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Rabu, 06 Juli 2016

The USPTO Moves to Clear "Trademark Deadwood"

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The USPTO Moves to Clear "Trademark Deadwood"

Is there a "trademark deadwood" problem?  The United States Patent and Trademark Office (USPTO) thinks there is a "trademark deadwood" problem in its register.  On June 22, 2016, the USPTO announced its intention to make new rules requiring additional documentation under section 8 and section 71 of the Trademark Act to ensure that a party is actually using the mark in commerce.

It is axiomatic in the United States that use is a prerequisite for trademark rights.  With respect to some limited exceptions, use is required to obtain rights at common law and to secure federal registration on the Principal Register.  Fundamentally, if there is not use, there is ordinarily less opportunity for goodwill to develop or for a likelihood of confusion to arise.

In 2012, the USPTO sent a request for comments on a proposal to shorten the filing time for section 8 affidavits of use.  Section 8 affidavits attesting to use are required after five years of registration.  Part of the rationale for Section 8 affidavits is a policy of removing marks that have not been used from the Principal Register (or without excusable non-use). This reduces the costs of trademark clearance performed by parties seeking to register new marks.  The 2012 proposal from the USPTO was to shorten the filing time from five years to the third year after registration.  Importantly, the USPTO noted that most small business fail within two years.

In response to request for comments, the influential Marques trademark organization recognized that trademark deadwood can be a problem.  However, Marques also noted that shortening the time period would increase the workload of attorneys and opposed the proposal.  Ultimately, the proposal was not adopted.

Supported by some evidence--Nice!
On June 22, 2016, the USPTO issued another proposed set of rules requiring additional documentation to prove use for Section 8 and Section 71 affidavits.  The rationale for the requirement is similar to the 2012 USPTO request for comments: the burdensome cost of clearing marks.  Specifically, the new rules provide the USPTO with the power to require additional documentation such as "exhibits, affidavits, or declarations, and such additional specimens of use as may be reasonable necessary for the USPTO to verify the accuracy of the claims that a trademark is in use in connection with the goods/services listed in the application."  However, this requirement would apply to a random selection of up to 10% of registered marks needing a Section 8 or Section 71 affidavit that claim more than one good/service per class.  The USPTO rejected an alternative to exempt small entities from the new rules.

Notably, this proposal is supported by a study (described in the 2016 proposed rules) conducted by the USPTO.  The study randomly chose 500 registrations that needed Section 8 or Section 71 affidavits.  The USPTO required additional documentation from the owners of those registrations. The USPTO discovered that 51% of the owners of those registrations failed to submit verifiable proof of use for the good/services initially claimed.  Thirty-five percent of the 51% requested that some goods/services be deleted and 16% were cancelled.  The USPTO does note that 422 applications were issued either Section 8 or Section 71 affidavits, including a number of registrations wherein some goods/services initially claimed were deleted.

Interestingly, this proposal could lead to additional evidence to support shortening the time for filing of Section 8 and Section 71 affidavits.  An increase in the burden to maintain their marks may disadvantage small businesses.  However, if a business survives to its fifth year, it may have accumulated enough resources to deal with the additional burden.  In your experience, is there a trademark deadwood problem in the United States?  [Katpat to John L. Welch's TTAB Blog]

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