PTO roundtable on the accuracy and integrity of the TM register

USPTO Roundtable: Ensuring the Accuracy and Integrity of the Trademark Register
(Note: I wasn’t able to attend in person so I just didn’t get names)
Debbie Kahn, commissioner for TMs
Registration renewals: pilot requiring additional proof of use for 500 registrants submitting Section 8 affidavits of use.  Stemmed from Bose, where standard of fraud was raised quite a bit.  Is there a problem?  97% have completed the pilot. Of those, 51% were unable to verify previously claimed use for the additional requests for proof of use. Of those, 35% deleted goods or services queried under the pilot, and 16% failed to respond to the office actions, resulting in cancellation. Pretty big result—we weren’t sure of the magnitude, and that was more than we had anticipated.  Also a surprise: it spanned all bases of registration. Not just foreign registrants.
Section 1(a) registrants: 27% deleted goods or services queried under the pilot. 44(e): 58% deleted. 66(a): 59% vcombined 1(a) and 44(e), 63%. Overall acceptance rate was lower for pilot participants than for non-pilot, from 80-89% (1(a) and 44(e)).  Notices of cancellation: 1(a) 18%, 44(e) 7%, 66(a) 14%, combined 1(a) and 44(e) 13%.
Cancellation only occurred if they didn’t respond to the office action.  Acceptances included registrants who deleted goods and services.
Now what?  Possible next steps, no decisions today. 
Sharon Marsh: Options: (1) nonuse expungement procedure from Canada, streamlined method of removing deadwood, Section 45 of the Trade-marks Act.  Third parties could request PTO to require owner to prove use; if owner complies, procedure completed. If not, any goods/services for which not provided proof are deleted from the registration.
McKeon: proceedings are summary; don’t determine substantive rights in a TM.  Not intended to replace proceedings about ownership, distinctiveness, abandonment: just show mark in use and if it isn’t and there aren’t special circumstances it may be expunged. There’s a lot of case law—dedicated case officers, steady stream of decisions.  No standing requirement.  Lawyers can initiate—don’t have do disclose who their clients are.  Requesting party can’t file evidence or conduct cross-examination; limited to written argument/taking part in oral hearing.  Must show sufficient facts to demonstrate trademark use.  Use by licensee suffices, but there has to be control, which in Canada won’t be assumed b/c of shareholder interest.
Q: if at Sec. 8 time in the US, excusable nonuse is valid—also true in Canada?
A: Yes.  Has to be real evidence, not just a hope and a prayer. Cases can get fairly complex. 
Appeal as of right to federal court where one can file new evidence.  But there cross examination by requesting party is available.  Court can order costs against parties, so it’s a little more serious.
Janet Furor: Affidavit stage: no cross-examination; no new evidence on appeal = no cross-examination.
Kahn: speed is appealing.  Is this a good procedure?
Furor: I like it for clients: relatively quick even if contested; 18-24 months and relatively inexpensive. Dedicated to deadwood.
A: If it’s real deadwood, can be faster than that. You can also stay a confusion rejection based on a mark by filing a contest.  A little over 6 months is possible if you prompt the TM office.
A: in 2012, 644 pending cancellation proceedings; 446 that went through to cancellation for nonuse.  Only 81 were contested.  More or less consistent over time.
A: agree generally, though it can be abused.
Kahn: if we did it here, are there things we should change?
A: Procedure could be shorter. Automatic 3 month extension is available to registrant, so 3 months becomes 6.  Increases uncertainty. If you’re in a search process, you’re in trouble.  Also can be used tactically.  Used to get something from the registrant. That may be good or bad; just an observation.
A: sometimes it would be nice to have cross-ex, but given the numbers it might not be worth it compared to keeping the procedure simple.
A: very important to require use as to each of the goods.  Specificity really does keep registrants honest.
A: Not a requirement of overkill: generally need a label sample, explain channel of trade. If list of goods is modest, very low cost to registrant–$2500-$3000. In many cases, once the affidavit is filed, the requesting party gives up.  Filing fee for requesting party, $400.
Q: is it more common for an unrepresented party to default?
A: given the technical definitions, being unrepresented is risky.
Q: who would decide these in the US?
Kahn: informal, preliminary thoughts: might use petition route, administrative decision w/ appeal option.
AIPLA (not official position of organization, just reflective of certain comments): one consideration is confidentiality.  Business information that the concerned party might not want to have made public.  (RT: Hunh?  If you have to show evidence of use, that really does have to be public to be “use.”  Not clear what this concern is.)  Another comment: will this open the floodgates?  What if you had to have a 2(d) refusal before you could file a request to look into the use?  That would keep it timely.  (That seems like a real barrier to business plans that could legitimately be confidential.
A: not crazy about that—allowing counsel to be named party addresses confidentiality.  Also, in practice, Marriott has used section 45 proceeding. In one situation, we were trying to make a go/no-go decision in a multicountry situation.  If you have to have already filed and gotten something cited against you, it’s not very helpful.
A: In Canada, registrar has discretion to dismiss clearly frivolous filing.
A: In Canada, there’s no standing requirement.  The registrant is the one who has to put on evidence. Hard to get at bad motives.
A: Registrant can’t be subjected to multiple frequent requests. No more than one every 3 years.
A: Registrar can initiate proceedings itself, but that’s very rare.  May sometimes be used if there were exceptional circumstances and then a bunch of time has passed and the Office thinks that you should have been able to use the mark by now.
A: would have to have standing requirement in the US under the statute, unless we go to Congress. A less costly, relatively quick process would have a lot to commend it. Other suggestions use a sledgehammer to swat a fly.
Q: do they take into account differences in nature of use pertaining to industry?
A: if your business is selling nuclear reactors, the expectations are different than if your business is selling chewing gum.  “Normal course of trade” standard.
A: generally doesn’t take a brain surgeon to find who’s behind a sec. 45 request—if the lawyer is the same as the lawyer for an application for another similar mark, you know.  General practice for IP firms: until about 5-10 years ago, all the requests were made by firms. Now more common to make requests in name of interested party. 
Kahn: for a petition, the standing requirement wouldn’t necessarily apply v. cancellation.
A: philosophical Q: whose responsibility is it to maintain the quality of the register? Someone who is given the benefits of registration? Or someone else?
Kahn: another option: require specimens for all goods/services listed when the first Section 8 or 71 declaration is filed; require specimen to be a photo showing use of the mark in conjunction w/claimed goods/require ad for services.
A: participants seemed unhappy w/this.  INTA: unofficial view—not excited.  In theory you need to show entitlement to benefits of registration, but people don’t expect this—significant cost to client as well as counsel time in preparing filings.  While it’s fair to have a relatively summary proceeding in which registrant is called upon to make showing when there’s reason to do so, balance isn’t in the right place to have it as a matter of course.  (But the stats show that half the time there’s a problem.  That’s a lot of problems as a matter of course.)
Another suggestion: Increase solemnity of declaration, including statement that registrant understands the seriousness of the oath; require statements detailing steps taken to verify use with the goods/services in the registration.
A: (again unofficial, not ABA position) The ‘steps taken’ would be a sledgehammer when a flyswatter would do.  Going through a laundry list is the same thing as requiring a digital photo.  When you put a declaration in front of a client, unless the client is herself an atty, the client will ask if it’s ok to sign. Puts onus on atty again.  Increasing solemnity of declaration won’t do much more than the current version.
Agreement by others—client would just sign it; check box won’t make them take it more seriously.
A: might give counsel more ammunition to impress on clients the importance of what they’re signing. It might help if the form highlighted exactly what goods you’re attesting are still in use.  Might focus their attention on what it is they’re declaring.
Final suggestion: continue random audits. 
Some support for that as well.  Q of resources; comment that the registrant should have the evidence fairly easily at hand.
In the pilot, it was a group of senior attorneys. 
Followup question: should there be a stronger result for people who don’t show use—should they lose the whole registration?
A: that’s too much, but there should be a fee for the amendment.
A: Bose spoke to that—correction of the register should be to the realities of use, not the whole registration.
A: Pilot did disclose a deadwood issue, and if we’re going to have use based rights in this country we should take reasonable steps to address it.
A: random audit would be really useful for data; not clear it would help deter, except to the extent that it empowers counsel to put the fear of God into clients; they can delete now for free but would have to pay later.
A: problem is not deadwood so much but overbreadth: most people had to delete goods/services. Not fraud but unawareness, in part because overseas the practice is different/they’re permitted to have overbreadth.  Should offer a procedure that can happen early in the registration for when it’s perfectly obvious just from the list of goods and services that it’s overbroad.  Not just for renewals!
Kahn: that’s our concept if we move forward.  RFC will come out for any proposals we put forward.

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