March, 28th, 2017

By Walter B. Welsh

Effective March 21, 2017, the USPTO is auditing declarations and affidavits of trademark use submitted under sections 8 and 71 (“declarations”). The program comes in response to a pilot study that found many trademark owners were unable to substantiate sworn statements of use.

The Trademark Office will randomly select 10% of declarations claiming use with two of more goods/services per class and issue and Office action requesting proof of use. The owner has six-months to provide the requested proof or voluntarily delete the goods/services in question. If the owner is unable to file the requested proof, the USPTO will cancel the goods/services under audit. If the owner fails to respond, the USPTO will cancel the entire registration.

Practice Tips

Continue to ensure that a declaration of use is submitted only for those goods and services on which the mark is used (or there is excusable nonuse).

Review and collect evidence of use for all listed goods/services prior to submitting the declaration to ensure a smooth response to an audit.

If audited, respond fully to the Office action, and cancel all goods/services no longer in use even if beyond the scope of the audit.

Failure to comply with audit requirements may increase likelihood of cancellation of related registrations based on fraud.

Affidavit/Declaration of Use Under Section 8 and Section 71

The trademark register identifies trademarks that are in use. An accurate register reduces the cost to clear new trademarks. The Lanham Act requires trademark owners to file a declaration between the fifth and sixth year of registration and before every tenth year of registration attesting to trademark use with each good/service listed in the registration. The trademark owner is also required submit a specimen showing use for at least one good/service per class.

While the declaration requirement improves the accuracy of the Register, it has limitations. For example, the owner is only required to submit evidence of use for one good/service per class even if multiple goods/services are listed. As a result, it is common for unused goods/services to remain on the register, thereby limiting its accuracy. The problem is compounded by case law that makes it very difficult to challenge a registration maintained with a materially false declaration.

The USPTO implemented the new audit program in response to a two-year pilot program to asses and promote the accuracy and integrity of the trademark register. The results were not encouraging. In 51% of the 500 registrations selected, the trademark owner failed to supply additional proof of use on the goods/services in question. In 35% of the registrations, the owner requested cancellation of some goods/services. The USPTO cancelled the remaining 16% of the registrations because the trademark owners failed to respond at all.

New Audit Program

Under the new audit program the USPTO will conduct random audits of up to 10% of section 8 and section 71 declarations in which the mark is registered for more than one good or service per class. Trademark owners subject to an audit will receive an Office action requesting additional proof of use in the nature of information, exhibits, declarations, and specimens showing use in commerce. The Office action will specify the goods/services for which additional proof of use is required. Initially, the USPTO plans to request proof of use for two additional goods/services per class in the initial Office action. Thereafter, the owner may be required to submit proof of use in commerce for additional goods/services. The trademark owner has the option to delete those goods/services for which they are unable to provide the requested proof of use. The Office action will further advise owners to delete all goods/services not in use in commerce because the Office may issue subsequent actions requiring proof of use on some, or all, remaining goods/services.

An owner response is due within six months of the Office action, or before the end of the statutory filing period for the section 8 or section 71 declaration, whichever is later. If the trademark owner responds, but is ultimately unable to provide the requested evidence, the USPTO will cancel such goods/services from the registration. If no response is filed by the deadline, the USPTO will cancel the entire registration.

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