There are many different reasons why someone might file an opposition or cancellation proceeding challenging a federal trademark application, and many clients are surprised to learn that it often has little to do with the challenged application.
The first reaction most people have when they receive a letter threatening to challenge a trademark application or a registered trademark is to assume that the threat is somehow personal: “I’ve never even heard of this other company. We don’t even operate in the same market. What have I ever done to them? Why are they coming after me?” Although one reason that trademark oppositions are filed is a perceived infringement on the rights of the opposing party, there are often other issues at play, which can sometimes make it surprisingly easy to resolve such disputes.
What Is a Trademark Opposition/Cancellation?
When someone files a U.S. Trademark application, the Trademark Office first reviews the application to see if there are any reasons why it should not be registered. Once the Trademark Office has finished this review and approved the application, the application is then “published for opposition.” As the name implies, the application is published by the Trademark Office in a large compendium of marks called the Official Gazette. The purpose is to notify anyone who is interested that the applied-for mark will be approved, and to provide others the opportunity to object to its registration. During the objection period, any person who believes it would be harmed by the registration can file an opposition proceeding. After the opposition period, if no oppositions have been filed, the trademark will be registered. However, even after it has been registered, any person who believes it would be harmed by the registration can file a cancellation proceeding.
Why Would Someone File a Trademark Opposition or Cancellation?
Although there are several legal bases to support an opposition or cancellation, the most common one is “priority,” which just means that the challenger believes they used the trademark before the applicant and therefore has superior rights. In such a case, typically the party challenging the application neglected to file their own application to secure their rights, and they are now concerned that they will lose the ability to do so if they allow the challenged mark to be registered.
Although priority is a fairly simple concept, priority issues can arise in several different ways. Understanding the source and nature of those issues can be very important in determining the best approach to the dispute and preparing a strategy for negotiating and resolving it. It can also help you determine at a very early stage whether the dispute is one that can be easily and quickly settled, or whether it will likely be litigated.
How Can We Learn More about Why Someone Filed a Trademark Opposition or Cancellation?
The obvious answer to this question is, of course, to talk to the other party or its attorney. However, a skilled negotiator may not be completely open about the reasons, in hoping of getting a better settlement. It is therefore important to conduct an investigation before engaging the opposing party or attorney.
The first place to look is the “prosecution history” of the challenger’s trademark application, if there is one on file. The challenger’s trademark application history will indicate any action taken by the Trademark Office in reviewing that application. Often, you will see that the challenging party filed an application for their own trademark, which was rejected by the Trademark Office based on a prior application or registration. If that prior application or registration is the one that is currently being challenged, the opposition may have little to do with the challenged application. In such cases, the opposition proceeding is seen by the challenger as its only option for overcoming the Trademark Office’s rejection and getting its own application approved. Such cases can often be settled by negotiating a coexistence agreement that will allow both parties to retain their registrations.
The second place to look is to the litigation history of the challenging party. Is this the first time this challenger has litigated a trademark opposition or cancellation? If there have been prior cases, have they been resolved by settlement or have they gone through trial? If they have settled, is there any indication of whether they settled by coexistence agreement or mutual compromise, or if they have only concluded when the other party gave up?
The third place to look is at internet or other sources to understand the general contours of both parties’ businesses, the scope of their territories, the respective size of the companies, and any other information that can be gained about their businesses that might be used to understand whether the two trademarks would create a conflict or confusion in the marketplace and how such potential conflicts might be avoided.
Evaluating this information can often help determine how quickly a trademark opposition or cancellation case is likely to settle, the best way of approaching the case and settlement efforts, and the potential cost of the case for the client, among other things. The vast majority of trademark opposition and cancellation cases settle within a couple months of their filing. Conducting an inquiry into the parties’ businesses and the nature and basis for the dispute can often expedite a speedy resolution of such cases and help achieve a favorable outcome that in many cases will allow both parties to retain their trademarks without further conflict.
As in all areas of the law, if you find an instance of an actual or potential trademark dispute, you should discuss the issues with an attorney specializing in that area of law.