Legal Alert: USPTO Issues New U.S. Licensed Attorney Requirement

Introduction

Your company spends weeks brainstorming, holding marketing meetings and, perhaps, even using focus groups – all in an effort to craft the “perfect trademark” for your latest envisioned product or service. You ask your trademark attorneys to conduct a clearance search – only to learn that your “perfect trademark” has already been registered through the U.S. Patent and Trademark Office (“U.S. PTO”) by someone else. You are confused! You did your own keyword searches online before involving your attorney. You did not find any evidence that your “perfect trademark” was being used by anyone else. Why were you unable to find this other party’s product or service being advertised using your “perfect trademark”? You and your attorneys dig deeper, only to find that the registration in question was filed by an overseas company which appears to have submitted falsified proof of use!

While this scenario might seem “far-fetched” it has happened more often than you might expect. Fortunately, new rule changes at the U.S. PTO may go a long way in curbing this growing problem.

Effective August 3, 2019, the United State Patent and Trademark Office (“U.S. PTO”) issued new rules governing the representation of foreign-domiciled trademark: (i) applicants; (ii) registrants; and/or (iii) parties to Trademark Trial and Appeal Board (“TTAB”) proceedings.

According to the explanatory comments in the Federal Register notice promulgating this rule change, the U.S. PTO’s rationale was two-fold, namely:

to protect the integrity of the U.S. Trademark Register; and

to better enforce compliance with U.S. statutory and regulatory requirements.

Explanation for Rule Change Rationale:

The reasoning behind these two rationale are simple – there appears to have been a major upswing in fraudulent filings at the U.S. PTO in recent years.

More specifically, there has been a dramatic, documented increase in recent trademark filings from pro-se, foreign-domiciled applicants. According to the U.S. PTO, trademark filings from foreign-domiciled entities rose from 19% of all trademark filings in 2015 to 26 percent of all trademark filings in 2017. The U.S. PTO also reports that while pro se parties only accounted for 28.5% of all U.S.-domiciled trademark filings in 2017, pro se parties accounted for a staggering 44% of all foreign-domiciled trademark filings in 2017.

In particular, the U.S. PTO’s rule change appears to be a reaction against a wave of fraudulent trademark applications originating from China. Indeed, reports suggest that – in some cases – the Chinese national and/or provincial governments are subsidizing trademark applications. One commentator even opined that such subsidies can reach nearly $800 per U.S. trademark registration – making trademark fraud a potentially lucrative “industry.” Little wonder then why the U.S. PTO estimates that the “number of total tainted applications [is] now in the tens of thousands…” – which we suspect is a conservative estimate.

Such fraudulent filings are a major threat to U.S. industries. In a cogent discussion of the importance of trademark rights, the U.S. PTO correctly observed that:

“The public relies on the register to determine whether a chosen mark is available for use or registration. When a person’s search of the register discloses a potentially confusingly similar mark, that person may incur a variety of resulting costs and burdens, such as those associated with investigating the actual use of the disclosed mark to assess any conflict, initiating proceedings to cancel the registration or oppose the application of the disclosed mark, engaging in civil litigation to resolve a dispute over the mark, or choosing a different mark and changing business plans regarding its mark. In addition, such persons may incur costs and burdens unnecessarily if the disclosed registered mark is not actually in use in U.S. commerce, or is not in use in commerce in connection with all the goods/services identified in the registration. An accurate and reliable trademark register helps avoid such needless costs and burdens.”

By requiring foreign-domiciled parties to be represented by licensed U.S. counsel, the U.S. PTO hopes to bolster the integrity of the Trademark Register as a whole.

Impact of Change:

We predict that, for U.S.-domiciled persons and companies, the negative impacts of this rule change should be minimal. For example, this rule change does not apply to U.S.-domiciled applicants, registrants and TTAB parties – although engaging competent trademark counsel is always advisable. Rather, the impact on U.S.-domiciled persons and companies should be almost uniformly positive. For example, as explained by the scenario above, U.S.-domiciled persons should be able to better rely on marketplace realities and – hopefully – avoid having to deal with the fraudulent trademark applications which have been increasingly “crowding” the Register and interfering with their efforts to register their “perfect trademark”.

While these same benefits will similarly accrue to foreign-domiciled persons and companies wishing to engage in legitimate business in the U.S., such persons / companies will face the added expense of having to engage local U.S. counsel.

Canadian Patent Agents / Trademark Agents & Attorneys:

Historically, Canadian patent agents were authorized to represent Canadian trademark applicants, registrants, or parties before the U.S. PTO in various trademark matters. However, under the rule change effective August 3, 2019, Canadian patent agents are no longer authorized to do so.

That being said, Canadian trademark attorneys and agents which have been reciprocally recognized by the U.S. PTO Office of Enrollment and Discipline can be recognized as an additionally appointed practitioner for Canadian clients. However, such Canadian clients must also appoint a U.S. licensed attorney to file formal responses to the U.S. PTO. Moreover, the U.S. PTO will only correspond with the appointed U.S. licensed attorney. In other words, Canadian trademark attorneys and agents will be allowed to continue having a role before the U.S. PTO but will need to begin engaging local U.S. co-counsel to practice before the U.S. PTO.

U.S. Attorney Requirements:

Finally, it is worth noting that a U.S. licensed attorney representing applicants, registrants and/or parties to TTAB proceedings must now provide:

his or her name, postal address, and email address;
a statement attesting to his or her active membership in good standing of a bar of the highest court of a U.S. state, commonwealth, or territory; and
certain information concerning his or her bar membership (i.e., state of admission, bar membership number (if applicable), and year of admission).

If you or your company are located outside the U.S. and would like to explore U.S. trademark protection, call us today for a free consultation.