As a result of the pandemic some businesses have been pressed to discontinue manufacture or sale of products. As a result, in 2020 the use of one or more of the trademarks owned by your business may have stopped. As a general rule, non-use of a trademark for three years will create a presumption of abandonment.
The events of 2020 have posed unique challenges to businesses in the U.S. and globally, testing their ability to adapt to new market conditions, re-evaluate resource allocation and operations, and achieve a steady position of productivity and readiness, amid a frequently-changing legal landscape. The rhythm for business-planning discussions and consideration of the intellectual property (IP) assets to support those plans has been disrupted, and in many instances eclipsed, by the pressure of short-term and immediate business solutions. But before we turn the page on 2020, there is time to take stock of your IP portfolio, including your trademarks, copyrights, domain names and social media accounts, to ready your business and its brands for 2021.
Pandemic Business Closures and Trademark Non-Use
Some businesses, as a result of the pandemic, have been pressed to discontinue manufacture or sale of products or have otherwise limited the scope of their business activities. As a result, in 2020 the use of one or more of the trademarks owned by your business may have stopped. Under U.S. trademark law, in the fifth year of a trademark registration term, and every ten years thereafter, a post-registration maintenance filing at the USPTO is required (e.g., evidence and a sworn statement about continuous trademark use in U.S. commerce). If sustained discontinuity of trademark use has occurred what options are available to keep a trademark registration active?
Even in normal market conditions, the answer to this question is highly fact-dependent, and includes consideration of the type of product, industry and market context for product sales, and the length of the period for non-use. The United States is a “use it or lose it” jurisdiction, as our trademark statute recognizes rights based on actual use of a mark in U.S. commerce, with the goodwill associated with such use created in consumers’ minds relating to product quality and the identity of the brand owner. As a general rule, non-use of a trademark for three years (or more) will create a presumption of abandonment, and the trademark registration will be vulnerable to a cancellation challenge. The presumption can be rebutted upon a showing by the rights holder that there is an intention to resume use of the mark, consistent with the ordinary course of trade. U.S. trademark law requires a registered mark to be continuously in use, with only very short breaks (days or weeks) permitted. For longer periods (many months or longer), a narrow list of excusable conditions for non-use is available—limited to trade embargoes, the sale of a business, acts of God, illness impacting the operation of the business, or a deficiency in supply of necessary materials or equipment.
In the context of an active U.S. trademark registration with an upcoming maintenance deadline to meet, the procedure for submitting proof of “excusable non-use” is to file a Declaration of Excusable Non-Use with the USPTO. The Declaration must set forth:
a) the date when use of the trademark in U.S. commerce stopped;
b) the approximate date when such use is expected to resume; and
c) description of facts to show non-use of the mark in relation to the goods or services covered by the registration is due to special circumstances that excuse the non-use, and is not due to any intention to abandon the trademark.
See 37 C.F.R. § 2.161. Acceptance of the Declaration will depend on the specificity and sufficiency of the factual details included. For example, reference to the specific state order(s) requiring closure of a “non-essential” business and the unprecedented national nature of the pandemic health crisis would be appropriate to include. Whether or not there is an impending trademark maintenance deadline, keeping careful track in your business records of the dates and conditions for ceasing use of a trademark (and/or production or sale of a product) will be important.
USPTO Fees to Increase in 2021
Meanwhile, there is still an opportunity to take advantage of cost saving measures if you act quickly. The U.S. Patent & Trademark Office (USPTO) recently announced new fees set to go into effect on January 2, 2021, including increases for trademark and patent applications, and new fees for certain contentious-matter procedures. It’s the first fee schedule change in nearly three years. In most cases, the trademark and patent fee application increases are in the neighborhood of 5 percent. For patents, the increase in patent issuance and other fees for large entities are higher (20 to 25 percent or more). The USPTO delayed rollout of these new fees (originally set for April 2020) in consideration of U.S. economic conditions. Trademark fee changes include:
- $75 per class increase for a U.S. trademark application (from $275)
- $100 per class increase for a Declaration of Continued Use (§ 8/71) (from $125)
- $50 (new fee) for a Letter of Protest against a pending third-party trademark application
- $100 increase for initial Extension of Time to Oppose (from $100); $200 increase for final Extension request (from $200)
- $200 per class increase for Notice of Opposition or Petition to Cancel against a third-party registration (from $400)
Since 2017, the USPTO has intensified efforts to foster American innovation and branding, through optimizing efficiency in the examination process for trademark and patent applications and improving procedures for various adversarial administrative proceedings. Over this same period, the USPTO received an unprecedented uptick in trademark application volume as well as a sharp increase in falsified evidence of trademark use. The announced fee changes are directly related to the increase in measures by the USPTO to address these issues.
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