The current issues involving the supply chain carries consequences for trademark applicants and registrants.
One of the biggest stories in the news lately has been the problems with the supply chain. See
https://www.nytimes.com/2021/10/22/business/shortages-supply-chain.html?smid=em-share for a summary of the issues involved.
For trademark applicants and registrants here are some additional issues to be considered.
You decide to file an application based on Section 1(a) of the Trademark Act based on your use of your mark in commerce. Your mark has been displayed on labels affixed to your goods or on the packaging therefore in a manner in which customers are accustomed to seeing those goods marked with a trademark. See 37 C.F.R. sec. 2.56. To complete your application you must state a date of first use in commerce. The date of first use in commerce is the date when the goods were first sold or transported under the mark in a type of commerce that may be lawfully regulated by the U.S. Congress, See 15 U.S.C. sec. 1127. This could be either interstate commerce or commerce between the United States and a foreign country.
But what if, because of a single case of Covid-19, your product for which you were seeking to file a U.S. Trademark Application for is sitting in a port in Ningbo, China, the world’s third busiest port. See https://fortune.com/2021/08/13/ningbo-port-closure-covid-china-shipping-backlog/ Of course, you can toss your Section 1(a) application out and apply to register your mark as an intent-to-use application, but as long as your product is sitting in Ningbo, it would be hard to demonstrate that that product and the mark that it bears is in commerce between the U.S. and China.
In normal times, it would not be unusual to assume that that product would make it to the U.S. in less than two weeks at which time you would have a first date of use in commerce to support a Section 1(a) application, which would expedite your registration process, as within three months after that application is allowed by the U.S. Patent & Trademark Office you would have your trademark registration and avoid the additional step of filing a statement of use which you would have to do with an intent-to-use application.
Once you have obtained a trademark registration by the end of both the 6th year subsequent to obtaining that registration and the 10th year subsequent to obtaining that registration, not including the six-month grace period, to retain that registration you must, under Section 8 of the Trademark Act, affirm that that mark is still being use on product sold or transported in commerce, e.g., in interstate commerce or in commerce with a foreign country. Again, what do you do if your product is stuck in Ningbo or another foreign port near where that product is manufactured due to supply chain issues.
“The purpose of Section 8 of the Trademark Act is to remove from the register those registrations that have become deadwood. See Morehouse Mfg. Corp. v. J. Strickland & Co., 407 F.2d 881, 160 USPQ 715 (C.C.P.A. 1969) . It is not intended, however, to cancel registrations because of a temporary interruption in the use of the mark due to circumstances beyond the control of the owner of the registration. In re Moorman Mfg. Co.,203 USPQ 712 (Comm’r Pats. 1979). Thus, if the mark is not in use in commerce but the owner believes the registration should not be cancelled, the owner may file an affidavit or declaration showing that nonuse is due to special circumstances that excuse the nonuse, and is not due to any intention to abandon the mark. See 15 U.S.C. §1058(b)(2); Ex parte Kelley-How-Thomson Co., 118 USPQ 40 (Comm’r Pats. 1958). Section 1604.11 of the Patent Office’s Trademark Manual of Examining Procedure states, “Trade Embargo or Other Circumstance Beyond Owner’s Control. Nonuse may be considered excusable where the owner of the registration is willing and able to continue use of the mark in commerce, but is unable to do so due to a trade embargo.”
While the U.S. Patent & Trademark Office has stated that any trademark owner that has been impacted by COVID-19 resulting in a disruption in the use of a mark may make a claim for excusable nonuse on that basis, it is not clear that a claim based on a supply chain disruption, although indirectly caused by the pandemic would be accepted as a Covid claim. It may be that the “Trade Embargo” rationale is a better analogy. “Affidavits or declarations should specify the reason for nonuse, the specific steps being taken to put the mark back in use, and any other relevant facts to support a finding of excusable nonuse.”
However, beware that if there has been a period of nonuse, even if it is beyond the trademark registrant’s control, that registrant will be barred from filing a Section 15 Declaration of Incontestability under the Trademark Act as such a filing requires an assertion that the registered mark was in continuous use in commerce for five consecutive years from the date of registration.
