Do You Really Want to Register that CORONAVIRUS Tagline? Things to Consider When Seeking a New Trademark Registration.

by | Apr 21, 2020 | In the News, Intellectual Property, Trademarks

Have you been sitting in your house, properly adhering to stay-at-home standards, and thinking to yourself, “I can’t wait to get some sweet coronavirus merch?” That is at least what recent trademark filers have assumed you were thinking, anyway. Since the beginning of 2020, fifty-three (53) trademark applications have been filed with the United States Patent and Trademark Office (PTO) containing the word “CORONAVIRUS”, and with one hundred seventy-six (176) more being filed containing “COVID.”

The majority of the trademark applications being filed are for printed materials like t-shirts or bumper stickers. “I SURVIVED THE CORONOAVIRUS,” “I SURVIVED COVID-19,” “CATS AGAINST COVID-19,” and “CORONAVIRUS FREE” are just a few examples. A quick search on the website Redbubble, a place where artists upload their designs to be printed on various items and sold, shows a litany of products already on the market.

 
While it is understandable that budding entrepreneurs may be looking to the current pandemic as a way to make a profit during this difficult economic time and achieve something positive, not every use of “CORONAVIRUS” or “COVID-19” is entitled to federal trademark protection.  So, it seems like a good time to take a brief moment to highlight several of the issues you should consider as you seek federal trademark protection, coronavirus-related or otherwise.  

First:  what is a trademark?  It is not just a clever saying – although that could be the beginning concept– but more is needed to establish trademark rights A trademark is a word, phrase, design or combination of both that is used in connection with goods or services and identifies and distinguishes the source of the good or services of one party from those of others. Consumers, for example, want to know when they’re drinking a genuine COCA-COLA product, not someone else’s inferior product with an infringing name slapped on it.  Thus, consumers associate you as the source of a product or a service when your trademark appears on that product or service.  By applying your trademark to your products or services, for example on a clothing line or a video game product, or in connection with consulting services or health-related services, you are building rights in your trademark. 

Also, at the time you file your trademark application, you must either (1) be using the mark in a trademark sense in interstate commerce (that is, actually selling your goods or rendering services to customers between more than one state or U.S. territory, or in commerce between the U.S. and another country); or (2)  have a bona fide good faith intent to do so.  You cannot obtain a registered trademark by merely requesting a “place holder” so no one else can use the mark on a particular good or service when you do not have a bona fide good faith intent to use the mark.  To show a bona fide good faith intent, you should have documentation to back up your intent, such as marketing plans and internal business meeting memoranda. 

Further, prior to filing, it would be in your best interest to make sure the mark is available for registration. If a third party has started using an identical or confusingly similar trademark before you in connection with the same or related goods or services, they would be the senior user of the mark and would have priority rights over you.  The United States is a use-based nation, meaning that trademark rights are created through the use of the trademark, and not necessarily through registration.  For this reason, a trademark search for the availability of a trademark – although not mandatory – is extremely beneficial in determining if your trademark is eligible for registration.  

This brings us to an important point regarding use of the trademark.  When a trademark is applied to your goods or services, the mark should be used in a “trademark sense” as opposed to an ornamental sense.  For example, a t-shirt design with the trademark placed largely front and center would not be considered a trademark use; rather, it would be seen merely as an ornamental use.  To function as a trademark, the mark would need to be displayed in a certain way for example, a properly used trademark would be displayed on clothing on its tag or label. The mark could also be displayed on the clothing item itself, usually in a smaller size above the breast, behind the neck, or son the arm of the shirt).  For services, the trademark would be used in connection with the services – for instance, on one’s website or brochures describing the services provided under the trademark. A trademark will not register on the Patent and Trademark Office’s Principal Register (where distinctive marks are registered) if it considered merely decorative or “ornamental.” 

Also, when considering whether to seek trademark registration, you may wish to consider how long you intend to use the mark, as the registration process can take 9-12 months if all goes smoothly at the U.S. Patent and Trademark Office and there are no issues with the mark.  During that period, you can use the TM symbol on your trademark, but you cannot use the  registration symbol until the U.S. Patent and Trademark Office actually issues a registration certificate.  Further, there are continued costs associated with maintaining the trademark after registration.  As an example, while we may all be thinking about COVID-19 now, hopefully down the road when we are all allowed to see each other’s bright and shining faces in public again, the initial phase of “covidwear” may fade out (as we hope the virus phases out), and you may no longer have a viable business interest in selling your goods or services under that mark. If you have any questions, please contact Kimberly Grimsley kim@olivergrimsley.com or Jennifer Mumm jen@olivergrimlsey.com at Oliver & Grimsley.

CARES Act and Trademark Deadlines

by | Apr 7, 2020 | In the News, Intellectual Property, Trademarks

On March 27, 2020, the President signed the Coronavirus Aid, Relief and Economic Security Act (CARES Act) – This Act is to provide the various areas in which the government is providing emergency assistance and health care to individuals, families and businesses impacted by COVID-19.  Under the CARES Act, the United States Patent and Trademark Office (the “PTO”) has provided for the extension of certain trademark filing deadlines between March 27th and April 30th, as the PTO has determined that practitioners, applicants, registrants and others associated with PTO filings and fees are being impacted and may be unable to make timely filings due to the outbreak.

In particular, the PTO and the Trademark Trial and Appeal Board (TTAB) has provided that they are giving a 30-day extension for the following deadlines currently due between March 27, 2020 and April 30, 2020:

  1. Response to an Office Action, including Notices of Appeal from the final Office Action under 15 U.S.C. § 1062(b) and 37 C.F.R. §§ 2.62(a) and 2.141(a);
  2. Statement of Use or Request for Extension of time to file a Statement of Use under 15 U.S.C. § 1051(d) and 37 C.F.R. §§ 2.88(a) and 2.89(a);
  3. Notice of Opposition or Request for Extension of Time to file a Notice of Opposition 15 U.S.C. § 1063(a) and 37 C.F.R. §§ 2.101(c) and § 2.102(a);
  4. Priority filing basis under 15 U.S.C. § 1126(d)(1) and 37 C.F.R. § 2.34(a)(4)(i);
  5. Priority filing basis under 15 U.S.C. § 1141g and 37 C.F.R. § 7.27(c);
  6. Transformation of an extension of protection to the United States into a U.S. application under 15 U.S.C. § 1141j(c) and 37 C.F.R. § 7.31(a);
  7. An Affidavit of Use or Excusable Nonuse under 15 U.S.C. § 1058(a) and 37 C.F.R. § 2.160(a);
  8. A Renewal application under 15 U.S.C. § 1059(a) and 37 C.F.R. § 2.182; or
  9. Affidavit of Use or excusable nonuse under 15 U.S.C. § 1141k(a) and 37 C.F.R. § 7.36(b).

There are other extensions available as well.  For instance, TTAB  has provided that if COVID-19 has caused a delay in a filing not mentioned above, a request (in an ex parte appeal) before the Board or a motion (for trial cases) for a reopening of a case may also be made.

Also, if a trademark application was abandoned or a trademark registration was canceled/expired under any of the deadlines listed above (due to an inability to respond to a trademark-related Office communication by its original deadline) because of the COVID-19 outbreak, the PTO will waive the revival and reinstatement fees.

Thus, filing one of the above documents will be considered timely provided that the filing is made within 30 days of the original due date and provided that the filing includes a statement that the delayed filing or payment was due to the COVID-19 outbreak.  With regard to the type of circumstances that would be considered to effect a timely filing, the PTO has noted the following situations::

  • Office closures,
  • cash flow interruptions,
  • inaccessibility of files or other materials,
  • travel delays,
  • personal or family illness, or similar circumstances, such that the outbreak materially interfered with timely filing or payment.

The PTO and TTAB are providing information as to their extensions and information on frequently asked questions on its website at www.uspto.gov/coronavirus.  The PTO will continue to evaluate the situation and will report if additional measure or extensions are put in place.

If you have any questions, please contact Kimberly Grimsley kim@olivergrimsley.com or Jennifer Mumm jen@olivergrimlsey.com at Oliver & Grimsley.

CARES Act Loan Provisions Overview

by | Apr 2, 2020 | Business Law, Corporate

Congress passed and the President signed H.R. 748 on March 27, 2020 in light of the recent Coronavirus / COVID outbreak. It contains the single largest government spending program ever enacted or implemented. Many clients are debating whether to make use of a portion of the act – specifically Div A, Title I, KEEPING AMERICAN WORKERS PAID AND EMPLOYED ACT. That Section allows the Small Business Administration to guarantee and in some cases pay off certain loans that would otherwise not be available to small businesses. The entire CARES Act can be viewed here https://www.congress.gov/116/bills/hr748/BILLS-116hr748enr.xml This post is an overview of that loan program and the ability to have some or all of the loan forgiven.

Before providing the overview, any client considering using this loan program should consider how likely the loan will be approved to be forgiven – and how much might not be forgiven. Even if a loan is not forgiven, there are valid reasons to consider using this loan program because the loan terms are generally very favorable as compared to regular SBA loans. Some businesses however, for example, businesses that have few or no employees, such as real estate holding companies – will not really benefit from this. However, their tenants might benefit from this because a covered cost includes rent. If their tenants are able to re-employ their workers in a fairly short time frame, the loan amount for those expenses might largely be forgiven.

Overview

  1. Eligibility:  In general, any business, including non-profits, sole proprietorships, contractors etc are eligible – but they generally must have less than 500 employees and have been in business as of 2/15/2020.[1] 
  2. Amount:  The maximum loan is 2.5 X the total payroll costs of the eligible business for the 1 year period prior to the date the loan is made, not to exceed $10,000,000. Businesses that have been in business for less time can still obtain a loan.
  3. Period:  The loan must be made between February 15, 2020 and June 30, 2020.
  4. Interest rate:  Interest cannot exceed 4%.
  5. Precondition:  The eligible business must make certification that it has been impacted by COVID, however, the certification is very broad.
  6. Use of funds:  Funds from the loan may only be used for eligible expenses which are: payroll costs; group health care benefits; employee related insurance premiums employee salaries, commissions, or similar compensations, payments of interest on any mortgage obligation, rent, utilities; and interest on any other debt obligations that were incurred before the covered period started.  Note that these types of expenses can extend past the “covered period” for loan forgiveness.
  7. Fees: All application fees are waived. All requirements for personal guarantees are also waived.
  8. Repayment deferral:  Lenders MUST defer all payments (interest and principal) for at least 6 months, but not more than 1 year.
  9. Forgiveness: The eligible business may request that the loan be forgiven for covered costs incurred during the “covered period” which is the 8 week period commencing on the date of the loan origination.
    • Covered costs are rent on leases entered into before February 15, 2020, payroll costs[2] (during the covered period), payments of interest on any covered mortgage obligation, and payments on covered utility payments.
    • The maximum forgiveness cannot exceed the covered loan amount.[3]
    • The amount to be forgiven is reduced on a formula of the average number of “full-time equivalent employees”[4] per month employed by the eligible recipient during the covered period, as compared to the same number in either the period of January 1, 2020 and ending on February 29, 2020 or the period February 15, 2019 and ending on June 30, 2019 (at the election of the borrower), but . . .
    • If the eligible business had reduced hours of full time equivalent employees in the period 2/15/2020 and ending on 4/27/2020, such reductions shall not be used in the above calculation as long as such reductions are reinstated not later than June 30, 2020.

More detailed provisions supporting the above summary

H.R. 748, Div A, Title I, KEEPING AMERICAN WORKERS PAID AND EMPLOYED ACT

Sec. 1102(a)(1)(A)(iii) – the term ‘covered period’ means the period beginning on February 15, 2020 and ending on June 30, 2020;

(viii) – “payroll costs” – generally, all costs, including retirement, PTO, tips, health insurance, but: capped at 100K over a year, does not include costs for employees whose principal residence is located outside of US, does not include employee tax withholdings, does not include payments under section 7001 of the Families First Coronavirus Response Act (Public Law 116–127).

Sec. 1102(a)(1)(D) – must have less than 500 employees (complex formulas and requirements as to how to count them, and for multi-location businesses)

Sec. 1102(a)(1)(E) – maximum loan is generally 2.5 X the average total monthly payments by the applicant for payroll costs incurred during the 1-year period before the date on which the loan is made, capped at $10,000,000. Formula is different if business was started after 2/15/19.

Sec. 1102(a)(1)(F) ALLOWABLE USES OF COVERED LOANS.—

“(i) IN GENERAL.—During the covered period, an eligible recipient may, in addition to the allowable uses of a loan made under this subsection, use the proceeds of the covered loan for—

“(I) payroll costs;

“(II) costs related to the continuation of group health care benefits during periods of paid sick, medical, or family leave, and insurance premiums;

“(III) employee salaries, commissions, or similar compensations;

“(IV) payments of interest on any mortgage obligation (which shall not include any prepayment of or payment of principal on a mortgage obligation);

“(V) rent (including rent under a lease agreement);

“(VI) utilities; and

“(VII) interest on any other debt obligations that were incurred before the covered period.

Sec. 1102(a)(1)(F)(ii)(II) A lender must consider the age of the business, especially if it either was not in operation as of 2/15/2020, or had no employees or contractors.

Sec. 1102(a)(1)(G) BORROWER REQUIREMENTS.— in general the borrower has to certify that

“(I) that the uncertainty of current economic conditions makes necessary the loan request to support the ongoing operations of the eligible recipient;

“(II) acknowledging that funds will be used to retain workers and maintain payroll or make mortgage payments, lease payments, and utility payments;

“(III) that the eligible recipient does not have an application pending for a loan under this subsection for the same purpose and duplicative of amounts applied for or received under a covered loan; and

“(IV) during the period beginning on February 15, 2020 and ending on December 31, 2020, that the eligible recipient has not received amounts under this subsection for the same purpose and duplicative of amounts applied for or received under a covered loan.

All application fees are waived, and there is no personal guaranty requirement.

Loans cannot exceed 4% interest

All payments on loans must be deferred at least 6 months, and not more than 1 year.

Loan Forgiveness, Sec. 1106.

“covered period” means the 8-week period beginning on the date of the origination of a covered loan;

“covered rent obligation” means rent obligated under a leasing agreement in force before February 15, 2020;

“expected forgiveness amount” means the amount of principal that a lender reasonably expects a borrower to expend during the covered period on the sum of any—

(A) payroll costs;

(B) payments of interest on any covered mortgage obligation (which shall not include any prepayment of or payment of principal on a covered mortgage obligation);

(C) payments on any covered rent obligation; and

(D) covered utility payments;…

Limits on forgiveness:  “The amount of loan forgiveness under this section shall not exceed the principal amount of the financing made available under the applicable covered loan.”  §  1106(d)

Amount is reduced by a formula:

(the average number of full-time equivalent employees per month employed by the eligible recipient during the covered period)

DIVIDED BY

EITHER:

(the average number of full-time equivalent employees per month employed by the eligible recipient during the period beginning on February 15, 2019 and ending on June 30, 2019)

OR

(the average number of full-time equivalent employees per month employed by the eligible recipient during the period beginning on January 1, 2020 and ending on February 29, 2020)

In addition, “The amount of loan forgiveness under this section shall be reduced by the amount of any reduction in total salary or wages [of any employee making less than 100K] … during the covered period that is in excess of 25 percent of the total salary or wages of the employee during the most recent full quarter during which the employee was employed before the covered period.”

Finally, “the amount of loan forgiveness under this section shall be determined without regard to a reduction in the number of full-time equivalent employees of an eligible recipient or a reduction in the salary of 1 or more employees of the eligible recipient, as applicable, during the period beginning on February 15, 2020 and ending on [April 27, 2020]” if

EITHER OR BOTH OF THE FOLLOWING ARE TRUE:

“(I) during the period beginning on February 15, 2020 and ending on [April 27, 2020], there is a reduction, as compared to February 15, 2020, in the number of full-time equivalent employees of an eligible recipient; and (II) not later than June 30, 2020, the eligible employer has eliminated the reduction in the number of full-time equivalent employees;

(I) during the period beginning on February 15, 2020 and ending on [April 27, 2020], there is a reduction, as compared to February 15, 2020, in the salary or wages of 1 or more employees of the eligible recipient; and (II) not later than June 30, 2020, the eligible employer has eliminated the reduction in the salary or wages of such employees

[1] A business formed or started after this date might be eligible, it is a factor in the loan underwriting.  Multi-location businesses with more than 500 employees might also be eligible.

[2] Note that there are no exclusions for payroll paid to owners, so long as the owner is not making more than 100K.

[3] It is not clear if they intended this to mean “plus interest”

[4] Note therefore that part time employees are covered but are calculated on a “full time equivalent” basis.