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Fall 2005-05 Actual use is required for a mark registered on intent-to-use basis

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Number 61
Fall 2005

Actual use is required for a mark registered on "intent-to-use" basis

The Supreme Court of Puerto Rico has finally clarified the requirements of registration of a mark applied on an-intent-to use basis.

The Puerto Rico Trademark Law provides that for a person to register a mark, he or she has, among other requirements, either to claim that the mark has been in use at the time of the filing of the application, or that the claimant intends to use the mark in commerce in Puerto Rico. In the latter case, the law provides that the claimant must file evidence of the use of the mark within a five-year period from the date of registration. The law, however, is silent as to the consequences of not filing the evidence of use within the five-year term. This is precisely what the case of Arribas & Assoc., Inc. v. Santa Clara C. por A., 2005 TSPR 143, determines.

"Santa Clara"

In the Arribas case, in 1998 Arribas & Assoc. filed an application for the mark "SANTA CLARA" for bottled water, based on intent-to-use. Shortly thereafter, Santa Clara C. por A. filed an almost identical application, also based on intent-to-use, and questioned Arribas's application. During the administrative proceedings before the Puerto Rico State Department, Santa Clara basically alleged that it was the rightful owner of the mark, given that it had used the mark in the Dominican Republic for many years and that Arribas was trying to appropriate the name and goodwill of the mark. Furthermore, Santa Clara alleged that Arribas had lost any rights it may have had to the application, and consequently the registration, since Arribas had not evidenced its use of the mark within the five-year term required by the law and the regulations.

The Puerto Rico State Department determined that Arribas had prior rights to the mark, given that it had filed its application before Santa Clara. Santa Clara appealed the administrative decision, and the Appellate Court again decided against Santa Clara. Santa Clara then appealed to the Supreme Court.

Supreme Court

The Puerto Rico Supreme Court first described the procedure for filing an application for a mark, giving particular attention to the requirements of an application on which the claimant files based on its intent to use the mark.

The law and the regulations promulgated by the State Department require that the claimant of a registration based on intent-to-use can either file a sworn declaration to evidence the use of the mark in the case he starts to use the mark after he has filed the application, but before the mark has been actually registered, or he can file a declaration evidencing use (including copies of the mark as actually used) after the mark has been registered, within the five year term following the date of registration. The five-year term commences on the date an application was filed, since the law and the regulations provide that the actual registration, which occurs on the date the State Department approves the mark for registration after the administrative registration procedure is completed, is retroactive to the date of filing.

Intent

The Supreme Court stated that registrations based on intent-to-use were designed to provide protection to persons or entities that are in the process of developing a mark. These provisions, however, were not intended to provide indefinite protection, but to provide a reasonable term (five years) for the mark owner to complete the development of the mark and commence its use. The logical conclusion, according to the Supreme Court, is then that the benefits afforded by the registration of a mark based on intent-to-use are lost if the owner does not evidence having used the mark during the prescribed term. The evidence of use is, thus, a necessary condition for the subsistence of the registration.

No correction possible

In considering the facts of the case, the Supreme Court concluded that Arribas had failed to evidence the use of the mark during the five year required term, and such failure could not be corrected after the expiration of the five year term.

Arribas contended that the administrative proceeding had taken so long that it had not been able to use the mark within the five-year term. The Supreme Court reasoned that the administrative and court proceedings should not have prevented Arribas from actually using the mark. In any event, neither the law nor the regulations provided for an extension or suspension of the five-year term. Arribas had therefore lost its rights to the application and subsequent registration.

Fair game

The Supreme Court further determined that Santa Clara, having also filed based on intent-to-use, had also failed to meet the requirements for the registration of the mark in its favor. Although Santa Clara had apparently filed some sort of evidence of use during the administrative proceedings, it decided at one point to submit the case based on the evidence in the files and had failed to abide by the methods of evidencing use available to it under the law and the regulations. If Santa Clara would had evidenced its use of the mark within the five-year term, the termination of Arribas' rights to the mark would have resulted in the registration of Santa Clara's mark. Not having done so, the mark was then "fair game" to either of them (or a third party); it was available for use and registration to the public.


© 2005 Goldman Antonetti
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