Sixth Circuit Issues Decision Clarifying Trademark Application Requirements

February 3, 2017

By Alexis V. Preskar

It is said the road to hell is paved with good intentions.  A recent decision from the Sixth Circuit indicates that the road to trademark registration is similarly fraught.  In Kelly Services, Inc. v. Creative Harbor, LLC, two companies sought to use the mark “WorkWire” for their respective employee connection apps.  Creative Harbor filed separate “intent to use” applications for the mark WORKWIRE on February 19, 2014 for numerous goods in Classes 9 and 35. Kelly Services had not yet applied for the mark, but it developed its app around the same time and it was first downloaded by a customer on February 20, 2014.  Litigation soon followed with each party claiming superior rights in the mark.  Creative Harbor asserted that its applications, filed before Kelly Services ever applied for the mark, made its interest superior; while Kelly Services argued that it had the “first use” and Creative Harbor lacked the necessary intent to use the mark for many of the applied-for goods.  The trial court agreed with Kelly Services and threw out Creative Harbor’s applications even though the company did have the requisite intent for some of the applied-for classes.  Creative Harbor appealed.

Two issues were before the appellate court: what counts as a “bona fide intent” for an intent to use application, and what is the remedy if an applicant lacks a bona fide intent for some, but not all, of the applied-for classes?

First, the court followed other circuits which have considered the meaning of bona fide intent (undefined in the trademark statute, the Lanham Act) and found that the intent must be demonstrable, and the analysis must be a “fair, objective determination based on all the circumstances.”  Mere speculative future intent or desire is not enough.  Scrutinizing the deposition testimony of Creative Harbor’s owner and CEO Christian Jurgensen, the appellate court found that Creative Harbor lacked a bona fide intent for many of the classes of goods as Jurgensen used words like “might,” “maybe,” and “future exploration” to describe the company’s plans for some of the listed classes.  This type of speculative intent did not show a firm intent to use the mark, but rather appeared to serve as a mere reservation of rights, which is disallowed.

With this initial question decided, the court next determined the proper remedy for Creative Harbor’s application defects.  While the trial court found that the lack of a bona fide intent as to some of the classes necessitated the denial of the entire application, the appellate court took a more charitable view.  Reviewing cases dealing with similarly faulty applications from the Trademark Trial and Appeal Board (TTAB), the court found that denial of an entire application for only some errors is too strong a medicine.  If an applicant commits fraud or fails to use the mark for any listed goods, a complete void of the application is appropriate, but where there are issues with only some classes, the appropriate remedy is to cure the application by deleting the inactive classes.  Kelly Services argued that the TTAB had changed course in more recent cases and had considered voiding an entire application for the failure of some classes, but the court distinguished this case as the applicant offered no rebuttal evidence to support the use of the mark as to any of the goods and services.  Judge Batcheler dissented from this analysis and found that the applicant must elect to remove the offending classes or otherwise risks their entire application.

Applications based on intent to use, rather than actual, current use, are already prone to overambitious plans.  Though it can be tempting to apply for a broad range of classes, applicants can get burned if they cannot demonstrate a firm intention to currently use the mark for each class.  While Creative Harbor’s application was ultimately saved, it was not without significant delay and costs, which can be fatal for a fledgling company.  This case illustrates that the safer path is to narrow the application from the start, and amend it later as new goods and services are used, or at the very least, amend the application when challenges arise.