By Michael Leonard, Co-Chair of the MARQUES International Trade Mark Law and Practice Team

In August 2019, the U.S. Patent and Trademark Office (USPTO) proposed an increase in the amount of many trade mark-related fees. According to the USPTO, the purposes of the fee increase are to:

• Improve the accuracy of the Register and proof of use.
• Address changes in filing behaviour that could result in fewer post registration filings.
• Ensure sufficient aggregate revenue to recover aggregate cost of trade mark operations in future years (based on current projections).
• More closely align fee rates to recover more of the cost of appeal and trial proceedings which are increasing.

The most notable of the proposed fee increases are shown in the table below.

Negative comments

An initial public comment period concluded on 30 September 2019. The USPTO received hundreds of mostly negative comments from the public, law firms and various organizations. Many individuals and owners of small businesses objected to the nature and extent of the fee increases.

During a hearing held on 23 September 2019, individuals speaking on behalf of AIPLA, INTA, IPO and two US law firms challenged the basis for several of the fee increases, which appear to be excessive when compared to the Trademark Office actual cost for undertaking a specific activity (referred to as a unit cost).

For example, one speaker pointed out that the proposed increase of the Section 8 and Section 71 declaration of use fees from $125 to $225 per class is an 80% increase. However, the unit cost for the USPTO to process a Section 8 Declaration of Use is only $108. (Strangely, despite being essentially the same filing, the USPTO reports that the unit cost for a Section 71 declaration of use is $30.) Thus, the question was raised as to the basis for an 80% increase when the cost of the activity is already below, or in the case of a Section 71 Declaration, well below the current fee.

Implications for MARQUES members

For MARQUES members, a key fee proposal to be aware of is the $100 fee per item for deletion of a good/service after the issuance of an audit. As members may be aware, in 2016 the USPTO initiated a “random” audit of up to 10% of all declaration of use and/or renewal application filings in an effort to ensure that owners are able to prove use of a mark on each and every good and/or service claimed to be in current use as part of such a filing.

If the present fee increase is approved in its entirety, this new rule will force members to potentially pay extensive fees if they are not truthful/diligent when attesting to the scope of the current use of a mark. For example, if a registration reciting goods described as “clothing, namely, dresses, skirts, shirts, underwear, shorts, socks, jeans, t-shirts, bras, girdles, night shirts and leggings” is selected for a random audit and the owner can only show use of the mark on underwear, bras and nightshirts, the owner would be forced to pay a fee of $900 for the deletion of the goods described as “dresses, skirts, shirts, shorts, socks, jeans, t-shirts, girdles and leggings”. As one can see, this potential fee increase could prove quite expensive to owners of registrations who are not careful/truthful when attesting to the scope of a mark’s current use in the United States.

What happens next

The USPTO and the TPAC (Trademark Public Advisory Committee) are now evaluating the written comments and the hearing testimony and will soon issue a written summary of the findings. The final proposed fees will then be published in the Federal Register in March/April 2020. After publication in the Federal Register, a final formal commenting period will be provided to the public.

Any approved fee increases are expected to take effect in August 2020. From the perspective of this MARQUES member, it is hoped that the concerns raised thus far, by the public and practitioners alike, will be taken into serious consideration and many of the proposed fee increases will be reduced.

Michael Leonard is a partner of Fox Rothschild LLP and Co-Chair of the MARQUES International TradeMark Law and Practice Team