Guest Post: Josh Jarvis, "The Trademark “Chaff” Quandary: PTO Report On Post-Registration Proof of Use"

My friend, Joshua S. Jarvis, of Foley Hoag LLP in Boston, has consented to my re-posting this article discussing the USPTO's recent report on its pilot study regarding post-registration proof of use - a study intended to "Assess the accuracy and integrity of the trademark register as to the actual use of the mark with the goods and/or services identified in the registration." This article originally appeared on Foley Hoag's Trademark and Copyright Law Blog. Take it away, Josh:

As any IP lawyer will readily admit, trademark practice before the United States Patent & Trademark Office (PTO) comes with its fair share of annoyances: inconsistent treatment of similar applications, unreasonably stringent identification requirements, and so forth. Another difficulty lies in what appears to be a large number of registrations subsisting on the federal register, past their initial maintenance filings, despite a high likelihood that such marks are no longer used, or have never been used, in connection with some or all of their identified goods and services.

Many of these problematic registrations have their roots in applications based on incoming foreign filings, which are exempt from proof of use requirements prior to registration. Although all such applications require a bona fide intent to use the mark in U.S. commerce in connection with all of the identified goods and services, as a practical matter some foreign applicants use this opportunity to “reserve” a trademark for vast swaths of goods and services (indeed, such a practice is common in many first-to-register jurisdictions).

Some trademark practitioners have expressed concerns that these broad registrations have a chilling effect on business innovation, littering the federal register with trademark “chaff” that prevents new, bona fide market entrants from registering their own marks.  In response to these concerns, and to assess the quality of its operations more generally, the PTO is conducting a pilot study related to post-registration proof of use.

Under current PTO practice, all registrants must submit a declaration of continued use between the fifth and sixth year after federal trademark registration. This submission typically requires a simple affidavit and a single specimen of use per class of goods or services, even if a given class recites a list of multiple goods or services.

Under the pilot study, the PTO has required more.  The PTO selected 500 registrations at random “to assess the accuracy and integrity of the trademark register as to the actual use of the mark with the goods and/or services identified in the registration.” Each registrant was asked to submit proof of use for two additional goods/services per class, in addition to the proof that had already been submitted.  If a registrant was unable to do so, the registration was subject to additional scrutiny and proof of use requirements.

With the study complete for 470 of the 500 registrations (94%), the program has revealed interesting results. In about half of the registrations, the registrants failed to pass the threshold proof of use requirements, resulting in either deletion of certain goods/services from the registration (34%) or cancellation of the entire registration (16%).  The PTO also separated the results by initial filing basis, as follows:

Basis for Registration	% of Registrations with Goods/Services Deleted	% of Registrations Receiving Notices of Cancellation
Section 1(a) (Use-Based)	27%	17%
Section 44(e) (Direct Foreign Filings)	56%	7%
Section 66(a) (Madrid-Based Filings)	61%	18%
Combined Section 1(a) and 44(e)	63%	13%

The results appear to confirm the common understanding among U.S. practitioners that incoming direct foreign filings (Section 44(e)) and Madrid-based foreign filings (Section 66(a)) are more likely to have goods and services on which the mark isn’t used, resulting in either deletion of those goods or cancellation of the registrations.  It is notable, however, that 44% of the use-based (Section 1(a)) filings were flawed in some respect, including 17% that were canceled entirely, indicating that post-registration issues are far from endemic to  registrations based on foreign filings.

In a prior roundtable discussion held by the PTO and George Washington University Law School, attendees proposed several potential solutions to mitigate the “chaff registration” issue, including:

• Creating a streamlined non-use “expungement” procedure that would be less involved than a typical cancellation action.
• Requiring specimens for all goods/services in maintenance filings.
• Increasing the “solemnity” of the declaration accompanying a maintenance filing, making registrants think twice before claiming use.
• Conducting random audits of maintenance filings, in a manner similar to the pilot study itself.

A streamlined non-use procedure is an interesting proposal — as the PTO report notes, such a proceeding is used in Canadian trademark practice.  Requiring specimens for all goods/services, however, may not be feasible given the PTO’s already limited resources, and could unduly burden both trademark registrants and practitioners — as a practical matter, random audits seem more viable. And I’m not convinced that increasing the solemnity of the continued use declaration would have any measurable effect.

A parallel issue that has been discussed among trademark practitioners is the quality of post-registration review more generally — unlike pre-registration proof of use, maintenance filings typically aren’t reviewed by attorneys, which may result in somewhat lenient proof of use analyses.  The 44% of use-based registrations that were flawed, including the 17% that were canceled entirely, suggests that there is significant room for improvement here.  The USPTO plans to hold another roundtable to discuss these issues, and in the meantime welcomes comments or additional proposals via e-mail at TMPolicy@uspto.gov.

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Text Copyright John L. Welch 2014.