Trevor Little

The USPTO’s Performance and Accountability Report for fiscal year 2016 (FY2016) has revealed that trademark filings rose by 5.2% last year, while the number of trademarks proceeding to registration spiked by almost 10%.

The report states that the 5.2% increase in new trademark filings in FY2016 resulted in 530,270 total filings representing a new high. While not as steep a rise as FY2015 (which was a 10.7% year on year jump to 503,889 filings), this year’s increase outpaced the rise experienced in 2012, 2013 and 2014. The number of trademarks registered also increased from 282,091 to 309,188 in FY2016 – a jump of 9.6%.

Despite this, the office met its goals for optimising trademark quality and timeliness. Average first action pendency averaged 3.1 months (the target being 2.5 - 3.5 months), while average total pendency was 9.8 months (against a target of 12). The first action compliance rate was 97.8% (target 97%), while 84.8% of trademark applications were processed electronically (exceeding the 82% target). The office’s trademark quality targets were also all met.

In the current edition of World Trademark Review, the USPTO’s trademark commissioner Mary Boney Denison gives an overview of the work areas that the agency’s 800 trademark staff have been focused on though FY2016. In addition to working towards pendency goals, these include the alignment of fees with the full cost of products and services (including a tiered fee structure for fully electronic processing), the exploration of mechanisms to ensure accuracy of the trademark register (with plans to now implement permanent post-registration audits of affidavits of use), expanding outreach and improving IT systems by developing the ‘Trademarks Next Generation’ system (TMNG). Testing continues on TMNG, which will replace the office’s legacy IT systems used to conduct examinations, issue office actions and manage workflow. It is expected to be deployed this year.

Elsewhere, she notes that the trademarks organisation created a new position – the office of the deputy commissioner for trademark administration – which was filled by retired Air Force Colonel Greg Dodson. Dodson’s primary responsibilities include the completion of the TMNG electronic systems, to lead the financial management of the trademarks organisation and guide strategic planning. He will be supported in these endeavours through two new senior-level positions: the Information Technology Administrator and the Information Technology Legal Administrator.

However, there is still more to be done, with Denison noting that – in addition to maintaining pendency and quality levels, rolling out the TMNG system for examination to all law offices and implementing the new trademark fees - efforts will continue “to address dead wood” on the register and, crucially, enhance the overall customer experience (which she characterises as “a top priority for the trademarks organisation”). To assist with the latter, a chief customer experience officer is being recruited, as well as “plain language writers to ensure that our users can understand what we are saying”.

Beyond that, new work area priorities are harder to discern, with all eyes now on the incoming Trump administration and the impact this may have on the office. Speaking to World Trademark Review at the recent Trademark Expo in Washington DC, Denison noted that new initiatives are unlikely until a successor to current director Michelle Lee is appointed: “When a new administration comes in, they will have new priorities. Broadly, then, it will be business as usual at the USPTO until we get a new political person, which will be sometime in calendar year 2017. What may be different is that there could be a marked decrease in what users see in the federal register for some period of time because it is not a time for us to launch major initiatives until the new leadership comes in."

The key question, then, is who will take the lead at the office. In a letter sent to the president elect by the American Intellectual Property Law Association (AIPLA) last week, it was noted that “a strong intellectual property system requires strong leadership”, with the need for such leadership positions to be filled by “experienced, highly respected” individuals with “strong legal and executive leadership skills, as well as a comprehensive understanding of domestic and foreign intellectual property laws and related international agreements”. To that end, the AIPLA recommends: “Preferred candidates should have at least 15 years of industry or USPTO experience, with 10 or more years of managerial and fiscal responsibility in a corporation, administrative agency, or law firm.”

That would narrow the field of potential candidates and, at last month’s IPBC Asia event in Shanghai, one name that kept cropping up in relation to the director position was Johnson & Johnson’s Phil Johnson, who was previously considered for the role in 2014. On the IAM blog, Richard Lloyd observed: “One usually well-informed delegate went as far as to call him the ‘overwhelming favourite’ for the job. As a widely admired member of the patent community and one who has taken a strong pro-patent line over recent years in the face of calls for much deeper reform of the US system, Johnson would certainly be a popular choice in DC and beyond.”

Whether Johnson or another candidate, patent experience will likely be a key requirement for the next appointment. Back in 2010, when director of the agency, David Kappos told World Trademark Review that the policy focus on patents was inevitable because the trademark function was “the little engine that can and does” – ie, it was stable, working effectively and not in need of major surgery. Hence the appointment of Michelle Lee – previously deputy general counsel for Google and the company's first head of patents and patent strategy – to succeed him made a lot of sense.

Whoever takes the reins, however, it is important that the trademark function is not neglected in favour of patent work areas, particularly at a time of rising applications. The AIPLA outlines a number of trademark focuses for an incoming director, including the removal of “dead marks which have never been or are no longer being used in commerce” from the register, efforts to protect US consumers from confusion caused by “the unauthorised use of foreign marks that are ‘well-known’ in the US”, the promotion of consistency and clarity in the grant or denial of registrations (“particularly for marks which could be deemed disparaging and, therefore, unregistrable should this part of the trademark law be sustained by the Supreme Court”) and continuing efforts to strengthen the Madrid System for the international registration of marks. To this wish-list you could also add doing more to tackle trademark solicitation scams, or at least ensure that users are proactively alerted to their existence.

To this end it is crucial that associations and user groups work closely with the next director to ensure that the proactive focus on trademarks continues as progress is not based on unstoppable momentum. It is important that the ‘little engine’ that Kappos previously referred to requires constant maintenance, fine-tuning and – where necessary – new parts. 

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