Tim Lince

It has been a busy first few days for US President Donald Trump, with a number of executive orders issued, cabinet appointments unveiled and January 20 (the date of his inauguration) proclaimed as ‘National Day of Patriotic Devotion’. In the midst of all this activity are some key policy changes that could have a significant effect on the trademark community – both in the United States and internationally.

Arguably the most significant event – from a trademark perspective – is President Trump’s signing of an executive action for the US to withdraw from the negotiating process of the Trans-Pacific Partnership (TPP). This move, in effect, sounds the death knell of the 12-country TPP – one of the largest free-trade agreements in history and a major pillar of Barack Obama’s legacy – as, to take effect, it requires six countries representing 85% of the group’s economic output to ratify it. The US represents 62% of that total.

We have written about the possible IP impact of the TPP extensively at World Trademark Review, as it had a number of trademark implications. For example, in Japan (which ratified the TPP agreement last month) a new trademark law (to take effect on the day TPP came into force) was introduced to increase statutory damages for infringement and enable trademark owners to recover the amount of damage “equivalent to expenses paid for initial acquisition and maintenance (renewal) of a trademark registration”. Furthermore, the agreement also included tough anti-counterfeit sanctions and reportedly would aid the spread of WIPO’s Madrid Protocol.

While the withdrawal of the United States from the TPP seemed an inevitability (it is an unpopular trade agreement in the country and opposition to it became a policy stance in the recent presidential campaign), a ray of hope for supporters of the agreement did appear overnight. Australian prime minister Malcolm Turnbull claimed he remains hopeful that the other 11 countries could proceed with the Pacific-wide trade pact despite the US withdrawal. He even claimed “there is potential for China to join” the agreement, which – with its tough anti-counterfeit measures – will no doubt pique the interest of the trademark community. In the immediate term, however, Trumps executive action puts the brakes on the TPP.

Elsewhere, two other developments in the last few days could have an impact on operations – both immediately and longer term – at the United States Patent and Trademark Office (USPTO). The first relates to who may head up the office, with conflicting reports on the future of the previous administration’s USPTO director Michelle Lee. Reliable sources told our sister title IAM last week that she was set to remain in the role but – since Trump took office – no official announcement has been made. The USPTO has stonewalled enquiries on Lee’s status - a spokesperson “declined to comment” when we asked for an update yesterday. However, as pointed out by Gene Quinn at IPWatchdog, the mystery could – in theory – become clearer today as, by law, newly issued patents must be signed by the director. As Quinn wondered: “When patents issue on Tuesday, January 24, 2017, who will sign them or have their signature placed thereon?”

As things stand though, mystery surrounds just who is acting as head of the agency and new initiatives will effectively be on hold - speaking to World Trademark Review at the recent Trademark Expo in Washington DC, the USPTO’s trademark commissioner Mary Boney Denison explained that – while operations will continue – the launch of major initiatives are unlikely until a head is confirmed and in situ.

Another development over the past few days has been President Trump’s newly instituted federal hiring freeze. As part of his pledge to “clean up the corruption and special interest collusion in Washington DC”, Trump signed a presidential memorandum that temporarily freezes hiring for federal government workers (excluding those in areas of the military, national security and public safety) as a way to rein in the size of the federal workforce. While the move is a fulfilled campaign promise, it has been met with some concern. For example, the US federal workforce is already approximately 10% smaller than it was in 1967, claims Richard G. Thissen, president of the National Active and Retired Federal Employees Association, and a hiring freeze “would undermine the efficiency of government operations by creating hiring backlogs and inadequate staffing levels, and it is unlikely to save any money”.

This point will resonate with folks at the USPTO, which recently revealed a record level of trademark applications in fiscal year 2016. Hiring is therefore essential to keep up with filing levels. As trademark commissioner Mary Boney Denison told us in October: “We had 503,000 applications last year, but have continued to meet our pendency and quality goals for the past 10 years. To ensure that continues, we have to keep up with filings – and, in turn, have had to hire more to maintain our high standards.” The extent to which the newly announced hiring freeze impacts the office remains to be seen but any reduction in staff at a time of rising demand for services can only create challenges.

Ultimately it is early days for the Trump administration and many more changes will come as President Trump continues to fulfil his pledge to transform the way the US government works and adopt a new stance towards trade deals. In the run-up to the election, a question we were asking was ‘what would a Trump administration mean for trademarks?’ The answer will become a lot clearer in the coming days and weeks. 

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