Timothy J. Lockhart

On August 16, 2018, the U.S. Trademark Trial and Appeal Board (TTAB) affirmed an Examining Attorney’s refusal to register the mark SHAPE XXXX, where the “phantom” XXXX element referred to the 50 U.S. states and Puerto Rico. In re Society of Health and Physical Educators, 127 USPQ2d 1548 (TTAB 2018) [precedential] (Opinion by Judge Marc A. Bergsman). The TTAB said that although phantom trademarks that are legally equivalent and therefore a single mark may be registerable, phantom marks that comprise more than one mark are not.

The applicant filed a use-based application to register the mark SHAPE XXXX for printed materials, clothing, and education services. The application included a “miscellaneous statement” that “[t]he ‘XXXX’ in the mark denotes the unabbreviated name of a state of the United States and Puerto Rico.” The Examining Attorney refused registration on the ground that “the subject matter sought to be registered is a phantom mark that constitutes more than one mark” and is therefore barred under Sections 1 and 45 of the Trademark Act, 15 U.S.C. §§ 1051, 1127, both of which refer to registration of only single marks.

In its analysis the TTAB noted that a “phantom” trademark is one where “‘an integral portion of the mark is generally represented by a blank or dashed line acting as a placeholder for a generic term or symbol that changes, depending on the use of the mark’” (citing In re International Flavors & Fragrances, Inc., 183 F.3d 1361, 1363 n.1 (Fed. Cir. 1999) (denying registration to a phantom mark where its element XXXX indicated varying botanical extracts such as flower, fruit, fragrance, etc.)). In the Flavors & Fragrances case the U.S. Court of Appeals for the Federal Circuit (CAFC) said phantom marks “encompass too many combinations and permutations to make a thorough and effective search [for confusingly similar marks] possible” and therefore do “not provide proper notice to other trademark users, thus failing to help bring order to the marketplace and defeating one of the vital purposes of federal trademark registration” (id.).

For that reason the TTAB has held that “[a] mark that contains a changeable or phantom element resulting in more than one mark must be refused registration.” In re Primo Water Corp., 87 USPQ2d 1376, 1378 (TTAB 2008). However, phantom marks that create legal equivalents may be registerable. To illustrate that point, the TTAB cited In re Dial-A-Mattress Operating Corp., 240 F.3d 1341 (Fed. Cir. 2001), in which the CAFC held that the mark 1-888-M-A-T-R-E-S-S for “telephone shop-at-home retail services in the field of mattresses” was the legal equivalent of the mark (212) M-A-T-T-R-E-S, in which the term (212) was defined as a changeable element. (The CAFC said that the difference between M-A-T-R-E-S-S and M-A-T-R-E-S was immaterial.)

Thus, the TTAB said, if a phantom mark “is to be registered, the possible variations of the mark must be legal equivalents” (citing In re Dial-A-Mattress Operating Corp., 240 F.3d 1341; other citation omitted). Here, “[t]he mark SHAPE XXXX, where XXXX is defined as the name of a state or Puerto Rico, has a large number of variations (i.e., 51 possibilities),” and this variation would inhibit effective searching because the 51 geographic locations are not listed in any searchable portion of the application. For example, a third party interested in marks that include the term NEVADA, would not find Applicant’s mark, because the term NEVADA does not appear anywhere in the searchable record.

The TTAB noted that “the owner of a service mark consisting of or including CALIFORNIA in Applicant’s field of business might consider the mark SHAPE CALIFORNIA to be objectionable, while it would not find another permutation of the mark, such as SHAPE NEW YORK, to be a matter of concern.” The reason, the TTAB said, is “precisely that the two marks are not legal equivalents because they create different commercial impressions when considered by a person having an interest in CALIFORNIA-formative marks.”

The TTAB added that “in addition to the differing significance of each of the possible phantom elements, it is obvious that each of them would lend a different appearance and pronunciation to the various permutations of Applicant’s proposed mark.” Although such differences might be “true of all phantom marks to some degree, the variation in the appearance and pronunciation of the marks encompassed by Applicant’s application are undoubtedly broader than that presented, for instance, by the three-digit variable area code” at issue in the Dial-A-Mattress case. And although, as the TTAB noted, there may be more area codes than the number of states plus Puerto Rico, area codes are not only numerical and fixed in length but also are part of a telephone-number mnemonic and therefore less varied in appearance and pronunciation.

Accordingly, the TTAB found that the possible variations of the mark SHAPE XXXX do not create legal equivalents. For that reason the TTAB affirmed the Examining Attorney’s refusal to register the applicant’s phantom mark.



James B. Wood

Throughout his presidential campaign, President Donald J. Trump exclaimed that he would be the toughest president on immigration by strengthening the nation’s immigration laws. Since taking office, the media has extensively covered the Trump Administration’s crackdown on illegal immigration, but the President’s actions have not been limited to just illegal immigration. In April 2017, President Trump issued the “Buy American, Hire American” Executive Order which has had reverberating effects on legal immigration, including on the H-1B visa program.

The H-1B visa program allows U.S. employers to employ foreign workers in specialty occupations. Specialty occupations are generally those positions requiring a bachelor’s degree or higher (or a degree equivalent) in a specific specialty field. Congress controls the number of new H-1B visa cases accepted by U.S. Citizenship and Immigration Services (USCIS) each fiscal year (FY). Since 2004, the statutory cap has been set at 85,000 H-1B visas per year. Due to this cap, USCIS accepts new H-1B visa cases starting the first week of April each year. In the likely event USCIS receives more than 85,000 new cases in the first week of April, a lottery is conducted to randomly select cases for adjudication.         

While it generally requires congressional action to implement any major immigration changes, the president is able to influence immigration policy and enforcement through executive action and Executive Orders. As mentioned above, President Trump’s most notable immigration action affecting the H-1B visa program has been the “Buy American, Hire American” Executive Order. This order directed the various Executive Branch Departments affecting immigration to “propose new rules and issue new guidance…to protect the interests of the United States workers in the administration of our immigration system.” Since this directive was issued, it has indeed led to major policies and changes effecting the H-1B visa program.

One of the first effects of the Executive Order has been visible through USCIS’s H-1B adjudication trends. From the 3rd quarter of FY17, when the Order was issued, to the 4th quarter of FY17 (which started on July 1), USCIS significantly increased the number of Requests for Evidence (RFE) issued and denials of H-1B petitions. RFEs are issued by USCIS when the government feels that additional information is needed to adjudicate a case. These RFEs require immediate attention and can result in an overall adjudication delay. In the 3rd quarter of FY17, USCIS issued RFEs on 22.5% of H-1B cases compared to a rate of 68.9% in the 4th quarter. Even more staggering than this jump is that in 4th quarter USCIS issued 63,184 RFEs which was nearly as many RFEs as USCIS issued in the first three quarters combined (63,599). The denial rate of H-1B petitions also rose from 15.9% in the 3rd quarter to 22.4% in the 4th quarter. These RFE and denial figures suggest that President Trump’s Executive Order has led to increased scrutiny of H-1B visa cases.  

In addition to these RFE and denial increases, the “Buy American, Hire American” Order led to major substantive changes in USCIS policy. In October 2017, USCIS issued a new policy memorandum rescinding its previous, longstanding “deference” policy. Prior to this memo, beginning in 2004 USCIS officers were instructed to defer to its prior determinations made in the initial adjudication of cases when deciding extension/renewal cases involving the same parties and facts. Under this prior policy, USCIS would only revisit its previous decisions in the case of material change in facts or prior government error. USCIS indicated its new policy of treating each case as a new case is “more consistent with the agency’s current priorities and also advances policies that protect the interests of U.S. workers.”

More recently, in July 2018, USCIS issued a policy memorandum taking effect in mid-September that provides adjudicators with the authority to deny cases on the basis that the initial evidence was not submitted or sufficient without first issuing RFEs. This new policy replaces another longstanding USCIS policy which required USCIS to issue an RFE in the event the petitioner could cure its deficiency by submitting additional information. However, the new policy does not address or clarify the initial evidence expectations or requirements. Ultimately, this could lead to employers seeing more cases denied, including cases being denied in error.

Despite the policy changes making it increasingly difficult to obtain H-1B visas, many tech companies will still need to rely on H-1B workers to ensure continuous, successful operations. As USCIS continues to enhance and amend its adjudication policies, companies should begin planning for their new H-1B cases well in advance of the April H-1B filing deadline and consult an immigration attorney to ensure they are up-to-date on the latest USCIS policies and adjudication trends affecting the H-1B visa program.  



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