USPTO to Begin Random Audits of Declarations of Use
Does your trademark registration identify multiple goods or services in a single class? If so, you could be subject to a random audit to make sure you are using your mark with all the goods and services claimed.
New Final Rule Effective February 17, 2017
On January 19, 2017, the United States Patent and Trademark Office (USPTO) published a new final rule, effective February 17, 2017, establishing a permanent random audit program for affidavits or declarations of use or continued use for marks with more than one good or service per class.
10 Percent of Section 8 and 71 Declarations Will be Subject to Audit
Specifically, under the new rule, the USPTO will conduct random audits of up to 10 percent of the section 8 and Section 71 affidavits filed each year for registrations with more than one good or service per class. In the cases selected for audit, the USPTO will issue an Office Action specifying the goods/services for which additional proof of use is required. The USPTO anticipates requiring proof of use for two additional goods/services per class and, depending on the response, may then issue additional Office Actions requiring more specimens. Trademark owners will have up to six months to respond to the Office Action generated by the random audit and, in response, the trademark owner can either submit the required proof of use, or delete those goods/services for which the mark is not being used. If the trademark owner fails to respond to the Office Action, the USPTO will cancel the entire registration unless time remains in the grace period for the section 8 or 71 declaration.
New Rule Issued After Two-Year Pilot Program
In issuing the final rule, the USPTO explained that it had previously implemented a two-year pilot program to assess and promote the accuracy and integrity of the trademark register. In the pilot program, the USPTO randomly selected 500 registrations for which section 8 and section 71 affidavits had been filed. The owners of the selected registrations were required to submit proof of use for additional goods/services per class in addition to the required one specimen per class and to verify use of the mark with the additional goods/services. In 51 percent of the registrations selected for audit in the pilot program, the trademark owners failed to supply the additional verified proof of use. Specifically, the owners of 35 percent of the registrations selected for audit asked that the USPTO delete certain goods/services that the owners had initially claimed were in use with the mark. And 16 percent of the registrations were cancelled because the owners failed to respond to the requirement for additional proof (or due to other issues raised).
If you are a trademark owner with registrations that identify multiple goods/services in a single class, you need to be prepared to prove use for all the goods/services listed if you get selected for the random audit.