Bad Faith Trademark Filings: How to Challenge One

What Makes a Trademark Filing Bad Faith?

A trademark filing becomes vulnerable as bad faith when it lacks something the Lanham Act requires: real use, a genuine plan to use, or an honest statement of ownership. The label itself does not decide a case; the challenger proves the specific defect.

15 U.S.C. § 1051 provides for applications based on use and applications based on intent to use, and each carries a sworn statement. An application based on intent to use requires “A person who has a bona fide intention, under circumstances showing the good faith of such person, to use a trademark in commerce,” under § 1051(b)(1). An application based on use requires the signer to verify that “the person making the verification believes that he or she, or the juristic person in whose behalf he or she makes the verification, to be the owner of the mark sought to be registered,” under § 1051(a)(3)(A). Use itself has a definition: “The term “use in commerce” means the bona fide use of a mark in the ordinary course of trade, and not made merely to reserve a right in a mark,” under 15 U.S.C. § 1127.

Bad faith filings can take several forms. A squatter may file on a brand it has no plan to sell under, hoping to be paid to withdraw. A former distributor or business partner may file in its own name on the brand it used to sell. A competitor may file first on a name it learned about in negotiations. Each one may lack a bona fide intent, a truthful ownership statement, or both.

How Does Federal Law Decide Who Has Priority?

A federal application’s filing date gives the filer priority only if a registration issues, and that priority does not reach a business that used the mark before the filing. A bad faith filer racing to the USPTO does not erase earlier, continuing use by the business that built the brand. If a registration does issue, a prior user’s defense under 15 U.S.C. § 1115(b)(5) “shall apply only for the area in which such continuous prior use is proved.”

The rule is 15 U.S.C. § 1057(c): “Contingent on the registration of a mark on the principal register provided by this chapter, the filing of the application to register such mark shall constitute constructive use of the mark, conferring a right of priority, nationwide in effect, on or in connection with the goods or services specified in the registration against any other person except for a person whose mark has not been abandoned and who, prior to such filing” and “has used the mark.” The statute lists other exceptions as well, including a person who filed its own application first.

Registration can also be refused outright. 15 U.S.C. § 1052(d) bars a mark that “Consists of or comprises a mark which so resembles a mark registered in the Patent and Trademark Office, or a mark or trade name previously used in the United States by another and not abandoned, as to be likely, when used on or in connection with the goods of the applicant, to cause confusion, or to cause mistake, or to deceive.” Proving prior use takes dated evidence: invoices, signage, web archives, and advertising. How first use and priority dates interact is covered on a separate page.

What Can You Do Before the USPTO Approves the Application?

Before approval, a business can file a letter of protest, which puts evidence of a ground for refusal in front of the USPTO examining attorney. It keeps the protesting business’s identity out of the record, but it does not make the business a party, and the examining attorney still decides whether to refuse. The rule limits a protest to grounds for refusal “appropriate in ex parte examination,” and USPTO guidance says the office typically does not consider a protest that claims “common law prior use” or that “the applicant is not the owner of the trademark in the protested application.”

The statute provides that “A third party may submit for consideration for inclusion in the record of an application evidence relevant to a ground for refusal of registration,” under 15 U.S.C. § 1051(f). The rule, 37 C.F.R. § 2.149, limits the submission to “objective evidence relevant to the examination of the application for a ground for refusal of registration if the submission is made in accordance with this section.” Its evidence index must be one “that does not identify the protestor or its representatives, does not contain legal argument.” Under § 1051(f), the USPTO’s decision to include the evidence or not “shall be final and non-reviewable, and a determination to include or to not include evidence in the record shall not prejudice any party’s right to raise any issue and rely on any evidence in any other proceeding.” A protest filed on or after publication must meet a stricter evidence standard than one filed before.

Timing matters in two ways. Under the same rule, “Any submission under this section must be filed no later than 30 days after the date the application is published for opposition.” The rule’s next sentence adds: “If the subject application cannot be withdrawn from issuance of a registration while consideration of the protest is pending, the protest may be considered untimely.” Also, “Filing a submission under this section does not stay or extend the time for filing a notice of opposition.” I suggest checking the current text of the rule before relying on any date, because the USPTO amends its rules.

A protest should not be mistaken for a decision. I once filed a letter of protest against an application that conflicted with a business’s federal registration. The USPTO accepted it and forwarded the evidence into the file, and the examining attorney still approved the application for publication. The business then faced the opposition decision below. Some businesses send a cease and desist letter at this stage too, which gives up the anonymity a protest keeps.

How Does an Opposition Stop a Bad Faith Application?

An opposition is a contested proceeding at the Trademark Trial and Appeal Board (TTAB) that asks the USPTO to refuse registration. It is filed after the application is published, on statutory grounds that include a lack of bona fide intent to use the mark.

Under 15 U.S.C. § 1063(a), “Any person who believes that he would be damaged by the registration of a mark upon the principal register” may oppose “within thirty days after the publication under subsection (a) of section 1062 of this title of the mark sought to be registered.” “Upon written request prior to the expiration of the thirty-day period, the time for filing opposition shall be extended for an additional thirty days, and further extensions of time for filing opposition may be granted by the Director for good cause when requested prior to the expiration of an extension,” the statute adds. Under 37 C.F.R. § 2.102(c), “The time for filing an opposition shall not be extended beyond 180 days from the date of publication,” and the Board grants the final extension “only upon written consent or stipulation signed by the applicant or its authorized representative,” a written request stating the applicant consented, or “a showing of extraordinary circumstances” under paragraph (c)(3). I suggest calendaring that window from the publication date the USPTO sets, because the statute counts from publication. I also suggest checking the current text of the statute and the rule before relying on any period, because Congress and the USPTO amend them.

For a bad faith application filed on an intent-to-use basis, the Federal Circuit’s decision in M.Z. Berger & Co. v. Swatch AG, 787 F.3d 1368 (Fed. Cir. 2015) addresses that ground directly. Deciding whether that ground is available for the first time, the court held: “Because a bona fide intent to use the mark in commerce is a statutory requirement of a valid intent-to-use trademark application under Section 1(b), the lack of such intent is a basis on which an opposer may challenge an applicant’s mark.” It added that “Although the evidentiary bar is not high, the circumstances must indicate that the applicant’s intent to use the mark was firm and not merely intent to reserve a right in the mark.” Finding that substantial evidence supported the TTAB’s determination, the court affirmed the decision sustaining the opposition. The TTAB had found that the applicant’s documents related only to prosecuting the application, and a witness testified that some goods were listed to “leave all doors open.” The steps of how a TTAB opposition runs, from the notice through discovery and trial, are covered separately.

When Can You Cancel a Registration That Already Issued?

A registration that already issued can be challenged by a petition to cancel at the TTAB, by a USPTO expungement or reexamination petition when the mark was never used or not used in time, or in a court case involving the mark. Which route is open depends on the ground and on how long the registration has existed.

The text of 15 U.S.C. § 1064 allows a petition “by any person who believes that he is or will be damaged” by the registration. I suggest checking the current text of the statute before relying on any period quoted below, because Congress amends it. Some grounds, including likelihood of confusion with a prior mark, are limited by § 1064(1): “Within five years from the date of the registration of the mark under this chapter.” Others are not: a petition may be filed “At any time if the registered mark becomes the generic name for the goods or services, or a portion thereof, for which it is registered, or is functional, or has been abandoned, or its registration was obtained fraudulently.” Section 1064(6) adds a ground, after a waiting period, “if the registered mark has never been used in commerce on or in connection with some or all of the goods or services recited in the registration.”

Two USPTO-run procedures target registrations that claim use that never happened. Under 15 U.S.C. § 1066a, “any person may file a petition to expunge a registration of a mark on the basis that the mark has never been used in commerce on or in connection with some or all of the goods or services recited in the registration.” Under 15 U.S.C. § 1066b, a petition to reexamine targets a mark that “was not in use in commerce on or in connection with some or all of the goods or services recited in the registration on or before the relevant date.” Each petition needs a verified statement of “the elements of the reasonable investigation the petitioner conducted,” and each statute sets a filing window measured from the registration date.

When the dispute is already in court, 15 U.S.C. § 1119 provides that “In any action involving a registered mark the court may determine the right to registration, order the cancelation of registrations, in whole or in part, restore canceled registrations, and otherwise rectify the register with respect to the registrations of any party to the action.” When a dispute ends in a negotiated deal, a trademark settlement agreement should say what happens to each pending filing.

What Does It Take to Prove Fraud on the USPTO?

Fraud on the USPTO requires proof that the filer knowingly made a false, material statement intending to deceive the USPTO, shown by clear and convincing evidence. A false statement made through an honest misunderstanding is not fraud, so a fraud claim against a bad faith filer needs evidence of what the signer knew.

The Federal Circuit set the standard in In re Bose Corp., 580 F.3d 1240 (Fed. Cir. 2009). The case involved a renewal filing that claimed use on goods the company had stopped selling, and the TTAB had cancelled the registration for fraud. The court held “that a trademark is obtained fraudulently under the Lanham Act only if the applicant or registrant knowingly makes a false, material representation with the intent to deceive the PTO.” It added: “There is no fraud if a false misrepresentation is occasioned by an honest misunderstanding or inadvertence without a willful intent to deceive.” The court reversed the cancellation and sent the case back so the registration could be restricted to the goods still sold.

For a bad faith filer, the evidence that can meet that standard is evidence of knowledge: emails showing the filer knew the brand belonged to someone else, a contract assigning or licensing the brand, or a history of filing on other businesses’ names. Fraud also carries money exposure. Under 15 U.S.C. § 1120, “Any person who shall procure registration in the Patent and Trademark Office of a mark by a false or fraudulent declaration or representation, oral or in writing, or by any false means, shall be liable in a civil action by any person injured thereby for any damages sustained in consequence thereof.” The wider rules on fraud on the USPTO and its penalties are covered on a separate page.

How Does Minnesota Handle a Bad Faith State Registration?

A Minnesota registration with the Secretary of State is challenged in Minnesota district court, which can order the registration cancelled on findings that include non-ownership, improper filing, or fraud. Minnesota accepts applications only from a person who adopts and uses the mark in Minnesota.

Under Minn. Stat. § 333.20 subd. 1, “any person who adopts and uses a trademark or a service mark in this state may file in the Office of the Secretary of State an application for registration of that mark.” The applicant must state its belief “that the applicant is the owner of the mark and that no other person has the right to use such mark in this state either in the identical form thereof or in such near resemblance thereto as might be calculated to deceive or to be mistaken therefor and the mark is in use.” A Minnesota application therefore rests on current use in Minnesota, not on a plan to use. Minn. Stat. § 333.19 subd. 1 also bars a mark that resembles a Minnesota-registered mark, an entity name “in use or reserved in this state by another,” or “a mark or trade name previously used in this state by another and not abandoned,” when confusion is likely.

Once issued, the certificate works for the registrant. Under Minn. Stat. § 333.21 subd. 2, it is evidence “in any action or judicial proceedings in any court of this state and shall be prima facie evidence of registrant’s ownership and exclusive right to use the mark.” A challenger therefore needs evidence to overcome it. The cancellation grounds appear in Minn. Stat. § 333.25 subd. 1: the Secretary of State cancels a registration “in compliance with an order of a district court” finding, among other grounds, that “the registrant is not the owner of the mark,” that “the registration was filed improperly,” or that “the registration was obtained fraudulently.” Under Minn. Stat. § 333.305, cancellation actions “shall be brought in the district court,” and the Secretary of State is notified and “shall be given the right to intervene in the action.”

Timing limits some grounds. Subdivision 2 of § 333.25 provides: “No registration shall be canceled after the mark has had substantially exclusive and continuous use by the registrant for five years following the registration of the mark except for the reasons set forth in subdivision 1, clauses (1), (2), and (3) and clause (4), items (i), (ii), and (iv).” Those surviving items include abandonment, non-ownership, and fraud, and the subdivision lists further exceptions. I suggest checking the current text of the statute before relying on that period, because the legislature amends it. Money is available too. Under Minn. Stat. § 333.27, a person who procures a Minnesota filing “by knowingly making any false or fraudulent representation or declaration” is “liable to pay all damages sustained in consequence of such filing or registration.” And Minn. Stat. § 333.30 preserves rights in a mark “acquired in good faith at any time at common law, except that the rights as against the registrant of the same or confusingly similar mark are limited to the areas of the person’s use established prior to the registration date and areas in which the person’s mark has become known prior to the registration date.” How federal and Minnesota registration compare in cost and reach is a separate decision.

What If the Bad Faith Filing Is a Domain Name?

A domain name registered to profit from someone else’s mark can be challenged in federal court under the Lanham Act’s cybersquatting provision. The owner must show the registrant had a bad faith intent to profit from the mark, and the court can order the domain transferred to the owner.

Under 15 U.S.C. § 1125(d), liability reaches a person who “has a bad faith intent to profit from that mark, including a personal name which is protected as a mark under this section” and registers, traffics in, or uses a domain name that, “in the case of a mark that is distinctive at the time of registration of the domain name, is identical or confusingly similar to that mark.” The statute lists factors a court may consider. One of them is “the person’s offer to transfer, sell, or otherwise assign the domain name to the mark owner or any third party for financial gain without having used, or having an intent to use, the domain name in the bona fide offering of any goods or services, or the person’s prior conduct indicating a pattern of such conduct.” Liability for using a domain name has its own limit: “A person shall be liable for using a domain name under subparagraph (A) only if that person is the domain name registrant or that registrant’s authorized licensee.” The statute also sets a limit on the bad faith finding: “Bad faith intent described under subparagraph (A) shall not be found in any case in which the court determines that the person believed and had reasonable grounds to believe that the use of the domain name was a fair use or otherwise lawful.” The remedy: “a court may order the forfeiture or cancellation of the domain name or the transfer of the domain name to the owner of the mark.” More on the claim is in my page on the Anti-Cybersquatting Consumer Protection Act.

How Can You Keep Your Own Filings From Looking Like Bad Faith?

A business keeps its own applications defensible by filing only for goods and services it genuinely plans to offer, keeping dated records of those plans, and signing only statements the signer knows to be true. The same rules that defeat a bad faith filer can be turned against a careless applicant.

M.Z. Berger shows the risk. The applicant there listed goods it never intended to sell. Its own witness testified that the list was “standard” and meant to “leave all doors open,” and the TTAB relied on that testimony in finding no genuine intent for those goods. The court required that “the circumstances must indicate that the applicant’s intent to use the mark was firm and not merely intent to reserve a right in the mark.” I suggest keeping business plans, product drawings, supplier quotes, and launch emails with each intent-to-use application, because documents created only to prosecute the application did not count as evidence of intent in that case.

Bose shows the other half. A signer who states use on goods the business no longer sells invites a fraud claim. Bose avoided a fraud finding because its signer testified he believed the statement was true and the challenger had no evidence of intent to deceive, and its registration was still restricted. Every paper filed with the USPTO also carries a certification under 37 C.F.R. § 11.18 that “The paper is not being presented for any improper purpose, such as to harass someone or to cause unnecessary delay or needless increase in the cost of any proceeding before the Office.” Sanctions for a violation can include “Terminating the proceedings in the Office.” Before filing, I suggest running a clearance search, because a conflict found before filing can be avoided by choosing a different mark.

Next Steps for a Minnesota Business Facing a Bad Faith Filing

The first step is to find where the filing stands, because the stage decides the tool. A pending application can draw a letter of protest on a ground the examining attorney can raise, such as confusion with a registered mark. A published one can be opposed within the window in § 1063, and a registered one can be cancelled on the grounds and within the limits in § 1064, or expunged or reexamined for nonuse. A Minnesota registration is challenged in district court under chapter 333. I suggest gathering dated evidence of your own first use, and anything showing what the filer knew, before choosing a route, because the opposition, cancellation, and fraud claims all rest on that evidence.

More on trademark law for Minnesota businesses is on the practice page. If a filing on your brand has appeared and you would like to know which of these routes fits it, email [email protected] with the application or registration number and a short description of how and where your business has used the mark. I will run an intake and conflict check before you send any confidential documents.