Under US law, to obtain a trademark registration, an Applicant must demonstrate a bona fide use of the mark in the ordinary course of trade. In recent years, there has been a dramatic increase in trademark applications that falsely claim a bona fide use in trade. As a result, the United States Patent and Trademark Office (“USPTO”) has been issuing and maintaining registrations for trademarks that should never have issued. When such fraudulent registrations remain on the Trademark Register, they block the legitimate efforts of businesses to launch new trademarks into the marketplace.
In recent years, this problem has only worsened by the flood of fraudulent trademark applications originating from China. Legislative history of the Trademark Modernization Act of 2020 (“TMA”) (enacted on December 20, 2020), demonstrates that as of September 2018, applications in the USPTO originating from China increased by more than 1100% over the prior 6-year period. Investigations reveal that a significant number of these applications have fraudulent claims of use and/or fake specimens including doctored photographs supporting the registration.
The TMA provides new tools to clear from the Trademark Register such fraudulent registrations. Three of these new tools are highlighted below.
Letter of Protest
The USPTO currently permits parties to submit a Letter of Protest against an application any time before publication. Under a Letter of Protest, a party can submit evidence that supports any ground of potential refusal of an application. Presently, there is no formal process in place for submitting a Letter of Protest.
To improve this process, the TMA requires the USPTO Director to establish a formal procedure for parties to submit evidence supporting a registration refusal against an application to register. Once a party submits evidence supporting registration refusal, the Director will have two months to decide whether to include the evidence in the record of the application. If the Director decides that the evidence should be made part of the application record, then the Trademark Examining Attorney likely will be required to review that evidence during examination.
Under the TMA, a party can file a petition for reexamination of a registration on the basis that the mark was not used in US commerce in connection with some or all of the goods or services recited in the challenged registration as of a “relevant date.” For use-based applications, the “relevant date” is the date of filing of the application. For intent-to-use applications the “relevant date” is the date on which a Statement of Use was filed. A reexamination petition must be filed within 5 years of the registration’s issuance.
Ex-parte expungement enables a petitioner to seek to expunge (or remove) goods and services from a trademark registration on the basis that the mark has never been used in commerce in connection with those goods and services. Expungement can only be sought between the third and tenth years after registration. Also, as part of the petition, a “reasonable investigation” into the non-use must be conducted and facts and supporting evidence must be submitted to the USPTO. If the Director of the USPTO determines that the petitioner has presented sufficient evidence of non-use, then the registration will be examined to determine whether to cancel the registration with respect to the relevant goods or services.
The specific rules for the TMA will be finalized by no later than December 2021 and the TMA’s expungement and reexamination procedures must be implemented by the USPTO by no later than December 27, 2021.