5 January 2022TrademarksAlex Baldwin

USPTO outlines new TM sanctions process

The US Patent and Trademark Office (USPTO) has outlined its new administrative process for investigating “suspicious” trademark applications in a notice published today, January 5.

The new process aims to crack down on trademark applications filed with the USPTO that appear to violate the Trademark Rules of Practice and forms part of its efforts to “protect the integrity of the US trademark register”.

The office is open to comments on the new sanctioning process, with a consideration deadline of January 20, 2022.

Sanctions breakdown

The office will now investigate “suspicious” submissions to determine whether they appear to violate USPTO rules or terms of use or part of an improper filings scheme.

Once the investigation is initiated, the USPTO may remove the applications from examination proceedings to ensure that it “does not move forward to approval”.

If this occurs, the applicant will not be able to make any further electronic submissions related to the application other than an express abandonment, withdrawal of an attorney or a petition to the USPTO director.

If the USPTO identifies conduct that violates the USPTO rules or terms of use, the office may issue an order to show cause as to why sanctions should not be imposed on the applicants.

While the USPTO will consider timely responses to the order, resubmitting documents or appointing a new attorney will not avoid the imposition of sanctions.

Finally, the USPTO will issue a final decision that includes an order for sanctions “if appropriate”.

Applicants will not be able to revive a terminated application unless they can demonstrate that the USPTO erred in including the application in the order for sanctions.

The USPTO “does not intend” to terminate registrations issued before the new administrative sanction process is initiated, but will update the electronic records to show that the application was subject to an order for sanctions.

“The USPTO may take additional actions to enforce orders for sanctions in cases where a sanctioned actor continues to violate the USPTO rules and/or the USPTO website's Terms of Use,” said the announcement.

‘False’ applications

This new process is the latest in the office’s ongoing effort to sanction attorneys and companies that provide false information in registering trademarks applications.

Specifically, the office has noticed an ongoing trend of mass “falsified” filings by Chinese companies since 2019.

In a blog post from the USPTO’s commissioner for trademarks in June, the office recorded a 63% increase in trademark applications from both US and foreign applicants year-on-year—which equates to around 211,000 additional applications.

In December 2020 alone, the USPTO received 92,608 applications, an increase of 172% over December 2019.

Alongside this post, the USPTO revealed that it had sent a letter addressed to the Chinese law firm Shenzhen Huanyee Intellectual Property and its director Yusha Zhang, alleging that the firm provided false information by entering signatures of thousands of third parties on applications and providing false information in trademark submissions “with the intent to circumvent the USPTO rules”.

The USPTO also published a report highlighting the surge in “suspect” applications from Chinese companies, prompting the office to launch an investigation into the issue.

“China’s filings are influenced by non-market factors such as subsidies, government mandates, bad-faith trademark applications, and defensive countermeasures,” said the report.

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