Alt Legal Connect Session Summary:USPTO Updates: USPTO representatives explain recent and upcoming changes
Alt Legal Team | September 15, 2021
On Wednesday, September 15, USPTO Deputy Commissioner for Trademark Examination Policy Amy Cotton and Deputy Commissioner for Trademark Operations Dan Vavonese presented the session, “USPTO Updates: USPTO representatives explain recent and upcoming changes.” The presenters discussed the surge in new trademark applications and how the USPTO is addressing it with technical and operational initiatives. They also provided key legal updates including new rules relating to the Trademark Modernization Act.
Presentation Materials: Click here
Trademark Application Surge
There’s been a steady, gradual increase in filings over the past 10 years. The USPTO had projected a 7% increase last year, but then the pandemic hit. In the first few months of the pandemic, the USPTO saw a big drop in filings. The economy was projected to drop and the USPTO mirrors the economy. As a result, the USPTO delayed hiring a new Examining Attorney class. But surprisingly, starting in May 2020, filings started going up and they continued to increase. The USPTO saw huge filing increases around 60k-70k/month and in December of 2020, 110k filings, which is an unbelievable number for USPTO staff. Increase was coming from China but in US as well, likely due to the huge increase in ecommerce. There were lots of reason for the surge, it was not coming from a single source. Over past few months, filings have been around 60k/70k/month. If you hear that trademark application filings are dropping, keep in mind that the numbers are still huge, they are just dropping relative to how exceptionally high the numbers have been. The projection is that by year-end, there will be 940k classes filed which is a 27% increase over last year.
USPTO Response Times
Dan explained that the First Action Pendency is the time from when an application is filed to when the first determination is made by Examining Attorney. He acknowledged that there have been considerable increases in First Action Pendency (close to 6 months) and that the USPTO is working extremely hard on this to get through as many applications as possible.
The surge in new filings has impacted applications but also other areas of the USPTO. All data submitted in an application is processed and entered into the system in 1 week. Additional quality checks take longer. If an application doesn’t include international classes (a regular application where the field was empty) then it cannot get entered into the system – someone needs to review and add the class manually. Dan urged the audience to include international classes when filing a TEAS regular application so that your data gets into the system as fast as possible.
Dan was pleased to report that the USPTO has made huge progress in processing amendments. Where the USPTO was taking 90 days to enter response, the period had shrunk to under 14 days.
Dan also shared with the audience that with all the timeframe issues, a huge focus of USPTO is to post processing times on its website.
How the USPTO is Handling the Surge
Dan explained how the USPTO is working to handle the surge in applications. He noted that the USPTO is reorganizing workload, that they have hired 47 new Examining Attorneys and will hire up to 100 new Examining Attorneys in the FY 2022, and that they are improving processes and efficiencies, specifically, looking for ways to automate processes.
Register Protection Initiatives
Amy began her discussion with an overview of USPTO registration protection initiatives, beginning with the In re Bose decision in 2009 making it more difficult to prove that making a false statement of use should be considered fraud. At the time, the USPTO was concerned that the impact of the case would mean there would be more false claims of use in maintenance submissions. Stakeholders agreed that use was critical to the register and in making important business decisions. The USPTO came up with a variety of ways to increase the duty of care to applicants and disincentivize false statements. In 2017, the post-registration audit program was permanently established, but there were no sanctions involved except there were significant deletions in the audit programs. As trademark filings increased in 2018-19, we saw applications with fake names, addresses, specimens, and attorney behavior to circumvent rules. At this point, it was important to ramp up the USPTO’s efforts to protect the register. In 2019, the USPTO increased scrutiny with respect to specimens of use, it set up a task force to investigate scams, and it required foreign domiciliaries to be represented by US counsel. But the problems continued and in 2020, the USPTO became more aggressive in terms of protecting the register. The USPTO was almost like a brand-owner dealing with an anti-counterfeiter and protecting its register! In 2021, the USPTO introduced a deletion fee in the context of goods and services deleted with the maintenance fee. Also, the USPTO issued administrative sanctions for actors violating their rules. Finally, in 2021, the USPTO is preparing to implement the Trademark Modernization Act which is designed to increase integrity of submissions and the trademark register.
Post Registration Audit
During this process, the USPTO is examining maintenance claims made in the Section 8/71 context. If a registration is selected for audit, the registrant must show use for two additional goods and services per class. If the registrant deletes the use, they must pay a deletion fee of $250/class. As of 2021, it is sanctionable to make a false statement of use. Failure to pay the fee could cause the registrant to lose the registration. Amy advised that you can avoid fees by keeping registrations accurate by using the Section 7 amendment process.
Updating Specimen Guidance
While post registration audit was aimed at maintenance filings and USPTO wanted to increase scrutiny over specimens of use as well. In 2019, the USPTO established a policy that a fake specimen creates an inference that a mark was not in use in commerce – this allowed evidence of non-use to be submitted in the application. But the USPTO was still seeing clearly fake specimens and substitute specimens were permitted to overcome refusals, the USPTO began seeing better fakes. So the USPTO issued new guidance to refuse registration when the specimen was clearly fake and they should probe to see if the mark was actually in use – it was forcing the applicant to respond with information. This was seen as too strict and negatively impacted good-faith filers so it was amended in 2020 to allow applicants to respond to refusal and RFI with substitute specimen or amending to 1(b) but there was no requirement to respond to the proof of use. Additionally, the USPTO wanted to expand the letter of protest procedure – typically third parties can’t intervene in another party’s application without filing an opposition, but the LOP program allows third parties to submit evidence regarding another party’s application. Historically, examining attorneys were not issuing refusals for nonuse, but now they are allowing LOPs to show evidence of nonuse. Amy recommended checking out the USPTO LOP practice tip page.
Special Task Force
Currently, the USPTO is seeing large schemes and scams that it’s impossible for all Examining Attorneys to spot and to respond with a coordinated action. For example, fake specimens will come in large waves, not with the same owners or companion applications. So, in 2019, the USPTO set up a special task force that coordinates investigations across the agency. They investigate false claims of use, applicants that submit fake specimens, false attorney names/addresses and otherwise circumventing US attorney requirement, unauthorized practice of law, forged submissions, hijacked applications and brands. The task force will look at nature of the misconduct – sometimes it’s a misunderstanding of rules, but other times they are clearly trying to circumvent US rules and these individuals can be subject to administrative or criminal sanctions. If you want to identify a scam before the USPTO, email TMscams@uspto.gov.
US Counsel Rule
All applicants must file their domicile address, whether they are represented or unrepresented, and that is how the UPSTO determines whether the US counsel rule is triggered. Simply because an applicant is represented does not mean they can get out of providing the domicile address. We find people trying to circumvent this rule with fake names and addresses, real names that are compromised, and “renting” of credentials. In terms of fake addresses, the USPTO is automate this process and flag certain types of addresses including PO boxes and c/o addresses. As for attorney misconduct, hijacking of attorney credentials, we are referring those matters to OED.
Mandatory Account Login
In 2019, the USPTO began requiring account logins which helped the USPTO track behavior. Now, the USPTO is working on identify verification, which is Phase 2 of this process to prevent sanctioned actors from popping up again. Phase 3 is role-based access restriction to allow only certain roles to access TEAS filings. This will stop unauthorized changes to correspondence and hijacking that the USPTO is seeing.
Trademark Modernization Act
Congress asked the USPTO what they needed to address false claims of use in applications and in maintenance declarations. The USPTO asked for: (1) Codification of the Letter of Protest procedure and $50 fee; (2) Authority to shorten response period to move suspicious marks through faster; (3) Faster, cheaper nonuse cancellation procedures. Congress passed the TMA, allowing the USPTO until December 27, 2021 to implement all procedures.
LOP Procedure – $50 fee, the same procedure as in place, but now a fee in place.
Flexible Response Period – Shorten response period to no less than 60 days but extendable to 6 months.
Expungement and Reexamination – New nonuse cancelation procedures to clear deadwood off the register and facilitate mark clearance.
Expungement: Target here is a Sec 1, 44, or 66 registration that has never been used on some or all of the goods and services identified in the registration. Three grounds:
- Petition initiated – between year 3-10 of registration
- Director initiated – between year 3-10 of registration
- Cancellation before TTAB – can make claim anytime after 3rd year of registration
Amy noted that a claim of expungement is fundamentally different than a claim of abandonment. Abandonment requires nonuse + intent not to resume use. Expungement does NOT require an analysis of the registrant’s intent. Expungement is an entirely new statutory basis for cancelation evaluating whether the mark was used on the challenged goods and services prior to the filing date of the expungement proceeding.
Reexamination: Target is a Sec 1 application that was not in use as of the relevant date on the application.
- Can file within first five years of application, year 0 – year 5
- Can file a petition to Director or Director can file a petition; no TTAB proceeding like Expungement because this already exists – the ground for cancelation for nonuse
For both Reexamination and Expungement, the petition fees are $600/class. Any person can file an Expungement or Reexamination proceeding but person filing must have a USPTO account; do not need to identify the party of interest. The petition must provide documentary evidence of nonuse.
Once the petitioner has submitted the petition, the process is an ex parte process and the Director decides whether a prima facie case has been made based on the petition and USPTO record. The Director may institute a proceeding without a petition if they have evidence establishing a prima facie case. If a prima facie case is established, the Director must institute proceedings and the Examiner will issue a Notice of Institution and an Office Action requiring response within 2 months with respect to the challenged goods and services. In response, the registrant has three options: (1) provide evidence of use to rebut prima facie case; (2) provide evidence supporting excusable nonuse (limited use – Section 44/66 filings and only in Expungement); (3) delete classes of goods/services. If registrant’s response is unacceptable, Examiner will issue a Final Office Action saying registration should be cancelled and registrant has 2 months to respond with additional evidence and request for reconsideration. The examiner’s decision to cancel would then go to the TTAB should the registrant decide to continue pursuing the mark. If the registrant does not respond, it results in immediate cancellation with respect to the challenged goods and services. A Petition for Reinstatement is available but only in extraordinary situations.
How to contact a supervisor in a given law office?
Go to homepage 🡪 contacts 🡪 navigate to list of all law offices and Examining Attorneys. If you look at your OA, you’ll see what office your Examining Attorney is in. Dan suggests that you try to work things out with Examining Attorney first before you to go the managing attorney.
Timeframes under TMA – how are law offices handling these?
Examining Attorneys have 7 days to work on a new application. They have hundreds of cases they are working on and have less than 28 days to respond. The USPTO will continue to monitor these timeframes to ensure that you are getting timely responses.
Plans to handle third party scammers sending out fake invoices
This is something we are very concerned about. Anytime we get a misleading solicitation, we post examples of it on our website. Not all are legally fraudulent, some are on the line. We go after those that look like they are the USPTO. We don’t have law enforcement capability; we have to go through DOJ. We try to create awareness and draw customers’ attention to these things. We also partner with China, EUIPO, JPO, and the Korean office to try to spread the word and raise awareness.
How to report behavior that looks like it is trying to circumvent the domicile US atty requirement
We are trying to increase capacity to take in and investigate these reports which is very difficult bc we don’t have this particular skillset. If we get a deluge of complaints, it will overload our system, so use TMscams@uspto.gov carefully when you have good evidence. Also, the letter of protest process is available – see the USPTO LOP practice tip page and use this procedure if you have evidence available.
How to deal with specimen refusals where Examining Attorney finds packaging looks fraudulent, but it’s just underfunded and unsophisticated.
We have lots of guidance in place but applicant must show use in commerce. We are certainly not out to get small business owners and this can be overcome.
What is being done to prevent entities from committing unauthorized practice of law
We are looking into this and determining if we can issue sanctions. Of course, there’s a lot of evidence needed to determine if UPL is being committed.
- Post registration proof of use audit program– https://www.uspto.gov/trademarks/maintain/post-registration-audit-program
- Examination guide 3-19 digitally created/altered or mockup specimens– https://www.uspto.gov/sites/default/files/documents/TM-ExamGuide-3-19.pdf
- Letters of protest– https://www.uspto.gov/trademarks/trademark-updates-and-announcements/letter-protest-practice-tip
- Scam alert: potentially misleading solicitations– https://www.uspto.gov/trademarks/protect/caution-misleading-notices
- Scam awareness: protect your trademark application/registration-https://www.uspto.gov/trademarks/protect/scam-awareness
- Administrative sanctions and Disciplinary orders- https://www.uspto.gov/trademarks/trademark-updates-and-announcements/orders-issued-commissioner-trademarks and https://foiadocuments.uspto.gov/oed/Lou_Final_Order_D2021-04_Redacted.pdf
- For applicants represented by excluded parties– https://www.uspto.gov/trademarks/trademark-updates-and-announcements/applicants-and-registrants-represented-excluded
- Trademark Modernization Act– https://www.uspto.gov/trademarks/laws/2020-modernization-act