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

[Greg Shatan]

George,

Although I'm sure it's inadvertent, you are very significantly
misinterpreting what you are presenting.  Your conclusions are not
supported by these materials. I'm at a party so I can't respond in detail
but will do so as soon as I can.

Greg

On Saturday, August 20, 2016, George Kirikos <icann at leap.com> wrote:

> 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/
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