[E-trademarks] paralegals that think they are smarter than lawyers

[Katherine Markert]

Carl,

I recently had a new non-U.S. client request that I record an assignment of IP rights.  I was not involved in drafting the original document, and it did not contain the magical “goodwill” word.  While the language of the agreement was arguably sufficient to demonstrate that goodwill did transfer, I warned the client of the risk of rejection since the term “goodwill” was not expressly called out in the agreement.

My decision was guided in part by the following TMEP section and 15 U.S.C. 1060.

503.01(c)    Recording Is Not a Determination of Validity
The act of recording a document is a ministerial act, and not a determination of the document’s validity or of its effect on title to an application or registration. The Assignment Recordation Branch does not examine the substance of documents submitted for recording for the purpose of determining validity. However, the Assignment Recordation Branch will review any underlying document submitted in support of an assignment to merely ensure that it is consistent with the information provided on the cover sheet, including whether or not the mark is transferred with the goodwill of the business, as required under 15 U.S.C. §1060(a)(1)<https://tmep.uspto.gov/RDMS/TFSR/current#/current/l-e02804d6-d858-424c-a693-3bd9353b3df5.html>. See TMEP §503.05<https://tmep.uspto.gov/RDMS/TMEP/current#/current/TMEP-500d1e636.html> regarding procedures involving documents returned as not recorded by the Assignment Recordation Branch. The USPTO will determine the effect of a document only when an assignee attempts to take an action in connection with an application or registration (e.g., when an assignee files a statement of use under 15 U.S.C. §1051(d)(1)<https://tmep.uspto.gov/RDMS/TFSR/current#/current/sec-78769f64-81f6-41f2-85f6-bfeb0d674399.html>  or a §8 affidavit).  37 C.F.R. §3.54<https://tmep.uspto.gov/RDMS/TFSR/current#/current/r-28527887-b20d-4baa-bb16-dd71da83ecda.html>.
In my view, the term “goodwill” needs to be expressly included in the assigning document precisely because the USPTO is not determining the validity of the document.  Absent the express presence of the term “goodwill” in the assigning document, then we are asking the USPTO to do more than a ministerial task of determining whether the cover sheet and underlying document are consistent because it would require interpretation on whether the language used in the underlying document is sufficient to convey “goodwill” (and thereby be consistent with the cover sheet).

[cid:image004.png at 01DA3D74.ABBCAAA0]
Katie Markert
Partner

Markert & Cominolli PLLC
Phone: 585-504-2507
Email: km at markertcominolli.com<mailto:km at markertcominolli.com>
Web: www.markertcominolli.com<http://www.markertcominolli.com/>
75 S. Clinton Ave., Suite 510, Rochester, NY 14604

[Title: LinkedIn - Description: image of LinkedIn icon]<http://www.linkedin.com/in/katherinemarkert>



From: E-trademarks <e-trademarks-bounces at oppedahl-lists.com> On Behalf Of Carl Oppedahl via E-trademarks
Sent: Tuesday, January 2, 2024 11:40 AM
To: for trademark practitioners <e-trademarks at oppedahl-lists.com>
Cc: Carl Oppedahl <carl at oppedahl.com>
Subject: [E-trademarks] paralegals that think they are smarter than lawyers


I am baffled at a recent interaction with the USPTO's Assignment Division.

I have seen the Assignment Division cheerfully and seemingly unquestioningly record all manner of documents, some of which had less actual substantive legal content than an image scan of a used facial tissue.  Such unquestioning recordation of documents is completely consistent with what the USPTO says at https://www.uspto.gov/learning-and-resources/transferring-ownership-assignments-faqs#type-browse-faqs_160521 :

The office simply puts the information on the public record and does not verify the validity of the information. Recordation is a ministerial function. The office neither makes a determination of the legality of the transaction nor the right of the submitting party to take the action.

Recently I e-filed a trademark assignment document through ETAS.  What came back was a Notice of Non-Recordation.  The excuse given for bouncing the assignment document is a form paragraph:

The assignment document submitted for recording is not acceptable.  The statement for the Goodwill of the business was omitted.  15 USC § 1060(a)

A click on LinkedIn indicates that the sole educational credential of the signer of the Notice is a two-year stint at Prince George's Community College.

I will mention that the signer of the Notice is technically correct that the magic word "goodwill" is not recited in the assignment document.  Suffice it to say that the words recited in the document do absolutely and without doubt convey the goodwill despite the magic word not having been recited.  (The document was drafted by someone who's not me, and it was executed prior to my firm having been asked to handle this recordation.)

I phoned up the Assignment Division reaching a different person than the signer of the Notice.  She confidently affirmed the propriety of the bounce, lecturing me that the word "goodwill" simply must appear in the document or it will not legally achieve the intended change of ownership.  Doubling down, she then offered to email to me an exemplary assignment document that she said would be legally effective.

Yes, we have unauthorized practice of law going on here at the USPTO.

I am torn between two possible ways of dealing with this bounce from the Assignment Division.

One choice would be to e-file a "resubmission" with a statement directed to the fact that the words recited do in fact convey the goodwill even if the magic word "goodwill" is not recited.  My guess, based upon what the telephone representative said, is that this would lead to a Reel and Frame Number.  But of course this would put a "kick me" sign on the trademark rights.  This would preserve in perpetuity the legal opinion by the USPTO about what was supposedly not conveyed, and any adversary in litigation would seize upon this in an argument that the trademark went abandoned upon the execution of the document.  Never mind that the USPTO's legal opinion came from someone with no more than a two-year credential from a community college.

Another choice would be to spend hours trying to craft some sort of cleanup document for signature by the same people who signed the existing assignment document.  The cleanup document might include "confirmatory" language confirming that of course the string of words that conveyed the goodwill really did convey the goodwill.  It might include nunc pro tunc language.  It might include quitclaim language.  But of course this would likewise put a "kick me" sign on the trademark rights.  This would preserve in perpetuity a messy cleanup document.

Either path requires me to spend professional time dealing with the bounce, time that I probably cannot bill to the client.

None of this fuss and bother would have been needed if the person signing the bounce notice had followed the USPTO's promise not to " verify the validity" of the document and the USPTO's promise not to "make a determination of the legality of the transaction".


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