When most business owners think of trademark disputes, they think of trademark infringement, which is the result of a similar trademark being used on similar goods or services. However, under U.S. trademark law, well-known brands are also protected against "trademark dilution". Famous marks cannot be used in connection with any goods or services without violating the federal Trademark Dilution Act. Unlike infringement, dilution does not require actual or likely confusion, competition between parties, or even actual economic injury. Instead, it protects against uses of a famous trademark that could weaken its distinctive quality or harm its owner’s reputation. We discuss herein how trademark dilution differs from infringement, and why understanding it matters for business owners.
Trademark dilution is a legal concept that protects famous trademarks from unauthorized uses that, over time, could weaken their ability to serve as unique identifiers of their owner’s goods or services. Unlike traditional trademark infringement, which requires proof of a likelihood of confusion among consumers, dilution focuses on preserving the distinctive quality and reputation of a famous mark even when there is no confusion, competition, or actual economic injury.
Under the Federal Trademark Dilution Act of 1995, and later its amendment in the Trademark Dilution Revision Act (TDRA) of 2006, the law prohibits the use of a mark or trade name that is sufficiently similar to a famous trademark if such use is likely to blur its distinctiveness or tarnish its reputation. This protection applies regardless of whether the junior user is competing with the famous mark’s owner or whether the use causes actual or likely confusion.
Federal law recognizes two types of trademark dilution: dilution by blurring and dilution by tarnishment.
Dilution by blurring occurs when the use of a mark that is similar to a famous trademark weakens the strength of the famous mark’s association with its specific goods or services. Importantly, this type of dilution does not depend on a likelihood of confusion among consumers. Instead, the harm lies in the gradual erosion of the famous mark’s uniqueness as a source identifier.
For example, if a small business launched “Google Plumbing” or “Rolex Coffee,” even if consumers are not confused into thinking these companies are affiliated with Google or Rolex, the mere association of these marks with unrelated goods and services could diminish their distinctiveness. Over time, consumers may no longer instantly associate the famous mark with its original source, undermining its commercial impact.
Under 15 U.S.C. § 1125(c)(2)(B), the Trademark Dilution Revision Act defines blurring as “an association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark.” Courts evaluating blurring look at factors like the degree of similarity, the level of recognition of the famous mark, and whether the use of the mark by the defendant is likely to create mental associations that impair the famous mark’s ability to stand out.
Courts look for actual association between the junior and senior marks to assess blurring. However, research suggests that mere association may not always impair the famous mark’s distinctiveness.
Dilution by tarnishment happens when the use of a mark similar to a famous trademark creates an undesirable association that harms the famous mark’s reputation. Unlike traditional trademark infringement, tarnishment does not require proof of a likelihood of confusion or competition between the parties. Instead, it focuses on whether the defendant’s use casts the famous mark in an unwholesome or negative light.
For instance, using a luxury brand name like “Chanel” in connection with low-quality or unsavory products, such as adult entertainment or shoddy merchandise, can damage the brand’s carefully cultivated image. Courts have noted that tarnishment often occurs when a famous trademark is linked to products of inferior quality or placed in offensive contexts.
Under 15 U.S.C. § 1125(c)(2)(C), tarnishment is defined as “an association arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark.” Courts consider whether the defendant’s use of the mark creates is likely to create negative connotations that erode the famous mark’s goodwill and standing in the marketplace.
Unlike trademark infringement, which focuses on actual or likely confusion among consumers, dilution applies even when there is no confusion or competition.
Trademark dilution and trademark infringement are distinct legal concepts with important differences for business owners to understand. In a traditional infringement case, the central issue is whether the defendant’s use of a mark creates actual or likely confusion among consumers as to the source of goods or services. In contrast, dilution does not require confusion, competition, or even actual harm. The focus is instead on whether the defendant’s use diminishes the uniqueness or tarnishes the reputation of the plaintiff’s mark, particularly when the mark is famous. Only famous marks that are widely recognized by the general consuming public, such as Coca-Cola or Google, qualify for this heightened protection. This distinction allows owners of famous marks to challenge uses that may gradually erode their brand’s strength, even outside their market.
Under 15 U.S.C. § 1125(c) of the Trademark Dilution Revision Act (TDRA), the owner of a famous mark can bring a dilution claim when certain criteria are met:
Importantly, the statute permits claims “regardless of the presence or absence of actual or likely confusion, competition, or actual economic injury.”
Not every trademark qualifies. To be considered famous, courts look at factors such as:
Examples of famous trademarks include Coca-Cola, Google, and Nike.
The Trademark Dilution Revision Act (TDRA) provides several important defenses that can shield a defendant from liability in a dilution action. These defenses recognize the need to balance the rights of famous trademark owners with the public’s rights to free expression and fair competition.
These defenses limit the scope of dilution law and help preserve free speech.
A federal cause of action for trademark dilution gives owners of famous marks several powerful remedies under the Trademark Dilution Revision Act (TDRA).
These remedies are designed to preserve a famous mark’s distinctiveness and to deter unauthorized uses that may weaken its strength in the marketplace.
A federal trademark registration provides significant advantages for trademark owners pursuing dilution claims. Registration with the Trademark Office secures nationwide federal protection, making it easier for the owner of the mark to enforce rights against unauthorized uses that may blur or tarnish their brand. While federal protection under the TDRA is available even to unregistered famous marks, registration strengthens a plaintiff’s position by serving as prima facie evidence of ownership and distinctiveness. When courts are determining whether a mark qualifies as “famous” for dilution purposes, they often consider whether the mark is federally registered as part of the analysis, along with factors like advertising reach and market recognition.
Many scholars argue that dilution law gives trademark owners rights in gross, effectively allowing them to control the use of words or phrases far beyond their original market without requiring proof of actual economic injury. This level of protection has been compared to granting near-monopoly rights over language itself. Critics note it may suppress free speech, especially where non-commercial use is at issue, e.g., in cases involving parody, commentary, or other non-commercial use. Critics also argue that this broad scope facilitates unfair competition by the trademark owner and can stifle the market by preventing smaller businesses from using descriptive or evocative terms.
Many countries offer similar protection for famous trademarks. However, requirements for proving dilution and the scope of protection vary widely. Business owners with global brands should understand the geographic extent of dilution protection in different jurisdictions.
Conclusion
Trademark dilution is a bit of a niche area of trademark law. However, it is often raised in trademark disputes and should be understood by parties and attorneys alike. If you have a potential trademark dilution issue or other intellectual property law matter, contact our office for a free consultation.
© 2025 Sierra IP Law, PC. The information provided herein does not constitute legal advice, but merely conveys general information that may be beneficial to the public, and should not be viewed as a substitute for legal consultation in a particular case.
If you have filed a patent application with the United States Patent and Trademark Office (USPTO), you may soon encounter a patent office action. For business owners and attorneys unfamiliar with the patent process, understanding what an office action is and how to respond to it can make the difference between an issued patent and a rejected patent application.
This article walks you through patent office actions, including understanding the different issues that may be raised in an office action and how to respond.
A patent office action is a formal written communication from the patent examiner assigned to the patent application by the USPTO. The document provides a detailed analysis of your pending claims, including an assessment of whether your claimed invention fulfills legal requirements for patentability: novelty, non-obviousness, and subject matter eligibility.
The first office action typically arrives between 12-18 months after the filing date, depending on the type of technology, examiner workload, and whether you have used expedited examination programs. During the examiner’s review, the examiner will cite prior art (e.g., previous patents, published applications, or literature) that they believe anticipates or renders your patent claims obvious to one of ordinary skill in the art (e.g., a technician in the relevant field of technology).
Statistically, the vast majority of first office actions in US utility patent applications are rejections of some or all claims. Only a minority receive “first action allowances,” and multiple rounds of examination are common. The process is iterative, with office actions prompting you to respond with legal and technical arguments, claim amendments, expert opinion, and/or other evidence of patentability. Successfully traversing this back-and-forth examination queue is essential for patent grant.
The USPTO issues several types of office actions and related communications during patent prosecution, each serving a distinct procedural role:
If the patent examiner determines that your application claims more than one independent or distinct invention, they will issue a restriction requirement. This procedural tool allows the USPTO to conserve examination resources by requiring the applicant to elect a single group of claims for examination at that time. The examiner divides the claims into distinct groups, each covering what they view as a separate invention. You must choose one group to proceed with in the current application. The unelected claims are withdrawn from immediate consideration but can be pursued later through one or more divisional applications. This election does not forfeit rights to the other inventions, but failing to file timely divisional applications could lead to loss of protection for them. Strategic consultation with a patent attorney is critical when making this election.
A non-final office action is the first substantive feedback a patent applicant receives from the patent examiner. In this communication, the examiner identifies perceived defects or deficiencies in your application, such as issues with claim scope, support for the claims in the description of the invention (written description), or compliance with other formal requirements. The patent examiner will also reference cited prior art that they believe anticipates or renders obvious your claimed invention. Based on this review, they may issue claim rejections under 35 U.S.C. §102 (novelty) or 35 U.S.C. §103 (obviousness), object to parts of your specification or drawings, or set forth requirements for correcting formal issues. Importantly, at this stage, you retain full opportunity to respond.
Responses to non-final office actions are crucial because you have broad procedural rights to address any deficiencies or concerns raised. As the applicant, you can freely amend claims to narrow, broaden, or clarify their scope, provided the amendments are supported by your original disclosure. You may present new legal arguments to challenge the examiner’s interpretations or conclusions, and you can submit additional evidence, such as affidavits or declarations under 37 CFR §1.132, to rebut cited prior art or establish unexpected results. The goal is to persuade the examiner that your application meets all legal requirements for patentability. Furthermore, applicants may request an examiner interview to discuss the application directly and potentially expedite resolution of issues. It is also the stage at which all aspects of the application, including objections to formalities and compliance with USPTO rules are addressed.
Schedule interviews to clarify complex issues, better understand the examiner’s position, and negotiate potential paths to allowance. These can be conducted via telephone, video conference, or in person at the patent office. If the applicant and the examiner come to an agreement about patentability, the patent examiner may invite the applicant to file an amendment or offer to enter an examiner's amendment to place the patent application in condition for allowance.
If the examiner remains unpersuaded after reviewing your response to a non-final office action, they may issue a final office action. While labeled “final,” this does not mean the end of the road for your patent application. However, it signals that prosecution is now procedurally more constrained. In a final office action, the examiner reiterates unresolved claim rejections and may include new grounds of rejection if applicable. At this stage, applicants cannot submit substantive claim amendments as a matter of right. Amendments will only be entered if they either place the application in condition for allowance (e.g., by adding limitations from dependent claims to independent claims), cancel rejected claims, or comply with formal requirements. If additional substantive changes are needed to overcome the cited prior art or examiner’s objections, the applicant must file a Request for Continued Examination (RCE) or a continuation application to reopen prosecution. Alternatively, an applicant may appeal to the Patent Trial and Appeal Board (PTAB) if they believe the examiner’s rejections are legally incorrect. Alternatively, applicants can pursue a continuation application to present revised claims. Strategic decision-making is critical here, and a patent attorney can help assess whether to amend, appeal, or continue prosecution to maximize your chances of obtaining an issued patent.
A written response to a patent office action is your opportunity to fully engage with the issues raised by the examiner and advocate for allowance of your application. You must address every rejection, objection, and requirement individually and in detail. This often involves crafting precise claim amendments to distinguish your invention from cited prior art or to resolve clarity issues identified under 35 U.S.C. §112. In addition to amendments, you should present well-reasoned legal arguments explaining why your claims meet patentability requirements, such as novelty and non-obviousness, despite the examiner’s rejections. When appropriate, you may include evidence submissions like expert declarations, experimental data, or affidavits under 37 CFR §1.132 to strengthen your position. A written response must comply with USPTO formalities and should be persuasive yet concise. Failure to fully address each point raised can lead to repeated rejections.
The After-Final Consideration Pilot (AFCP) is a USPTO initiative designed to provide applicants with an additional opportunity for consideration after a final office action without the need for a Request for Continued Examination (RCE). Under AFCP, the examiner may conduct limited further review of after-final responses that include amendments requiring only minor additional searching or examination effort and conduct an interview regarding the issues raised by the amendment. This program is particularly useful for applicants who believe their proposed changes could place the application in condition for allowance with minimal further work by the examiner. However, participation is discretionary, and the examiner may decline if they determine the amendments would require significant new analysis.
An Ex parte Quayle Action is issued when the patent examiner determines that your application is in condition for allowance except for minor formal issues not related to the claims. These issues may include clerical errors, issues with reference numbering in the specification and drawings, or required changes to drawings. At this stage, substantive amendments to claims or the specification are not permitted, as all patentability requirements have already been met. The applicant’s response is limited to addressing these formal matters, ensuring the application conforms fully to USPTO standards before allowance. Once the examiner confirms the formalities are resolved, the application proceeds directly to a Notice of Allowance.
When you submit a response after receiving a final office action, the examiner may issue an advisory action as a follow-up. An advisory action informs you whether the examiner will enter your proposed amendments or arguments into the record and consider them. It can confirm acceptance of minor amendments that place the application in condition for allowance or notify you that the proposed changes fail to overcome the outstanding rejections. Importantly, advisory actions do not reset or extend response deadlines. They serve as procedural guidance, helping applicants decide whether to pursue further action such as a Request for Continued Examination (RCE), an appeal, or filing a continuation application to keep prosecution alive.
A notice of allowance is issued when the patent examiner determines that all formal and substantive requirements for patentability have been satisfied. It represents the final step before the USPTO grants your patent. This document notifies the applicant that prosecution is complete and no further action is needed on the merits of the application. However, the patent will not issue until the applicant pays the required issue fee and, if applicable, submits any final paperwork such as corrected drawings. Failure to pay this fee by the deadline can result in abandonment, so prompt action is critical. The notice often comes after successful responses to office actions and signals that the application has cleared all hurdles, putting you on the threshold of securing enforceable patent protection.
If you believe the examiner’s rejections are legally or factually incorrect and further amendment isn’t feasible, you may appeal your case to the Patent Trial and Appeal Board (PTAB). The appeal process is more formal than office action responses and requires the filing of a notice of appeal, followed by an appeal brief detailing why the examiner’s decision was in error. The process often involves extensive legal analysis, case law citations, and technical arguments. The PTAB will review the entire prosecution history and may affirm or reverse the examiner’s rejections. In some cases, it may remand the application for further examination.
The USPTO sets strict deadlines for responding to any of the foregoing office actions. The initial statutory response period is typically three months from the mail date for substantive office actions. The other types of office actions have different response periods. You must meet these deadlines in order to maintain your patent application:
Timely response to USPTO communications is critical to keeping your patent application active. Below are the response periods for various types of office actions:
Non-Final Office Action: Response due within 3 months to avoid extension fees. Extensions available for up to an additional 3 months (total of 6 months) with payment of fees.
Final Office Action: Same deadlines as non-final office actions. However, responses are more limited procedurally.
Restriction Requirement: Response required within 2 months, extendable up to 6 months with extension fees. Failure to elect a group of claims may result in abandonment of the unelected claims.
Ex parte Quayle Action: Response due within two months, with extensions available up to extend the deadline up to 6 months. Only formal matters may be corrected at this stage.
Advisory Action: No statutory response period. These are issued in response to after-final submissions and do not extend existing deadlines. Applicants must monitor original deadlines carefully.
Notice of Allowance: Issue fee must be paid within 3 months of the mailing date. No extensions are permitted.
The response periods can be extended up to a total response period of up to six months by paying escalating monthly extension fees:
These fees vary depending on the entity status of the applicant. Most applicants qualify for small entity status, which reduces the fees by 50%. Some applicants qualify for micro-entity status which reduces the fees to 25% of large entity fees. These fees also periodically change as the USPTO adjusts its policies, and they can be looked up on the USPTO website here.
Failure to timely respond within the maximum statutory period results in application abandonment, subject to possible revival under 37 CFR §1.137 if unintentional or unavoidable. If abandonment occurs, you will completely lose filing rights unless revival is secured through petition and additional fees. The need to respond promptly and strategically makes professional assistance valuable for navigating these complex deadlines.
Statistics show that patent applications prosecuted by registered patent attorneys or agents have higher allowance rates and fewer procedural missteps. Unrepresented inventors often struggle with:
Professional guidance prevents loss of rights, poor patent scope, and extended pendency. Early engagement with qualified patent counsel often results in stronger patents and more efficient prosecution.
Whether you’re dealing with your first office action or navigating complex final rejections, remember that this process is designed to ensure that only truly novel and non-obvious inventions receive patent protection. With proper preparation, professional guidance, and strategic thinking, you can successfully navigate USPTO examination to secure your patent rights.
For best results, you should consult with an experienced patent attorney early in the process, maintain realistic timelines and budgets for prosecution, and deal with office actions in a timely and thorough manner. If you are considering a patent application or have other intellectual property matters to address, contact our office for a free consultation.
© 2025 Sierra IP Law, PC. The information provided herein does not constitute legal advice, but merely conveys general information that may be beneficial to the public, and should not be viewed as a substitute for legal consultation in a particular case.
When a competitor registers a trademark that interferes with your brand or violates your rights, the U.S. Patent and Trademark Office (USPTO) provides a mechanism to challenge it: the petition to cancel. A cancellation proceeding is a process administered by the Trademark Trial and Appeal Board (TTAB) of the USPTO that allows you to contest a trademark registration if you have better rights in the mark or a highly similar mark, or if the registration was wrongfully issued. Trademark cancellation proceedings are useful tools for protecting your trademark rights from third party competition and eliminating invalid registrations.
In this article we provide an overview of the petition for cancellation process, the relevant trademark law, and strategic considerations in pursuing a trademark cancellation.
A petition to cancel is an administrative legal filing submitted to the Trademark Trial and Appeal Board (TTAB), requesting the invalidation of an existing trademark registration. This administrative action is available for marks listed on either the Principal Register or the Supplemental Register maintained by the United States Patent and Trademark Office (USPTO). Cancellation proceedings are pursued after registration, making them an essential post-registration mechanism. Cancellation actions differ from trademark opposition proceedings, which are initiated before a trademark registers.
Cancellation proceedings resemble traditional litigation in federal court, though they are handled entirely within the administrative framework of the TTAB. The party filing the cancellation (the petitioner) assumes the role of the plaintiff, while the registrant (the respondent) is considered the defendant. The process begins with the filing of a petition for cancellation, which includes the factual and legal grounds upon which cancellation is sought. These proceedings follow structured timelines for pleadings, discovery, submission of evidence, and trial briefs, culminating in a decision by a panel of administrative trademark judges.
The TTAB has exclusive jurisdiction over the registration status of trademarks. It cannot grant monetary damages or injunctive relief; its power is limited to determining whether a mark should remain registered. Common grounds for filing a petition include nonuse, abandonment, fraud, likelihood of confusion, and genericness. See TBMP § 301.01; 37 C.F.R. § 2.111(a).
Under Lanham Act § 14 (15 U.S.C. § 1064), “[a]ny person who believes that he is or will be damaged” by a registered trademark may initiate a petition to cancel. This broad statutory language opens the door to a wide range of parties, including businesses, individuals, and organizations, who can show that they possess a legitimate stake in the outcome of the cancellation action.
However, mere dissatisfaction or generalized concern is not enough. The TTAB and the federal courts have interpreted the statute to require that a petitioner demonstrate a real interest in the proceeding and a reasonable basis for the belief that damage will occur if the registration remains in effect. A "real interest" generally means that the petitioner has a direct commercial stake, such as selling similar goods or services under a potentially conflicting mark, or being blocked by the registered mark during examination of their own trademark application.
Courts have further clarified that a petitioner must hold a reasonable and good faith belief that they are likely to be harmed by the registration and that the harm is not merely hypothetical. This standard was articulated in Australian Therapeutic Supplies PTY. Ltd. v. Naked TM, LLC, 965 F.3d 1370 (Fed. Cir. 2020), where the Federal Circuit emphasized the need for a petitioner to have a legitimate commercial interest.
In practice, petitioners often include prior users of a mark, owners of similar trademarks, or businesses facing legal or market barriers due to the registered mark. Legal counsel can help establish standing based on available facts and strategic objectives.
A petition to cancel a trademark registration must be based on valid legal grounds recognized under the Lanham Act and TTAB precedent. These grounds fall into substantive and procedural categories and are codified primarily in 15 U.S.C. § 1064 and related sections. The most commonly asserted bases include the following:
A mark is deemed abandoned when its use has been discontinued with no intent to resume. Under the Trademark Act, nonuse for three consecutive years constitutes prima facie evidence of abandonment. 15 U.S.C. § 1064(3). Petitioners must show either a complete cessation of use or intent not to resume use.
If a registrant never used the mark in commerce as required prior to registration, the registration is subject to cancellation. This is particularly relevant for intent-to-use applications that matured to registration without bona fide use. The expedited cancellation pilot program specifically targets such nonuse claims to streamline removal of unused marks from the register.
Fraud occurs when a registrant knowingly makes a false, material representation of fact with the intent to deceive the USPTO during the prosecution or maintenance of a trademark registration. To prevail on a fraud claim, the petitioner must demonstrate that the registrant acted with scienter and that the misrepresentation was material to the USPTO’s decision to approve or maintain the registration. In Great Concepts, LLC v. Chutter, Inc., 84 F.4th 1014 (Fed. Cir. 2023), the Federal Circuit held that the TTAB lacks authority to cancel a registration based solely on false statements made in a declaration of incontestability under Section 15 of the Lanham Act, because such statements are not material to the continued validity of the underlying registration itself. This demonstrates the high bar required for a successful fraud claim.
A registration may be cancelled if it is likely to cause confusion with a previously used or registered mark. The TTAB evaluates this under the DuPont factors, considering the similarity of marks, goods/services, and trade channels. In order to successfully pursue a cancellation proceeding on this basis, the petitioner must have trademark rights that are earlier than the trademark registration date and earlier than the registrant's first use of the mark in commerce.
A generic term cannot function as a trademark. Descriptive marks may also be cancelled if they lack acquired distinctiveness. Petitioners must show that consumers perceive the term as merely describing the goods/services rather than indicating source.
Owners of famous marks may assert dilution by blurring or tarnishment. Unlike confusion-based claims, dilution does not require competing goods or services, only that the junior mark weakens or harms the reputation of the famous mark.
A mark may be cancelled if it is deceptively misdescriptive or outright deceptive. This includes marks that misrepresent the geographic origin, quality, or nature of goods/services in a way likely to deceive consumers.
These statutory grounds are not exhaustive, but they represent the most frequently asserted bases in trademark cancellation proceedings. For more detail, see Chapter 300 of the Trademark Trial and Appeal Board Manual of Procedure (TBMP) and the TTAB's developing jurisprudence, particularly in light of evolving standards on fraud and administrative adjudication.
While the Lanham Act provides robust tools for challenging trademark registrations, petitioners must be mindful of critical time limitations imposed by 15 U.S.C. § 1064. In general, certain grounds for cancellation must be asserted within five years from the date the registration issued. The most common example is a claim based on likelihood of confusion with a prior mark, which is time-barred after five years unless specific exceptions apply.
However, not all cancellation claims are subject to the five-year limit. The statute expressly allows some grounds to be raised at any time, including claims of fraud, abandonment, genericness, and functionality. These exceptions recognize that some flaws go to the heart of a mark’s validity or its ongoing use in commerce.
Importantly, the five-year bar applies only to marks on the Principal Register. Marks on the Supplemental Register, which lack inherent distinctiveness, remain subject to cancellation on any ground at any time. Additionally, if the registration was obtained through fraud, or if the mark has become generic or abandoned after registration, the five-year limitation does not apply.
Failure to observe these time constraints can result in dismissal of the petition to cancel, even if the substantive claims are otherwise strong. As such, assessing the trademark registration date and understanding which grounds survive the five-year mark is essential to pursuing a timely and effective cancellation action.
To initiate a trademark cancellation proceeding, a petitioner must file a petition to cancel through the Electronic System for Trademark Trials and Appeals (ESTTA), the USPTO’s official online filing platform for TTAB matters. The process begins by selecting the appropriate ESTTA form, inputting required information about the registered mark (e.g., the trademark, the goods or services, the registration number, etc.), the grounds for cancellation, and the petitioner’s standing to bring the action. The petition must clearly set forth the factual and legal basis for cancellation, akin to a complaint in a civil lawsuit. A filing fee is required for each class of goods or services in the challenged registration. As of 2024, the required fee is $600 per class, though this amount may be updated by the USPTO periodically.
Once the cancellation petition is filed, the TTAB issues a formal notice of institution, which sets forth deadlines for the respondent to file an answer and provides a schedule for discovery, disclosures, and trial periods. If the ESTTA system is unavailable due to technical problems or if extraordinary circumstances exist, a petitioner may file on paper, but only with prior approval and a petition to the Director under 37 C.F.R. § 2.146.
TTAB proceedings are adversarial in nature and closely follow the procedures used in federal civil litigation. Discovery in a cancellation proceeding is governed by the Federal Rules of Civil Procedure (FRCP), as supplemented by TTAB-specific rules found in the Trademark Trial and Appeal Board Manual of Procedure (TBMP). Once the respondent files an answer, the parties are required to conduct a discovery conference, during which they must discuss the nature of the claims and defenses, possibilities for settlement, anticipated discovery needs, and issues related to the preservation and disclosure of electronically stored information (ESI).
Following the conference, parties must serve initial disclosures, which include basic identifying information about potential witnesses and relevant documents. Discovery tools available to each party include interrogatories, requests for production of documents, requests for admission, and depositions. These tools are used to develop evidence and clarify claims and defenses before trial. The discovery period typically lasts six months, unless extended by stipulation or Board order. Effective use of discovery can shape the trajectory of the case and position the petitioner or respondent for a favorable outcome at trial. See TBMP Chapter 400.
Following the close of discovery, the TTAB schedules a series of testimony periods during which the parties present their evidence (e.g., USPTO records, petitioner trademark use records, deposition testimony, etc.), akin to the trial phase in a civil lawsuit. These periods are strictly regimented and controlled by the Trademark Rules of Practice, particularly 37 C.F.R. § 2.121, and detailed in TBMP Chapter 700.
The plaintiff/petitioner is assigned the first 30-day testimony period to present its legal case, followed by a 30-day testimony period for the defendant/respondent to rebut the petitioner’s claims and present any affirmative defenses or counterclaims. A final 15-day period is reserved for the petitioner to present rebuttal evidence.
Evidence may be submitted through oral testimony (depositions), or in written form via affidavits or declarations, provided they comply with the strict requirements of 37 C.F.R. §§ 2.123, 2.124, and 2.125. Parties must also serve pretrial disclosures identifying witnesses and documents no later than 15 days before the opening of each testimony period. Failure to observe these deadlines can result in exclusion of evidence.
The testimony period is a critical phase where parties “try” their case on the written record. There is no live courtroom trial; instead, the TTAB evaluates the case based solely on the submitted evidence and written briefs.
After the close of the testimony periods, each party is permitted to file a trial brief summarizing the relevant facts, legal arguments, and supporting authority. These briefs are critical because they serve as the parties’ final opportunity to persuade the TTAB to rule in their favor. The brief must cite to the record created during the testimony period and should avoid introducing any new evidence, which is not permitted at this stage.
Typically, the plaintiff/petitioner files an opening brief, followed by the defendant/respondent’s answering brief. The petitioner may then file a reply brief. Briefs are filed electronically through ESTTA, and specific formatting and page limits apply under 37 C.F.R. § 2.128.
Either party may request an oral hearing, which gives counsel the chance to present a live summary of their arguments before a panel of TTAB administrative judges. Although not required, oral argument can be strategically valuable in complex cases or those involving nuanced legal questions.
After reviewing the evidence, trial briefs, and (if requested) oral argument, the TTAB will issue a final written decision. This decision includes findings of fact, legal analysis, and the Board’s ruling on whether the trademark registration will be cancelled or maintained. The TTAB’s decision becomes final unless appealed within the statutory period.
Under 15 U.S.C. § 1071, the losing party has two primary options for appeal. First, they may file an appeal directly to the U.S. Court of Appeals for the Federal Circuit, which will review the TTAB’s decision on the existing administrative record. Alternatively, the party may initiate a civil action in a U.S. District Court, which allows for de novo review and the opportunity to introduce new evidence.
Each appeal route has strategic implications. The Federal Circuit provides a faster and narrower review, while district court litigation can accommodate evidentiary expansion but involves greater cost and complexity.
The USPTO’s Expedited Cancellation Pilot Program was developed to efficiently address straightforward nonuse claims, where the registrant is alleged never to have used the mark in commerce. This program streamlines the standard TTAB process by reducing procedural complexity, limiting discovery to essential disclosures, and accelerating the litigation timeline. It is ideal for clear-cut cases involving abandonment or lack of use, offering a cost-effective route to remove deadwood from the Principal Register.
Before initiating a cancellation action, it is important to carefully assess the factual and legal basis for the claim. Begin by evaluating the registrant’s actual use of the mark in commerce. Search for verifiable evidence of current or prior use, or a lack thereof, particularly if alleging nonuse or abandonment. Consider factors such as advertising, packaging, online presence, and sales activity.
Simultaneously, you should document your own prior rights, including use in commerce, dates of first use, and geographic scope. Collect business records, marketing materials, domain registrations, and any relevant registrations or applications to support your position.
Not every trademark conflict requires formal litigation. You may consider alternative approaches, such as sending a cease-and-desist letter, initiating settlement discussions, or negotiating a coexistence agreement. These strategies can resolve disputes more quickly and at a lower cost.
It is also important to assess whether the challenged registration is blocking your trademark application. If so, successful cancellation may clear the path to your own registration.
Finally, engaging an experienced trademark attorney is critical. TTAB proceedings follow strict procedural rules and evidentiary standards. Missing deadlines, failing to present evidence properly, or misunderstanding standing and grounds for cancellation can result in dismissal or permanent loss of rights.
Conclusion
Filing a petition for cancellation is a powerful way for trademark owners to protect their brand. However, it is a serious undertaking and should only be pursued after careful consideration. A cancellation proceeding is a complex adversarial proceeding requiring careful strategy. If you need assistance with a trademark dispute, a trademark registration, or other trademark matter, contact our office for a free consultation.
© 2025 Sierra IP Law, PC. The information provided herein does not constitute legal advice, but merely conveys general information that may be beneficial to the public, and should not be viewed as a substitute for legal consultation in a particular case.
The Patent Prosecution Highway (PPH) is an international initiative that enables accelerated examination of patent applications through cooperation among participating patent offices. For business owners and attorneys seeking faster intellectual property protection, the PPH is useful tool for streamlining the patent prosecution process.
The Patent Prosecution Highway (PPH) is a cooperative framework among patent offices designed to expedite the examination of utility patent applications. It consists of a series of bilateral and multilateral agreements that permit applicants to leverage favorable examination results, such as an indication that at least one claim is allowable from one participating patent office (referred to as the Office of First Filing or OFF) to request accelerated examination in another participating office (the Office of Later Examination or OLE).
For example, if an applicant receives a positive examination outcome in a European patent application, they may use that outcome to file a PPH request in the Japan Patent Office (JPO), Korean Intellectual Property Office (KIPO), or any other office with a PPH agreement in place. To qualify, the application filed in the second office must sufficiently correspond to the claims found allowable in the first office, and a PPH request must be filed before substantive examination begins.
The PPH significantly streamlines the patent prosecution process by allowing patent examiners in the second office to rely on the prior search reports, written opinions, and examination results from the first office. These shared work products can guide the examiner in identifying allowable subject matter more quickly, often leading to fewer office actions, earlier grants, and reduced costs for the applicant.
In addition to bilateral agreements, the Global PPH pilot program provides a harmonized framework that includes over two dozen participating patent offices, enabling applicants to use a standardized request process across multiple jurisdictions. By allowing applicants to request accelerated processing in OLE offices, the PPH supports faster and more efficient international intellectual property protection.
PPH programs are particularly useful for applicants filing under the Patent Cooperation Treaty (PCT), as positive written opinions or international preliminary examination reports from the International Searching Authority (ISA) or International Preliminary Examining Authority (IPEA) can serve as the basis for a PPH request during the national phase.
The Patent Prosecution Highway (PPH) was developed to address several challenges in the global patent landscape, particularly the redundancy and inefficiencies caused by multiple jurisdictions independently examining similar or identical applications. Traditional patent prosecution often involves waiting for a first office action and responding to multiple rejections. With the PPH, the examination process is expedited, and the number of office actions may be reduced. By fostering cooperation and information sharing among participating patent offices, the PPH aims to create a more streamlined and harmonized international patent system.
Overall, the objectives of the PPH align with the broader goals of modernizing the international patent system, facilitating foreign trade, and encouraging innovation through faster and more cost-effective intellectual property protection.
To use the PPH, an applicant must first file a patent application in a participating office (the office of first filing or OFF). Once that office determines that at least one claim is allowable, the applicant may request accelerated examination for a corresponding application in another participating office (the office of later examination or OLE).
Filing a Patent Prosecution Highway (PPH) request requires careful attention to timing, documentation, and jurisdiction-specific rules. Applicants should ensure full compliance with the requirements of the relevant participating patent office to avoid delays or outright rejection. Filing a PPH request typically involves the following steps:
Applicants should also be mindful of the timing and procedural nuances in different jurisdictions. Some offices may have specific forms, page limits, or electronic filing protocols. Filing errors, such as failing to provide required translations, omitting correspondence tables, or submitting the request after substantive examination has begun, can result in denial of the PPH request.
There are three primary types of PPH that reflect the sources of prior work products used to support a request for accelerated examination.
Each PPH type offers unique advantages depending on the applicant's filing strategy, target jurisdictions, and the source of allowable claims. For applicants filing under the PCT, the PCT-PPH route is often the most efficient. For those relying on fast national examination results, bilateral or Global PPH pathways may be preferable. Regardless of the type chosen, all PPH programs aim to reduce redundancy, speed up examination, and improve the predictability of international patent prosecution.
Numerous countries and regional offices participate in PPH programs, including:
A full list of participating patent offices and their bilateral agreements can be found on the USPTO and WIPO websites.
While the Global PPH provides a consistent framework, some patent offices maintain unique procedures or requirements. For example:
Understanding local requirements helps avoid rejection of the PPH request.
As international collaboration and demand for streamlined intellectual property (IP) systems grow, the Patent Prosecution Highway (PPH) is poised to evolve significantly. The globalization of innovation, increased cross-border filings, and technological advancements are driving ongoing improvements in the scope and functionality of PPH programs.
Several key developments are shaping the future of the PPH:
In summary, the Patent Prosecution Highway is a powerful mechanism that provides a strategic advantage to businesses and innovators by expediting prosecution of patents, improving consistency among jurisdictions, and lowering the overall burden of securing global patent rights.
If you are considering pursuing international patent rights or you have other patent matters with which you need assistance, contact our office for a free consultation.
© 2025 Sierra IP Law, PC. The information provided herein does not constitute legal advice, but merely conveys general information that may be beneficial to the public, and should not be viewed as a substitute for legal consultation in a particular case.
An "intent to use" (ITU) trademark application can be a valuable first step in the trademark registration process. A business can secure priority in a brand name, logo, or slogan (the trademark) before the business establishes any sales under the trademark. An intent to use application allows applicants to secure a priority filing date while they prepare for product or service rollout. Many well-known companies in tech, fashion, and entertainment file ITU applications before launching brands. This proactive strategy helps secure rights during product development and marketing preparation.
For example, a startup planning to launch a new software service may file an ITU application with the mark associated with the intended software service. While finalizing beta testing and marketing materials, the trademark application is pending and the company can subsequently register the mark once it is in use in commerce.
An intent to use trademark application is a filing option under Section 1(b) of the Lanham Act that can be submitted to the United States Patent and Trademark Office (USPTO). An ITU application allows applicants to claim rights in a trademark or service mark before it is used in commerce. Instead of proving actual use at the time of filing, the applicant provides a sworn statement declaring a bona fide intent to use the mark in commerce in the near future.
An ITU application can be a valuable tool for startups, rebranding companies, and businesses launching new products or services. It allows the applicant to secure rights before there is public disclosure of the brand, and ensures that no one else can claim the mark after the filing date. This approach gives the applicant time to finalize branding, production, and marketing without third parties establishing earlier rights in the same or similar mark.
To file an intent to use application, the applicant must have a bona fide intent to use the applied-for mark in commerce. This means the intent must be in good faith and genuine, with current plans to carry out the provision of the goods or services under the applied-for mark. The USPTO and courts may require the applicant to provide evidence of this intent, such as business plans, product prototypes, or marketing research.
The requirement of a bona fide intent to use a trademark ensures that the trademark register reflects marks tied to genuine commercial activity rather than speculative or defensive filings. This policy protects the integrity of the registration system by preventing applicants from blocking others through unused placeholder applications intended to obstruct the lawful use of trademarks in commerce. It also aligns with the constitutional basis for trademark law under the Commerce Clause, which requires a real intent to use the mark in commerce.
If a legal conflict develops later (e.g., a third party challenges the application), having sufficient evidence of bona fide intent becomes crucial. If the party challenging the validity of the ITU application filing can show that there was no bona fide intent to use the applied-for mark at the time the intent to use application was filed, the resulting trademark registration may be invalidated void ab initio and possibly fraud on the trademark office.
Filing a trademark application on an intent to use (ITU) basis provides significant strategic advantages for businesses and brand owners preparing to launch new products or services. One of the primary benefits is the ability to secure an earlier application filing date. The filing date establishes priority, which can be crucial if a legal conflict develops or if another party later attempts to register a confusingly similar mark. By locking in that earlier date, the applicant gains a competitive edge in potential disputes. In addition, an ITU application serves as a powerful brand reservation tool. It signals to the marketplace that the applicant has laid claim to the mark, discouraging others from using or seeking to register identical or similar marks. This early filing can prevent costly conflicts down the road. Furthermore, the ITU process provides flexibility, allowing applicants time to develop their brand identity, marketing materials, and distribution plans before proving actual use in commerce.
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The intent to use (ITU) application process is very similar to standard use-based trademark application under Section 1(a) of the Lanham Act, but with some important distinctions. When completing the application form, the applicant must designate the application under the “intent to use” basis and include a sworn statement affirming a bona fide intent to use the mark in commerce. The applicant must also clearly identify the goods and/or services with which the mark is intended to be used.
After submission, the application is assigned to a USPTO examining attorney. The examining attorney reviews the ITU application to ensure that it satisfies all legal requirements under the Lanham Act, including proper classification, clarity of the identified goods or services, and the absence of conflicting marks. If the application passes this examination without issue, it proceeds to publication in the Official Gazette. This public notice gives third parties an opportunity to oppose the mark’s registration if they believe it would cause them harm. If no opposition is filed, or if any opposition is resolved in the applicant’s favor, the USPTO issues a Notice of Allowance (NOA), signaling that the application has been preliminarily approved pending proof of actual use in commerce.
A Notice of Allowance (NOA) indicates that the intent to use (ITU) application has been preliminarily approved by the USPTO, but the mark is not yet registered. To proceed to a trademark registration, the applicant must prove actual use of the mark in commerce. This is done by filing a Statement of Use (SOU), which includes a verified statement affirming that the mark is currently in use, and a specimen of use showing the mark as used in connection with the identified goods or services.
The SOU must be filed within six months of the issuance of the NOA. If the applicant is not yet ready to demonstrate use within that initial six-month period, they may request an extension of time. The USPTO permits up to five such extension requests, each granting an additional six months, for a total allowable period of up to three years from the NOA date to file the SOU. Each extension request must be accompanied by the required fee and a continued declaration of the applicant’s good faith intention to use the mark.
If the applicant begins using the mark after filing the ITU application but before the Notice of Allowance is issued, they can file an Amendment to Allege Use instead of waiting to file the SOU. This amendment includes the same requirements as a SOU and, once accepted, shifts the basis of the application from intent to use to actual use.
An intent to use trademark application is a powerful tool for businesses seeking to protect their intellectual property before launching a new product or service. It allows applicants to claim a priority filing date while securing time to develop their brand.
With careful planning, an ITU application can help business owners obtain robust trademark protection with long-term value.
To ensure successful registration, applicants should file early to secure an earlier application filing date, maintain documentation proving bona fide intent, and begin using the mark in commerce at the earliest possible time so that registration can be achieved within the statutory timeframe of up to three years from the NOA.
If you are considering launching a business or brand, or you have other trademark matters with which you need assistance, contact our office for a free consultation.
© 2025 Sierra IP Law, PC. The information provided herein does not constitute legal advice, but merely conveys general information that may be beneficial to the public, and should not be viewed as a substitute for legal consultation in a particular case.
A Markman hearing, also called a claim construction hearing, is a pivotal proceeding in U.S. federal patent litigation where a judge (not a jury) determines the meaning of disputed claim terms in a patent. This interpretation shapes the scope of a patent holder’s rights and often decides the fate of a patent infringement case.
The hearings are named for the Supreme Court case Markman v. Westview Instruments, 517 U.S. 370 (1996), which mandates that claim interpretation is a question of law for the court.
The Markman hearing is a critical juncture in patent litigation where both patent holders and defendants can gain a significant procedural and substantive advantage if they approach the hearing strategically. For patent holders, the primary objective is to advocate for a broader interpretation of claim terms that encompasses the accused product or process. This often involves leveraging the patent specification and prosecution history to demonstrate how the claim language was intended to be read in light of the invention as a whole.
Patent holders should be careful not to introduce interpretations that risk indefiniteness or overreach, which could invite challenges under 35 U.S.C. §§ 112 or 101. They should also rely on the ordinary meaning of terms where appropriate and be prepared to show how a person of ordinary skill in the art would understand the claim language, potentially through expert testimony and relevant dictionary definitions. Strategically using intrinsic evidence to support a broader scope while rebutting attempts to narrow terms through extrinsic evidence is often essential to preserving the value of the asserted claims.
In contrast, defendants typically seek a narrower construction of the claim terms to avoid infringement or to set the stage for a summary judgment motion. Defendants should carefully analyze the prosecution history and any narrowing amendments or disclaimers made by the patent applicant, which can support a more limited interpretation of the claims. Highlighting ambiguities or inconsistencies between the claim language and the specification may also support arguments for non-infringement or invalidity.
Defendants should be prepared for rigorous cross examination of the patent holder’s expert witnesses, challenging their understanding of the technology and their interpretations of the claim terms. Additionally, aligning proposed claim constructions with eventual jury instructions is vital, ensuring that the jury receives a clear and legally sound framework within which to assess infringement and validity.
Both parties must also remain mindful of how the district court’s claim construction order may affect subsequent proceedings, including appeals to the Federal Circuit, and may influence concurrent proceedings, such as inter partes review before the United States Patent and Trademark Office (USPTO) or enforcement actions before the International Trade Commission.
The legal framework governing Markman hearings and patent claim construction has been shaped by several landmark judicial decisions, starting with the Supreme Court’s pivotal ruling in Markman v. Westview Instruments. In that case, the Court held unanimously that the interpretation of patent claims is a matter of law to be decided by a judge rather than a jury. The decision emphasized that because claim construction affects the scope of the patentee’s legal rights, it is properly within the purview of the court. Importantly, the Court clarified that judges must first look to intrinsic evidence, including the patent's written claims, the specification, and the prosecution history, to determine the meaning of disputed claim terms. Only if the intrinsic record does not resolve ambiguities should courts consider extrinsic evidence, such as expert testimony and technical dictionaries.
Nearly a decade later, the Federal Circuit reinforced and refined these principles in Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005) (en banc), which is now the leading case on patent claim construction rules. In Phillips, the Federal Circuit's decision reiterated that the starting point for interpreting claim language is its ordinary meaning as understood by a person of ordinary skill in the art, in light of the patent specification. The court confirmed a strong preference for relying on intrinsic evidence, cautioning that extrinsic sources such as dictionary definitions, inventor testimony, or expert opinions should not override the context provided by the patent itself. The Phillips decision established a hierarchical approach to evaluating evidence in claim construction, placing intrinsic evidence at the top.
The standard of appellate review Markman hearing findings has also evolved. Initially, under Cybor Corp. v. FAS Technologies, Inc., 138 F.3d 1448 (Fed. Cir. 1998), the Federal Circuit reviewed all aspects of claim construction de novo, meaning it gave no deference to the trial court’s findings. This changed with the Supreme Court’s decision in Teva Pharmaceuticals USA, Inc. v. Sandoz, Inc., 574 U.S. 318 (2015), which held that while the ultimate determination of claim meaning remains a question of law, any underlying factual findings, such as a judge’s reliance on expert evidence to resolve ambiguities, must be reviewed for clear error on appeal. As a result, appellate review of claim construction now reflects a hybrid standard: legal conclusions are reviewed de novo, while factual determinations are subject to more deferential review. This nuanced approach reflects the complexity of claim interpretation in modern patent litigation.
The Markman hearing is the process of interpreting claim terms, which depends on a structured evidentiary hierarchy established by precedent. Courts divide the sources of interpretive guidance into two categories: intrinsic evidence and extrinsic evidence, with a strong preference for the former.
Intrinsic evidence is considered the most authoritative and reliable source in claim construction. It consists of three core components. First, the claim language itself is the starting point; it must be read in the context of the entire patent, not in isolation. Courts analyze each term in light of surrounding text and how it is used within the patent as a whole. Judges prefer to interpret the written claim language on its face, making the patent scope and rights more accessible to the reader.
Second, the patent specification plays a central role, as it is the written description of the invention and effectively serves as the "dictionary" of the patent, providing definitions, context, and examples of how terms should be understood. The specification may expressly define certain terms or implicitly shape their meaning through detailed descriptions of the invention’s structure and operation.
Third, the prosecution history, which is the record of communications between the patent applicant and the patent examiner during the patent application process, can further illuminate the intended scope of the claims. Amendments, arguments, and rejections captured in this history often clarify the meaning of claim language and may establish disclaimers or limitations that affect how terms are interpreted.
When intrinsic sources fail to fully resolve a dispute over the meaning of a term, courts may turn to extrinsic evidence, which serves a supportive, secondary function. This includes technical dictionaries, engineering glossaries, and treatises that reflect the common usage of terms at the time of the invention. Expert testimony is also a common form of extrinsic evidence, offered to explain how a person of ordinary skill in the art would have understood particular claim terms based on the technical context.
While extrinsic evidence can help fill gaps or confirm interpretations suggested by intrinsic materials, courts generally treat them with caution. The Federal Circuit has consistently held that extrinsic evidence cannot contradict or override the meaning evident from the intrinsic record. In deciding claim construction, Judges will typically only consult extrinsic materials if, after a thorough review of the patent claim language, specification, and prosecution history, there remains genuine ambiguity regarding a claim’s scope.
In sum, while both categories of evidence may be presented during a claim construction hearing, the court’s analysis is anchored in intrinsic materials. Extrinsic sources, including expert opinions and dictionary definitions, are used judiciously and only when necessary to clarify unresolved ambiguities. Any consulted extrinsic support must align with intrinsic record. This prioritization reinforces the importance of clear drafting during the patent prosecution process and underscores the role of the patent specification and prosecution history in defining the legal boundaries of a patent.
While the precise procedures for a Markman hearing can vary depending on the jurisdiction, most district courts follow a similar sequence of events designed to facilitate a thorough and orderly claim construction process. The hearing typically unfolds in multiple phases, starting well before the court convenes for oral argument.
Claim term identification: Each party, plaintiff and defendant, identifies specific claim terms from the patent that are disputed and require judicial interpretation. Courts generally encourage the parties to limit their selection to the most material terms to streamline the process and focus on issues likely to impact the outcome of the patent infringement case.
Selecting the right disputed claim terms is essential. Parties should focus on a limited number of key terms (e.g., 5 to 10) that are most likely to affect the outcome of the case. Overloading the court with excessive disputes can dilute persuasive focus and lead to inefficient proceedings. Strategic claim selection enhances clarity and improves the chances of a favorable construction ruling.
Initial disclosures: This step is governed by local rules that often vary by district. For example, in the Northern District of California, which has established detailed patent local rules, patentees are typically required to serve detailed disclosures within approximately 45 days of the initial case management conference. These disclosures include the asserted patent claims, identification of the accused products or systems, relevant priority dates, and other foundational information that will shape the claim construction dispute.
Claim construction briefing: Each party submits detailed written arguments in support of its proposed claim interpretations. The briefs typically cite intrinsic evidence, including the patent specification, claim language, and prosecution history, and may also include references to extrinsic evidence such as technical dictionaries or expert declarations. In many cases, both sides retain technical experts to provide opinions on how a person of ordinary skill in the art would understand the disputed terms. These expert declarations are often submitted with the briefing, and in some jurisdictions, experts may also be deposed or permitted to testify at the hearing.
Markman Hearing - Oral argument: Attorneys for both parties appear before the judge to present their arguments, answer questions, and address the opposing party’s interpretations. Notably, there is no jury present during this hearing, as claim construction is a legal issue reserved for the court. Depending on the complexity of the technology involved, the court may appoint a special master or engage a technical advisor to assist in evaluating the parties’ positions, particularly in cases involving highly specialized subject matter.
Claim construction ruling: The court will issue its claim construction in a written claim construction order. This ruling sets forth the court’s interpretation of each disputed term and explains the rationale behind each construction, citing the evidence presented and applicable legal standards. The timing of the ruling varies by case. In some instances, judges issue the order early, before substantial discovery has taken place, to help define the scope of the case and inform early motions. However, many courts prefer to hold the Markman hearing after some discovery has occurred but before trial, allowing the judge to consider a more complete evidentiary record while still providing guidance before summary judgment or trial preparation begins. In rare cases, claim construction rulings are issued during or even after trial, particularly when the meaning of terms emerges as a disputed issue during testimony.
Ultimately, the Markman process plays a foundational role in shaping the trajectory of a patent litigation matter. A favorable claim construction can lead directly to a finding of infringement or non-infringement on summary judgment, narrow the issues for trial, or drive the parties toward settlement. For both patent holders and accused infringers, mastering each step of this process, from identifying disputed terms through briefing, argument, and ruling, is essential to an effective litigation strategy.
The outcome of a Markman hearing significantly influences both summary judgment and trial. During a jury trial, the district court’s Markman hearing ruling becomes part of the legal framework for the case. The jury must evaluate infringement and validity based on the patent claim construction provided by the court, which are incorporated into the jury instructions. On appeal, the Federal Circuit applies a dual standard of review established by the Supreme Court in Teva v. Sandoz. While legal conclusions regarding claim construction are reviewed de novo, any factual findings, such as those based on expert testimony or extrinsic evidence, are reviewed for clear error. This distinction underscores the importance of developing a robust evidentiary record at the district court level.
The court's claim construction is also very often a trigger point for settlement discussions between the parties. A Markman hearing may result in patent claim construction that is favorable to one party over the other, creating an incentive to resolve the case early.
Post Grant Review (PGR) and Inter partes review (IPR) are administrative proceedings before the USPTO's Patent Trial and Appeal Board (PTAB) in which the validity of a patent can be challenged without resorting to patent litigation. They are also often used in parallel to patent litigation by defendants to potentially invalidate an asserted patent and render the plaintiff's patent infringement claims moot. These proceedings do not involve formal Markman hearings, but the interpretation of claim scope remains central to the process. The PTAB and patent office examiners routinely construe disputed terms, and their constructions can significantly influence both validity challenges and parallel litigation strategies. Although the evidentiary rules and procedures differ from federal court, parties must still develop persuasive arguments based on intrinsic evidence, often supported by expert declarations.
Business method patents and covered business method (CBM) patents was a form of PTAB proceeding that was in place in 2020 to address the unique challenges in claim construction. Business method patents are highly susceptible to invalidity under 35 U.S.C. §§ 101 and 112. Effective construction in these cases is critical to avoid characterizing the invention as an unpatentable abstract idea or as lacking sufficient written description or definiteness. PTAB often interpreted such claims narrowly to avoid triggering eligibility or enablement issues. The CBM program is no longer in place. However, business method patents can still be challenged in federal court and through IPR proceedings.
Additionally, claim construction issues in patents can arise in International Trade Commission (ITC) proceedings under Section 337, where they often proceed in parallel with district court litigation and may influence the outcome of both forums.
Markman hearings are pivotal in patent litigation. You should seek the assistance of intellectual property attorneys with thorough patent law and litigation expertise. It’s not just legal formality, it’s the key battleground where patent claim construction rules, evidence presented, and judge decisions converge to define the operational meaning of your patent rights.
If you are faced with a potential patent dispute or have other patent matters with which you need the assistance of experienced patent attorneys, contact our firm for a free consultation.
© 2025 Sierra IP Law, PC. The information provided herein does not constitute legal advice, but merely conveys general information that may be beneficial to the public, and should not be viewed as a substitute for legal consultation in a particular case.
When launching or growing a business, one of the most critical assets you can develop is your brand identity. Your brand distinguishes your products or services from competitors and creates lasting recognition in the minds of consumers. At the core of brand protection lies the trademark. But navigating trademark law can be difficult, especially for business owners unfamiliar with legal processes. That’s where a trademark attorney becomes an invaluable asset.
In this article, we answer the essential question: What does a trademark attorney do? We’ll walk through the key legal services trademark attorneys provide, how they help you protect and enforce your rights, and why their expertise can make or break your brand’s success.
A trademark is a word, phrase, symbol, or design that identifies and distinguishes the source of goods or services. Trademarks can include brand names, logos, taglines, product packaging, and even unique sounds or colors. Owning a trademark gives you the legal right to prevent others from using confusingly similar marks that might mislead consumers.
Whether you’re starting a new venture or expanding an established company, securing your own trademark rights is vital to building and protecting your brand. However, the trademark application process is significantly more complicated than filling out forms. It involves trademark vetting, legal strategy, risk analysis, and trademark maintenance, tasks where a skilled trademark attorney brings substantial value.
Before investing time and money into branding, a trademark lawyer can help you vet your proposed trademark and conduct a comprehensive trademark search. A comprehensive search identifies existing trademarks that may conflict with your proposed name or logo and helps you avoid costly mistakes that could lead to legal disputes or forced rebranding.
Business owners and entrepreneurs sometimes attempt to conduct their own trademark search without the assistance of a trademark attorney. Skipping a comprehensive search or relying solely on free online tools can result in adopting a mark that is already in use or too similar to another protected brand. The consequences can include lawsuits, denied applications, or rebranding expenses.
Without an understanding of how priority rights in trademarks work, knowing where threats and risks to trademark registrations come from, and proper search tools, non-attorneys can easily fail to conduct a proper and thorough trademark search. Searches should, of course, include reviewing the United States Patent and Trademark Office (USPTO) database for potential conflicts with prior filings, but it is also important to identify state-level trademark registrations, search for unregistered common law marks, and to search domain names, business directories, and social media platforms.
The results from these searches must also be properly analyzed to determine whether the mark can be registered and whether there is a potential for trademark infringement. This multi-layered review uncovers both direct conflicts and confusingly similar marks that may pose registration challenges or trademark infringement risks. A trademark attorney has the knowledge and skill to properly analyze these results, identifying red flags that a business owner might miss.
A trademark attorney will also analyze whether your proposed mark is eligible for federal trademark registration based on formal requirements. Not all trademarks qualify for protection under U.S. law. Marks that are considered generic or merely descriptive marks, those that simply describe the goods or services, are refused registration by the USPTO.
A key part of this evaluation involves assessing the distinctiveness of the mark. Trademark law classifies marks along a spectrum, ranging from fanciful marks (like "Xerox" or "Kodak") to arbitrary, suggestive, descriptive, and finally generic terms. Fanciful marks are inherently distinctive and among the easiest to register because they are invented terms with no prior meaning. In contrast, descriptive marks, for example "Cold and Creamy" for ice cream, are often considered weak and may require proof of secondary meaning to gain protection.
Your trademark attorney will also explain the difference between use-based applications, where the mark is already in use in commerce, and intent-to-use applications, which are filed when you plan to use the mark in the near future. Understanding which filing basis is appropriate can influence the success and timing of your application.
By helping you choose a legally strong mark from the outset, ideally one that is distinctive, unique, and clearly associated with your brand, your attorney sets the stage for a smoother registration process and long-term brand protection. This strategic guidance can make a crucial difference in ensuring your trademark is not only accepted but enforceable in the marketplace.
A major part of what a trademark attorney does is manage the trademark application process, ensuring that all required elements are properly prepared and submitted to the USPTO or an appropriate state trademark office. This legal process demands precision, strategy, and a comprehensive understanding of trademark law.
There are many formal requirements that need to be properly addressed, including properly identifying the correct trademark owner and applicant, determining the proper basis for the application (e.g., should it be a current use application, an intent-to-use application, an application based on foreign priority, or other basis), properly identifying goods and services and the correct classification therefor, and submitting a proper specimen of use demonstrating use of the mark in commerce. The application process demands precision, strategy, and a comprehensive understanding of trademark law.
Errors, omissions, or misclassifications in any of these areas can result in delays, refusals, or even loss of rights. By entrusting this process to a trademark attorney, you ensure that your application is complete, accurate, and legally sound, maximizing your chances of approval and long-term brand protection.
During examination, the application will be assigned to a trademark examining attorney to review and evaluate whether the trademark can be registered. The Examiner may issue a USPTO office action, which is an official letter detailing problems with the application. These could be procedural (e.g., missing information) or substantive (e.g., a likelihood of confusion with an existing mark).
Responding to office actions often requires legal arguments, amendments to the application, or supporting evidence. Trademark attorneys are skilled at crafting responses that address the USPTO’s concerns and move the application toward approval. Having a skilled trademark attorney ensures that the office action is properly addressed and the trademark is given the best chance of registration.
Even after registration, trademark rights require ongoing maintenance. A trademark attorney helps ensure you meet renewal deadlines, file required declarations of use, and monitor the market for potential infringers. Attorneys manage monitoring the USPTO for confusingly similar new applications, surveying the marketplace for unauthorized use of confusingly similar marks, and surveying domain names and social media handles that may violate your trademark rights
If another party uses a similar mark in a way that causes consumer confusion, your trademark attorney can take action. They may start with a cease-and-desist letter or escalate to formal litigation if needed. Enforcement actions include sending demand letters, filing oppositions or cancellations against third party trademark filings with the Trademark Trial and Appeal Board (TTAB), and initiating lawsuits in state and federal court.
Attorneys help you assess the scope of the infringement, potential damages, and the best course of action. Their involvement often leads to faster and more favorable resolutions.
Before launching a product or entering a new market, businesses must assess whether their branding could infringe on existing marks. A freedom to operate analysis by a trademark attorney evaluates potential conflicts and reduces legal exposure. Freedom to operate analyses often include more than one form of intellectual property, such as trademarks and copyrights. Many trademark attorneys are versed in other areas of intellectual property law. However, if a case or legal matter includes issues beyond trademark law, you should inquire whether your trademark attorney or other attorneys at their law firm can handle other areas of law.
This proactive assessment minimizes the risk of future trademark disputes and costly rebranding efforts.
Trademark attorneys also advise on licensing and assignment agreements. These documents allow others to use your mark under specific conditions or transfer ownership of a mark entirely. A trademark attorney can take basic objectives of a trademark license or other transaction and prepare a thorough written agreement that includes all important contract concerns under US trademark law, including the limits on the licensed use, quality control terms, auditing provisions, warranties, and other highly relevant terms for a trademark agreement.
Poorly drafted agreements can jeopardize trademark rights. Legal guidance ensures your brand is used correctly and consistently.
If your business operates globally or plans to expand overseas, a trademark attorney can coordinate international trademark applications through systems like the Madrid Protocol. Many trademark attorneys have the skills and resources to file for trademark rights in multiple countries efficiently, handle the unique requirements of foreign jurisdictions, and work with foreign counsel to acquire and enforce rights internationally.
A coordinated strategy ensures your brand is protected wherever you do business.
An experienced trademark attorney does more than handle filings, they act as a long-term partner in developing and managing your brand portfolio. A successful portfolio of brands requires ongoing legal advice tailored to your business goals, strategy for naming new products and services, risk mitigation for rebrands and mergers, and coordination with marketing and business teams.
This strategic support aligns your legal protection with your brand’s growth trajectory.
So, what does a trademark attorney do? They provide critical legal services that help business owners select, register, protect, and enforce their brand identities. An experienced attorney safeguards the value of your trademarks, reduces legal risk, facilitates stronger brand protection, enforces your trademark rights, and provides peace of mind
If you need assistance with your brand or have other trademark needs, contact our office for a free consultation. Our attorneys are skilled in all areas of intellectual property law.
© 2025 Sierra IP Law, PC. The information provided herein does not constitute legal advice, but merely conveys general information that may be beneficial to the public, and should not be viewed as a substitute for legal consultation in a particular case.
When launching a new product, service, or technology, you want to know whether you can do so without infringing third party intellectual property. To make this determination, it is often necessary to conduct a Freedom to Operate (FTO) search and analysis. An FTO analysis includes a search for patents in the relevant area of technology to evaluate whether you can make, use, sell, or import a product or process without infringing the valid intellectual property rights of others, particularly patents. Failure to secure FTO can result in costly patent infringement litigation that threatens your product, profits, and reputation.
This article provides an overview of FTO searches and analyses, and explains their role and value in business development in the patent context.
Freedom to Operate refers to the legal ability to develop, manufacture, use, market, sell, or import a product or process in a specific jurisdiction without infringing the valid intellectual property (IP) rights of others, most commonly patents. It is important to understand that FTO is not a right in itself, unlike a patent, which grants the holder the right to exclude others. Instead, FTO is a condition that must be verified through detailed analysis of the existing IP landscape to determine whether your actions would violate the enforceable rights of others.
It should be understood that owning a patent on your own innovation does not automatically confer the right to commercialize the patented technology. Patents are often incremental, and your invention may build upon or incorporate elements of prior patented technologies. As a result, even patented innovations can potentially infringe other existing patents or pending patent applications. Patentability concerns whether your invention is new and non-obvious; FTO concerns whether commercializing your invention infringes others’ rights.
A thorough freedom to operate analysis involves identifying relevant patents, reviewing the patent and its examination record to determine the meaning and scope of the patent claims, and assessing whether your product or process would fall within the scope of the patent claims. This proactive step is necessary to manage infringement risk and avoid costly patent litigation.
An FTO analysis is a critical component of any product development and commercialization strategy, and its importance spans several key stages of the business lifecycle. At the early stage of development, conducting an FTO search can help identify potential obstacles in product design and research and development, allowing companies to make adjustments before investing significant time and resources.
Prior to making a significant investment, whether in manufacturing, marketing, or distribution, an FTO analysis minimizes the risk of encountering unforeseen patent barriers that could halt progress or result in costly litigation. Patent infringement lawsuits can result in significant litigation costs, injunctions, and costly damage awards.
FTO analyses are also a key element of IP due diligence during licensing negotiations, mergers, acquisitions, and joint ventures, where freedom from third-party patent risk can materially affect the value of a deal. Without proper FTO, companies risk litigation, reputational damage, and significant business disruptions that could derail product launch or long-term profitability.
An FTO search is a foundational step in determining whether your new product, process, technology or other innovation may infringe on the patent rights of others. A patent search is conducted to identify relevant patents and patent claims that could impact your ability to bring the product to market without legal risk. This includes reviewing issued and enforceable patents, which are actively in force and could form the basis of an infringement lawsuit. It also involves analyzing pending patent applications (which are typically published 18 months after their initial filing date) that may eventually issue with enforceable claims. Furthermore, particular attention is paid to competitor patents, as these are the most likely to be enforced in the market space you’re entering.
Because IP rights are territorial, the FTO search must be conducted separately for each jurisdiction where you intend to manufacture, sell, or import the product, e.g., the US, UK, EU, Japan, and others. A finding of FTO in one country does not guarantee freedom in another, making it essential to tailor searches to each target market. Reliable tools for conducting such searches include public patent databases such as the USPTO, Espacenet (by the EPO), and WIPO’s Patentscope, which offer access to global patent documents. However, it should be understood that examining the patent itself is insufficient. The patent's examination record (the "prosecution history") must also be closely examined to determine how the patentee distinguished the patent claims from the prior art, which informs the meaning of the patent claims. The patent claims must be understood or construed in view of the entire patent record.
An FTO legal opinion from a qualified patent attorney is needed to properly assess the legal risks associated with launching a new product, process, or technology. An FTO opinion provides a detailed, reasoned assessment of whether the product or process is likely to infringe any identified patents, based on a review of relevant patent claims and the technical features of the innovation. These opinions are valuable at multiple stages of product development. They help inform design decisions, especially when modifications or design-arounds are necessary to avoid infringement.
In the context of investments, licensing deals, or acquisitions, an FTO opinion demonstrates thorough due diligence, increasing investor and partner confidence. Importantly, such opinions may also serve as a defense against allegations of willful infringement, potentially limiting exposure to enhanced damages in litigation.
A standard FTO opinion typically includes a detailed description of the product or technology, the search strategy and databases used, a thorough assessment of infringement risk, and a legal analysis of the scope of potentially relevant patent claims. This structured format ensures that the analysis is comprehensive, legally sound, and clearly communicated to business stakeholders.
Your freedom to operate is not a one-time determination, it is a dynamic assessment that must evolve alongside changes in both your product and the broader patent landscape. Over time, new patent applications are published, existing patents may expire, and new patents are granted, all of which can impact your infringement risk. In addition, as your product undergoes refinements during the development cycle, features that were not previously at issue may suddenly fall within the scope of an existing or newly issued patent. Therefore, what was once a low-risk assessment may shift, exposing your business to potential legal threats if not properly monitored.
To mitigate these risks, it is critical to follow several best practices. First, always update your FTO analysis after any significant product design changes. Second, actively monitor patent filings from key competitors, as these may signal future IP barriers. Third, make it a policy to reassess your FTO status periodically in all relevant jurisdictions where you intend to operate.
One effective strategy for managing patent infringement risk is to modify your product or process to avoid falling within the scope of a competitor’s patent claims, if possible. This approach, known as “designing around,” enables businesses to move forward with commercialization while minimizing the likelihood of legal disputes. The process begins by carefully analyzing and construing the relevant patent claims to identify specific claim limitations, the elements that define the legal boundaries of the patented invention. Once these limitations are understood, the product or process may be altered to omit or substitute one or more of those elements, thereby aiming to avoid infringement.
However, designing around is not merely a technical exercise, it must be validated through legal analysis. After the design changes are implemented, a follow-up analysis should be conducted to confirm that the revised product or process does not fall within the scope of the identified patent claims. This verification ensures that the redesign successfully mitigates the infringement risk.
If a patent presents a significant infringement risk and designing around is not technically or commercially feasible, there are still several strategic options available to mitigate liability. One common approach is to negotiate a license with the patent holder, which provides the legal right to use the patented technology in exchange for agreed-upon terms, often including royalties.
Alternatively, a company may seek to acquire the patent outright, thereby eliminating the risk entirely. In some cases, it may be appropriate to challenge the validity of the patent through formal mechanisms such as ex parte reexamination, post-grant review, opposition proceedings, or patent litigation. Each of these approaches involves different costs, timelines, and levels of legal risk. Some may be quicker but less certain, while others are more resource-intensive but potentially more definitive. For this reason, it is essential to consult with experienced patent counsel to evaluate and implement the most effective risk management strategy.
Freedom to operate studies can require a significant investment of time and resources, especially in complex and highly competitive industries like biotechnology, pharmaceuticals, or electronics, where overlapping patents and dense patent landscapes are common. However, the cost of an FTO analysis is almost always far less than the expense of defending a patent infringement lawsuit. Several factors influence the overall cost, including the breadth of the product scope, the number of jurisdictions being analyzed, the technical complexity of the product or process, and the volume of potentially relevant patents. To manage these costs effectively, businesses should begin the FTO process early in product development and carefully define both the geographic reach and technical focus of the analysis.
One of the most instructive historical examples of freedom to operate (FTO) in practice is the U.S. automobile industry’s confrontation with the Selden patent in the early 20th century. George Selden obtained U.S. Patent No. 549,160 in 1895, which broadly claimed the concept of a gasoline-powered automobile. The patent was licensed exclusively to the Electric Vehicle Company, which in turn formed the Association of Licensed Automobile Manufacturers (ALAM) to enforce the patent and extract royalties from car manufacturers.
The upstart Ford Motor Company refused to join the ALAM or pay royalties, believing that the Selden patent did not cover its vehicles. Ford commissioned a detailed FTO analysis by patent attorney Ralzemond Parker, who concluded that Ford’s engine technology, which was based on the Otto cycle, was materially different from the Brayton-cycle engine described in the Selden patent. Based on this legal opinion, Ford publicly indemnified its customers and continued production.
The dispute culminated in Columbia Motor Car Co. v. C. A. Duerr & Co., 184 F. 893 (2d Cir. 1911), where the Second Circuit ultimately held that Ford’s automobiles did not infringe the patent, validating Ford’s position and FTO strategy.
This landmark case underscores the power of a thorough FTO analysis in guiding business decisions and resisting overbroad patent assertions. It also illustrates how legal clarity, grounded in technical distinctions and claim construction, can provide the foundation to proceed confidently in the face of aggressive enforcement efforts.
A proper freedom to operate strategy is essential due diligence prior to launching any new technology, product, or service. It allows your company to proceed with development and commercialization while limiting legal exposure.
While no FTO opinion can offer a 100% guarantee, the process of conducting FTO searches, reviewing identified patents, and obtaining legal guidance is critical to making informed, strategic decisions. By treating FTO analysis as an integral part of your due diligence, you improve your chances of a successful, sustainable market entry.
If you need to discuss an FTO analysis, patentability search, infringement analysis, or other patent matter, contact our office for a free consultation.
© 2025 Sierra IP Law, PC. The information provided herein does not constitute legal advice, but merely conveys general information that may be beneficial to the public, and should not be viewed as a substitute for legal consultation in a particular case.
A trademark license agreement is a transaction in which one business (licensor) allows another (licensee) to lawfully use the licensor's trademark in exchange for a licensing fee. A trademark license agreement allows a licensee to leverage a licensor's established brand recognition without owning the mark. For the licensee, the agreement provides rapid market entry, reduced marketing costs, and access to consumer trust. For licensors, trademark licensing generates revenue and extends brand reach without direct expansion.
License agreements are essential in franchising, merchandising, and co-branding strategies. When properly structured, they protect brand value while enabling commercial growth. Without a license, unauthorized use may constitute trademark infringement, exposing the unauthorized user to legal liability. Trademark licenses are effective tools for monetizing intellectual property and scaling operations efficiently within defined legal and quality control boundaries.
For business owners unfamiliar with intellectual property law, learning how these agreements work may translate into a better understanding of the value of strong trademarks and the business opportunities available through trademark licensing. This guide explains the key provisions and practical considerations of a trademark license agreement in plain language.
A trademark license agreement is a legally binding contract in which the licensor grants certain rights to a licensee to use the mark in connection with specified goods or services, in exchange for compensation. Licensing is often used when the licensor wants to expand into a new geographic area, industry, or marketing channel without directly operating there. For example, a clothing company might license its mark to a retailer to develop clothing stores under the clothing company's trademark. These agreements can cover service marks and traditional trademarks, and typically define rights concerning use, exclusivity, quality control, territory, and termination.
A trademark license can be based on a common law trademark, a state trademark registration, or a federal trademark registration. Each form provides differing levels of legal protection, geographic scope, and evidentiary advantages.
Common law trademarks arise automatically through use of a mark in commerce, even without registration. They are enforceable within the geographic area where the mark is used and recognized by consumers. While sufficient to form the basis of a license, they offer limited protection and are harder to enforce, particularly across state lines.
State trademark registrations provide protection within the boundaries of the registering state. They offer some procedural benefits, such as inclusion in a searchable database, but remain limited in scope. State registration may be appropriate for purely local businesses but lacks the national presumption of validity provided by federal law.
Federal trademark registrations, issued by the United States Patent and Trademark Office (USPTO), offer the strongest legal foundation for a license. They provide nationwide constructive notice of ownership (15 U.S.C. § 1072), a legal presumption of validity and exclusive right to use the mark nationwide (15 U.S.C. § 1115), and the ability to bring suit in federal court. A federally registered trademark can also be recorded with U.S. Customs and Border Protection to prevent the importation of infringing goods.
In a licensing context, federal registration gives licensors stronger control and enforcement options and enhances the marketability of the license. Licensees are more likely to invest in promoting a brand backed by a valid, enforceable federal trademark registration.
While each agreement is tailored to specific business goals, most include these essential elements:
This clause specifies what rights are being granted. It defines:
Courts have emphasized that a valid trademark license must include provisions for quality control to ensure that the licensor maintains control over the nature and consistency of the goods or services offered under the mark. See Eva’s Bridal Ltd. v. Halanick Enterprises, Inc., 639 F.3d 788 (7th Cir. 2011). Without such oversight, the arrangement may be deemed a "naked license," which occurs when a licensor allows use of its trademark without retaining control over product or service quality. See FreecycleSunnyvale v. Freecycle Network, 626 F.3d 509 (9th Cir. 2010). Naked licensing can result in abandonment of the trademark under the Lanham Act, rendering the mark unenforceable and potentially destroying its value entirely.
The licensor is legally required to maintain control over the nature and quality of goods or services sold under the licensed mark. This obligation reflects a core principle of trademark law: the protection of consumers. Trademarks function as source identifiers, assuring consumers that the products or services bearing the mark originate from a single source and meet consistent quality standards. When a trademark is licensed, quality control provisions help preserve that assurance by preventing variations that could mislead consumers.
Courts have long held that this requirement safeguards not only the goodwill of the trademark owner but also the public interest in reliable purchasing decisions. If a licensor fails to monitor the licensee’s use of the mark, it risks engaging in “naked licensing,” which can result in the loss of trademark rights. The licensor does not need to control or constantly monitor the licensee's operation. However, quality control provisions must be present in a trademark license agreement and provide the licensor reasonable oversight (e.g., approval of the licensee's proposed trademark use and semiannual product reviews).
Trademark license agreements typically include detailed payment provisions tailored to the commercial goals of both the licensor and licensee. Common compensation structures include flat fees, which are one-time or periodic lump-sum payments for the right to use the trademark. These may be appropriate for short-term or narrowly scoped licenses.
More commonly, licensors receive royalties based on the licensee’s sales of products or services bearing the licensed mark. This approach aligns the licensor’s compensation with the success of the licensee’s use and incentivizes both parties to maximize revenue. Royalties may be calculated as a percentage of gross or net sales, and may include additional provisions defining deductible expenses or adjustments for returns. A central principle in royalty negotiations is that the royalty rate should reasonably reflecting the fair market value of the trademark. However, the parties to the agreement are free to define the rate upon mutual agreement.
Agreements often incorporate minimum royalty requirements, which obligate the licensee to pay a specified amount regardless of actual sales. This protects the licensor from underperformance. In some cases, “most favored nation” clauses are included to ensure the licensor receives terms at least as favorable as those granted to any other licensee of the same mark.
Additional compensation terms may require reimbursement of advertising or promotional expenses incurred by the licensor, particularly when cooperative marketing efforts are involved.
The term of a trademark license agreement can be either for a fixed duration, such as one, three, or five years, or perpetual, subject to specific conditions. Agreements often include provisions for automatic renewal or renewal upon mutual agreement, provided certain performance metrics or compliance standards are met. Termination clauses are critical and typically permit one or both parties to terminate the license early in cases of material breach, such as nonpayment of royalties, unauthorized use, failure to maintain quality control, or the insolvency or bankruptcy of either party. These clauses must be drafted with clarity to ensure enforceability and predictability.
A comprehensive agreement will also outline the notice requirements for termination, including the form, delivery method, and timing of such notice. Post-termination obligations should be explicit, particularly regarding whether the licensee must immediately cease all use of the trademark, destroy related marketing materials, and cooperate in de-branding efforts to prevent ongoing consumer confusion or inadvertent infringement after the license ends.
To allocate risk, most agreements include indemnity provisions. Licensors are sometimes asked to indemnify the licensee against third-party claims of trademark infringement. However, this can expose the licensor to significant liability, so licensors often limit indemnity to “known claims” or include disclaimers of warranty.
Third-party infringement claims pose significant risks to licensees, potentially halting operations, disrupting supply chains, or damaging valuable customer relationships. To manage this risk, trademark license agreements often include indemnity provisions, which function like insurance policies, requiring the licensor to defend or reimburse the licensee for losses arising from trademark disputes. These clauses are particularly important when a licensee relies heavily on the licensed mark to market and sell products or services.
However, licensors must carefully structure indemnity obligations to avoid assuming unlimited liability. Rather than agreeing to blanket indemnification, licensors often limit their obligations to claims that result from their own breach of warranty, misrepresentation, or negligence. Additionally, agreements typically require the licensee to provide prompt notice of any third-party claims to allow the licensor to respond in a timely and strategic manner.
Licensors may also reserve the right to approve or control settlement decisions, ensuring that the resolution of any claim aligns with their business and legal interests. These limitations help strike a fair balance between protecting the licensee and preventing the licensor from bearing excessive or unforeseeable risk, especially in complex or uncertain enforcement landscapes.
Trademark licensing offers significant strategic and financial benefits for both licensors and licensees. For companies that own well-known or even moderately recognized trademarks, licensing creates an opportunity to monetize underutilized assets, generate passive revenue streams, and expand into new markets without bearing the full risk and cost of direct operations.
From the licensee’s perspective, gaining access to an established trademark allows a business to reduce marketing and promotional costs, enhance consumer trust, and accelerate product acceptance by leveraging existing brand recognition. This is especially valuable for startups or companies entering new geographic or product markets.
For the licensor, licensing provides a means to extend brand visibility, increase market penetration, and generate income while still retaining ownership and control over the trademark. The ability to grant only certain rights, such as use in a defined territory or for a specific class of goods, preserves long-term brand value and strategic flexibility.
However, the success of any trademark licensing venture depends heavily on clear contractual terms, rigorous quality control, and the involvement of experienced legal counsel to mitigate risk and prevent disputes.
A trademark license agreement is a powerful tool that, when executed properly, can deliver substantial commercial benefit while safeguarding the interests of both the licensor and licensee. However, failure to address key provisions, such as quality control, compensation, liability, and termination, can jeopardize the value of the mark and expose the company to substantial legal risk.
Whether you're licensing a mark to grow your business or seeking to leverage someone else’s brand, it’s essential to involve experienced legal counsel, verify the validity of the mark, and ensure that all obligations are clearly defined and binding.
If you are considering entering a trademark licensing situation or other trademark matters, contact our office for a free consultation.
© 2025 Sierra IP Law, PC. The information provided herein does not constitute legal advice, but merely conveys general information that may be beneficial to the public, and should not be viewed as a substitute for legal consultation in a particular case.
U.S. patent law provides for both injunctive relief, which halts infringing activity, and monetary compensation for the harm suffered by the patent holder. The monetary compensation may be measured in the patent holder's lost profits or a reasonable royalty that the infringing party would have paid. Also, in some cases, a jury may award enhanced damages in exceptional cases where the defendant acted egregiously.
Patent infringement is a potential issue for any business developing new products and services. It is important to understand the risk of patent infringement and the monetary damages that might result from infringement. The types of patent damages are explored in more detail below.
When a defendant is found liable for patent infringement, U.S. law ensures that the patent owner receives fair compensation. Under 35 U.S.C. § 284 of the Patent Act, once a court determines that a defendant's infringement has occurred, it must award the patentee "damages adequate to compensate for the infringement, but in no event less than a reasonable royalty" for the unauthorized use of the patented invention. These damages are designed not to punish the infringer, but to restore the patent holder to the financial position they would have been in had the infringement not occurred. However, if the infringement is proven to be willful, the court may award enhanced damages, up to three times the compensatory amount.
The law recognizes two main forms of compensatory damages:
Lost profits are one of the most significant categories of patent infringement damages because they aim to place the patent owner in the financial position they would have occupied “but for” the infringement. In other words, these damages are meant to compensate for the sales, market share, and profits the patentee lost due to the infringer unlawfully making, using, or selling the patented product.
To succeed in a claim for lost profits, the patentee must present evidence at trial that satisfies a four-part test established in Panduit Corp. v. Stahlin Bros. Fibre Works, 575 F.2d 1152 (6th Cir. 1978). The elements are:
In addition to diverted sales, courts may consider other economic harms, such as price erosion (where the infringer’s competition forces the patentee to lower prices), increased costs (from fighting to maintain market share), and convoyed sales, losses on related products or services sold in conjunction with the patented item (e.g., parts, accessories, or maintenance services).
Proving lost profits often requires detailed financial records and expert testimony, and it can be particularly challenging when the patent owner is not actively selling the product. In such cases, courts typically award reasonable royalty damages instead.
When a patent owner cannot prove lost profits, they are still entitled to damages under the Patent Act, specifically, a reasonable royalty. Under 35 U.S.C. § 284, “[u]pon finding for the claimant the court shall award the claimant damages adequate to compensate for the infringement, but in no event less than a reasonable royalty for the use made of the invention by the infringer”. This provision guarantees a minimum baseline of compensation and ensures that patentees receive some remuneration even when actual losses are difficult or impossible to quantify.
A reasonable royalty is calculated based on a hypothetical negotiation between a willing licensor and a willing licensee at the time the infringement began. This legal fiction allows courts to simulate what the parties would have agreed upon in a good faith license negotiation, had infringement not occurred. The foundational authority for evaluating reasonable royalties comes from Georgia-Pacific Corp. v. U.S. Plywood Corp., 318 F. Supp. 1116 (S.D.N.Y. 1970), which identified 15 non-exclusive factors relevant to determining the royalty rate. These include:
One key legal requirement is apportionment, the process of ensuring that damages reflect only the value of the patented feature, and not the value of the entire product unless the patented feature drives consumer demand. The Federal Circuit has emphasized that “a patentee is only entitled to a reasonable royalty attributable to the infringing features”. Power Integrations, Inc. v. Fairchild Semiconductor Int’l, Inc., 904 F.3d 965, 977 (Fed. Cir. 2018). This rule is particularly important in the context of complex, multi-component products, such as smartphones or software systems.
Courts often require use of the smallest salable patent-practicing unit as the royalty base to avoid overcompensation, unless the entire market value rule (EMVR) applies, i.e., when the patented component drives the demand for the entire product. LaserDynamics, Inc. v. Quanta Comput., Inc., 694 F.3d 51, 67 (Fed. Cir. 2012).
To support a damages award, expert testimony is typically required and must be grounded in economic rigor and factual evidence. Courts have excluded speculative or unsupported opinions, emphasizing the need for reliable methodologies and factual ties between the royalty and the extent of infringement. Lucent Techs., Inc. v. Gateway, Inc., 580 F.3d 1301, 1336–37 (Fed. Cir. 2009).
Thus, the reasonable royalty framework acts as both a statutory safeguard for patentees and a critical analytical tool for courts in patent infringement cases.
In addition to compensatory damages, courts may award enhanced damages, up to three times the amount of actual damages, under 35 U.S.C. § 284 when willful infringement is proven. However, enhanced damages are not available in every infringement case. The Supreme Court in Halo Electronics, Inc. v. Pulse Electronics, Inc., 579 U.S. 93 (2016), clarified that such damages are reserved for "egregious cases of misconduct beyond typical infringement", and courts have broad discretion to determine whether enhancement is appropriate.
The Halo Court rejected the prior Seagate test, which had required clear and convincing evidence of objective recklessness, finding that it was overly rigid and inconsistent with the discretionary language of § 284. Instead, Halo emphasized that willfulness should be assessed based on the infringer’s subjective bad faith at the time of the conduct, and that culpability is generally measured against the knowledge of the actor at the time of the challenged conduct.
Key factors that courts consider when determining whether to enhance damages include:
See Read Corp. v. Portec, Inc., 970 F.2d 816 (Fed. Cir. 1992).
Because the inquiry is fact-intensive and centers on intent, companies should document good-faith efforts to avoid infringement, such as conducting freedom-to-operate analyses, obtaining legal opinions, and designing around patents. These proactive steps may help a court find that the infringement was not willful, thereby avoiding exposure to treble damages.
Patent litigation can be costly, unpredictable, and disruptive. Whether you’re a patent owner seeking damages or a defendant facing exposure and seeking to limit damages, understanding how courts assess infringement damages is critical. For business owners, here are some practical takeaways:
If you need assistance with a patent dispute or other patent matter, contact our office for a free consultation.
© 2025 Sierra IP Law, PC. The information provided herein does not constitute legal advice, but merely conveys general information that may be beneficial to the public, and should not be viewed as a substitute for legal consultation in a particular case.
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