Expedited Trademark Cancellation Proceedings at the USPTO

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The U.S. Patent and Trademark Office (“USPTO”) currently offers a pilot program that provides parties the opportunity to engage in expedited non-use cancellation proceedings. Broadly speaking, cancellation proceedings allow third-parties to challenge a trademark registration and to seek its cancellation on a number of different grounds, such as, for example, that the mark is merely descriptive, the mark was obtained fraudulently, there is a likelihood of confusion between the registered mark and petitioner’s mark, or the mark has been abandoned. As a subset of abandonment cancellation proceedings, non-use cancellation proceedings allege that a trademark registration should be cancelled due to lack of use of the mark by the registrant.

Background on Cancellation Proceedings:

Under the U.S. Trademark Act, “a mark registered on the principal register . . . shall be prima facie evidence of the validity of the registered mark.”[1] Despite registration of a mark, however, the U.S. Trademark Act provides that:

A mark shall be deemed to be “abandoned” if . . . the following occurs:

(1) When its use has been discontinued with intent not to resume such use. Intent not to resume may be inferred from circumstances. Nonuse for 3 consecutive years shall be prima facie evidence of abandonment. “Use” of a mark means the bona fide use of such mark made in the ordinary course of trade, and not made merely to reserve a right in a mark. . . .[2]

As a result, the trademark register contains a large number of registered but abandoned trademarks that properly should no longer be registered.[3] Such marks are periodically cleared out because registrants are required to file a declaration of use attesting to (and showing) use of a registered mark in U.S. commerce (i) between the fifth and sixth years after registration, and (ii) between every ninth and tenth years of registration for as long as a mark is registered. Failure to attest to and show such use results in the USPTO cancelling a registration.

In many cases, however, such cancellations happen too slowly. Often, “abandoned” registered marks either (i) appear in clearance searching for potential new marks or (ii) are cited by the USPTO to refuse registration of newly applied-for marks. Because such registrations involve marks that have been abandoned, they should not properly present a conflict for a mark under consideration or a basis for a refusal to register by the USPTO.

Cancellation provides a means to clear such abandoned marks from the register.[4] Cancellation proceedings are mini-litigations, involving a petition for cancellation (similar to a complaint in district court) with a $400 USPTO fee, an answer (and potential counterclaims), and, many times, discovery (including document production and depositions), expert witnesses, and an oral hearing. When fully litigated, cancellations can last for several years before a decision by the Trademark Trial and Appeal Board (“TTAB”) at the USPTO.

Often, however, cancellations—especially non-use cancellations—end in default. For example, a registrant who is no longer using a mark may simply not respond to a cancellation petition (or may never receive service of the petition). In either case, the cancellation may quickly end with the TTAB entering a notice of default, followed by entry of judgment by default and cancellation of the challenged registration—all occurring within about 5 or 6 months of the cancellation petition being filed.

The current pilot program seeks to provide a means to expedite non-use cancellations that do not end in default, but that have a relatively simple set of facts that nonetheless demand adjudication by the TTAB on whether a registrant has abandoned rights to the mark by not using the mark.

Current Accelerated Case Resolution Procedures at the TTAB:

The TTAB has long offered parties procedures by which to accelerate opposition and cancellation proceedings that involve claims other than just non-use claims. Known as “Accelerated Case Resolution” (or “ACR”), these procedures can be used to fast-track any case in which both parties agree to the procedures.[5] ACR procedures can apply to almost any claim that could be raised during a cancellation or opposition proceeding.

ACR procedures can vary, but the process generally takes the form of stipulated facts, limited discovery and limited testimony witnesses, cross-motions for summary judgment, and accompanying evidentiary submissions. The parties must agree on, and the Board must approve, the procedures, which generally take the place of a traditional trial record and traditional briefs at a final hearing. In ACR, the TTAB seeks to render a decision within 50 days from the completion of briefing, and TTAB guidance contemplates (although does not require) parties choosing 11-month, 14-month, 17-month, or 18-month ACR track options.[6]

Expedited Non-Use Cancellation Proceedings:

Focusing on ways to expedite non-use cancellation proceedings specifically, the USPTO initially published on May 16, 2017, proposed rules under a Request for Comments on a Possible Streamlined Version of Cancellation Proceedings on Grounds of Abandonment and Nonuse.[7] Under the proposed rules, the USPTO indicated that the proceedings would require certain evidence be submitted with the pleadings (such as a declaration or other evidence of non-use), very limited discovery only for good cause shown, an abbreviated schedule, no oral hearing, and an expedited issuance of a decision by the TTAB.[8] Fees would be lower, with $300 per class contemplated.[9]

The USPTO received a number of comments to the proposed rules, both in favor and raising concerns.[10] Based on these comments, the Office decided instead to implement the current pilot program.[11] The pilot has two main goals: (i) identify the types of non-use cancellation cases that would be most suitable for expedited proceedings; and (ii) identify expedited procedures that can be used in such cases.[12]

Under the pilot, beginning in March 2018, the TTAB began attempting to identify cancellation proceedings that solely involve non-use or abandonment claims and that do not involve a registrant in default.[13] In a number of such identified cases, once an answer is filed, the TTAB advises the parties that it will participate in the initial discovery conference, and that the parties should be familiar with ACR and be prepared to discuss potential ACR options prior to the conference.[14]

In the conference, the interlocutory attorney for the case, as well as one of the designated administrative law judges at the TTAB (not one of the presiding judges, however), participate.[15] The interlocutory attorney and judge then discuss with the parties potential options for expediting the cancellation, including potential fact and evidentiary stipulations, options for limiting discovery, and use of the “summary judgment ACR model,” in which the TTAB treats summary judgment motion filings and accompanying evidence as the final record and briefing, and in which the TTAB decides disputed issues of fact.[16]

Even if not contacted by the Board to do so, the parties themselves may choose to participate in the expedited program.[17] If interested, agreeable parties should coordinate at any point in the case and discuss options for expediting with their interlocutory attorney.

For cases that are part of the program, the Board seeks to issue final decisions within 50 days of briefing being complete.[18] One recent expedited cancellation proceeding terminated with a final decision of cancellation issued exactly nine months after the filing of the petition for cancellation.[19]

The USPTO intends to continue the pilot program until it has enough information to assess the following points[20] (largely raised in the comments to the proposed rule):

  • The frequency of parties’ willingness to agree to ACR in some form.
  • Concerns expressed about ACR.
  • The types of ACR measures preferred.
  • How effective such measures are in developing the record and issues.
  • The progress and timing of ACR pilot cases.
  • The rates of default judgment.
  • Withdrawals and settlements.

The USPTO also intends to learn how to best and how to quickly identify cases that would be appropriate for expedited non-use cancellation proceedings.[21]

Once it has completed the pilot program, the USPTO will likely provide another notice of proposed rulemaking with lessons learned from the pilot program.

Other Steps Being Taken By the USPTO:

Along with considerations related to expedited cancellation proceedings, the USPTO has implemented several other procedures to try to keep the register clear from marks not currently in use. One is a post-registration specimen audit program, which requires certain registrants who submit post-registration declarations of use to submit additional specimens or proof of use on certain identified goods or services beyond those submitted in the original declaration of use.[22] Another is reformatted declaration and signature portions of allegations and declarations of use forms, to more clearly advise applicants and registrations of use in commerce requirements for federally registered U.S. trademarks.[23]

Conclusion:

Although the pilot program may only be temporary, we advise trademark clients to consider this and other ways to expedite cancellation proceedings at the USPTO. Doing so can achieve quicker results with reduced costs, and, if successful, can clear “abandoned” registrations to allow new marks to register.

[1] 15 U.S.C. § 1115(a).

[2] 15 U.S.C. § 1127.

[3] According to the USPTO, “over half of active registrations include some goods or services for which the registered mark is not actually being used.” Expedited Cancellation Pilot Program, USPTO, https://www.uspto.gov/trademarks-application-process/trademark-trial-and-appeal-board/expedited-cancellation-pilot-program (last visited Mar. 3, 2019) (hereinafter “Expedited Cancellation Pilot Program”).

[4] See 15 U.S.C. § 1064.

[5] See Trademark Trial and Appeal Board Manual of Procedure (“TBMP”) § 702.04 (2018).

[6] See id. § 702.04(a); TTAB ACR Options, USPTO, https://www.uspto.gov/trademarks-application-process/appealing-trademark-decisions/ttab-acr-options (last visited Mar. 8, 2019).

[7] Improving the Accuracy of the Trademark Register: Request for Comments on Possible Streamlined Version of Cancellation Proceedings on Grounds of Abandonment and Nonuse, 82 Fed. Reg. 22,517 (May 16, 2017), available at https://www.federalregister.gov/documents/2017/05/16/2017-09856/improving-the-accuracy-of-the-trademark-register-request-for-comments-on-possible-streamlined.

[8] See id.

[9] See id.

[10] See USPTO, Highlights of Comments on USPTO 2017 Streamlined Cancellation Proposal (Aug. 14, 2017), available at https://www.uspto.gov/sites/default/files/documents/Summary%20Report%20of%20Comments.pdf.

[11] See Expedited Cancellation Pilot Program, supra note 3.

[12] See id.

[13]See id.

[14] See id.

[15] See id.

[16] See id.

[17] See id.

[18] See id.

[19] See TV Azteca, S.A.B. de C.V. v. Martin, 128 U.S.P.Q.2d 1768 (T.T.A.B. 2018).

[20] See Expedited Cancellation Pilot Program supra note 3.

[21] See id.

[22] See, e.g., Post Registration Proof of Use Audit Program, USPTO, https://www.uspto.gov/trademarks-maintaining-trademark-registration/post-registration-audit-program (last visited Mar. 8, 2019).

[23] See, e.g., Trademark Electronic Application System (TEAS) Reformatted Declarations, USPTO (Apr. 29, 2017), https://www.uspto.gov/sites/default/files/documents/TEAS_Reformatted_Declarations.docx.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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