Changes in Post-Registration Audit Selection for Affidavits or Declarations of Use, Continued Use, or Excusable Nonuse in Trademark Cases, 85435-85437 [2024-24755]

Agencies

• DEPARTMENT OF COMMERCE
• Patent and Trademark Office

[Federal Register Volume 89, Number 208 (Monday, October 28, 2024)]
[Rules and Regulations]
[Pages 85435-85437]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-24755]


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DEPARTMENT OF COMMERCE

Patent and Trademark Office

37 CFR Parts 2 and 7

[Docket No. PTO-T-2024-0043]


Changes in Post-Registration Audit Selection for Affidavits or 
Declarations of Use, Continued Use, or Excusable Nonuse in Trademark 
Cases

AGENCY: United States Patent and Trademark Office, U.S. Department of 
Commerce.

ACTION: Policy update.

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SUMMARY: To promote the accuracy and integrity of the trademark 
register, the United States Patent and Trademark Office (USPTO or 
Office) is amending its practice concerning the selection of 
registrations for audit during the post-registration maintenance 
process. When the USPTO implemented its audit program in 2017, it 
announced that it would conduct random audits of certain affidavits or 
declarations filed each year. To promote the accuracy and integrity of 
the trademark register, the USPTO is adding additional directed audits 
to its practice.

[[Page 85436]]


DATES: 
    Effective date: This policy change is effective October 28, 2024.
    Comments due: Written comments must be received on or before 
November 27, 2024 to ensure consideration.

ADDRESSES: Written comments must be submitted through the Federal 
eRulemaking Portal at www.regulations.gov. To submit comments via the 
portal, commenters should go to www.regulations.gov/docket/PTO-T-2024-0043 or enter docket number PTO-T-2024-0043 on the www.regulations.gov 
homepage and select the ``Search'' button. The site will provide search 
results listing all documents associated with this docket. Commenters 
can find a reference to this document and select the ``Comment'' 
button, complete the required fields, and enter or attach their 
comments. Attachments to electronic comments will be accepted in Adobe 
portable document format (PDF) or Microsoft Word format. Because 
comments will be made available for public inspection, information that 
the submitter does not desire to make public, such as an address or 
phone number, should not be included in the comments.
    Visit the Federal eRulemaking Portal for additional instructions on 
providing comments via the portal. If electronic submission of comments 
is not possible, please contact the USPTO using the contact information 
below in the FOR FURTHER INFORMATION CONTACT section of this document 
for special instructions.

FOR FURTHER INFORMATION CONTACT: Montia Pressey, Office of the Deputy 
Commissioner for Trademark Examination Policy, at 571-272-8944 or 
[email protected].

SUPPLEMENTARY INFORMATION: On January 19, 2017, the USPTO published in 
the Federal Register a final rule making permanent the program under 
which it conducts audits of the affidavits or declarations of continued 
use or excusable nonuse filed pursuant to section 8 of the Trademark 
Act (the Act) (15 U.S.C. 1058), and affidavits or declarations of use 
in commerce or excusable nonuse filed pursuant to section 71 of the Act 
(15 U.S.C. 1141k) (collectively, affidavits or declarations). See 
Changes in Requirements for Affidavits or Declarations of Use, 
Continued Use, or Excusable Nonuse in Trademark Cases (82 FR 6259). The 
final rule provided the USPTO with the authority to request additional 
information in connection with the submission of an affidavit or 
declaration under sections 8 or 71 to assess and promote the accuracy 
and integrity of the trademark register.
    As explained in the final rule, the post-registration audit program 
benefits the public because it facilitates the USPTO's ability to 
assess and promote the integrity of the trademark register by 
encouraging accuracy in the identification of goods or services for 
which use in commerce or continued use is claimed. The accuracy of the 
trademark register serves an important purpose for the public, as it is 
a reflection of marks that are actually in use in commerce in the 
United States for the goods/services identified in the registrations 
listed in the register. The public relies on the register to determine 
whether a chosen mark is available for use or registration. If a 
party's search of the register discloses a potentially confusingly 
similar mark, that party may incur a variety of resulting costs and 
burdens, such as those associated with investigating the actual use of 
the disclosed mark to assess any conflict, proceedings to cancel the 
registration or oppose the application of the disclosed mark, civil 
litigation to resolve a dispute over the mark, or changing plans to 
avoid use of the party's chosen mark. If a registered mark is not in 
use in commerce in the United States, or is not in use in commerce in 
connection with all the goods or services identified in the 
registration, these costs and burdens may be incurred unnecessarily. An 
accurate and reliable trademark register helps parties avoid such 
needless costs and burdens.
    The statutory requirements in sections 8 and 71 exist to enable the 
USPTO to clear the register by canceling, in whole or in part, 
registrations for marks that are not in use in commerce for all or some 
of the goods or services identified in the registration. The final rule 
furthered this statutory purpose by allowing the USPTO to assess 
whether marks are actually in use for some or all of the goods or 
services covered by a registration, and to require deletion and/or 
cancellation of those goods or services for which a mark is not in use 
(and for which excusable nonuse does not apply).
    To that end, the final rule provided the USPTO with the authority 
to require the submission of information, exhibits, affidavits or 
declarations, and such additional specimens of use as may be reasonably 
necessary for the USPTO to ensure that the register accurately reflects 
marks that are in use in commerce in the United States for all the 
goods or services identified in the registrations, unless excusable 
nonuse is claimed in whole or in part. This authority was not limited 
to random audits. However, because the USPTO previously announced that 
selection for the audits would be done on a random basis, the agency 
now provides notice that it amends its practice under 37 CFR 2.161(b) 
and 7.37(b) to include directed audits.
    Since the final rule was adopted in 2017, the USPTO has become 
aware of circumstances in which the accuracy and integrity of the 
trademark register would benefit from directed audits in addition to 
the current practice of random audits. Specifically, the USPTO 
discovered systemic efforts to subvert the requirements for use in 
commerce of a mark to support registration.
    First, the USPTO became aware of an ongoing issue of applicants 
submitting specimens that were digitally created or altered or were 
mockups and thus did not show actual use in commerce, as is required. 
That awareness led to the publication in July 2019 of Examination Guide 
3-19, Examination of Specimens for Use in Commerce: Digitally Created/
Altered or Mockup Specimens, which was later incorporated into the 
Trademark Manual of Examining Procedure.
    Second, the enactment of the Trademark Modernization Act in 2020, 
and its implementation by the USPTO in 2021, resulted in the creation 
of two new post-registration proceedings that allow the Office to 
examine whether a registered mark is, or was at the time of 
registration, in use in commerce for goods or services covered by the 
registration. See Changes To Implement Provisions of the Trademark 
Modernization Act of 2020, 86 FR 64300 (November 17, 2021). Certain 
disturbing trends have been discovered since the implementation of 
these proceedings, such as the use of specimen farms. These are 
websites that do not sell products in the ordinary course of trade. 
Instead, they provide applicants or registrants with documents to 
submit to the USPTO that appear to satisfy the requirement to show use 
of the mark in commerce on the goods recited in the application or 
registration. No two specimen farm websites are exactly alike, but many 
have the following: (1) incomplete contact information, blank pages, or 
missing or incomplete product descriptions; (2) place-holder text on 
many pages; (3) the same, sometimes incorrect, product information for 
multiple product listings; and/or (4) products that cannot be purchased 
in or shipped to the United States. Additional information about 
specimen farms has been published on the USPTO website at 
www.uspto.gov/trademarks/protect/challenge-invalid-specimens.
    The USPTO plans to conduct directed audits of section 8 and 71 
affidavits or declarations when the registration file

[[Page 85437]]

and/or the post-registration maintenance documents exhibit certain 
attributes that call into question whether a mark is in use in commerce 
in the ordinary course of trade. Among other things, these audits will 
focus on registration files in which it appears that a specimen 
accepted during examination or submitted with a section 8 or 71 
affidavit or declaration was digitally altered, consistent with the 
parameters set forth in Examination Guide 3-19, or comprised printouts 
from a website determined to be a specimen farm. Under the directed 
audit program, the initial office action may request proof of use for 
all or some of the goods or services covered by the registration, in 
addition to other information deemed relevant to the USPTO to determine 
whether the mark is in use in commerce in the ordinary course of trade 
or whether the elements of excusable nonuse apply. The procedures will 
otherwise follow those for random audits.
    After considering any public comments received in response to this 
notice, the USPTO will publish information about the program on its 
Post Registration Audit Program web page at www.uspto.gov/trademarks/maintain/post-registration-audit-program. The USPTO will likewise 
publish future changes to the post-registration audit program on its 
website.
    These changes will better position the audit program to address 
obvious issues with registration, thus protecting the integrity of the 
federal trademark registration system and improving the overall 
accuracy of the trademark register.

Katherine K. Vidal,
Under Secretary of Commerce for Intellectual Property and Director of 
the United States Patent and Trademark Office.
[FR Doc. 2024-24755 Filed 10-25-24; 8:45 am]
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