The general rule of thumb for trademarks in the U.S. – and everywhere else, for that matter – is “the earlier, the better.” It’s almost always the right move to file a trademark application as early as possible, and well in advance of a product or service announcement, both to (a) minimize the possibility of conflicting marks and filings; and (b) mitigate the potential for attempted trademark and domain name “squatting” that inevitably follows a well-publicized product/service announcement. This is why a federal intent-to-use (ITU) application is so valuable. Provided a company has the requisite bona fide intent, an ITU filing allows a company to secure a constructive trademark priority date years before the company begins shipping products or providing services in U.S. commerce.
But what if a company wants the benefits of an ITU application without revealing its business plans to the world? One possible solution is a “submarine” filing.
Tensions Between Business Goals and Trademark Best Practices
Despite the legal benefits of an ITU filing, there’s a potential downside: it essentially telegraphs a company’s intentions. Because U.S. federal trademark applications are made available for public inspection (e.g., via the USPTO’s TESS database) almost immediately after filing, a trademark filing could disrupt a company’s carefully crafted marketing push leading up to a key announcement or important product unveiling. This is especially the case if the trademark is highly suggestive, such that the mark combined with the descriptions of goods/services leave little mystery.
This can be frustrating, and illustrates the tension between a company’s legal strategy and PR/marketing strategy. On the one hand, it’s a competitive world, and a “poorly timed” trademark application may well reveal a company’s heretofore confidential plans to unveil a new product, announce new platform feature, or even take on an entirely new industry. Indeed, analysts, enthusiasts, and competitors – especially in the technology, entertainment, automotive, and game industries – routinely scour various trademark registries for clues as to a company’s next move. On the other hand, as discussed above, time is always of the essence in the world of trademarks, and waiting too long could conceivably result in a more complex road to securing trademark rights, complications related to social media and domain name strategies, or a need to rebrand entirely. So what’s a company to do if it desires the comfort of a U.S. federal application, but also wants to keep its plans under wraps for just a while longer?
Shell Company Shenanigans
One option a company can employ is to file a trademark application in the name of a separate entity – for instance, a “shell” subsidiary or affiliated entity not known to be connected to the interested company, and possibly one created for the express purpose of “disassociating” the trademark filing from the true party of interest. Corporate/tax considerations aside, in theory this can be a viable strategy, but in the U.S. it’s one fraught with complications; first, there’s a question of whether the holding entity has a bona fide intent to use the mark, and second, transferring the inchoate trademark rights and the underlying ITU application could require some fancy footwork due to the Lanham Act’s anti-trademark-trafficking prohibitions. These complications could result in an application or a resulting registration being vulnerable to challenge on the basis of it being void ab initio (invalid from the outset), or abandoned via improper transfer – potentially serious consequences that may not manifest until a dispute arises years later.
For these reasons, U.S. trademark filers desiring some stopgap stealth may prefer a different approach. Enter the so-called “submarine” trademark filing. A submarine filing is a trademark application filed in a relatively obscure trademark registry that, unlike many national registries, does not have a widely accessible online database of pending applications, such that an application is not easily available for public inspection. Popular destinations for such applications include the island nations of Jamaica, Mauritius, Saint Lucia, Tonga, and Trinidad and Tobago – none of which currently make trademark applications available to public scrutiny via an online database.
How, you might ask, does filing for your trademark in a relatively obscure registry like Mauritius help you secure trademark rights in U.S.? Well, it’s because Mauritius on the one hand, and the U.S. and most other countries on the other hand, are signatories to the Paris Convention for the Protection of Intellectual Property – an intellectual property treaty dating back to 1883 which, among other things, provides for trademark “priority” for identical trademark filings filed in treaty countries within six months of the original application. In the U.S., the Paris Convention priority benefit is codified in Section 44(d) of the Lanham Act. This means that – except in the very rare situation where your company can’t claim any treaty country as its “country of origin” – you could file in Mauritius on February 1, 2019, and wait to file in the U.S. up to August 1, 2019, and your “priority” date for the U.S. application would be February 1, 2019. In other words, your relative rights – your rights vis-à-vis third-parties claiming or seeking rights in confusingly similar marks – would be assessed as if you filed your U.S. application in February, but because you waited for a few months you enjoyed the strategic benefit of keeping your trademark hidden, “underwater,” until your U.S. application was actually filed.
Here’s an example of a submarine trademark strategy in action. Mobile game publisher Zynga filed an application to register the mark GIFS AGAINST FRIENDS in Trinidad and Tobago on March 13, 2017. The U.S. ITU application was filed on April 19, 2017, and the game was announced and released just a day later, on April 20, 2017. In this case, the submarine filing likely gave the company some peace of mind, but allowed it to hold off on a more public trademark filing until it was ready to announce the game. You’ll note that Zynga filed the U.S. application a day before announcing the game, but it could have also waited until the day after, or almost another five months later, with no loss of trademark rights.
“Submarine” Benefits and Risks
One benefit of the submarine filing strategy is that there are no eligibility requirements, other than that (a) the initial application be filed in a Paris Convention jurisdiction, and (b) the applicant have a country of origin that is also a Paris Convention member (any member – e.g., this would work for a Swiss company filing in the U.S.). Beyond that, a trademark applicant claiming priority under 44(d) can file a standard ITU or use-based trademark application in the U.S., and need have no connection to the “underwater” registry. (The broad availability of the submarine strategy under 44(d) should not be confused with a mark registered under Lanham Act Section 44(e), which is available only where the same mark is duly registered in the trademark owner’s “country of origin.”) Further, there’s little risk. Once the U.S. application is filed, the fate of the submarine application cannot affect the U.S. application’s priority date – even if the submarine application is eventually abandoned entirely.
Beyond the relatively modest cost of engaging local counsel to file the initial trademark application abroad, the possible downside to submarine filings is their relative uncertainty. Although certain trademark registries currently don’t provide online databases such that it’s difficult to identify new trademark filings, trademark search vendors are increasingly keeping even “obscure” registry databases updated and available to their subscribers. This means that it may be difficult to keep determined and curious snoopers ignorant for long. That said, while a submarine filing isn’t a 100% waterproof bet to avoid public scrutiny, it does increase a company’s chances of securing trademark rights while also maintaining some control of the “buzz” leading up to a surprise product announcement, especially if the lead time is relatively short.
To mitigate this uncertainty, some companies double up on the strategies discussed above, and create shell companies expressly for the purpose of holding and filing submarine applications, though my earlier admonition to tread (water) carefully apply.
it important for companies to maintain the secrecy of product