Franchising and Licensing Two Powerful Ways to Grow Your Business in Any Economy_6

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Franchising and Licensing Two Powerful Ways to Grow Your Business in Any Economy_6 F R A N C H I S I N G A S A G R O W T H S T R AT E G Y138 ❒ The right to sue in federal court and obtain statutory remedies for in- fringement ❒ In foreign countries whose laws require prior registration in the home country, a possible right to foreign registration ❒ Protection against federal registration by another identical or confus- ingly similar mark ❒ The right to use the symbol on goods or with servicesRegistration on the Supplemental Register allows the owner of the mark toput the world on notice of his use and rights to the mark. Further, registrationof a descriptive mark on the Supplemental Register may be advantageous fora period of time while the mark’s use is increased to the point where it be-comes so substantial as to acquire secondary meaning. It is at this time thatthe mark may qualify for registration on the Principal Register. It may beadvantageous for a start-up franchisor to take advantage of registration on theSupplemental Register if registration is denied on the Principal Register untila few franchises are sold and the mark, through increased use, gains second-ary meaning. This would bolster the marketability of the franchises muchmore than would an unregistered trademark licensed by the franchisor.Overview of the Registration ProcessPrior to the passage of the Trademark Law Revision Act of 1988 (TLRA), atrademark owner was eligible for federal registration of his trademark only ifthe mark had actually been used in interstate commerce. This requirementwas different from that of most other countries, which generally allow a com-pany to register a mark even if no actual use had been established. Thismeans that a substantial amount of time and expense might be invested in aproposed trade identity for a new product or service, with virtually no assur-ance that the mark could ever be properly registered and protected. Under the TLRA, a franchisor may file an application to register a trade-mark based on actual use or upon a ‘‘bona fide intention’’ to use the markin interstate commerce. This allows the franchisor to conduct some marketresearch and further investigation without the need to actually put the markinto the stream of commerce as a prerequisite to filing for federal protection. The USPTO has developed the following procedures for registrationunder TLRA’s ‘‘intent to use’’ provisions:1. Company files application for registration, which is subject to all of the current tests for registrability (e.g., likelihood of confusion, descriptive- ness, etc.). If the mark is used in interstate commerce prior to approval of the application by the examiner, an amendment to the application should be made to allege that use of the mark in interstate commerce has oc- curred.2. When the application is approved by the examiner, a Notice of Allowance will be issued to the applicant.PROTECTING THE INTELLECTUAL PROPERTY OF THE FRANCHISE SYSTEM 1393. If actual use does not occur until after the application is approved, the applicant will then have six months from the date of the Notice of Allow- ance to actually use the mark in interstate commerce and file a Statement of Use. The Statement of Use must be accompanied by examples of the mark as used (called specimens). Specimens may include labels evidenc- ing use of a trademark on a product or brochures marketing services under a particular service mark. After review and approval of the Statement of Use and specimens, the mark will be registered. An applicant may request extensions of time for filing of the Statement of Use for up to four succes- sive six-month periods. Failure to file by this deadline will result in an abandonment of the mark.Regardless of whether a franchisor files under the ‘‘actual use’’ or ‘‘intent touse’’ provisions, an application must be prepared and filed at the USPTO forthe trademark in the classification that is appropriate for the goods and ser-vices offered. A trademark examiner will then review the application to de-termine if it meets the statutory requirements and whether similartrademarks have already been registered in the same or similar lines of busi-ness. The examiner’s concerns are usually enumerated in a formal office ac-tion. Legal counsel is then required to respond to all of the concerns of theexaminer. This process continues until the application is either finally re-fused or recommended by the examiner for publication in the Official Ga-zette, which serves as notice to the general public. Anyone who believes thathe or she would be injured by registration may file a Notice of Oppositionwithin 30 days of publication in the Official Gazette. Failure of the parties toresolve any differences will result in a hearin ...