Emil J. Ali
USPTO Director Raises Glass to Trademark Enforcement and Issues Sober Warning about Bad Faith Actors
Updated: Aug 1, 2020
On May 20, USPTO Director Andrei Iancu addressed the 141st annual meeting of the International Trademark Association (INTA) and warned of the threat to intellectual property rights caused by “bad faith” actors. In his opening remarks he praised the economic benefits of U.S. businesses leveraging the power of intellectual property rights, citing Port City Brewery, a local Alexandria, VA company, as an example. A USPTO director with a strong patent background, Iancu notably pointed out that trademark-intensive industries are critically important to the U.S. economy—directly accounting for 23.7 million jobs and $6.1 trillion in added value in 2014. He went on to report that this exceptional economic benefit is threatened by the significant increase in recent years of trademark applicants failing to file accurately and in good faith, particularly with respect to claims of use of their marks in commerce.
Iancu noted that the onslaught of foreign applicants making false claims and attempting to thwart USPTO rules is particularly alarming. “Over the last few years, the USPTO has seen a tremendous uptick in foreign applications with inaccurate or possibly fraudulent claims of use of the mark for the goods or services specified in the application,” the Director said. This behavior, which Iancu noted violated both legal and ethical obligations, includes submitting fake or altered specimens of use, submitting false claims of use to obtain and maintain registrations, using practitioners who are not authorized to represent others before the USPTO, making unauthorized address changes and assignments of ownership, and making attempts to circumvent the newly proposed U.S. counsel requirement even before it has been implemented.
Iancu went on to say that “within days of proposing the U.S. counsel rule, [the USPTO was] alerted to hundreds of emails sent from overseas to U.S. lawyers, offering money for use of the lawyers’ bar information on trademark filings, in an effort to circumvent this rule. One was literally signed ‘Bruce from China.’”
Recent action by the USPTO to counter these attacks includes issuing orders to exclude specific non-U.S. “filing factories” that make a practice of bad-faith applications. However, Iancu noted that the USPTO’s ability to sanction foreign businesses and practitioners is “extremely limited,” and foreign bad actors can often hide their improper activities. The Director elaborated that the USPTO’s Proof of Use Audit Program has tested the accuracy of claims of use between the 5th and 6th anniversary and every 10 years after registration, and according to Iancu “[o]ver 50% of the audited registrations have ended up deleting goods or services because the registrant could not provide proof of use for the good or services [they] queried.”
To further defend against these threats, the USPTO has established a working group tasked with devising changes to their current practices. Iancu promised that specifics would be forthcoming from Commissioner Mary Boney Denison, Chief Administrative Trademark Judge Gerard F. Rogers and Chief Policy Officer Shira Perlmutter.
Practitioners should remain aware that the USPTO, including the Office of Enrollment and Discipline, have taken a strong interest in protecting the Trademark Register. Practitioners, even those who only file trademarks on an occasional basis, should be aware that specimens, declarations, and signatures are being carefully reviewed by Trademark Examining Attorneys, as well as support staff. Moreover, those practitioners who associate with foreign applicants and counsel should be vigilant to ensure “Bruce from China” is not putting their license at risk.
For additional information, please contact McCabe & Ali, LLP at 877-OED-4097.
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