Mar 14 | 2019

USPTO May Require Foreign Trademark Applicants To Utilize U.S. Counsel

In its ongoing efforts to ensure the integrity of the U.S. trademark register, encourage accuracy in applications and compliance with U.S. law, the U.S. Patent and Trademark Office (USPTO) issued a Notice of Proposed Rulemaking on February 15, 2019 which, if adopted, will require that foreign applicants secure U.S. counsel in the process of submitting a trademark application to the USPTO. This proposed rule is a radical departure from the USPTO’s current practice under which foreign parties can submit applications to the USPTO and appear before the Trademark Trial and Appeal Board pro se. The rule will likely take effect in the fall of 2019. Meanwhile, the USPTO is accepting comments on this proposal until March 18, 2019.

The proposed rule results from a significant increase in trademark applications from foreign applicants found to have inaccurate and, at times, fraudulent statements or doctored samples pertaining to use of the applied for mark. Many applications filed from abroad are not tied to a licensed U.S. attorney which may be increasing the number of inaccurate and, often, suspect applications.  In fact, in 2017, 44% of all applications from foreign parties – 50,742 – were filed without a U.S. attorney. Many of these applications come from China, where Chinese municipal governments subsidize the filing of U.S. trademark applications to encourage foreign investment in the U.S. Chinese applicants – bankrolled by local government funds – aggressively file trademark applications sometimes with no consideration of, or understanding for, U.S. trademark laws and procedure.

It is hopeful that the new rule, if implemented, will address the problem by requiring foreign parties whose domicile or principal place of business is not within the U.S. or its territories to obtain U.S. counsel as they seek U.S. registration. U.S. attorneys would have to confirm to the USPTO that they are an active member in good standing of their state bar and provide bar membership information. Under the proposed rule, if a foreign party files an application without U.S. counsel, the USTPO will inform the party that the appointment of a qualified U.S. attorney is required and then provide the applicant six months to respond and obtain U.S. counsel. Should the foreign party violate the rule, the application will be deemed abandoned by the USPTO. The USPTO hopes that the presence of U.S. counsel will ensure that trademark applications contain accurate statements regarding use of the mark, because failure to do so could subject U.S. counsel to disciplinary action by the USPTO, other federal agencies, and/or the state where the attorney is licensed.  

The proposed rule would include an exception for recognized Canadian trademark attorneys and agents.  The USPTO already allows Canadian trademark practitioners to represent applicants in USPTO trademark matters, and that would not change under the proposed rule.  What would change is that the new rule would no longer allow Canadian patent agents to represent USPTO trademark applicants in new matters (although they can continue to handle existing matters).  

Although this rule has not gone in to effect, the USPTO has reported that some foreign parties are already trying to circumvent its requirements. Per a bulletin sent out on February 22, 2019, the USPTO reported that U.S. attorneys are receiving emails from foreign parties offering to pay to use their information in trademark filings. The USPTO surmises that such an arrangement would aid the unauthorized practice of law and violate federal rules, including the USPTO Rules of Professional Conduct.  That some foreign parties are already looking for ways to undermine the new rule may be an indicator that the USPTO’s proposal may well meet its intended goals.

Once the rule goes into effect, foreign applicants will be subjected to increased initial costs for U.S. protection due to the need to retain U.S. counsel from the onset of the application process, but it is possible that the involvement of a U.S. attorney – assuming familiarity with the USPTO’s rules and procedures – could save foreign applicants money in the long run during the prosecution of the application.