USPTO amends the rules: "Requirement of U.S. Licensed Attorney for Foreign Trademark Applicants and Registrants" now in effect

Are foreign applications for US trade marks under increasing scrutiny? A recent amendment to US trade mark application procedure seems to point to "Yes": 

"The United States Patent and Trademark Office amends the Rules of Practice in Trademark Cases, the Rules of Practice in Filings Pursuant to the Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks, and the rules regarding Representation of Others Before the United States Patent and Trademark Office to require applicants, registrants, or parties to a trademark proceeding whose domicile is not located within the U.S. or its territories to be represented by an attorney who is an active member in good standing of the bar of the highest court of a state in the U.S."

The USPTO has been considering an array of amendments to US trade mark law and procedure, including the requirement of a US attorney for trade mark applications. This amendment went into effect August 3, 2019; let's explore the impetus behind this change, the details of the amendment and any possible implications for pending matters or international obligations.

Background

Back in June, this Kat took a look at US trade mark oppositions brought by Caterpillar as research for a post regarding their dispute with a Californian coffee company; under the "CAT" mark, the company has opposed more than 15 trade mark applications made by Chinese entities in the past year. These oppositions typically resulted in default judgments when the applicants could not be reached.

The USPTO identified a similar trend across US trade mark applications in general, noting a pattern of unauthorized practice of law "designed to circumvent USPTO rules." Some of these practices include "trademark filings involving false use claims and fake or digitally altered specimens that purport to - but do not actually - show use in commerce as required by law." Further, the USPTO has confirmed that applicants often cannot be reached following such filings:

"[I]n many applications, the address information for the applicant is not legitimate (i.e., the address is for the unauthorized individual or entity representing the applicant) or is incomplete or inaccurate."

The rise in such illegitimate practices is amplified by two parallel trends.  First, the USPTO has seen a dramatic rise in trade mark applications from foreign entities and individuals; from fiscal year 2015 to 2017, the USPTO saw a 60% increase (from 70,853 to 115,402 filings) in foreign filings, while only a 7% increase (301,098 to 320,885) in domestic filings over the same period. As a result, the proportion of foreign filings also grew from 19% to 26% during that time. 

Regarding problematic filings, while some are domestic, 

"a significant and increasing number come from overseas, primarily from China. Often, those applicants are represented by unauthorized, Chinese individuals who evade USPTO sanctions."

Second, this trend was compounded by a sharp rise in pro-se applicants, particularly among foreign applications. 44% of foreign filings are pro-se applicants, while only 28.5% of domestic applicants file pro-se. Two years prior, foreign applicants filed pro-se at a similar rate to domestic applicants at 25.4%. Both trends are underscored by a rapid increase in US trade mark filings from China; "from 2013 to 2017 applications from China increased by 1000 percent."

Possible Reforms on the Drawing Board

These trends greatly complicate the process of educating those applicants that fail to meet their burdens in good faith as well as the process of sanctioning those who seek to circumvent US trade mark requirements in bad faith. Mary Denison, USPTO Commissioner for Trademarks testified before Congress that "there is no one silver bullet" in order to combat the effects of "counterfeit and clutter" on the trade mark register, the USPTO is planning to implement a variety of amendments and reforms:

#1: Requiring foreign-domiciled applicants to be represented by US counsel.

The USPTO will have a US lawyer who can be held accountable for improper filings, even when those applications are filed from overseas;

#2: Auditing post-registration maintenance filings to ensure that the mark is being used in commmerce in connection with all of the goods and services in the registration;

My new cat, Echo, will keep an eye on reforms as well!

#3: Updating examination guidance and training on questionable specimens of use that instructs examiners to issue refusals when they discover fake or suspicious specimens of use, rather than just requesting additional specimens as was the past practice; and, 

#4 Creating a special task force to develop and implement additional policies, procedures, and technology solutions. 

In addition, Commissioner Denison noted several possible reforms to the trade mark application and registration process; this Kat will keep an eye on these and other reforms as they are implemented. For now, let's dive into the details of the first amendment discussed by the Commissioner. 

Rule Changes

This amendment is affected through revision of the federal regulations regarding requirements for representation in trade mark prosecution; in particular, the requirement for a US attorney is effective for applicants not domiciled in the United States or its territories. 

Domicile is defined in this context as "the permanent legal place of residence of a natural person or the principal place of business of a juristic entity." Principal place of business is defined as "the location of a juristic entity's headquarters where the entity's senior executives or officers ordinarily direct and control the entity's activities and is usually the center from where other locations are controlled.

Applicants not domiciled in the US must "designate an attorney as the applicant's representative, and include the attorney's name, postal address, email address, and bar information." While a US attorney is necessary for a complete application, this requirement is not a filing date requirement; thus, the United States remains in compliance with international obligations under the WIPO Singapore Treaty and Trademark Law Treaty.

This amendment does not create a unique framework; "a significant number of trademark offices around the world require foreign-domiciled applicants and registrants to obtain local counsel as a condition for filing papers with those trademark offices." Some mechanics of this amendment, however, remain unclear; for example, the US attorney requirement applies to applicants using the Madrid Protocol, but the USPTO has no mechanism to enforce this rule in that context. Further, the amendment allows for reciprocal recognition of foreign attorneys, but only attorneys from Canada are eligible at this time.

My other new cat is named Atticus 
after a famous (albeit fictional) attorney

Effects

As evidence by the "use-in-commerce" requirement, the US considers a "clean" trade mark register - free of clutter and counterfeit - to be of value to the trade mark system. Because the USPTO does not have the authority to cancel ill-gotten marks unilaterally, the Office is beholden to the initiation of cancellation proceedings by third parties to maintain a cleaner trade mark register. 

This amendment is one of many targeted at reducing the number of successful registrations stemming from dubious filings, as well as reducing those dubious filings. In order to accomplish this goal, the US is shifting some of the cost onto foreign applicants by requiring a US attorney. While this may be viewed a subsidy to US trade mark practitioners, the cost will be somewhat offset, both by the cleaner register and the other amendments aimed at improving the efficiency of the registration process. The USPTO is boldly and aggressively combating counterfeit and clutter in the US trade mark register, within the limits of its authority. 

And its authority is limited; this amendment will not impact foreign trade marks that have already been registered. Similarly, although the amendment requires US trade mark applicants using the Madrid Protocol to file with a US attorney, the amendment provides no mechanism to enforce this. As a result, Madrid filings that meet the other statutory requirements will have the US attorney requirement waived until the Madrid system can be updated. This Kat will be keeping watch for this and other revisions to the US trade mark system; watch for updates as further revisions are implemented.