When is Non-Use “Excusable”?
Under United States Law, it is necessary to file a Section 8 Use affidavit (Section 71 for Madrid Protocol Registrations) demonstrating use of the mark, or excusable non-use of the mark. These affidavits are due during the sixth (6) year of registration in the first term, and every ten (10) year trademark renewal.
In my 35+ years of being a trademark attorney I have yet to see a case of a client, an adversary or a third party where “excusable” non-use was positively determined.
It is important to understand that the purpose of this requirement is to remove from the register those registrations that have become deadwood. The provision contains an “escape hatch” where there is a temporary interruption in the use of the mark due to circumstances beyond the control of the holder of the registration. The underlined section is the critical point…. It is a demonstration that there are special circumstances justifying the non-use and that the non-use is not self-inflicted, but rather due to circumstances beyond the trademark owner’s control.
Not considered “excusable”
- Business Decision. Nonuse related to a business decision is not beyond the holder’s control and does not excuse nonuse.
- Decreased Demand. Decreased demand for the product sold under the mark, resulting in its discontinuance for an indefinite period, does not excuse nonuse. The purpose of the requirement for an affidavit or declaration of use or excusable nonuse is to eliminate registrations of marks that are not in use due to ordinary changes in social or economic conditions.
- Retooling. The mark might be out of use temporarily because of an interruption of production for retooling of a plant or equipment, with production possible again at a scheduled time. However, nonuse due to retooling is excusable only if the holder shows that the plant or equipment being retooled was essential to the production of the goods and that alternative equipment was unavailable on the market.
- Negotiations with Distributors. A recitation of efforts to negotiate agreements that would allow for resumption of use of the mark, or a statement that samples of the goods have been shipped to potential distributors, may establish lack of intention to abandon the mark, but does not establish the existence of special circumstances that excuse the nonuse.
- Use in Foreign Country. Use of the mark in a foreign country has no bearing on excusable nonuse of a mark in commerce that can be regulated by the United States Congress.
- Use of Mark on Different Goods/Services. Use of the mark on goods/services other than those recited in the registration does not establish either special circumstances or lack of intention to abandon the mark.
- Use of Mark in Another Form. Use of a mark as an essential part of a materially different composite mark does not excuse the failure to use the mark at issue
Considered “excusable”, possibly
- Trade Embargo or Other Circumstance Beyond Holder’s Control. Nonuse may be considered excusable where the holder 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.
- Sale of a Business. Temporary nonuse due to the sale of a business may be considered excusable.
- Orders on Hand. If the product is of a type that cannot be produced quickly or in large numbers (e.g., airplanes), yet there are orders on hand and activity toward filling them, nonuse might be considered excusable.
- Illness, Fire, and Other Catastrophes. Illness, fire, and other catastrophes may create situations of temporary nonuse, with the holder being able to outline arrangements and plans for resumption of use. Such nonuse is often excusable. However, a mere statement that the holder is ill and cannot conduct his or her business will not in itself excuse nonuse; the holder must show that the business is an operation that could not continue without his or her presence.
The only “excusable non-use” I have seen that escaped from being cancelled due to failure to demonstrate non-use was due to a “trade embargo.” As an example, a client of ours was involved in litigation with a third party that had stolen our client’s mark and registered it. When they had to file their section 8 affidavit they claimed “excusable non-use” because of the litigation, which was thoroughly rejected by the USPTO – after multiple attempts.
Suffice it to say, if the mark is not in use at the time of when a Section 8 (or 71) use affidavit is due, proper evidence (specimens) showing such use is not available, and there is an intent to resume use of the mark, the best (and really only) thing that can be done is to file a new application as early as possible in order to claim rights from the subsisting registration.