, American Forests, filed an opposition seeking to prevent Barbara Sanders from receiving a registration over LEAF RELEAF. American Forest alleged (1) that LEAF RELEAF was confusingly similar to its trademarks GLOBAL RELEAF and RELEAF and (2) that the application named Barbara Sanders as the applicant/owner but that Sanders did not have a bona fide intent to use the mark. The second issue is the focus of this article. During a deposition Barbara Sanders admitted that she intended to use the LEAF RELEAF, not by herself individually, but together with her husband. In other words she intended to sell products under the LEAF RELEAF together with her husband in a partnership and not on her own.
It is a general principle of law that when two or more people join together for the purpose of making a profit, they have formed a partnership. This can be true even if there is no written agreement between the two or more people. Further, Barbara Sanders used the word partnership to describe her and her husband’s affiliation regarding the products to be sold. Therefore, the proper applicant for the trademark application was the partnership comprised of Barbara Sanders and her husband.
Section 1 of the Trademark act requires that the application be filed in the name of the trademark owner. When the owner named on the application is not the person or entity that intends to use the mark or actually is using the mark, then the application is void and the registration will be refused. See also Trademark Manual of Examining Procedure § 803.06.
In the American Forests case, Barbara Sanders’ application was found to be void and Sanders lost the opposition and her application. The rule is rather strict. You see here even though Barbara Sanders was going to be using the mark (together with her husband), she was not the proper owner because it was actually a partnership between her and her husband that was legally recognized as intending to use the mark.
Start-up Owner Problems
Another situation where this issue arises is in start-ups. Often an entrepreneur will come up with a name for their company or product before the company (LLC or Corporation) is legally formed. Once a name is chosen early filing of an intent-to-use trademark application is encouraged so that someone else doesn’t file an application on the same or similar name and block you from using your name. However, if an entity is not yet formed, filing an application in the name of a non-existent entity is not a good idea. And, if the individual does not intend to sell products/services himself or herself before the legal entity is formed then, like in the American Forests case, the individual or individuals would not be proper applicants.
A good question to ask to determine the owner is who will receive revenue from the first sales? If it is a company, then the company should be the applicant. If the company is not formed, then it may be necessary to first have the company legally formed. Then a trademark application can be filed in the name of the company that will own, control, and realize revenue from the sale of products/services under the mark.
Exceptions for Minor Errors
Some exceptions exist that allow minor errors in the owner’s name to be corrected. However it is best to ensure the owner is properly named. You should contact a trademark attorney to determine whether errors in your case are correctable.
Circumstances of your company or start-up enterprise need to be considered in order to determine who should be named as the owner on a trademark application and whether other steps (e.g. forming the legal entity) are needed before a trademark application is filed.