A new requirement for U.S. trademark filings could clean up the submission pool for the U.S. Patent and Trademark Office and drum up some business for American attorneys.
On July 2, the USPTO finalized a rule that would require foreign entities to be represented by a U.S.-licensed attorney in all trademark filings and matters. These would include not just submissions for new trademarks but also proceedings before the USPTO’s Trademark Trial and Appeal Board, which determines a party’s right to register a trademark.
The rule, effective Aug. 3, is expected to curb an influx of low-quality or fraudulent trademark filings coming from entities based overseas, particularly from China. It will also drive more entities toward stateside practitioners positioned to accommodate those clients, attorneys say.
The USPTO is instituting the rule as a step toward “combating fraudulent submissions,” USPTO Director Andrei Iancu said in a press release.
“Businesses rely on the U.S. trademark register to make important legal decisions about their brands,” Iancu said. “In order to maintain the accuracy and integrity of the register, for the benefit of all its users, the USPTO must have the appropriate tools to enforce compliance by all applicants and registrants.”
While other jurisdictions — including Brazil, China and the EU — have trademark offices that have required parties to retain local counsel for trademark matters, the U.S. has not.
“Many other countries worldwide have had this requirement for decades,” said USPTO Trademarks Commissioner Mary Boney Denison. “We believe that this new rule will help improve the quality of submissions to the USPTO.”
U.S.-licensed attorneys representing foreign parties must attest to the USPTO that they are in good standing with a bar in a state or U.S. territory, according to the rule. Canadian parties can no longer be represented by Canadian patent agents in trademark matters under the rule. Canadian trademark agents and attorneys can still represent them, but only when in addition to a U.S.-licensed lawyer.
The USPTO has been seeing an increasing number of trademark submissions from foreign filers that were either bogus or out of compliance with U.S. trademark law or USPTO rules. These submissions are often made with the help of foreign entities who aren’t authorized to represent applicants at the USPTO, according to a USPTO fact sheet.
Brian O’Donnell, counsel at Kilpatrick Townsend & Stockton’s Denver office whose practice includes trademark litigation, said the rule should alleviate the USPTO’s burden of ferreting out fraudulent submissions.
“I think it will go a long way toward solving, if not entirely eliminating, the problem,” O’Donnell said. A U.S.-based attorney is not going to risk his or her bar license and good standing by knowingly filing a fraudulent trademark submission, he added. “I think it’s a really simple solution to what I would refer to as a small but potentially growing issue.”
Cindy Pham, an associate at IP firm Bradford LTD in Denver, said the volume of low-quality or fraudulent submissions has “dramatically increased over the years,” especially from China. The Chinese government pays its citizens significant incentives whenever they successfully register a U.S. trademark, Pham noted. Those incentives drive a higher volume of trademark filings, including illegitimate claims, to the USPTO. It’s very difficult for the office to verify declarations from foreign filers, let alone follow up against them when the office discovers fraud, she said. “They currently have no way to enforce any disciplinary action on these fraudulent filings.”
The rule won’t just affect foreign entities, Pham said. Low-quality trademark filings can muddy the waters for other parties in the submission pool. It can be frustrating when attorneys apply for a trademark and the office initially thinks it could get confused with a different low-quality mark when “sometimes it’s valid, sometimes it’s not.”
Pham said the rule will also eventually benefit foreign-based entities that are already filing in good faith in the U.S. If someone tries to invalidate their claims post-application, there’s less reason to assume their marks are invalid, she said.
With more foreign entities looking for stateside counsel to help register U.S. trademarks, that should create some business opportunities for U.S.-licensed practitioners, said Aaron Bradford, Bradford LTD’s managing member.
“I’m not sure how it’s going to manifest itself — that’s what’s going to be interesting,” Bradford said. Foreign entities might look for attorneys in Washington, D.C., because the USPTO headquarters is there, or even cities like Denver that have a field office. In any event, the IP community might see “an uptick in trademark lawyers suddenly becoming ‘international trademark lawyers,’” Bradford said.
Bradford LTD attorneys have made trips to China to strike up projects with entities there. Bradford said the firm is currently working with Chinese companies on branding, brand clearance and trademark applications stateside.
“We have convinced our clients to use us for branding and protection as it affords them a far better result,” Bradford said. “This is what these new rules are designed to institutionalize.”
The new rule is likely not the only measure the USPTO will take to fight bogus filings from overseas entities. Iancu has previously said in congressional testimony that his office was considering additional steps to sniff out bad trademark submissions, including using software to detect whether the photos parties submit as “specimens of use” were doctored.
— Doug Chartier