In 2019, the United States Patent and Trademark Office (USPTO) published the Requirement of U.S. Licensed Attorney for Foreign Trademark Applicants and Registrants (the “Requirement”), which completely changed the “game rules” for foreign applicants, registrants and parties to inter partes proceedings in the Trademark Trial and Appeal Board (TTAB).
In this article, we will go over the Requirement, analyze sanctions imposed by the USPTO for failure to comply with the Requirement, and offer advice to practitioners and foreign trademark owners regarding their trademark applications.
The Requirement and USPTO’s Objective
Effective August 3, 2019, the USPTO requires all foreign-domiciled trademark applicants, registrants, and parties to TTAB proceedings to be represented by attorneys licensed to practice law in the United States. Failure to comply with such rule may lead to sanctions and affect pending trademark applications.
A foreign-domiciled applicant refers to an individual or entity that does not have a domicile in the United States. An individual’s domicile is the place where the person resides and intends to be his or her principal home. An entity’s domicile is its principal place of business (i.e., headquarters) where the entity’s senior executives or officers ordinarily direct and manage the entity’s activities.
In addition, the USPTO requires attorneys, when representing clients before the USPTO, “must (i) conduct a reasonable inquiry, before submitting any filing, to determine that the filing is not being presented for any improper purpose and that the facts have evidentiary support, and (ii) personally sign filings and correspondence.” (37 C.F.R. Part 11). USPTO requires strict compliance with these rules, which forbid (1) sharing attorneys’ USPTO accounts with clients, (2) having paralegals submit prosecution documents under attorneys’ names, or (3) having agencies use software to prepare and file trademark applications. After August 3, 2019, foreign clients’ pro se applications are effectively banned.
According to the USPTO, the Requirement aims at improving the quality of the federal Trademark Register, stopping the unlicensed practice of law before the USPTO, and assisting in regulatory compliance. Before the effectiveness of the Requirement, the USPTO faced a high volume of trademark applications, many of which claimed to be the applicants’ pro se filings but were actually done by agencies without any U.S. attorneys’ involvement. USPTO maintains that the pre-Requirement situation resulted in increasing numbers of foreign applicants receiving inaccurate, inadequate, and sometimes untrue information about the legal requirements for trademark registration in the U.S., such as the standards for the use of a mark in commerce, who can properly sign for the mark owner, or even who may be the true owner of the mark under U.S. law. As the situation was exacerbated by a growing surge of filings from foreign applicants, the USPTO decided to implement the Requirement.
Sanctions and the Effect on Trademark Application
In addition to the Requirement, Congress enacted the Trademark Modernization Act of 2020 (the “TMA”) which became effective in December 2021. Together with the effectiveness of TMA, the USPTO has expanded and memorialized its sanction process in Trademark Administrative Sanctions Process (the “Process”).
The Process begins “when the USPTO identifies or otherwise learns of a suspicious submission in connection with a trademark application or registration, based on information communicated by internal sources or through external sources.”
If the USPTO initially concludes that a pending application may be part of an improper filing process, such as an application filed in violation of the Requirement, it will suspend the application and any outstanding deadlines during its investigation and issue a show-cause order to the applicant. To respond to a “show-cause order,” the applicant must demonstrate to the satisfaction of the USPTO that no violation has occurred. If the applicant fails to do so, the USPTO may impose sanctions after opportunity to respond, such as striking the filing and terminating the application process. If the USPTO actually imposes sanctions, it will update the trademark’s application record accordingly. Applicants may not revive a terminated application unless the applicant can demonstrate that the USPTO erred in including the application in the order for sanctions.
On the other hand, if the USPTO concludes that an existing registration was procured through an improper filing scheme, the USPTO will not terminate the registration but will update its electronic records to include the sanction history. The findings made in the sanctions order may affect the validity of the registration. In most extreme situation, the USPTO may enter a final decision adverse to the owner’s right to keep a mark on the trademark register under section 15 of the Trademark Act of 1946, 15 U.S.C. 1065.
In addition, for attorneys who represent foreign applicants but fail to comply with the Requirement, the USPTO may refer the attorney to the USPTO’s Office of Enrollment and Discipline (OED) for appropriate action. Attorneys may be disciplined for such violations, including deactivation of their USPTO accounts, preclusion from filing trademark-related documents, exclusion, or suspension from practice before the USPTO, reprimand, censure, or probation. Attorneys disciplined by the USPTO may also be subject to discipline by their State Bar. Further case studies reveal that USPTO has rejected all post-registration submissions made by attorneys who are subject to sanction orders.
Advice to foreign trademark owners/ applicants
Facing the dire consequences for non-compliance with the Requirement, foreign trademark owners who want to register their trademarks in the U.S. must retain U.S.-licensed attorneys to represent them in all trademark matters before the USPTO.
Currently, USPTO primarily targets its sanctions to attorneys who fail to follow the Requirement. However, a trademark owner’s trademark applications and rights to already-registered trademarks may be indirectly affected due to the involvement with sanctioned attorneys.
If a trademark applicant has a pending trademark application that is subject to or affected by a sanction from the USPTO, the applicant should consider retaining a new attorney and filing a new application. Alternatively, the applicant may switch the application to a different firm. Even if the trademark has been registered, the new application filed by a different U.S. attorney can help preserve continuing trademark protection in case the affected registration is terminated or expires prematurely due to the sanction.
If you have any questions, please feel free to contact us at chank@kitchanlaw.com.
