Jan 27 | 2017

USPTO to Increase Scrutiny of Trademark Registrations

The U.S. Patent and Trademark Office (“USPTO”) has adopted a rule change that will impact owners of federal trademark registrations. Effective February 17, 2017, the USPTO will begin randomly auditing Declarations of Continued Use that trademark owners must periodically file to maintain registration rights.

The USPTO believes that this audit program will help curb abuse of the trademark registration system and help maintain the accuracy and integrity of the trademark register. The USPTO sees this audit program as an extension of the existing obligation on the part of trademark owners to periodically demonstrate continued use of their trademarks. Under the existing obligations, all owners of registrations must file a Declaration of Continued Use between the fifth and sixth years of registration and then file a similar Declaration every ten years following the date of registration. The Declaration is an affirmation by the trademark owner that the mark is still being used in commerce for all of the goods and services listed in the registration, coupled with a sample of use for each class of goods and services.

Trademark owners are not required to submit proof of use for each and every good or service identified in the registration, and this new program will not change that. What this new program will do, however, is require randomly selected trademark owners to provide proof of use for additional goods or services listed in their registrations to verify the accuracy of claims that a trademark is in use in commerce in connection with particular goods and services identified in the registration.

The reason the USPTO is concerned about this issue is that certain abuses in the registration system have already been discovered. During a pilot program a few years ago, the USPTO reviewed 500 randomly selected Declarations of Use. In 51% of those cases, the trademark owners failed to supply additional proof of use on specific goods/services for which use in commerce was initially claimed. This widespread failure by half of selected trademark owners confirmed suspicions that many registrants are either not understanding their obligations when it comes to Declaration of Continued Use filings or are intentionally claiming rights in marks for goods and services that the trademark owner knows are no longer (or never were) offered in the marketplace under that mark.

The new program picks up where the pilot program left off. Once the program begins, the USPTO will conduct random audits of the Declarations of Use that are filed for marks registered for more than one good or service per class. The number of audits is expected to begin at approximately 10% of the total number of Declarations of Continued Use filed each year, and the percentage may increase in future years depending on results and the USPTO’s resources. When the USPTO audits a Declaration of Continued Use, it will issue an Office action specifying the goods/services for which additional proof of use is required. The trademark owner will then have six months to satisfy the USPTO’s inquiry. Proof of use could be met by producing information, exhibits, affidavits or declarations, and samples showing use in commerce (beyond the one-sample-per-class that the trademark owner already included with the Declaration).

The Office action also will advise trademark owners to delete those goods and/or services for which the trademark is no longer used or for which the trademark owner is otherwise unable to provide the requested proof of use. If the trademark owner responds but is unable to satisfy the USPTO’s inquiry, the USPTO will partially cancel the registration for the goods and services that were the subject of the inquiry. If the trademark owner does not respond at all, the USPTO will cancel the entire registration.

In view of this audit program, trademark owners need to be careful not to hastily file Declarations of Use before thoroughly reviewing how their marks are being used and whether those marks continue to be used in connection with all of the goods and services identified in the registration certificate. To lessen the burden that an unexpected audit may impose, trademark owners should make it their practice to always collect samples of use for all goods and services in a registration each time a Declaration of Continued Use is due and to note any goods and services that are no longer relevant to the mark. That way, if an audit Office action issues, trademark owners will be ready to either present additional proof of use or delete the goods or services that are no longer relevant.

By Adam W. Sikich, Esq.