The United States trademark law is based on the common law first to use in commerce theory. Is the use of the mark in interstate commerce which creates rights over a trademark, not its registration.

In the United States, trademark US Applicants can base their applications on the following basis:

  1. Prior use of the trademark in interstate commerce, or;
  2. The intention of use (ITU) the mark in commerce in the future.

Foreign Applicants, in addition to 1 and 2 above, can base their applications in:

  1. A foreign application: Foreign applicants can file an application claiming priority of a pending application in their country within six months of the filing date of the first-filed foreign application, and/or;
  2. A foreign registration: Foreign applicants can file an application claiming priority on a prior foreign registration.

Prior Use: “Prior use of the trademark” means that, at the time of filing, your trademark must be in use in the ordinary course of trade. Generally, the following are acceptable forms of use of the mark in commerce:

For products: The mark must appear on the products, the packaging for the products, a container for the products, or on displays or banners associated with the products, and these products must be sold or transported in commerce.
For services: The mark must be used or shown in the sale or advertising for the services, and said services must be offered in commerce. On the contrary, in a first to file system, prior use is not taken into consideration, whoever files the application first have superior rights over the brand.

A trademark squatter is whoever files, or registers, a trademark belonging to another with the intent to profit from the goodwill of said trademark.

Although trademark squatters can take advantage of the US Intent to Use filing system, trademark squatting is not a big issue in the United States due to the common law first to use in commerce theory and the strong court system prevalent in the US.

That is not the case in foreign jurisdictions, where a first to file system combined with the fact that it is not required to prove actual use of the mark in commerce to obtain registration, has made it easier for trademark squatters to file for trademark protection in bad faith with the sole intent of holding them for ransom from the real trademark owners.

Samples are abundant, Apple, in 2012 $60 million to a Chinese trademark squatter to get its iPad trademark in China. Even law firms are not immune, more recently, after the merger of Patton Boggs and Squire, Sanders & Dempsey, what appeared to be a fake Chinese Intellectual Property Law Firm, days after the merger was announced, filed for trademark protection in China for the name of the new merged firm “Squire Patton Boggs” and a competing domain name The Chinese squatter demanded almost half a million dollars ransom to surrender the trademark and the domain name.

Getting your trademark and domain back from a trademark squatter is costly and time consuming.

Squire Patton Boggs was forced to file for opposition which was denied, and then proceeded to file cancellation proceedings against the squatting firm. The case was settled with Squire Patton Boggs gaining control of both the trademark and domain name, terms of the settlement are not public.

One has to wonder how much the trademark squatter received in compensation versus how much would have cost Squire Patton Boggs to preemptively file for trademark protection in the most important, first to file jurisdictions around the world, before going public with their announcement.

Since a trademark always represents a company’s identity, losing it is always a cause of concern for companies. Thus, the first, and less costly, defense against trademark squatters is to file for trademark protection and having a trademark attorney counseling you along the way will pay itself in the long term.

I have helped countless small to medium businesses internationally with all their intellectual property needs. I’d like to help you too by protecting your rights to trademarks, copyrights, and other intellectual property rights in the US and overseas before a trademark squatter does.

Augusto Perera, Esq.
Intellectual Property, Business and Legal Affairs Attorney

Augusto Perera, P.A.
2525 Ponce de Leon Boulevard
Suite #300
Coral Gables, FL 33134

T: 888-581-0816
F 305-721-1532
C: 786-200-8674 (Call, Text or WhatsApp)