[gnso-rpm-wg] TMCH -- false declarations of use, statistics from the USPTO

[George Kirikos]

Hi folks,

I was doing some research on false declarations of trademark "use",
and came upon some startling statistics that are relevant to our TMCH
discussions.

The following link summarizes some of the important research conducted
by the USPTO:

http://www.finnegan.com/resources/articles/articlesdetail.aspx?news=05be4815-5b70-41c6-b521-055aee7946c2

"The results of the pilot program indicate that a substantial majority
of foreign registrants, 73% under the Madrid Protocol and 65% under
the Paris Convention, have submitted false declarations of use and
have therefore received trademark protection to which they are not
entitled in the United States."

The same study was discussed in the following blog:

http://www.thebrandprotectionblog.com/uspto-announces-new-trademark-use-audit-program-in-proposed-rule/

"...USPTO randomly audited 500 registrations with recently filed
affidavits averring use. In addition to the usual specimen submitted
for each class of goods or services, the USPTO asked registration
owners to submit proof of use of their marks for two additional goods
or services per class selected at random by the USPTO.

During the two-year pilot program, the USPTO found that 51% of the
audited registration owners were unable to satisfy these additional
proof requirements. The USPTO cancelled 16% of the audited
registrations in their entirety because the registration owners failed
to respond to the request for additional proof or any other issues
raised during the examination of the original affidavit. In addition,
35% of the audited registration owners requested that some of the
goods or services be deleted from their registration."

The final report by the USPTO can be read in its entirety at:

https://www.uspto.gov/sites/default/files/documents/Post_Registration_Proof_of_Use_Pilot_Final_Report%20.doc

(sorry it's not a PDF)

This huge amount of fraudulently registered marks has caused them to
make some proposals a couple of months ago, see:

https://www.federalregister.gov/articles/2016/06/22/2016-14791/changes-in-requirements-for-affidavits-or-declarations-of-use-continued-use-or-excusable-nonuse-in

"A register that does not accurately reflect marks in use in the
United States for the goods/services identified in registrations
imposes costs and burdens on the public."

"The public relies on the register to determine whether a chosen mark
is available for use or registration. Where a party's search of the
register discloses a potentially confusingly similar mark, that party
may incur a variety of resulting costs and burdens, such as those
associated with investigating the actual use of the disclosed mark to
assess any conflict, proceedings to cancel the registration or oppose
the application of the disclosed mark, civil litigation to resolve a
dispute over the mark, or changing plans to avoid use of the party's
chosen mark. If a registered mark is not actually in use in the United
States, or is not in use in connection with all the goods/services
identified in the registration, these costs and burdens may be
incurred unnecessarily. An accurate and reliable trademark register
helps avoid such needless costs and burdens."

Obviously, the exact same reasoning applies to the TMCH itself.

In light of these truly startling statistics, I think we need to have
much greater scrutiny of what marks get placed into the TMCH, despite
claims of "use". Even specimens of use can be "gamed", as discussed at
length in an article at:

http://www.fr.com/news/dont-be-confused-about-whether-your-trademark-is-used/

which had numerous examples of "sham" transactions, sporadic, casual,
or de minimis uses. e.g.:

"- a single shipment of one jar of salt from one corporate officer to
another for no charge;
- sale for $2.50 of 12 bank book holders, followed by instructions not
to offer them to prospective customers;
- sale of a few dollars’ worth of women’s sportswear to a cooperating
company which immediately returned the goods to the seller;"

The TMCH needs to be aware of how the system can be gamed, given the
financial incentives to do so, as do we as this policy is reviewed.

Perhaps a random audit of TMCH registered marks should be done.
Perhaps they should all be in a public database, so that there can be
greater scrutiny by the public compared to a private/secret database.
If it turns out that 51% or 65% or 73% don't pass muster, it would
have great implications for our work.

Sincerely,

George Kirikos
416-588-0269
http://www.leap.com/