The USPTO Proof of Use Trademark Audit – There’s a New Sheriff in Town.

If you’re a branding professional or a trademark attorney, then you understand the benefits of a United States registration of a trademark. If you’re newer to the trademark registration process, consider reviewing my Branding: 8 Common Questions About Trademarks! and The Federal Trademark ® Process-How It Works! articles on LinkedIn.

The purpose of this article is to provide some little-known information to branding practitioners about a newer United States Patent & Trademark Office program, called the Post Registration Proof of Use Audit Program.

With a career spanning more than 35 years, I have personally filed more than 600 trademark applications for registration with the USPTO. Over those years, the laws have changed and practices scrutinized in new ways. But, audits are audits, meaning someone—being the USPTO in this case—is empowered to verify information being provided during registration maintenance. This is new, and practitioners need to focus on the new legal and practical implications.

Just a bit of background. A federal trademark registration is effected within one or more “classes.” For example, perfume, clothing, alcohol products for consumption, motor oil, and consulting services are different classes. A trademark can be registered in multiple classes, such as a celebrity designer may register the designer’s brand for perfume, clothing, sunglasses and custom clothing tailoring services.

Now, let’s take the clothing class, for example. To register a brand for clothing, first you choose that class, then you identify the particular items of clothing that are commercialized with the brand in that class. That is, for clothing, the items might be caps, tee shirts, and sweatshirts.

Many years ago, some practitioners would select the clothing class for registration, and then identify a long hit-list of clothing items, whether or not those items were actually commercialized. Sort of like a, “we’re claiming all these items as part of the registration, even if we haven’t commercialized them yet.” I won’t get into the details, but that practice, even though somewhat customary within the industry, was legally overruled and superseded (or clarified) by the standard to claim only those items actually commercialized. The effect of that overruling was, of course, to make the acquisition of the trademark registration both more difficult to achieve, as well as more limited in scope. Whether this is good or bad depends upon whether you are defending your own ground or attacking someone else’s ground.

When the USPTO “examining attorney” reviews the class or classes selected in the application and the respective items list, he or she does not verify the commercial use. For the application to succeed to a registration, among other things, the USPTO requires one “specimen item” (proof) that demonstrates the commercial use for the entire class and all items in the class. In other words, if you select the clothing class and you identify “caps, tee shirts, sweat shirts and socks” as the commercialized items, you only need to submit a specimen (usually a .jpg picture) of one commercialized item, such as a picture of the tee shirt with the brand. You do not need also to submit, for example, a picture of the caps, sweat shirts or socks, even though they are claimed. In effect, one item specimen represents the entire class.

Since the USPTO only reviews one item specimen for the entire class of claimed items, what forces the applicant to be “honest” and only to identify truly commercialized items? That is, what prevents an applicant from claiming 50 different items of clothing, even though only caps have been actually commercialized?

In the past, that was generally answered as, litigation. That is, a third party, not the USPTO, attacking your claim in a trademark battle. Previously, as a practical matter, if a registrant “overclaimed,” it risked a registration cancellation action by a third party. But, now, the USPTO itself is directly auditing registrations. Although this fact does not change any legal standard, it does change the probabilities and risks of an attack against a registration, including for overzealous claims and hopeful clients.

So says the USPTO:

The program improved the integrity of the trademark register by allowing us to cancel audited registrations…Because removing these registrations or deleting goods or services not in use is crucial for maintaining an accurate register….

From an audit perspective, the applications at greatest risk have at least one class with four listed items.

Therefore, it is imperative to document continued commercial usage during the life of the registration. Before this audit program, there might be a 1 in 100 chance of third-party litigation of some form, and a 1 in 1,000 chance of that litigation placing the commercial use into direct scrutiny. Now, there is a 100% chance that a registration will be maintained, and an entirely new risk of an audit by the USPTO at that maintenance juncture.

Registrant beware.

A brand is a mission-critical part of commercial strategy. If you need to navigate through the protection and registration of your brand, the maintenance, or handle the implications of this new USPTO audit procedure, my office and I will be glad to assist you.

Gregg Zegarelli, Esq.

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Gregg Zegarelli is Managing Shareholder of Technology & Entrepreneurial Ventures Law Group, PC. Gregg is nationally rated as “superb” and has more than 25 years of experience working with entrepreneurs and companies of all sizes, including startups, INC. 500, and publicly traded companies. He is Adjunct Professor in the Duquesne University Master of Leadership graduate degree program, currently teaching, Developing Leadership Character Through Adversity. He is author of One: The Unified Gospel of Jesus, and The Business of Aesop™ article series, and co-author with his father, Arnold Zegarelli, of The Essential Aesop: For Business, Managers, Writers and Professional Speakers. Gregg is a frequent lecturer, speaker and faculty for a variety of educational and other institutions. Copyright © 2019 Gregg Zegarelli. Gregg can be contacted through LinkedIn.

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You might also like:

Branding: 8 Common Questions About Trademarks!

The Federal Trademark ® Process-How It Works!

Branding America – In God We Trust. Or, Adams, Franklin, Jefferson and Washington Debate the American Slogan – Stand for America®

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