There are instances when a trademark professional may need to advise a client on the best course of action regarding a pending trademark matter. This could include making the difficult decision to abandon a trademark application or withdrawing a proceeding before the Trademark Trial and Appeal Board (“TTAB”). One common scenario arises when an applicant submits a trademark application without first conducting a thorough trademark clearance search. Without proper due diligence, an application may face opposition if a third party identifies a likelihood of confusion with an existing registered trademark. If such an opposition has merit and the opposing party holds senior rights, it may be advisable to abandon the application. However, this decision carries significant legal and business implications.
The Process and Risks of Abandoning a Trademark Application
A trademark applicant can formally abandon a trademark application by filing an express abandonment with the United States Patent and Trademark Office (USPTO). However, if the application is already involved in an opposition, concurrent use proceeding, or interference, abandonment requires the written consent of every adverse party. Otherwise, judgment will be entered against the applicant. This process is governed by 37 CFR §2.135 and highlights the legal constraints surrounding abandoning a trademark application after proceedings have begun.
If an applicant does not obtain the necessary consent, the resulting judgment may preclude the applicant from seeking registration for the same mark in the same format and for identical goods or services. While there are limited exceptions—such as if the opposing party ceases operations or abandons its own mark—applicants should approach abandonment cautiously.
Consequences of Default Judgment or Dismissal with Prejudice
A trademark applicant must also consider the ramifications of a default judgment or a TTAB action dismissed “with prejudice.” Either scenario bars the applicant from reapplying for the same trademark for identical goods or services. Given these potential consequences, careful legal analysis is essential before making a decision. An applicant who abandons a case improperly may find themselves unable to secure trademark protection in the future.
Withdrawing a TTAB Proceeding: Considerations and Impact
There are circumstances in which a party that initiates a TTAB proceeding may need to withdraw the case. For example, an opposer or petitioner may discover unfavorable evidence that weakens their claim after filing an opposition or cancellation action. In such cases, withdrawing the proceeding may be the most practical solution.
If an answer has not yet been filed, the party can withdraw the proceeding without the opposing party’s consent and without prejudice. However, once an answer is submitted, the case cannot be withdrawn without prejudice unless the opposing party provides written consent, as outlined in 37 CFR §2.106(c). If withdrawal occurs without prejudice, the party may initiate a new proceeding in the future. On the other hand, if a case is dismissed or withdrawn with prejudice, the plaintiff is permanently barred from filing a similar proceeding against the same mark for the goods or services listed in the application or registration.
A critical nuance to consider is that while a mark in its existing form cannot be re-challenged if the case was dismissed with prejudice, alterations to the mark—such as adding a design element or modifying the goods and services—could create an opportunity for a new proceeding. This distinction underscores the importance of strategic decision-making when dealing with withdrawing a TTAB proceeding.
Alternative Strategies: Exploring Business Resolutions
Given the complexities and risks involved in TTAB proceedings, businesses should consider alternative resolutions before initiating or withdrawing a case. Board proceedings present several disadvantages, including the TTAB’s narrow focus on registration eligibility rather than marketplace realities. The TTAB does not consider real-world business impact, consumer perception, or commercial success when making determinations. Instead, decisions are confined to the contents of the application and registration.
Additionally, the TTAB lacks jurisdiction to award monetary damages, attorney fees, or injunctive relief. Because of these limitations, alternative dispute resolution—such as negotiation or settlement—often presents a more pragmatic approach. A mutually agreeable resolution allows both parties to continue their operations without incurring substantial legal costs.
The Role of Settlement Agreements in Trademark Disputes
Settlement agreements play a crucial role in resolving trademark disputes outside the TTAB. If both parties reach an agreement, they can dismiss the action by filing a joint motion. The TTAB does not require the settlement terms to be publicly disclosed, allowing businesses to keep their agreements confidential.
Through settlements, parties can craft creative solutions that meet their respective needs. For example, co-existence agreements may allow both parties to use similar marks under specific conditions, or a party may agree to rebrand in exchange for compensation or other considerations. These agreements provide more flexibility than a TTAB ruling, which can result in a win-lose outcome.
Importance of Conducting a Trademark Clearance Search
To avoid the pitfalls of opposition and TTAB proceedings, conducting a trademark clearance search before filing an application is crucial. A comprehensive search can identify potential conflicts early in the process, reducing the risk of legal disputes. It enables applicants to assess whether their proposed mark is likely to face opposition and whether modifications may be necessary to secure registration.
Failure to conduct a trademark clearance search can lead to costly legal battles, delays in brand development, and the ultimate abandonment of the trademark application. Businesses should work with an experienced Trademark Attorney to analyze search results and devise an effective trademark strategy.
Seeking Legal Counsel for Trademark Matters
The decision to abandon a trademark application or withdraw a TTAB proceeding requires careful consideration of the legal and business implications. By consulting with an experienced Trademark Attorney, businesses can navigate these challenges effectively and make informed decisions that protect their brand assets.
A legal professional can provide guidance on:
- Conducting a thorough trademark clearance search before filing an application
- Weighing the risks and benefits of abandoning a trademark application
- Evaluating the consequences of withdrawing a TTAB proceeding
- Exploring alternative dispute resolution options
- Drafting and negotiating settlement agreements
With the right strategy, businesses can safeguard their trademarks while minimizing the risks associated with litigation and opposition.
Conclusion
Trademark disputes require careful planning and strategic decision-making. Whether an applicant is considering abandoning a trademark application, withdrawing a TTAB proceeding, or avoiding legal conflicts through a trademark clearance search, it is essential to understand the implications of each action. By seeking legal counsel from a Trademark Attorney and exploring alternative resolutions, businesses can protect their intellectual property while mitigating unnecessary legal risks.
Ultimately, the best approach is to be proactive. Conducting a trademark clearance search before applying, seeking settlement solutions when disputes arise, and carefully evaluating the consequences of withdrawing or abandoning an application can help businesses build a strong and legally defensible brand. For businesses facing trademark issues, consulting a Trademark Attorney is the first step toward making informed and strategic decisions.