Washington University Law Review Volume 68 Issue 3 Federalist Society Symposium: The Presidency and Congress—Constitutionally Separated and Shared Powers January 1990 Trademark Law Revision Act of 1988 and the Gatekeeper Role of the PTO: Heading Abuse Off at the Pass Tammy J. Snyder Washington University School of Law Follow this and additional works at: https://openscholarship.wustl.edu/law_lawreview Part of the Intellectual Property Law Commons Recommended Citation Tammy J. Snyder, Trademark Law Revision Act of 1988 and the Gatekeeper Role of the PTO: Heading Abuse Off at the Pass, 68 WASH. U. L. Q. 753 (1990). Available at: https://openscholarship.wustl.edu/law_lawreview/vol68/iss3/18 This Note is brought to you for free and open access by the Law School at Washington University Open Scholarship. It has been accepted for inclusion in Washington University Law Review by an authorized administrator of Washington University Open Scholarship. For more information, please contact [email protected]. TRADEMARK LAW REVISION AcT OF 1988 AND THE GATEKEEPER ROLE OF THE PTO: HEADING ABUSE OFF AT THE PASS "No trade-no trademark" has long been the underlying principle of American trademark law.1 Until recently, the Lanham Act2 embodied this maxim by requiring use of a mark prior to federal registration.3 Congress ushered in a new era in trademark registration, however, with the passage of the Trademark Law Revision Act of 19881 (1988 Act). Hailed as the most significant change in trademark law in forty years,5 the 1988 Act includes provisions which for the first time allow domestic applicants to seek registration of a trademark prior to use.6 The 1988 Act essentially creates a dual application system: for marks7 already used in commerce, the "use in commerce" registration system is preserved;' for proposed marks, registration includes filing a notice of "intent to use." 9 The intent-to-use legislation has three primary goals:1° 1. See McLean v. Fleming, 96 U.S. 245 (1877). Modern courts continue to articulate this principle. See, eg., United Drug Co. v. Theodore Rectanus Co., 248 U.S. 90 (1981). 2. 15 U.S.C. §§ 1051-1127 (1982), also known as the Trademark Act of 1946. 3. 15 U.S.C. § 1051 (1982). This Note discusses the use requirement with respect to registra- tion on the Principal Register. 15 U.S.C. §§ 1090-1096 govern registration on the Supplemental Register, which does not confer the substantive rights obtained through registration on the Principal Register. 4. 15 U.S.C. §§ 1051-1128 (1988). On November 16, 1988, President Reagan signed into law Public Law 100-667, effective November 16, 1989. President Signs Trademark Bill with Satellite Television Provisions, 37 PAT. TRADEMARK & COPYRIGHT J. (BNA) 87 (Nov. 24, 1988) [hereinafter President Signs Trademark Bill]. 5. See Trademark Law Change is Taking Effect, WALL ST. J., Nov. 15, 1989, at Bl 1, col. 1 (hereinafter Trademark Law Change); 134 CONG. REc. S16,972 (daily ed. Oct. 20, 1988) (statement of Sen. DeConcini). 6. 134 CONG. REc. 11,073 (1988) (statement of Sen. DeConcini). Other major revisions of the 1988 Act include: a provision reducing the federal registration and renewal period from twenty years to ten, 15 U.S.C. § 1058(a); a provision giving plaintiffs in infringement cases for unregistered marks the same relief measures available to holders of registered marks, 15 U.S.C. §§ 1116-1118; and a provision creating a cause of action for trade disparagement in the form of false advertising, 15 U.S.C. § 1125(a). 7. The Lanham Act makes a distinction between the terms "trademark" and "mark." See 15 U.S.C. § 1127. However, this Note uses the terms interchangeably. 8. 15 U.S.C. § 1051(a) (1988). See infra notes 25-35 and accompanying text. 9. 15 U.S.C. § 1051(b) (1988). See infra note 102 and accompanying text. 10. S. REP. No. 515, 100th Cong., 2d Sess., reprintedin 1988 U.S. CODE CONG. & ADMIN. NEWS 5577, 5577 [hereinafter S. REP. No. 515]: The purpose of the Trademark Law Revision Act of 1988 is to bring the trademark law up- to-date with present day business practices, to increase the value of the federal trademark Washington University Open Scholarship 754 WASHINGTON UNIVERSITY LAW QUARTERLY [Vol. 68:753 1) to lessen the risks inherent in developing a trademark in a modem economy; 2) to eliminate "token use," a legal fiction developed to facili- tate compliance with the preapplication use requirement of the Lanham Act; 2 and 3) to reconcile American trademark law with trademark regis- 13 tration laws of other countries. While the 1988 Act enjoys wide ranging support, 4 the new law raises some problems. Critics argue that the intent-to-use provisions of the 1988 Act will overload the system with unused marks." They also assert that certain provisions relating to notice of intent to use are too vague, and therefore registrants may use registration unfairly to deprive compet- itors of the opportunity to establish marks. 6 This Note examines the intent-to-use provisions of the Trademark Law Revision Act and ad- dresses the validity of the critics' charges. Part I reviews the state of the law before enactment of the 1988 Act and the circumstances giving rise registration system for U.S. companies, to remove the current preference for foreign com- panies applying to register trademarks in the United States and to improve the law's pro- tection of the public from counterfeiting, confusion, and deception. Id. Accord, 134 CONG. REC. 11,073 (1988) (statement of Sen. DeConcini); 134 CONG. REc. S16,972 (daily ed. Oct. 20, 1988) (statement of Sen. DeConcini) 11. See infra notes 37-40 and accompanying text. 12. See infra notes 41-56 and accompanying text. 13. See infra notes 57-86 and accompanying text. 14. 134 CONG. REc. H10,423 (daily ed. Oct. 19, 1988) (supporters of the Trademark Law Revision Act of 1988 include representatives from industry, trade and labor organizations, bar as- sociations, private attorneys and law firms, the U.S. Department of Commerce, and the U.S. Patent and Trademark Office). 15. House PanelHears Views on TrademarkAct Revision, 36 PAT. TRADEMARK & COPYRIGHT J. (BNA) 489, 490 (Sept. 15, 1988) (statements of Roberta Jacobs Meadway) [hereinafter House PanelHears Views] (businesses would have to search through many marks before finding one that appears clear); TrademarkBill Snags, ADVERTISING AGE, April 18, 1988, at 20 (letter to the editor from Roberta Jacobs Meadway) (registration process will be clogged with many marks that will never mature into registered marks under the new law) [hereinafter TrademarkBill Snags]. See also Howes, The Case Against Intention to Use, 51 TRADEMARK REP. 242 (1961) (intent to use system would place an intolerable burden on Patent and Trademark Office in examining trademarks). 16. Trademark Law Change, supra note 5 (statement of Roger W. Harrell). For additional criticisms of the 1988 Act, see generally March, Intention-to-Use-1938-1963,53 TRADEMARK REP. 984 (1963) (questioning constitutionality of intent-to-use system); Van Senten, Proposed Trademark Legislation on a Recording System for Declarationsof Intent, 50 TRADEMARK REP. 221 (1960) (in- tent to use system places undue emphasis on a formal recording system to the detriment of substan- tive common law rights, and grants a right to those who have no basis for an actual claim of right) [hereinafter Proposed Trademark Legislation]; Comment, Intent to Use Applications for Trademark Registration, 35 WAYNE L. REv. 1135 (intent to use system results in less judicial flexibility to address problem of priority) [hereinafter Comment]. But see Vinicombe, The Constitutionalityof an Intent to Use Amendment to the Lanham Act, 78 TRADEMARK REP. 361 (1988) (arguing that the intent-to-use registration system falls within "commerce" which Congress may regulate and is there- fore constitutional). https://openscholarship.wustl.edu/law_lawreview/vol68/iss3/18 1990] TRADEMARK LAW REVISION ACT to the need for the amendments. Part II explains the specific require- ments of the 1988 Act and the manner in which the law attempts to remedy the shortcomings of the Lanham Act. Part III addresses the crit- icisms of the 1988 Act and the related allegations of unfair trade. Fi- nally, Part IV proposes three approaches to the 1988 Act to guide the Patent and Trademark Office (PTO) in interpreting the Act's require- ments and to simultaneously minimize any potential unfair competition. I. THE LANHAM ACT AND ITS PROBLEMS Common law trademark rights vest through adoption and use of a trademark."7 Unlike other countries," the United States does not man- date registration of a mark as a predicate to ownership rights.19 How- 17. S.C. OPPENHEIM, G. WESTON, P. MAGGS & R. SCHECTER, UNFAIR TRADE PRACTICES AND CONSUMER PROTECTION, 48 (4th ed. 1983) [hereinafter OPPENHEIM]. For example, Blue Bell, Inc. v. Farah Manufacturing Co., 508 F.2d 1260 (5th Cir. 1975), concerned two clothing manufac- turers' competing claims to the trademark "Time Out." Both manufacturers wanted the trademark for their men's sportswear lines. Id. at 1262-63. Neither party had registered the trademark; both claimed to have established a common law right to the trademark through prior use in commerce. Id. at 1265. The outcome in Blue Bell turned on a determination of which company, filling actual sales orders, first shipped goods bearing the trademark to members of the general public. Id. at 1267. Farah made a bona fide shipment of goods to customers about a month before Blue Bell. Id. The court held, therefore, that "Farah established priority of trademark use." Id. A substantial number of arms-length sales over an extended period of time, where the goods are clearly identified by a distinctive and widely advertised mark, will always be sufficient to establish common law trademark rights as against any subsequent user of the mark.