New Trademark Rules: How Will Your Business Be Impacted?

By Cindy N. Pham, Attorney, BRADFORD, LTD.

Branding decisions are frequently affected by prior trademark filings – often to the point where a company takes an entirely different path with its business or branding plan. A new rule by the USPTO may change all that. 

On August 3, 2019, the United States Patent and Trademark Office (USPTO) issued a new rule that affects all foreign businesses and individuals seeking a trademark. Namely, if a foreign-based company applies before the Trademark Trial and Appeal Board, they must now be represented by an attorney licensed to practice in the U.S. This new rule imposes direct requirements on all trademark applicants, registrants, and parties whose permanent legal residence or principal place of business is outside the United States, and while the new rule is aimed squarely at foreign entities, it is expected to have impacts on U.S.-based companies. 

What Led to the Change?

This new rule – that foreign businesses and individuals must be represented by a U.S.-licensed attorney – is a direct result of the surge in inaccurate and fraudulent foreign trademark applications and registrations, inundating the USPTO.  In addition to the number of applicants who file trademark applications to circumvent U.S. trademark requirements, there are many applicants who submit inaccurate statements simply because they misunderstand those requirements.  

For example, some applicants don’t realize U.S. applications are limited to the goods and services that they use or have bona-fide intent to use with their mark in U.S. commerce. Other countries offer a broader range of use and applicants claim they are entitled to that broader range in the States as they would elsewhere.  

But regardless of the reason, these applications have become problematic– the USPTO estimates these potentially invalid trademark applications number in the tens of thousands.  

The USPTO relies on applicants to be truthful and accurate and requires that all trademark documents be signed> Applicants are subject to criminal penalties for submitting knowing and willful false statements.  While this ensures compliance by U.S. trademark applicants, the USPTO was challenged to enforce this requirement against foreign-based entities and individuals not subject to U.S. jurisdiction. With the new rule requiring that all trademark submissions be made by lawyers subject to U.S. disciplinary action, the USPTO hopes to prevent foreign applicants from asserting inaccurate or false statements, particularly those regarding use or intent to use the mark in the U.S.  

So, what does this mean for U.S. and foreign companies?

Foreign-based companies or individuals will need to retain a U.S.-licensed attorney to file a federal trademark application in the U.S or appear in a trademark proceeding before the USPTO.  These entities will also need a U.S.-licensed attorney to file any post-registration maintenance documents or risk losing registration.  

Pending trademark applications filed before August 3, 2019 may be excepted from the new rule, but only if the application requires no further action.  Applicants will need a U.S. attorney if they must respond to an Office Action or filed on an intent-to-use basis and need to submit a Statement of Use.  In that event, the USPTO will suspend the application to ensure enough time to secure U.S. counsel.        

Although this new rule may seem burdensome, it lends greater credibility to all applications and helps ensure accuracy, which benefits all trademark applicants.

How does the new rule affect U.S. companies?

Branding decisions are often impacted by prior third-party trademark registrations or applications, whether it is the decision to use (or not use) a trademark or the decision to dispute a third-party’s claim to a trademark.  The existence of so many potentially invalid foreign-based trademarks in the U.S. trademark register has complicated matters for U.S. businesses because these trademarks may have served as a bar to registration under the U.S. “first-to-file” trademark system.  

For example, a U.S. business may have changed its business plans to avoid using a trademark that a foreign company is squatting on, not knowing that the trademark in question wasn’t valid. Some affected companies may have even expended limited resources to initiate proceedings to cancel or oppose the inaccurate or falsely filed registration or application.

It may take some time but, if this new rule works as intended, potentially invalid third-party trademarks will eventually be culled from the U.S. trademark register. This will facilitate business decisions based on more accurate and reliable trademark information, saving many companies from unnecessary costs in assessing or challenging the validity of trademark registrations and applications.  

Have Questions?

If you are a foreign-based company looking for U.S. representation or a U.S. company indirectly affected by this new rule, do not hesitate to contact one of our attorneys at BRADFORD, LTD.  We represent all types of companies that operate in the U.S. and abroad and are happy to walk you through whatever it is that you need.  

 

About the Author

Cindy N. Pham is an attorney with BRADFORD LTD and focuses on business, commercial and intellectual property litigation, as well as copyright and trademark prosecution and enforcement. She also has experience with proceedings before the United States Patent Trial and Appeal Board, including preparing petitions and responses in Inter Partes Review proceedings. Prior to joining BRADFORD, LTD., Ms. Pham worked as a litigation associate at national and international law firms. Contact Cindy at cindy@apb-law.com or +1 720.221.4505. 

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BRADFORD, LTD

Bradford LTD specializes in IP protections and maximization for startups and small businesses. We also provide scaled legal services to our clients, including fractional legal counsel and value-based rates. From trademark, copyright and service mark protections to patent protection and outside inside counsel, we help position entrepreneurs and owners for long-term success.

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