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USPTO’s “Random” Proof of Use Audits – What you Should Know

Having been a USPTO examiner for 13 years, I am keenly aware, as are many of you, of the recent uptick in “random audits” by the USPTO. We have bad actors to thank for that – those who obtain US trademark registrations that fraudulently claim a mark is being used on goods and services.

One of the USPTO’s reactions to the bad-faith registrations has been to initiate an audit program during renewal and maintenance filings, in which they can require a trademark owner to provide additional proof of how the mark is actually being used. If your registration is “randomly” selected, you must provide proof of use for each of the goods or services selected for audit. If you can’t, those goods and services are not only automatically deleted from the registration, but you’ll then have to prove use for every single item in the registration. And if you can’t do that, you then run the risk of having your entire registration canceled. For information about the USPTO’s description of the audit program, you can check out their FAQ here: https://www.uspto.gov/trademarks/maintain/post-registration-audit-program.

Are Random Audits Really Random? – According to the USPTO’s audit FAQ page, “the USPTO randomly audits registration maintenance filings.”  But if you’re a practitioner familiar with the program, the audits seem to be anything but random. Some trademark owners seem to be audited constantly, while others have never been audited at all.  Where’s the disconnect? Let’s take a closer look at how the USPTO audit program works.

Inside the Audit System – From my many years of experience with the USPTO and subsequent research on the mechanics of the audit program, here are a few interesting items of note:

  1. – Every trademark renewal or maintenance filing is run through an algorithm, which only scans for semicolons and commas in a description of goods or services. The USPTO’s goal here is to flag descriptions that contain 10 or more entries within a single International Class.
  2. – The flagged registrations are then placed into a randomizer program (this is the only “random” part of the entire process), which then selects between 25-30 percent for audit — with a target goal to raise the percentage to 50 percent by next year.
  3. – Once a registration is selected by the randomizer program, the goods or services selected for additional proof of use are then manually selected by the examiner.
  4. – Examiners most often flag goods/services that seem obscure or do not fit within the overall theme of the other goods and services.

For those of you who are constantly getting audited for proof-of-use, chances are your registrations have more than ten entries in a single class.

How can you lower your risk of being audited? (And in doing so, drastically decrease the time and expense you may incur.)

While the USPTO will undoubtedly tweak its audit selection procedures from time to time, here are some practices to consider now that proof of use audits are a reality:

  1. – Keep descriptions of goods and services brief and as broadly worded as possible.  Avoid “laundry-list descriptions at all costs.  Keep commas and semicolons to a minimum.
  2. – Avoid description entries that are redundant.  Don’t assume that a longer description means more protection.  If you have an entry for “computer software,” do you really need another entry for “computer programs” or “computer applications”?
  3. – If you can keep IDs to under 10 entries per class, your chances of getting audited are almost zero. File applications where the goods/services grouping make sense, regardless of the classification.  For example, consider filing a class 41 application for entertainment services, and a separate class 41 application for educational services.
  4. – For existing registrations, take advantage of the USPTO’s new policy of allowing a registrant to delete goods and services from a registration for no fee, so long as the deletion is filed before the renewal or maintenance documents.

The upshot?  A trademark owner whose registration only lists a few goods or services will likely NEVER face an audit, while a trademark owner whose registration contains a long list of goods and services likely will.

As a former USPTO examiner, I’m proud to be a part of Munck Wilson Mandala’s highly reputable trademark practice, which manages more than 10,000 active trademarks for clients around the world.  We are in a unique position to draft trademark applications or file renewals that will be more likely to avoid costly audits and minimize the time and headache of portfolio maintenance.  To learn more about our services or to schedule a call, see my contact information below:

 

Jason Blair
Munck Wilson Mandala
512.476.7900
jblair@munckwilson.com