US Trademark Holders Brace for Random Audits of Use

In an effort to improve the accuracy and integrity of the US trademark register, the US Patent and Trademark Office (USPTO) has recently amended its rules to provide for the verification of declarations of use and cancellation of trademark registrations which do not reflect acceptable ‘use’ in commerce.

Effective 17 February 2017, random audits will commence on US trademarks registered in respect of more than one good/service class. The purpose of the audits is to verify whether or not a trademark is being used in commerce in connection with the classes of goods and services for which it is registered.

What does this mean for US trademark holders?

If you hold a US trademark which is only registered for one class of good or service you’re off the hook. At this stage, random audits will only be conducted on those registered in more than one class.

If you do hold a multi-class trademark, there is a chance your use of that mark may be audited either this year or in years to come. The USPTO anticipates that initially only 10% of multi-class registrations will be selected for audit, however this percentage may increase going forward as resources permit.

What will the audit require of me?

If you are selected at random for audit, you will be required to provide evidence that your trademark is being used in commerce, in connection with the classes of goods or services for which it is registered. This may require you to submit information, exhibits, affidavits or specimens of use which are necessary to satisfy the USPTO that their Register accurately reflects the nature and extent of your trademark’s use in commercial activities.

What if I can’t provide sufficient proof of my trademark’s use in a particular class?

If an audit reveals that your trademark is not being used in connection with a particular class for which it is registered, you will simply be required to delete those classes from the registration. No personal liability or charges for false declaration are anticipated to result.

However, you may receive further audit requests in respect of that trademark or any other trademarks you hold.

 Can I ignore a request for audit?

Failing to respond to a request for audit within 6 months or the end of the relevant statutory filing period (whichever is later) will result in automatic cancellation of the entire trademark registration. Therefore, it is in the interest of trademark holders to promptly act upon any request for audit they receive.

What should I do now?

There’s no harm in trademark holders waiting until they are audited, to relinquish a class of goods or services that they are not using. However, if you intend to use your mark in connection with a registered class it is advisable that you ensure you can prove sufficient current usage in order to preserve your rights in that respect.

US trademark holders are advised to conduct an internal review of their trademark usage to determine whether any of their registrations might be at risk of cancellation and consider whether immediate should be taken to preserve ‘at risk’ classes.

If you have questions about the new rules, require advice on how the rules might directly affect your US portfolio or would like us to audit your US trade mark portfolio contact us now.

More information about the new provisions can be found here.