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Reprinted from: FASTENER WORLD MAGAZINE -- MAR/APR 1998
IMPACT OF THE FQA INSIGNIA RECORDAL
REQUIREMENT ON FOREIGN MANUFACTURERS
By: Peter Weissman
Introduction to the Recordal Requirement of the Fastener Quality Act
Effective May 26, 1998, the Fastener Quality Act (FQA) requires, amongst other things,
that fastener manufacturers and private label distributors obtain and register an
insignia (herein, "recordal" or "recordal requirement"). The recordal requirement is
satisfied by filing an Application for Recordal with the U.S. Patent and Trademark Office
("PTO").
The overall purpose of the 1996 amendment to the FQA is to protect public safety,
deter the introduction of nonconforming fasteners into commerce, and provide
commercial and governmental customers with greater assurance that fasteners meet
stated specifications. To best carry out these objectives, the recordal requirement was
established in order to improve the traceability of fasteners. Failure to so record an
insignia may have significant consequences, including an injunction, monetary damages,
and in extreme circumstances, criminal penalties.
Ask anyone whether the recordal requirement applies to manufacturers located outside
the United States ("foreign manufacturers") and you will undoubtedly receive a
resounding "yes". However, while the FQA makes clear that foreign manufacturers
must satisfy certain other conditions, such as laboratory testing, the FQA does not
explicitly place a requirement on foreign manufacturers to record an insignia. This
article will explore the scope and impact of the FQA, and in particular the recordal
requirement, on foreign fastener manufacturers as well as importers of fasteners.
Whether the Recordal Requirement Applies to Foreign Manufacturers
The FQA, states that:
Any manufacturer or private label distributor of a fastener must, prior to any sale
or offer for sale of any fastener which is required by the standards and
specifications by which it is manufactured to bear a raised or depressed insignia
identifying its manufacturer or private label distributor, apply for and record an
insignia to be applied to any fastener which is to be sold or offered for sale to
ensure that each fastener may be traced to its manufacturer or private label
distributor.
Though the FQA applies to "any" manufacturer, there is no express requirement that
foreign manufacturers must abide by the recordal requirement.
Nevertheless, the FQA does require that a fastener may NOT be offered for sale or sold
in commerce unless the recordal requirement has been satisfied. Thus, regardless of
where a fastener is produced, it must have an insignia if it is to be sold or offered for
sale in the United States. However, the FQA does not explicitly place the burden of
recording an insignia on the foreign manufacturer. As a practical matter, however, a
foreign manufacturer will likely carry the burden of recording insignias when selling
fasteners to companies in the United States, and especially for smaller distributors.
Complying with the Recordal Requirement
In order to satisfy the recordal requirement of the FQA, an Application for Recordal of
Insignia must be filed with the U.S. Patent and Trademark Office (PTO). The applicant
may (1) request that the PTO assign a random alphanumeric insignia (which is usually
two numbers followed by two letters, such as 01AA); or (2) base the Application upon a
pending U.S. trademark application or registered trademark.
Hence, in order for the applicant to select an insignia, the applicant would first have to
file a trademark application for the insignia. By requiring that the insignia have a
trademark, the PTO effectively prevents multiple applications being granted for the same
insignia.
The insignia must be used on those fasteners that are required by the standards and
specification by which it is manufactured to bear a raised or depressed insignia. If the
fastener has no head, the insignia must be applied to another surface area in a legible
manner. The insignia must be applied through a raised or depressed impression and
be readable with no greater than 10x magnification. Accordingly, an applicant should
take care not to record a lengthy mark if it cannot be easily placed on the fasteners in
the requisite manners.
Foreign applicants may be at an unusual disadvantage with regard to obtaining a
trademark. U.S. trademarks may be based either upon an intent-to-use a certain mark,
or upon a mark used in commerce. However, only use in United States commerce
qualifies, and use outside the country does not afford any priority. Thus, a foreign
applicant may only rely upon use made in the United States, despite any earlier use in
their own country.
This may not be problematic where no other company has a similar mark. However,
where a foreign applicant and U.S. applicant both seek to register the same mark, the
U.S. applicant may be able to rely upon an earlier date of use.
Conclusion
The FQA was enacted with one goal in mind, to improve the quality of fasteners in
commerce, and hold manufacturers and/or distributors of faulty fasteners accountable.
This objective also affects foreign manufacturers of fasteners. To comply with the
recordal requirement, foreign manufacturers may also be forced into a contest over
trademark rights.
Generally, it takes from 6 to 8 weeks or more to obtain an official Certificate of Recordal
from the PTO. In addition, it takes two or more weeks simply to obtain a trademark
serial number. Although the time to obtain a trademark is significantly longer, only a
serial number is required to file an Application for Recordal. Thus, now is the
time to file an Application for Recordal and/or a trademark application in order to meet
the FQA deadline.
[ e-mail to: FASTENER WORLD
MAGAZINE ]
Mr. Weissman is a Patent Attorney with the law firm of Jacobson, Price, Holman &
Stern , PLLC in Washington, D.C., where he may be reached at (202) 638-6666,
fax (202) 393-5350, or
[ e-mail to PWeissman@JPHS.com ]
[ Their website is at: http://www.JPHS.com ]
He is also a former patent examiner for the U.S. Patent and Trademark Office. The views
expressed in this article are those
of the author alone and may not be attributed to the firm or any of its clients.
Please use your 'back' button to return to this article index.
Reprinted from: Fastener Technology International, June/July 1997
Insignia Recordal Requirement
by: Peter S. Weissman, Patent Attorney
There are legal ramifications and trademark issues for
fastener manufacturers
and distributors
that are obtaining and registering insignias for the FQA.
The Fastener Quality Act (FQA) requires that fastener manufacturers and private label
distributors obtain and register an insignia (recordal requirement).
The recordal requirement is satisfied by filing an Application for Recordal with
the U.S. Patent and Trademark Office (PTO).
The overall purpose of the FQA is to protect public safety, deter the introduction of
nonconforming fasteners into commerce and provide commercial and governmental customers with
greater assurance that fasteners meet stated specifications. To best carry out these
objectives, the recordal requirement was established in order to improve the traceability of
fasteners. Failure to record an insignia may have significant consequences, including an
injunction, monetary damages, and in extreme circumstances, criminal penalties.
At first blush, the recordal requirement may appear rather simplistic and straightforward.
All that is required is for manufacturers and private label distributors to register an
insignia with the PTO. However, implementation of the FQA is far from being free of
difficulties. On the technical side, it may not always be clear at what point an item becomes
a fastener, or even what types of fasteners are subject to the FQA.
On the legal side, there may be even more troubling concerns, especially in
implementation of the recordal requirement. By virtue of its nature, the recordal requirement
is closely intertwined with trademark law. For fastener manufacturers and distributors that
are suddenly thrust into the deep end of the trademark pool, the application process may seem
quite confusing and daunting. Moreover, the cumulative aspect of imposing trademark-related
concerns upon a significant portion of a single industry may have consequences that do not
surface for months, or even years, later.
In addition, distributors are placed in the unique position of being capable of using
their own insignia, or passing the recordal requirement on to the manufacturer. This
distributor "conundrum" may pose significant issues to the distributor, and create tension on
relationships between distributors and manufacturers. Certainly, preexisting contracts must
now be renegotiated to determine who will bear the costs and burdens involved in complying
with the FQA.
Choosing an Insignia
Before filing an Application for Recordal with the PTO, an applicant must first decide
upon an insignia. Clearly, the simplest way out is for the applicant to request that the PTO
assign a random alphanumeric insignia, which usually consists of two numbers followed by two
letters. This may seem distasteful, since the applicant is forced to accept the ordinary and
unimaginative scheme summarily established by the PTO. Nonetheless, having the PTO assign an
alphanumeric insignia may be adequate for a company that is not interested in promoting the
insignia as a trademark.
On the other hand, the applicant may decide to design and select its own unique insignia.
As long as a company must affix an insignia on its product, it might as well be one of their
own choosing and design. In order to do so, however, an applicant must first file a federal
trademark application for that insignia with, surprisingly enough, the PTO. However, ownership
of a federally-registered trademark does NOT alone satisfy the recordal requirement; the
insignia must still be registered with the PTO.
The question may arise, then, why an applicant must file the insignia as a trademark,
and still file an Application for Recordal, since both are filed with the PTO. The trademark
register is separate and vastly distinct from the insignia register. Insignia registration is
primarily concerned with being able to trace defective or substandard fasteners to its
manufacturer or distributor. In contrast, the trademark register ensures that the chosen
insignia will not conflict with a trademark owned by another party, and will not otherwise
cause confusion with consumers of the goods.
"The trademark register is separate and vastly distinct from the insignia register."
Once the trademark application is filed, the insignia may then be used in the recordal
application. But, if the trademark application is finally denied registration by the PTO,
abandoned, or if trademark rights are otherwise lost, a new trademark application would have
to be filed along with a new Application for Recordal.
Once recorded with the PTO, the insignia must be applied to any fastener that is sold
or offered for sale if the fastener is required by the standards and specification by which
it is manufactured to bear a raised or depressed insignia identifying its manufacturer or
private label distributor.
The Impact on Trademarks
Many fastener companies have long been quite content using their trademarks without
federally registering those marks. Indeed, the industry has functioned quite well without
companies having to overly concern themselves with protecting their marks. Suddenly, however,
the FQA has forced the entire industry to consider obtaining a trademark to register as an
insignia. This combination of factors presents an interesting circumstance that has never
presented itself before. What happens when a substantial number of members to an industry
file for a trademark, many of which have rights dating back five, ten or even twenty or more
years?
For fastener companies that elect to register their own mark, one option will readily
become apparent. That is, the company will look to register an abbreviation of the company's
name, and most likely, the initials of its name. Clearly, the entire name would be too
lengthy to place on a fastener, so that the initials present a nice alternative. In fact,
many companies are already using their initials either in combination with, and sometimes as
an alternative to, their full name.
The federal register bears this out. Currently, there are 44 marks registered for
fasteners, 15 within the past five years, that bear the initials of the applicant.
Significantly, 37 of these marks have been in use for over 5 years, 16 over 15 years, and 7
over 25 years. Moreover, due to the recent spark of interest in trademarks (undoubtedly due
to the FQA recordal requirement), an additional 30 marks have been filed since July 1993, and
are still pending, based upon the initials of the applicant. Of these, 18 have been in use
for over 5 years, 11 for more than 15 years, and 3 for over 25 years. In fact, one mark,
recently filed in 1997, has been in use since 1912!
Once this is recognized, the problem becomes apparent. There are only a limited
combination of initials that might be used amongst the hundreds of fastener companies.
In addition, many fastener companies include descriptive terms like fastener, nut, bolt,
etc., somewhere in their name, perhaps with Company and/or Inc. Accordingly, several initials
will be prevalent among the chosen fastener insignia.
"When searching for conflicting trademarks, the PTO only inspects the federal trademark
register."
In addition, from a procedural standpoint, the PTO should conduct an interference
search between the trademark register and the insignia register. Otherwise, the PTO might
assign an insignia that includes a mark registered to another. Or, a trademark might be
registered on a mark that has been assigned by the PTO. Currently, however, when searching
for conflicting trademarks, the PTO only inspects the federal trademark register. Clearly,
it would not be overly burdensome to include a search of the insignia register. Nevertheless,
it is unlikely the PTO would modify their searching procedures to accommodate the unique
circumstance of fasteners.
The Conundrum of the "Private Label Distributor"
The FQA applies to "manufacturers" and/or "private label distributors." A "private
label distributor" is defined as a person who contracts with a manufacturer for the
fabrication of fasteners bearing the distributor's distinguishing insignia. Ordinarily, a
distributor that does not require the manufacturer to apply the distributor's own insignia
is not subject to the recordal requirement. Nonetheless, the FQA applies to "manufacturers
or private label distributors," so that the manufacturer would remain subject to the recordal
requirement.
Seemingly then, distributors have the ability to control whether they are subject to the
recordal requirement. If the distributor chooses to select its own insignia, it is then
considered a "private label" distributor that is subject to the FQA. If, on the other hand,
the distributor does not wish to select an insignia, it is not a "private label" distributor,
and therefore not subject to the recordal requirement.
Nevertheless, just because the distributor may choose to pass the burden of the recordal
requirement onto the manufacturer does not necessarily provide the distributor with a
"get-out-of-jail-free card." The statute is quite clear that no fastener subject to the
recordal requirement "shall be offered for sale or sold in commerce unless the manufacturer
or private label distributor has complied with the [recordal] requirements." This applies to
preclude any distributor, whether private label or not, from placing fasteners in commerce
that are subject to the recordal requirement.
Moreover, this apparent freedom of the distributor to pass the recordal requirement on
to the manufacturer may merely be academic in nature. After all, once the manufacturer
obtains and registers an insignia, the distributor is then in a position of dispensing
fasteners bearing an insignia that is registered to the manufacturer. This may be acceptable
to the distributor where the insignia is a random alphanumeric mark. However, a distributor
may think twice about distributing a fastener that bears an insignia operating as a trademark
of the manufacturer.
This awkward position may compel a distributor that is not otherwise subject to the
recordal requirement to nonetheless register its own insignia. Of course, that distributor
must then have the manufacturer place the insignia on the fastener. This may be no more
pleasing of a solution to the manufacturer, who is then forced to apply what may be a
trademark of the distributor, then for the distributor to be dispensing fasteners bearing the
trademark of the manufacturer. Of course, each the distributor and manufacturer may apply
its own insignia, or one of the parties may simply decide to place its trademark on the
labels or boxes accompanying the goods.
Still yet, should the fastener subsequently prove defective, the distributor may find
itself in the middle of a lawsuit for a fastener that only bears the manufacturer's insignia,
though may have been distributed by any number of distributors. Thus, it would seem that a
distributor would serve itself well to use its own insignia, regardless of whether the
manufacturer has obtained its own insignia. At the opposite end of the spectrum, a
manufacturer may likewise be drawn into a lawsuit for a fastener that a distributor may have
obtained from any number of manufacturers. The recordal requirement does not prevent more
than one insignia from being placed on a fastener. Indeed, several insignias may be
registered with the PTO.
"Distributors have the ability to control whether they are subject to the recordal requirement."
In this regard, a fastener may quickly become congested with insignias where there are
intermediary manufacturers and/or distributors.
Conclusion
The Fastener Quality Act was enacted with one goal in mind, to improve the quality of
fasteners in commerce, and hold manufacturers and/or distributors of faulty fasteners
accountable. The recordal requirement provides a quick and easy method of tracing ownership
of fasteners meeting specs.
Yet, the goals of the recordal requirement may have inadvertently caused trademark
issues to surface that otherwise would have remained dormant. Though these issues may be of
interest to the trademark arena, fastener companies will surely be repulsed by the idea of
having to perform the role of the defiant gladiator.
[ e-mail to: Fastener Technology International MAGAZINE ]
Mr. Weissman is a Patent Attorney with the law firm of Jacobson, Price, Holman &
Stern , PLLC in Washington, D.C., where he may be reached at (202) 638-6666,
fax (202) 393-5350, or
[ e-mail to PWeissman@JPHS.com ]
[ Their website is at: http://www.JPHS.com ]
He is also a former patent examiner for the U.S. Patent and Trademark Office. The views
expressed in this article are those
of the author alone and may not be attributed to the firm or any of its clients.
Please use your 'back' button to return to this article index.
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