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IP Blog / Audit program at USPTO brings changes and additional requirements for registrants

Audit program at USPTO brings changes and additional requirements for registrants

Following a pilot program conducted by the United States Patent and Trademark Office (USPTO), the USPTO is considering and implementing some new procedures that will have a big effect on trademark filers, especially those belonging to foreign companies.

- Roxana Sullivan (Attorney at Law)
- Cary Levitt (Chief Operating Officer, United States)

In 2012, the USPTO launched a pilot program to gather data on whether registered trademarks were actually being used on all the products or services listed in their registrations. As both domestic and foreign filers know, the USPTO requires specificity in the identifications of goods and services. This has sometimes been an issue for foreign filers who are accustomed to drafting identifications either containing the class heading or to include as many goods or services under a class heading as possible.

The pilot program was launched to help the USPTO determine if new procedures needed to be implemented in the Office to clear the trademark registry of “deadwood,” or registrations for marks that are no longer in use. Under the program, the USPTO randomly selected 500 registrations that were up for renewal and required the registrants to submit proof of use for two additional items in each class listed on the registration. In more than half of the trademark registrations selected, the owner was unable to verify the actual use of the mark.  These findings prompted a three pronged approach to tackling those registrations which may be problematic.

The first approach, which has already been implemented, has been to increase the readability of the declarations that are submitted along with renewals. This should make these declarations more readable. Signatories should be well aware that by signing the declarations, they swear under penalty of perjury of ongoing use of the mark as part of the maintenance filing.

The second approach consists of amendments to the cancellation proceedings. Although not yet in effect, a blog post by Gerard F. Rogers, Chief Administrative Trademark Judge at USPTO, indicates that streamlined proceedings are on the horizon. The streamlined proceedings would make it easier to cancel a mark because of nonuse or abandonment of the mark. Under the new proceedings, a party seeking the cancellation of a mark can do so by providing evidence of nonuse. The streamlined proceedings will mean not only speed (cases could be decided anywhere from 70 days to 170 days from commencement), but also efficiency and cost savings for the challenger.

The third approach, and what the bulk of this article will discuss, is the new audit program that has been implemented by the USPTO. The new rules surrounding the audit program were made effective on March 21, 2017. 

Typically, when a registrant submits a renewal for a trademark, that registrant has to provide specimens showing that the mark is being used in commerce in connection with the goods and services specified in the registration. Normally, only one specimen is required for each class of goods or services. Under the audit program, however, the USPTO will ask registrants to submit further proof of use on more than one good or service per class.

Registrations are randomly selected, but the selection focuses on single class registrations which have four or more goods or services in the class and multiple class registrations in which at least two classes have two or more goods or services in each class. If a registration has been selected for audit, the USPTO will issue an Office action identifying any deficiencies in the underlying affidavit or declaration and also require proof of use for two additional goods or services in each class.

Initial Office actions will include an advisory warning, telling registrants to delete any goods or services that are no longer in use or for which acceptable proof of use is not available. If a registrant submits proof of use, then the USPTO will issue a notice of acceptance and the registration will be maintained. However, failure to provide acceptable proof of use will result in a second Office action requiring proof of use for all the remaining goods or services for which proof of use had not been previously provided. A significant burden of proof is placed on the registrant with the issuance of the second Office action as it means registrants need to gather proof of use for every good and service. For those registrations containing as many goods as possible under a certain class, this requirement can mean extensive additional work gathering the necessary information. Although an option to file a petition with the director is available, it is only granted in rare circumstances.

What are the options that registrants have and what are the outcomes when their registration has been selected as part of the audit program?

  1. No response is filed: if a registrant ignores the Office action or chooses not to respond, then the registration will be canceled in its entirety;
  2. Adequate response: if the response provides acceptable proof of use for queried items, or deletes the queried items and the existing specimens of record qualify as proof of use for the remaining goods or services, then a notice of acceptance will issue without further inquiry;
  3. Inadequate response: if a response deletes the queried items or no acceptable proof for the queried items is provided and additional goods or services remain in the registration for which proof of use does not exist, then the USPTO will issue a second Office action requiring proof of use for all remaining items in the registration;
  4. Response to second Office action acceptable: a response to a second Office action is acceptable if the registrant provides proof of use for the queried items or deletes the queried items and the specimens of record qualify as proof of use for the remaining goods or services;
  5. Response to second Office action unacceptable: a response to a second Office action is unacceptable if the registrant deletes some of the queried goods or services or provides unacceptable proof of use. In this case, the goods or services for which proof of use was not provided will be deleted from the registration and a partial notice of acceptance will issue;
  6. Time remains in statutory filing period: if time remains in the statutory filing period to file a maintenance filing, a registrant has the option to file a new maintenance filing, along with all new filing fees, and not respond to the Office action. If this course is chosen, the new maintenance filing is also reviewed for compliance with both statutory and audit requirements, as the registration has already been flagged and remains subject to the audit.

In light of these recent changes, registrants are advised to keep good records of use of their marks not just on some goods or services, but on multiple goods or services, particularly if their registrations fall within the parameters of targeted registrations for audit as described above. It is also beneficial for registrants to conduct their internal audit of registrations to determine which goods or services are still in use and which are not, and proactively delete those goods or services for which the mark is no longer being used.  Since these procedures are new both to registrants and examiners at the USPTO, it is best to consult with an attorney if faced with a request for audit following a maintenance filing.  An attorney can assist with selecting proper specimens and may even be able to consult with examiners in the Post Registration Unit for additional guidance.

Overall, the changes at the USPTO have been set up to clear the trademark register and make it easier for applicants to register their marks. The audit program along with the possible new cancellation proceedings help facilitate the registration of marks and to clear the registry of “deadwood” registrations that block new ones. 

The article was first published in Corporate Live Wire, Expert Guide: Intellectual Property 2018 (February 2018 issue )

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