By Trevor Little
March 21 2013
With the Trademark Clearinghouse (TMCH) opening its doors for business next week, many law firm counsel are now considering how best to serve their clients in the new gTLD environment. A number have voiced concern that they will be required to register as Trademark Agents – the financial commitment of which could be seen as less than desirable. However, the choice is not ‘agent or nothing’.
One of the questions we asked private practitioners in this year’s Global Benchmarking Survey (the results of which will be previewed in this blog in the coming weeks, before being fully analysed in the next issue of WTR magazine) was whether they had identified any business expansion opportunities in terms of the new gTLD environment. While 16% answered in the affirmative, the ‘no’ camp dominated. For many, a more pertinent question is how best to actually service clients without exposing themselves to financial risk.
Either trademark holders (individual or company) or their agents can register marks in the Trademark Clearinghouse. However, the latter – officially “entities or individuals that act on behalf of trademark holders in order to submit and maintain trademark records on behalf of the trademark holders” – are required to set up a pre-paid account funded with $15,000. With this sum equating (at the base level) to the cost of registering 100 marks, a number of firms have asked how best to service clients if such a level of registrations is unlikely or, as one practitioner told WTR, they are reluctant to stump up such a sum before the realistic level of registrations they will lodge is apparent.
Certainly, when it comes to registering marks, clients would benefit from legal guidance, John Wilks, partner at DLA Piper, argues: “Trademark Clearinghouse interaction will require a degree of legal expertise (particularly so as to maximise it as a brand protection tool), and there is therefore a danger that, should smaller law firms not take on or refer such work, inexperienced employees may be tasked with fulfilling a function they would ideally seek counsel on.”
However, the good news is that law firms may not be faced with an ‘all or nothing’ scenario. The one requirement to being a Trademark Agent is to sign the agent contract and payment terms. However, when WTR contacted the Trademark Clearinghouse, a spokesperson were told us that, while the $15,000 prepayment sum can be entirely used for registrations, any money not used in this way will be returned to the depositor once they terminate their contract/account with the Clearinghouse – hence agents are not effectively stumping up money on a ‘use it or lose it’ basis.
This may be positive news to some, but still requires a substantial deposit of money up front. In this regard, other strategies may be employed, beyond referring the work to other partner firms. DLA Piper’s Karine Disdier-Mikus suggests: “Law firms are able to assist their clients either directly in becoming Trademark Agents if they feel the need for it (because they have the budget, the clients and the team to make it work), or through outside services providers. It is actually no different than what is already done for registering domain names or trademarks, conducting searches and organising watching services.”
Expanding on this, Wilks notes: “Counsel could engage the services of an intermediary that is providing filing services (some of these are doing so on a large scale and offering relatively low prices which exclude pre-validation), and carry out the pre-validation work for clients. They could also partner up with an appropriate TMCH filing services provider, and refer clients to that provider.”
Gretchen Olive of CSC Brand Services, one such service provider, told WTR that the company will be working directly with both brand owners and law firms to provide the mechanical expertise of the TCHM interface (including the storage of SMD files), explaining: “As to how the relationship works, it depends how the client wants to use us. We can provide a back office function or they can put us in front of their clients”.
Even beyond this, there is an option for those firms with a small roster of clients looking to register their rights in the Clearinghouse and wishing to offer the service without having to deposit $15,000. When WTR contacted the Trademark Clearinghouse, it confirmed that there is nothing to prevent external counsel from acting on behalf of their clients and using the law firm’s credit card to register trademarks for their corporate colleagues. In such instances, the external counsel could then invoice the client for the registration sum and related expenses that they occurred during the registration. As long as the trademark owners’ details are used when filing the application, the applicant would still be the trademark owner and the registration confirmation, and all communications, would go straight to the client (whose contact details are associated with the trademark).
The advantage of law firm practitioners becoming official TMCH agents is that all communications would subsequently be sent to them directly instead of their client and, where the volumes allow, it does open up access to bulk submission discounts (which Domain Incite reports have been made easier to qualify for). However, for those which do not act as official trademark agents, there are options available.
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