First to use: priority of trademark rights in the US

The complex matter of determining superior rights to a mark can be decided by the filing and registration bases, says Michael Smith of BSKB.

Trademark owners often are counselled about the need to police the use of their marks or marks confusingly similar thereto. In doing so, however, it is important for the owner of a mark to ensure it has priority of use before seeking to enforce its trademark rights. Failure to do so can result in an alleged infringer asserting superior rights in an admittedly confusingly similar mark. The US’ first to use regime, as opposed to first to file, combined with the various filing and registration bases, can make determining priority of use a complex task.

The two elements of a successful claim of trademark infringement are (1) priority of use in a protectable mark, and (2) likelihood of confusion. In the US, trademark rights are acquired through use of a mark in commerce. Registration does not create the trademark rights, use in commerce does.

“Use in commerce” is defined as “the bona fide use of a mark in the ordinary course of trade, and not made merely to reserve a right in a mark” 15 U.S.C. § 1117. A mark is deemed to be in use in commerce:

(1) on goods when

(A) it is placed in any manner on the goods or their containers or the displays associated therewith or on the tags or labels affixed thereto, or if the nature of the goods makes such placement impracticable, then on documents associated with the goods or their sale, and

(B) the goods are sold or transported in commerce, and

(2) on services when it is used or displayed in the sale or advertising of services and the services are rendered in commerce, or the services are rendered in more than one State or in the US and a foreign country and the person rendering the services is engaged in commerce in connection with the services.

When filing an application for federal trademark registration, the application must assert an application filing basis. There are five application filing bases: 1(b) intent to use, 1(a) actual use in commerce, 44(d) foreign application, 44(e) foreign registration, and 66(a) Madrid Protocol. In addition to having an application filing basis, there must be a registration basis for a registration to issue. While sections 1(b) intent-to-use and 44(d) foreign application are application filing bases, they are not registration bases. Thus, there are three bases for registering a mark in the US: 1(a) actual use in commerce, 44(e) in reliance on a foreign registration from the applicant’s country of origin, and 66(a) pursuant to the Madrid Protocol. For applications filed with 1(b) or 44(d) bases, the applicant must perfect either a 1(a) or 44(e) registration basis to complete the registration process. The basis of a 66(a) application cannot be amended.

“The owner of the registration may have a constructive first use date three or more years prior to its actual date of first use in commerce.”

The filing and registration bases can be important because they may affect the registrant’s priority date. For example, one of the benefits of filing an application with a 1(b) intent-to-use basis, is the application filing date becomes the constructive first use date upon the completion of the registration process on the Principal Register. Even if the owner of the application does not use the mark in commerce for years after the application is filed, upon completion of the registration process the priority date reverts back to the application filing date. Thus, the owner of the registration may have a constructive first use date three or more years prior to its actual date of first use in commerce in the US.

Use in commerce is not required to obtain a registration with a 44(e) or a 66(a) basis. The issue may arise, then, as to whether the owner of a registration with a 44(e) or a 66(a) registration basis with no actual use of the mark in the US has enforceable trademark rights, and, if so, what is the registrant’s priority date.

In SCM v Langis Foods, the DC Circuit addressed a dispute over the priority of trademark rights resulting from an application under § 44. Langis, a Canadian company, and SCM, a US company, both claimed rights in the trademark ‘Lemon Tree’ for use with fruit beverages. Langis filed a trademark application in Canada on March 28, 1969, and it began using the mark in Canada on May 15, 1969. Coincidentally, SCM began using the ‘Lemon Tree’ mark in the US on May 15, 1969. Both companies filed applications in the US, with SCM filing first on June 18, 1969, and Langis filing an application under § 44 on September 19, 1969. In October 1971, Langis’ US application was granted even though Langis had not yet used the mark in the US. SCM sought cancellation of Langis’ registration, claiming that SCM had priority of rights based on its first use of the mark in the US. The Trademark Trial and Appeal Board (TTAB) rejected SCM’s argument, but after SCM filed suit, the district court agreed with SCM.

“To rely on a § 44(d) filing basis, the US application must be filed within six months of the date the foreign application was filed.”

The DC Circuit reversed. The court agreed with Langis that, by providing that a § 44 application “shall be accorded the same force and effect as would be accorded to the same application if filed in the United States on the same date on which the application was first filed in the foreign country,” § 44(d) “grants a foreign applicant which has used the trademark in its home country after the foreign filing but prior to the actual United States filing a constructive use date as of the date of the foreign filing”. As a result, Langis had priority since its constructive first use date of March 28, 1969, ie, the date of its Canadian application, preceded SCM’s actual first use date of May 15, 1969. Accordingly, the court held that Langis’ mark “must be protected in this country from the date of the foreign application even as against an intervening first use by another in the United States”. Importantly, however, to rely on a § 44(d) filing basis, the US application must be filed within six months of the date the foreign application was filed.

The question regarding applications filed under § 66(a) had gone unaddressed until recently. In Lodestar v Bacardi & Co (9th Cir. 2022), a US court for the first time had to grapple with whether the owner of a registration with a 66(a) registration basis with no actual use of the mark in the US has enforceable trademark rights, and, if so, what is the registrant’s priority date.

On August 19, 2009, Lodestar requested extension of protection to the United States under the Madrid Protocol for its internationally registered marks ‘Untamed’ for use with ‘rum’, among other goods. On October 4, 2011, the US registrations for the ‘Untamed’ marks issued. Because the applications were filed with a 66(a) Madrid Protocol basis, Lodestar was able to obtain the US registrations without submitting evidence of actual use of the mark in commerce in the US. While there is some debate in the case about Lodestar’s first use in commerce of ‘Untamed’ in the US, the first sales to US retailers of Lodestar’s ‘Untamed’ rum occurred in January 2015.

In 2012, Bacardi began developing what ultimately became an advertising campaign for its rum products that would use the phrase ‘Bacardi Untameable’. In July 2013, Bacardi sought extension of protection to the US under the Madrid Protocol of its Liechtenstein-registered trademark for the phrase ‘Bacardi Untameable’. Lodestar opposed the application in April 2014 when it was published. The Opposition was suspended pending the outcome of the later-filed civil litigation.

In November 2013, Bacardi launched its ‘Untameable’ advertising campaign to promote its rum products. Bacardi never used the term ‘Untameable’ on the labels of its products, but in advertisements in a variety of media.

In August 2016, Lodestar sued for trademark infringement and unfair competition. While Bacardi eventually prevailed because there was no likelihood of confusion, the court addressed the important question of the priority date afforded a registration with a 66(a) basis. The court concluded that, even assuming that Lodestar’s first use of its mark in US commerce occurred after Bacardi’s campaign began, under the Madrid Protocol, Lodestar’s subsequent bona fide use of its registered mark on certain rum products gave rise to a priority of right that it could seek to enforce under the Lanham Act. The court reasoned that under the Madrid Protocol, as under § 44, a foreign applicant who obtains a registration without showing actual use in the US has a right of priority, as of the relevant “constructive use” date, over another company who first uses the mark in the US. Once that registrant begins actually using the mark in the US, and does so even after the competing user has begun using the mark, the registrant may bring an infringement action, subject to any applicable defence, based on that superior right of priority.

Sections 44 and 66 provide not only a means for obtaining a US registration without actually using the mark in commerce in the US, but they provide a possible means for establishing a priority date before the date of an actual first use of a mark in the US.

Michael Smith is a partner at BSKB. He can be contacted at: msmith@bskb.com