If you’ve found it cost-effective to focus on your existing trademark registrations only when either there is a question of infringement or when it’s time for a maintenance filing, some new rules at the USPTO may change that calculation. Now may be the best time to review your portfolio. The USPTO has implemented changes intended to incentivize trademark owners to routinely audit their own registrations in order to avoid extra fees and third-party challenges, as well as to allow anyone to challenge certain existing registrations. The goal is to cull the trademark register of registrations for goods and services that don’t fulfill the use in commerce requirement, so-called ‘dead wood’ registrations.
1) New Fees to Delete Goods and Services During the Maintenance Period
Every trademark registration owner must periodically file maintenance documents asserting the continued use of the mark in commerce in connection with the listed goods and services. Any good or service not being offered at the time of the filing is required to be deleted. Deleting goods or services used to be free. The USPTO has now added a $250 fee per class if it’s done in connection with a maintenance filing. For example, let’s say that you are selling clothing, and you obtain a trademark registration for your brand in connection with shirts, pants, skirts, and socks. A few years later you stop selling socks. If during the next maintenance period you delete ‘socks’ from your registration, you would have to pay a $250 fee for that deletion. And, if your registration is not just for a word mark, but also for a logo, and if you have a few things in a few classes that are being dropped, these fees can add up rapidly. Further, if you don’t pay the deletion fees, then the whole registration is canceled.
Accordingly, trademark registrants should periodically be reviewing their portfolios to confirm that they are actually selling the goods and providing the services that are listed in the registrations and keeping contemporaneous records documenting this use. These records would be used to substantiate the claimed use in the event of any USPTO audit, third-party challenge, or when it’s time for a maintenance filing. And, to the extent that a registrant finds that it’s not providing a service or good listed in the registration, these goods or services should be deleted from the registration prior to the start of the maintenance period. The new deletion fees only apply during a maintenance period, so staying ahead of the game can save registrants from unnecessary expenses.
2) Challenging Other Parties’ Registrations
The USPTO has also provided new “expungement” and “re-examination” petitions that anyone can bring against an existing registration.
An ‘expungement’ petition targets a registration where the mark has never been in use with the listed goods or services. These are largely designed to target registrations filed by foreign entities based on foreign registrations where a showing of use was never required to obtain the US registration. As someone who routinely runs trademark searches, this is an issue that often arises. For example, if I am clearing a mark to be registered in connection with socks, pants, and shirts, I may come across a registration for a similar mark, registered in connection with clothing. However, let’s say it is for a brand I’ve never heard of, and the same registration also lists pages and pages of diverse things, such as, for example, lighting fixtures, airplane engines, financial consulting, movie production, toys, etc. It’s reasonable to expect that not all of the listed goods and services are actually being sold by the registrant. However, because of the structure of the international trademark system, foreign owners don’t need to show actual use until 5 years after the registration issues. The expungement proceeding allows third parties to petition to remove some or all of the registered goods or services for marks where the goods have never been sold in United States commerce. This petition can be filed against a trademark that’s been registered between 3 and 10 years.
A re-examination proceeding targets marks where there was an inaccurate claim by the registrant regarding use. For marks filed as ‘use-based’ or ‘intent-to-use’ in order to perfect the registration, the applicant must allege that the mark is being used in commerce. A brand owner may inaccurately assert that a mark is being used in connection with a particular good or service. Now, a re-examination procedure allows anyone to alert the USPTO regarding this lack of use. A re-examination petition can be brought within five years after a mark registers.
With regard to both types of petitions, any person may make the request to the USPTO to investigate and, if substantiated, the USPTO will issue an office action to the registrant. If the registrant doesn’t respond or fails to show use, the registration will be canceled in whole or in part, as appropriate.
I am curious to see how these petitions are used in practice. There are a few aspects that I think will reduce their usefulness. First, each petition requires a $400 fee per class of goods or services challenged. Second, each petition must include (1) a verified statement that establishes that a reasonable investigation was conducted by the petitioner, with a concise factual explanation of the asserted findings of the petitioner, and (2) evidence supporting the conclusion of non-use. Both from a practical and financial perspective, my suspicion is that owners without deep pockets might skip these petitions and either do nothing or bring a cancellation proceeding. While a cancellation proceeding is more expensive, it’s simpler to initiate and could potentially open up a line of communication in order to reach a co-existence agreement with the owner of the challenged registration. Further, if the registrant is truly not using the mark, in most cases, those owners tend to default and the cancellation petition is granted.
I could see suggesting a client file a re-examination or expungement petition right when the client files its own application if the new applicant is confident that its application will be blocked by the ‘dead wood’ registration. Because the current timeline for the initial review of trademark registration applications is more than 7 months, filing an expungement or re-examination petition right at the point of filing the new trademark application would give a sufficient timeline for the USPTO to undertake an investigation and potentially clear the path prior to the applicant’s application being reviewed by the USPTO. I expect that large well-funded brands will also use these petitions as part of their arsenal to clear the field, given that the costs will not dissuade them and they are likely to have people on staff whose job duties may include putting together these evidentiary packages.
In light of these changes, brand owners should take care to keep records and documentation of their trademark use, and periodically review and revise their trademark registrations, in order to proactively reduce costs and challenges.