On January 13, 2017, the United States Patent and Trademark Office’s (USPTO) Trademark Public Advisory Committee (TPAC), a group of senior industry professionals who advise the Commissioner for Trademarks of the USPTO, held its quarterly public meeting. This Legal Update discusses the key trademark policy developments reviewed at this meeting, including likely policy issues for 2017.
Legislative
Dana Colarulli, the head of the USPTO’s Office of Governmental Affairs, discussed the role of the office, which includes representing the USPTO on Capitol Hill, responding to requests from members of Congress and building relationships with elected officials.
Mr. Colarulli reported on some of the key hearings at which the USPTO testified during the 114th Congress, including the USPTO Director Confirmation Hearing (1/21/2015), the Legislative Hearing on H.R.9 (“The Innovation Act”) (4/14/2015) and the hearings on Antitrust Enforcement (6/7/2016), Counterfeits and Their Impact on Consumer Health and Safety (4/27/2016), Resolving Issues with Confiscated Property in Cuba (2/11/2016), Oversight of the USPTO (9/13/2016) and Time and Attendance Abuse at the USPTO (12/7/2016).
Mr. Colarulli also discussed what he believes will be key trademark issues for the 115th Congress. While mentioning that intellectual property matters are not likely to be a significant focus of the new Congress due to other legislative priorities, issues that may be addressed in 2017 include patent reform, copyright modernization and USPTO operational issues. Mr. Colarulli did not express concerns about the Trump administration adopting new policy positions affecting the IP community. He noted that little would change on congressional leadership of IP-related committees such as the House Subcommittee on Courts, Intellectual Property and the Internet.
International Trademark Policy
While the USPTO continues to pursue trademark policy partnerships and links throughout the world, the focus of TPAC discussion last week was Latin America. Shira Perlmutter, the Chief Policy Officer and Director for International Affairs, explained that relationships between the USPTO and foreign countries are formed by a cadre of international IP attachés. Ms. Perlmutter provided a country-by-country review of Latin America, detailing the differences in the USPTO’s strategy in each country. For example, the USPTO has strong relationships with several Latin American countries, including Brazil, Chile, Peru and Colombia, all of which share a memorandum of understanding with the USPTO. In other countries, the relationship is positive but still developing. For example, Argentina recently had a change of government, and, according to Ms. Perlmutter, the new government under President Mauricio Macri is much more receptive to collaboration with the USPTO than under former President Christina Kirchner’s administration.
Ms. Perlmutter also mentioned progress on relationships and goals within Central America. For example, Central America has been grappling with many issues related to geographical indications and geographic signs. The USPTO has been providing guidance to Central American countries on these issues. Additionally, the USPTO has started forging a relationship with Cuba, which has been made possible by other recent general foreign policy developments.
Administrative Management Issues
Mary Denison, the Commissioner for Trademarks, gave a detailed presentation covering administrative management issues at the USPTO and matters affecting trademark applicants, such as fee and proceeding changes. A selection of these matters includes:
- In 2016, fee paid classes increased by 7.5 percent. Ms. Denison noted that many new examining attorneys were hired in 2016, and today, examining attorneys represent 65 percent of the total trademark staff at the USPTO. Interestingly, 77 percent of these attorneys telework (work from home or outside of the office) full-time, and many work in “virtual law offices” of the USPTO. This is a part of the TEAPP (Telework Enhancement Act Pilot Program), which allows employees to waive the right to travel expenses for a reasonable number of mandatory trips to the USPTO. Ms. Denison expressed enthusiasm for the TEAPP and is hoping to make the program permanent.
- The USPTO is working to improve its customer experience and has hired Deloitte Consulting to help identify ways to improve customer service. Deloitte recently delivered a final report from which the USPTO staff has started implementing recommendations. Some of Deloitte’s suggestions included hiring a chief customer experience officer and two plain language writers to assist in making the application process understandable for non-lawyers. Other changes include improving the USPTO’s website and simplifying the trademark filing process.
- Ms. Denison provided an update on e-government, the electronic filing (e-filing) of applications. The original goal for 2016 was to have all applications submitted electronically. This goal has not been reached, but currently the e-filing rate is at 99.7 percent. The USPTO will continue to encourage users to make use of end-to-end electronic processing.
- A fee change became effective on January 14, 2017. This will further USPTO strategic objectives by offering lower-cost e-filing options, better aligning fees with the full cost of goods and services and incentivizing more timely filings due to cost differences. For a list of all the fees being changed is available here.
- The USPTO continues to use information technology (IT) resources to further its goals. A Trademark Next Generation (TMNG) initiative will update and modernize all systems. In particular, IT developments have focused on the beta version of My.USUSPTO.gov, which is a personalized collection of widgets and links that send participants recent USPTO news and status updates. Ms. Denison encouraged the public to sign up and provide feedback and suggestions.
- Ms. Denison discussed several new trademark initiatives, which include post-registration technology amendments, a new proof of use initiative to assess the accuracy of trademark registrations that claim usage and expedited cancellation proceedings when there is abandonment or no use as of the filing date.
- Finally, the USPTO continues to prioritize international engagement. Ms. Denison gave a status update on the TM5, which is comprised of the five largest trademark offices (those of the European Union, Japan, Korea, China and the United States) and focused on the exchange of information and collaboration on trademark matters. Ms. Denison highlighted increasing participation and trust with China as a particular priority.
Budget
Tony Scardino, the Chief Financial Officer, provided a summary of fiscal year 2016 for the USPTO, and a look ahead for fiscal year 2017. In 2016, the USPTO operating reserve level was $107 million, well above the minimum reserve level of $55 million. The USPTO, through its Continuing Resolution is funded through April 2017.
The USPTO is currently working on the financial year 2018 budget submission. A summary of preliminary fee estimates will be shared within TPAC by the end of January 2017. The Trump administration will likely submit the 2018 budget to Congress in March or April 2017.
Mr. Scardino provided additional detail about the fee changes that went into effect on January 14, 2017. The revised fee schedule sets or adjusts 42 trademark processing and service fees. As noted by Ms. Denison, this fee change aims to incentivize electronic filing and communication.
Trademark Trial and Appeal Board
Gerard Rogers, the Chief Administrative Trademark Judge, gave an extensive presentation to the TPAC on the workings of the Trademark Trial and Appeal Board (TTAB), including past highlights and likely issues for 2017.
Judge Rogers explained the Final Rule, which became effective on January 14, 2017. The Final Rule applies to all pending cases before the TTAB. The new rule is intended to increase the efficiency and processes in trademark trial and appeal cases. It promotes the use of e-filings and harmonizes rules consistent with existing practice, case law and Federal Rules of Civil Procedure. For example, it promotes proportional discovery completed during the discovery period and distinguishes pre-trial activities from discovery and trial activities. However, the Final Rule will not change TTAB processes deemed significant by the Supreme Court, such as rules regarding providing testimony under oath, the rules of cross examination, the availability of oral argument and the availability of de novo review of TTAB decisions in district court.
Judge Rogers also discussed the increase in filing fees for TTAB actions, including those applying to ex parte appeals. He noted that this is the first increase in 25 years. The per class (“class” referring to goods and/or services) filing fee will increase by $100 for e-filings and $200 for paper filings. Similarly, the opposition and cancellation filing fees will be increased for the first time in 15 years by $100 for e-filings and $200 for paper filings.
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As always, we hope that this overview provides you with timely insight into the latest developments affecting trademark practice in the United States. Please feel free to reach out to us if you have any questions regarding these USPTO developments.
