Action:
Current processes for examination of applications for
the registration of trademarks should be changed to meet the needs of U.S.
trademark owners in the 21st Century.
Background Information:
Currently, GS-905 attorney
advisors (Trademarks) complete all substantive and procedural examination
on applications for the registration of trademarks. Other than a decision
in the 1960's to move from using non-attorney examiners to attorney examiners,
examination and how examination is completed by the USPTO appears to have
been relatively consistent since the implementation of the Lanham Act in
1946. When applicants and registrants raise questions regarding the
work of the Office, regardless of whether the topic is quality or pendency,
generally the question is not whether or not the substantive provisions
of the Lanham Act should be changed, but whether or not the USPTO is
interpreting the Act and examining applications for the registration
of trademarks in
a "satisfactory" manner - generally coming down to the question: should
the examiner have made a specific refusal of registration in a particular
application? However, to date, there has been little or no internal
or external demand to substantially change examination processes to address
quality or pendency issues.
The U.S. economy and the
use of trademarks in that economy have substantially changed in the 57
years between passage of the Lanham Act and today. Because of these changes,
consideration is being given to whether or not it is appropriate to consider
changing how the USPTO serves trademark owners in the day-to-day administration
of the U.S. system for the Federal registration of trademarks. In 1946,
Congress stated the following regarding the Lanham Act:
The purpose of this bill is to place all matters relating
to trademarks in one statute and to eliminate judicial obscurity, to
simplify registration and to make it stronger and more liberal, to dispense
with
mere technical prohibitions and arbitrary provisions, to make procedure
simple, and relief against infringement prompt and effective.
S. Res. No. 1333, 79th Cong. 2d Session
(1946).
Given the generally robust nature of the
American economy since the end of World War II, to the degree that trademarks
affect the economy, there may be little question that the Lanham Act succeeded
in updating U.S. trademark law to deal with the economic realities of the
mid-20th century. At the start of the 21st century,
it is time to consider whether the registration procedure is simple,
could it work better, and does it provide trademark owners with registrations
that meet their needs? For a number of years there has been an ongoing
discussion inside the USPTO and in the Trademark Bar regarding the structure
and focus of the Trademark Operation's examination process. Further,
there is a perception of tension between timeliness of examination and
quality
of examination inside and outside of the Trademark Operation.
The Lanham Act is relatively silent regarding
the examination process and the role the Office should have in the examination
and registration of trademarks. Section 1062 of the Lanham Act states
that:
Upon the filing of an application for registration and payment of the prescribed
fee, the Director shall refer the application to the examiner in charge
of the registration of marks, who shall cause an examination to be made
and, if on such examination it shall appear that the applicant is entitled
to registration, or would be entitled to registration upon the acceptance
of the statement of use required by section 1051(d) of this title, the
Director shall cause the mark to be published in the Official Gazette of
the Patent and Trademark Office.
Section 1052 of the Act states that: "No
trademark by which the goods of the applicant may be distinguished from
the goods of others shall be refused registration on the principal register
on account of its nature.", but, it does not prescribe that an examiner
must examine an application for any of the substantive relative or absolute
grounds set forth in the Section. Section 1051, in setting the requirements
for an application, states that the applicant: "shall comply with such
rules or regulations as may be prescribed by the Director." Most of what
an examiner does during the examination of an application for registration
of a trademark is set forth in Rules of Practice and the Trademark Manual
of Examining Procedure. There is minimal language in the Lanham Act itself
stating that during examination the Office must perform a specific act
as part of the examination process. Section 1063 of the Act provides for
a pre-registration opposition proceeding that allows "any person who believes
that he would be damaged by registration of a mark upon the principal register
. . ." to oppose registration. This section provides an opportunity to
any party with an interest to oppose the registration of a trademark regardless
of any decisions made during the examination process. Finally, section
1064 provides for a post-registration cancellation proceeding to any
"person who believes that he is or will be damaged" by registration of
a mark.
When the United States Patent Office began
moving in 1946 to implement the Lanham Act, the United States and the world
were substantially different than at the start of the 21st century. The
U.S. was emerging from World War II and was attempting to move from a war-based
economy to a consumer-focused economy. The U.S. economy, and the use and
registration of trademarks, was essentially defined by the conditions in
the forty-eight states of the continental United States, and the Patent
Office issued registration number 444,811 on June 19, 1946, marking the
end of the registration series under pre-1946 Trademark Acts. In 1946,
communications with the Patent Office were primarily through the U.S.
Postal Service, 1st class stamps cost 3 cents, and if one
wished to access a searchable file of registered marks, they came to
the Patent Office
and used the paper search files. Other than purchases made through mail-order
catalogs, most consumer purchases were made at "brick and mortar" stores
in the purchasers' local neighborhood or community, most commonly for products
made in the United States. Today applications for registration of trademarks
may be filed electronically, registrations and pending applications in
the USPTO may be searched anywhere in the world by accessing the USPTO
Web site, and the marketplace for increasing numbers of U.S. companies
and source of goods for consumers is the world. On February 4, 2003,
the USPTO issued registration number 2,685,000, and, often the Internet
is
the "store" that the consumer accesses from their home using the domain
name of the seller before they see the registered trademark for the product
or service they are purchasing on-line.
The Lanham Act of 1946 was intended to remedy
the deficiencies in the 1905 Trademark Act on the basis that the 1905
Act was "inadequate to cope with the realities of the twentieth century commerce
and brand names." McCarthy on Trademarks, Section
5:3 (1996 ed.) Now, 57 years after the passage of the Lanham Act, at
the start of the 21st century, is it time to ask if the examination
system being used at the USPTO, that emerged from the Lanham Act of 1946,
needs to be revisited to better "cope with the realities" of the twenty-first
century where business is often done using a trademark and a domain name,
and the customer need not leave their home to purchase goods or services?
In response to that question, the following
options were considered:
Options:
1. Retain
the current system for the examination of applications for the registration
of trademarks without change - a status quo option. GS-905 attorney
advisors would continue to perform all examination activities, as is done
today, accommodating any changes that would be required as the Trademark
Operation introduces technology into its operations. This contemplates
that in fiscal year 2004, when the Trademark Information System (TIS) is
fully implemented and most pre-examination and post-examination activities
are moved into the law offices, examining attorneys would assume some functions
that are currently performed by support staff. The implementation of
e-Government technology in fiscal year 2004 has a high potential for
improving quality
of products and pendency but, a status quo solution for performing
examination, even with the addition of TIS, is unlikely to address some
issues related to examination quality that generate complaints from applicants.
2. Retain
the current system for the examination of applications for the registration
of trademarks but use a mix of attorney and paralegal/non-attorney examiners. Potentially
non-attorney examiners could perform all "procedural examination" work
currently being completed by attorneys. Attorneys would focus on substantive
issues related to relative and absolute grounds of refusal in applications
and handle all final refusals of registration.
The availability of electronic file wrappers and
electronic file management systems in fiscal year 2004 will substantially,
or entirely, eliminate problems associated with moving and providing access
to paper files to more than one employee during the examination process. For
example, multiple employees can electronically access the same file at the
same time and the prosecution history for every application could be set
up with edits to ensure that both the substantive and procedural examinations
have been completed. If the Trademark Operation were able to incorporate
non-attorney examiners at a 3-1 ratio (3 non-attorneys to 1 attorney), assuming
a GS-11 working grade, it would result in saving approximately $6 million
in compensation costs during the first full year of the change at fiscal
year 2003 staffing levels. Any changes in the composition of the examining
workforce would be implemented over a period of time; attorneys would be
replaced with non-attorney examiners as attorneys leave the office and
the vacant positions are filled until a ratio of attorneys to paralegals
is achieved
that is consistent with the content of the examination work in the Office.
3. Contract examination activities. This
assumes that examination may be defined as not being an inherently
governmental function on the basis that all decisions by an examiner may
be taken on an ex parte appeal to the Trademark Trial and Appeal
Board (TTAB) and that it is only the TTAB who may render final determinations
regarding registration of any trademark. This option was rejected because: (a)
there could be substantial issues regarding the drafting and administration
of a contract that would have the intended positive impact on pendency,
quality, and cost of operations; and (b) if the option were implemented
in a short time frame, it could result in substantial disruptions regarding
the transition to examination by contract personnel and in dealing with
employment issues regarding attorneys who would no longer be needed in
the workforce. These disruptions could have a substantial negative impact
on the administration of the U.S. trademark system for a substantial
period of time until the contractor was fully operational.
4. Adopt a system of examination that places
increased responsibility on the applicant to assist in the processing
and examination of the application. Applicants would be required to
use electronic communications and to provide information that would assist
in the examination of the application. In return, the Trademark Operation
would guarantee expedited examination and prompt registration of marks
eligible for registration, "second pair of eyes" review of all relative
and absolute refusals proposed by an examiner with a focus on elimination
of unnecessary refusals and high quality refusals; and electronic communication
with the applicant throughout the process. Requirements for applications
filed under this option.
a. Electronic
filing and communications by the applicant;
b. Sixty
(60)-day response period to all communications received from the Office
regarding the application;
c. Complete
applications (i.e., all fees must be paid for all classes when the application
is filed; all information required for a "complete" application must
be provided; specimens [if required] must be attached; the application must
be signed, etc.); and
d. U.S. Identification Manual descriptions
would be required for all goods and services listed in the application.
5. The Trademark Operation would complete a full examination
based on the search provided by a Certified Search Service (CSS) and other
evidence found during the examination or available in Office records, and
would make refusals of registration on any relative (likelihood of confusion)
or absolute grounds in the Lanham Act if supported by the record before
the examiner. The USPTO would assess the likelihood of confusion based
on the search provided by the CSS and a likelihood of confusion search
provided to the examining attorney by the Trademark Information System
(TIS) pre-examination search function. The examiner would conduct a full
review and research for supplemental materials, including materials provided
by the pre-examination search function in TIS, regarding absolute grounds
of refusal set forth in the Lanham Act. A full procedural examination
would be completed to ensure that all of the elements required in an application
were present and that the applicant had complied with all filing requirements. All
applications filed under this option would receive priority examination. If
the application was complete and there were no refusals on relative absolute
grounds, the trademark would be published for opposition on an expedited
basis. This process would be implemented in the Trademark Operation
concurrently with the implementation of the TIS on
November 2, 2003.
6. Adopt a deposit system for
registration of trademarks. The Office would mandate that all applications
deposited for registration: (1) be filed electronically, and (2) use an
identification of goods or services listed in the U.S. Identification Manual. The
Office would conduct a procedural examination to ensure that the application
contained all of the elements required for a complete application and a
limited examination on absolute grounds required by treaty obligations
or public policy grounds set forth in sections 1052 (a), (b), (c) and (e)(2)
of the Act. If the application was complete and no refusal was made
regarding the limited absolute grounds, the application would be forwarded
for publication
for opposition.
USPTO Recommended Course of Action:
After consideration of
the proposed options and the current condition of the Trademark processes
in the USPTO, it was not believed that major revisions to the Lanham
Act or the examination process were required or desirable. However, the USPTO
is proposing to adopt a market-based strategy relative to procedures for
filing and examination of applications for the registration of trademarks
with a focus on using technology to enhance and improve the process. Applicants
will be allowed to choose between three filing options that will affect
fees, method of filing, and speed of process. Each option will have a
different fee based on the level of resources required to process and examine
the application and will allow trademark owners to select the filing and
examination option that best suited their needs and budget. Listed in
order of amount of filing fees (lowest to highest), the options would
be:
1. File
a "complete" application electronically and the Office will guarantee priority
processing. The applicant would be expected to comply with all of the
filing and examination requirements established by the USPTO to take advantage
of this expedited service. The Trademark Operation would examine the application
for all substantive and non-substantive grounds set forth in the Lanham
Act using a mix of attorneys and non-attorney examiners. Finally, applications
with substantive refusals under this option will be subject to a "second-set-of-eyes"
review to ensure that the refusal is appropriate and of high quality;
2. File
the application electronically under current Rules of Practice for receiving
a filing date. The Trademark Operation would examine the application
for all substantive and non-substantive grounds set forth in the Lanham
Act
and the Rules of Practice using a mix of attorneys and non-attorney examiners;
and
3. File
the application on paper under current Rules of Practice for receiving
a filing date. The Trademark Operation would examine the application
for all substantive and non-substantive grounds set forth in the Lanham
Act
and the Rules of Practice using a mix of attorneys and non-attorney examiners.
These options would have
positive impact on quality and pendency and result in a higher rate of
satisfaction with the administration of the Lanham Act by the USPTO because
trademark owners could select the filing option that best suited their
business or legal needs. Under each option, there would be an improvement
in quality of examination and process because attorney examiners would
focus on examining the relative and absolute grounds of refusal set forth
in the Lanham Act. In addition, the Office will implement quality improvement
measures such as in-process reviews, "second-set-of-eyes" review for some
files, and a certification program for employees to ensure that their knowledge
of the law and examining skills are current. In all applications in which
a substantive refusal is made, an attorney examiner will handle the entire
examination to ensure that the applicant only had to work with one examiner
during the prosecution of the application. In applications in which
there were no substantive refusals, which comprise up to 80 percent of
the trademark
applications filed in the USPTO, a non-attorney examiner would handle
the application and work with the applicant regarding any needed amendments.
The focus on examination of legal issues
in applications reviewed by attorneys should result in greater job satisfaction
and improved quality of examination by Agency attorneys because of increased
use of their legal skills and the reduced requirement to handle non-substantive
examination issues. Similarly, the use of non-attorney examiners for
non-substantive examination should reduce compensation costs and improve
quality because
these examination jobs in Trademarks would be more interesting and provide
better opportunities for advancement to a higher grade.
Exclusive use of electronic processes to
communicate and manage the application process in recommended options
1 and 2 are designed to provide improvements in quality of product, efficiency
and cost of operations.
The cost savings that will result from the implementation
of e-Government methods for supporting the filing, examination and registration
processes, and the reduction in compensation costs associated with greater
use of non-attorney examiners in specified examination activities, should
result in the overall cost of Trademark examining operations being reduced. When
achieved, these savings will be passed on to applicants in terms of lower
fees. Further, it is expected that e-Government/e-commerce initiatives
will reduce the need for both contract and Government employees who primarily
support paper-based operations and lower the incidence of lost files and
papers, resulting in substantial cost savings over time.
Recommended options 1 and 2 above would
have the lowest fees. The highest fee would be associated with paper filings
because of the higher costs associated with processing a paper application
vs. one filed electronically. Currently, the costs for handling paper
applications are approximately $50 higher than the costs associated with
filing an application electronically. Under the proposed fee legislation
schedule, the fee for an electronic filing under recommended option 1
would be $275, recommended
option 2 would be $325 and the fee for filing a paper application would
be $375.
After the implementation of e-Government
in fiscal year 2004, the goal for average pendency to first action
under recommended options 2 and 3 will be two months, and average pendency
to
registration or issuance of a Notice of Allowance (NOA) will be 12
months. Under
recommended option 1, the goal for average pendency to first action
would be one month or less with average pendency to registration or issuance
of a NOA of ten months.
Proof of Concept:
The USPTO will design a pilot to test the
viability of the concept to restructure the composition of the examination
work force using a mix of attorney and paralegal/non-attorney examiners.
Input from the user community will be considered
in the design of the pilot program. The results of the pilot will
be evaluated and shared with the user community prior to making a final
decision regarding
a change in the composition of the examination workforce.
Timing:
· Identify
filing requirements for "expedited examination" in 2003
· Establish a process to
receive requests for amending the U.S. Identification Manual
· Revise
the U.S. Identification Manual and the TMEP in 2003
· Plan
the redesign of jobs and restructure the Trademark Operation in 2003
· Implement
expedited examination on November 2, 2003, in conjunction with
e-Government initiatives that support accepting and
processing filings under the Madrid Protocol
· Seek
input from the user community on the design and evaluation of a program
to test the feasibility of hiring non-attorney examiners in 2003
· Propose/conduct
a pilot program to test the redesign of the examining corps using a mix
of attorneys and non-attorney examiners
· Share
the results of the pilot program with the user community
· Determine
if a change in composition of the examining corps is warranted in 2004
Benefits:
· Higher
level of certainty regarding Office practices
· Variable
filing fees for examination and registration of marks depending on option
chosen by applicant
· Expedited
registrations resulting from use of e-Government
· Option
selected would set expectations for quality and the time to registration
· Faster
access to Federal courts to protect trademark rights
· Attorney
examiners would primarily focus on substantive, legal work providing
greater job satisfaction
· Paralegal
examiners would perform procedural examination regarding elements of
application which would provide more satisfying jobs for qualified members
of the current
Trademark support staff
=online
business system 
=fees 
=forms
=help 
=laws/regulations 