In 2017, the United States Patent and Trademark office (USPTO) received 440,768 new trademark applications representing an increase of almost 14 per cent from 2016. This explosion in trademark filings has renewed fears around trademark clutter – where companies file to protect a set of similar marks that are overly broad or unused.
The race to register
Trademarks have been a staple of IP protection for hundreds of years. However, the recent growth in global trademark filings is incredible – the number has almost doubled since 2006 and will soon top ten million annually.
Why is this? One factor is new technology, which has driven a 1100 per cent jump in trademark applications from China in the US. Companies often ‘race to register’ any and every mark for a diverse number of potential applications in new innovations. The result is a bloated register, cluttered with unused marks.
The growth of IoT applications is further complicating the issue. Consider an internet-enabled vehicle. Recent innovations have allowed it to include climate control; navigation; steering wheel control and vehicle data – all managed by connected technologies. IoT applications manage manufacturing processes, transportation systems, home controls, travel, shop and even smart power grids. Each different application could warrant new filings for what is essentially the same technology applied in a different way.
According to an IDC report, the global IoT market is predicted to reach USD 1.7 trillion by 2020 – almost tripling from 2014. There will be billions of IoT devices across the globe, with brands trying to register any and every potential application with a new mark. When consumer behaviours inevitably shift and the market moves to adjust, those marks may be left unused but still registered, further adding to a bloated register.
A known issue
During a 2012 pilot program from the USPTO, 500 trademarks were randomly selected to require additional specimens or other proof of use. The programme aimed to identify idle and unused trademarks. More than half of the chosen trademark owners could not supply additional verified proof of use on the goods or services they initially claimed trademark protection for. In many of the registrations the owner had not moved forward with at least some of the goods or services that were initially claimed, and registrations were cancelled by the USPTO after trademark owners failed to respond to calls for additional evidence.
This pilot program demonstrated how the issue of trademark clutter threatens the trademark system. When established businesses register for trademarks in bulk, there is a potential to undermine the efforts of new market entrants to secure and register recognisable brands.
A common cause
The default position of brands has often been to protect as many marks as possible, driving other applicants out and helping establish a well-known and profitable identity. When names can make or break a brand, a significant number of trademarks are created purely for protection.
However, these protective practices lead to a systemic problem. When new entrants to a market are faced with trademark clutter, their only choice is to adopt equally aggressive application strategies. This behavior leads to more clutter and further reduces the available pool of marks for the next generation of applicants.
Strategy for change
Start-ups are already resorting to unusual spellings for brand names to counteract the effects of trademark clutter. Yet creative spellings still cause difficulties when the sight, sound and meaning of a mark is similar to a prior mark, meaning even these solutions are not fully protected and may still infringe earlier marks filed or used earlier.
This is particularly problematic in the pharmaceutical industry, where there are health risks attached to being unable to easily identify a product. When drugs with varying effects have similar names, human error can lead to doctors and pharmacists inadvertently prescribing the wrong drugs. Between eight and 25 per cent of medication errors are attributed to name confusion, according to World Trademark Review.
Managing trademark clutter
USPTO director Andrei Iancu recently spoke on how to reduce trademark clutter at the Intellectual Property Owners Association 46th Annual Meeting. One of his key points was the need for managing increasing trademark registration from foreign countries, revealing a new rule that “would require foreign trademark applicants and registrants to be represented by US licensed attorneys to file trademark documents with the USPTO.”
The USPTO has also initiated a ‘Post Registration Proof of Use Audit Program’, requiring owners to demonstrate they are actually using a registered trademark. When audited registrations are unable to provide proof of use, they can be cancelled – preserving the integrity of the trademark register.
While governmental organizations like the USPTO are attempting to regulate and better control increasing trademark registrations, it is up to brands themselves to take a more measured approach to trademark portfolios. Brands may be able to save significant time and money by having a more considered approach to trademark filings – only protecting the innovations they value most and regularly assessing the portfolio for trademarks that are no longer required. They could also keep a keen eye on the market and oppose registration of problematic applications where possible.