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Rule Change Requires U.S. Counsel for Foreign-Domiciled Trademark Applicants

Posted in IP, Trademark Law

The United States Patent and Trademark Office (the “USPTO”) explains that

“A trademark is a brand name. A trademark or service mark includes any word, name, symbol, device, or any combination, used or intended to be used to identify and distinguish the goods/services of one seller or provider from those of others, and to indicate the source of the goods/services.”
https://www.uspto.gov/trademarks-getting-started/trademark-basics.

Applying for registration of a trademark with the USPTO provides certain legal advantages to the owner when pursuing infringers. In fact, a large number of U.S. trademark applications are filed by foreign-domiciled applicants whose permanent legal residence or principal place of business is outside the United States. In one of the most significant changes in recent U.S. trademark practice, on July 2, 2019, the USPTO announced that as of August 3, 2019, all foreign-domiciled trademark applicants, registrants, and parties to Trademark Trial and Appeal Board (“TTAB”) proceedings must be represented by an attorney who is licensed to practice law in the United States.

The rule change will take effect in less than two weeks (August 3, 2019) and will apply to all newly-filed applications and other proceedings. However, this rule change is not limited to new actions.  The requirement for U.S. counsel will also apply to other USPTO trademark proceedings that began before August 3, 2019, that still require additional substantive action by the unrepresented party in order to proceed. For example, U.S. counsel will be required when responding to an Office Action.

Previously, foreign-domiciled applicants and registrants, including parties in the TTAB, could act on their own behalf (pro se) or through foreign counsel if they met certain requirements. However, those options are no longer allowed. In addition, Canadian counsel, who previously met the requirements for foreign counsel, can no longer be primary counsel for clients in such proceedings, but they can be secondary counsel for Canadian clients.

Further, the rule change will apply even for the Madrid Protocol, the foreign trademark filing treaty, because the Madrid Protocol filing form at the World Intellectual Property Organization (WIPO) will be amended to add a U.S. attorney before filing and all files will eventually need to designate U.S. counsel.

In addition, the new rule will require U.S. counsel 1) to confirm they are active members in good standing of their bar and 2) to provide their bar information. This requirement is intended to stop or prevent the unlicensed practice of law before the USPTO and prevent the current practice of some who fraudulently copy contact information from legitimate U.S. law firms falsely making it appear the applicant is represented by U.S. counsel.

This rule change will impact tens of thousands of foreign-domiciled individuals and entities who avail themselves of the trademark processes and procedures at the USPTO but is seen by many as necessary to combat the recent increases in fraudulent applications and submission of fake specimens. Speaking at the International Trademark Association annual meeting in May, USPTO Director Iancu stated “In recent years, we’ve seen a significant increase in the number of applicants who are not fulfilling their legal and ethical obligations to file accurately and in good faith, particularly as to claims of use of the mark in commerce. We have seen a surge in improper submissions and bad faith behavior.  Some are domestic, but a significant and increasing number of these come from overseas…. They include submitting fake or altered specimens of use; submitting inaccurate or knowingly false claims of use in U.S. commerce to obtain and maintain registrations; using practitioners who aren’t authorized to represent others before the USPTO; making efforts to circumvent the newly proposed U.S. counsel requirement even before it has been implemented; and making unauthorized address changes and unauthorized assignments of ownership.”

Previously, foreign-domiciled parties who were not represented by U.S. counsel were effectively immune from discipline by the USPTO or any other domestic authority. Worst case, even if a trademark application was fraudulent or fake specimens were submitted, the trademark application was merely denied without further penalty or sanction. With the increasing number and sophistication of those who try to obtain fraudulent trademarks to adversely impact U.S. commercial activity, undermine the reliability of searches, or bring into question the integrity of the trademark registration system, the USPTO has chosen to require foreign-domiciled applicants to retain U.S. counsel who can be held accountable for unethical behavior.

In commenting on the rule change, Director Iancu stated “Businesses rely on the U.S. trademark register to make important legal decisions about their brands. 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.” In addition, the USPTO Commissioner for Trademarks Mary Boney Denison pointed out that “many other countries worldwide have had this requirement for decades.” The USPTO believes “this new rule will help improve the quality of submissions to the USPTO.”

This rule change has been under consideration for several months as a part of a multi-step process to deal with fraudulent applications and fake specimens. For example, just a few days after this announcement, the USPTO issued new examination guidelines related to digital alteration of specimens. The USPTO had previously developed several programs, including guidelines relating to digital alteration of specimens, a pilot program encouraging the public to report fraudulent trademark application material, and a post-registration audit program for certain trademark registrations. In fact, early results from the random audit program showed that over 50% of audited registrations had to delete goods or services because they could not establish proof of use. These changes aim to maintain the reliability and integrity of the U.S. trademark system in light of globalization, treaty obligations, new technologies, and other worldwide developments.

Some have expressed concern that the requirement for U.S. counsel will increase the cost of trademark applications and likely decrease the number of applications. Others are concerned the rule change unfairly discriminates against foreign applicants. However, the increased cost will hopefully be offset by the increased reliability of the U.S. trademark registry. Further, the new rule may serve to protect foreign applicants who currently may be receiving inadequate or false information regarding the legal requirements for obtaining U.S. trademarks because their foreign counsel may not be appropriately knowledgeable as to the U.S. requirements for use of a mark in commerce, USPTO procedures, and/or trademark ownership issues.

The bottom line is that foreign-domiciled applicants should immediately retain U.S. trademark counsel.