In a Notice of Proposed Rulemakingissued on February 15, 2019, the United States Patent and Trademark Office (“USPTO”) proposed a rule that would affect a subset of foreign applicants, registrants, or parties to a proceeding seeking to register or preserve their marks under U.S. trademark law, and would also affect U.S.-licensed attorneys.

Under the proposed rule, foreign applicants, registrants, or parties to a proceeding whose domicile or principal place of business are located outside the U.S. or its territories are now required to obtain representation by an attorney licensed to practice law in the U.S., the District of Columbia, or any U.S. territory.

How Do I Know If the Proposed Rule Applies to Me?

It’s important to understand who the proposed rule applies to, as noncompliance may have detrimental effects on U.S. trademark applications or registrations and can end up costing a substantial amount of money.

When determining whether an individual or business is a foreign applicant, registrant, or party to a proceeding and, therefore, falls within the proposed rule, the key determination is where that foreign individual or business is “domiciled” or has its “principal place of business”. “Domicile” refers to an individual’s permanent place of residence and does not include, or apply to, an individual’s temporary place of living. “Principal place of business” refers to the location of the business’ headquarters where the chief executives and officers “direct and control” the business’ activities. For example, if a business has its headquarters and executive offices in Spain, its principal place of business would be considered Spain, thereby subjecting it to the USPTO’s proposed rule.

It’s important to note that the new “domicile” and “principal place of business” requirements aren’t out of the ordinary. According to the Notice of Proposed Rulemaking, several countries require foreign individuals and businesses to be represented by local attorneys.

Furthermore, there are certain actions by foreign individuals or businesses that would require representation by a U.S.-licensed attorney under the proposed rule. The most straightforward is when a foreign individual or business files a trademark application with the USPTO. The proposed rule also applies to foreign registrants, meaning those who have already received their Registration Certificate from the USPTO, but also encompasses those who file “post-registration maintenance requirements”, such as Declarations of Use or Declarations of Incontestability. Lastly, the proposed rule applies to foreign parties to a proceeding, which encompasses opposition proceedings and other proceedings that come before the Trademark Trial and Appeals Board (“TTAB”).

What happens if I filed a U.S. trademark application without the required representation?

If a foreign individual or business submits a trademark application to the USPTO and falls within the proposed rule, but doesn’t have the required representation, the applicant will be informed of their noncompliance via an Office action. (Office actions are official letters from the USPTO where trademark examining attorneys list problems with trademark applications.)

The applicant would then have six months, the customary time period, to respond to an Office Action, exhibiting compliance with the proposed rule. If, at the end of those six months, the applicant doesn’t respond to the Office action and doesn’t comply with the proposed rule, the application is deemed abandoned. (Abandoned means that the application is no longer pending and can’t move further along in the registration process.)

In addition to the consequences listed above, the USPTO has set forth two options pertaining to how to handle applications subject to the proposed rule. The first option defers the application until the applicant hires a U.S.-licensed attorney, with the belief that a U.S.-licensed attorney can review the application to ensure its compliance with U.S. trademark law and other features of the proposed rule. The second option allows for the USPTO to complete an examination of the application, followed by an Office action noting the application’s noncompliance with the proposed rule.

How does the proposed rule affect trademark applications filed under the Madrid Protocol?

The proposed rule would apply to trademark applications filed under the Madrid Protocol. (The Madrid Protocol is a treaty that allows applicants to obtain trademark protection in multiple countries using a single application and paying a single set of fees.) However, the USPTO is considering granting an exception to a small number of Madrid applicants whose applications “are submitted with all formalities and statutory requirements already satisfied”. In other words, the exception applies to those Madrid applications that aren’t refused.

The exception for certain Madrid applicants is simply due to timing. Currently, when a Madrid application is filed, the application is received by a specific division of the World Intellectual Property Association (“WIPO”), who then passes the application to the USPTO. However, the current Madrid application is devoid of any provision designating a U.S.-licensed attorney. Until the Madrid application is updated to include a provision designating a U.S.-licensed attorney, the USPTO is considering carving out an exception for certain Madrid applicants that fall within the proposed rule.

I’m a U.S.-licensed attorney. How am I affected?

The proposed rule affects what information U.S.-licensed attorneys are required to provide to the USPTO. First, U.S.-licensed attorneys, regardless of who they represent, would be required to substantiate their good standing and active bar membership, along with providing certain bar membership information, such as a bar identification number. (It’s important to recognize that U.S.-licensed attorneys include attorneys that reside outside of the U.S., but are licensed to practice law in the U.S., the District of Columbia, or any U.S. territory.)

Additionally, whenever a trademark applicant is represented by a U.S.-licensed attorney, the attorney’s name, address, email address, and bar information must be provided to the USPTO. Without this information, the trademark application is deemed incomplete and can’t move forward in the registration process until the required information is provided.

Why is the USPTO changing its rules?

In the Notice of Proposed Rulemaking, the USPTO listed several reasons for establishing the new U.S.-licensed attorney requirement. Of greatest importance to the USPTO is maintaining the integrity of the U.S. Trademark Register. When the U.S. Trademark Register accurately reflects what trademarks are actually used in commerce and are actually used on the specified goods and classes, it not only protects consumers, but other trademark applicants as well. The USPTO noted the substantial costs that trademark applicants may incur when determining whether a certain mark is available for registration or use, such as investigating actual use of the mark.

Second, the USPTO stated that the new rule would help reduce fraudulent and inaccurate claims in applications, as U.S.-licensed attorneys are subject to USPTO practice rules and other disciplinary sanctions. The USPTO noted that many foreign trademark applicants are pro se(meaning they represent themselves) and aren’t well-versed in U.S. trademark law, leading to “inaccurate and possible fraudulent submissions” that violate U.S. trademark law and USPTO practice rules. For example, the USPTO indicated that some foreign applicants will claim they’re using a mark, but upon closer inspection, such use appears nonexistent. Furthermore, the USPTO noted that foreign applicants and their representatives aren’t sufficiently affected by sanctions and other violations of law. When attempting to enforce criminal perjury prosecutions, many foreign applicants aren’t easily subject to U.S. jurisdiction, thereby making criminal perjury prosecutions extremely difficult. By enacting the proposed rule, the USPTO hopes to decrease the occurrences of misconduct and unauthorized practice of law, as U.S.-licensed attorneys are subject not only to the USPTO’s practice rules, but also criminal perjury charges and formal sanctions by U.S. state bars.

Lastly, the USPTO indicated that the increase in foreign filings prompted the proposed rule. From 2015 through 2017, trademark applications from foreign applicants increased by 7%, with 26% of all 2017 trademark applications originating with foreign applicants. With the dramatic increase in foreign applicants, the USPTO hopes to suppress the issue of inaccurate applications to ensure the Federal Register’s integrity and decrease the costs attributed to fraudulent or inaccurate foreign applications.

What’s Next?

The USPTO provided the public with the opportunity to comment on the proposed rule to voice their opinions and concerns, which must be submitted by March 18, 2019. While only twenty comments have been submitted, at the time of writing this article, it’s obvious that the proposed rule will affect thousands, if not hundreds of thousands, of foreign trademark applicants, registrants, or parties to a proceeding. For now, we’ll have to wait and see exactly how the proposed rule will be implemented under the USPTO’s Final Rule and just how greatly it affects foreign applicants.