USPTO EXPANDS AUDIT PROGRAM AND IMPLEMENTS SIGNIFICANT NEW AUDIT FEES
As we previously reported, on November 1, 2017, the USPTO launched an audit program enabling the Office to perform random audits of trademark registration renewals. After a trademark owner files a Section 8 or 71 Declaration of Use, the USPTO can issue a Post-Registration Office Action/Audit Notice requiring the trademark owner to provide two (2) or more additional specimens per class. If the trademark owner cannot provide the requested proof of use, the USPTO will issue a second Office Action requiring the trademark owner to provide evidence of use for each and every good and service included in the registration.
To date, more than 14,000 registrations have been audited under the program. Additionally, the USPTO has announced plans to expand the audit program to cover at least 5,000 registrations each year. Accordingly, the likelihood of receiving an audit is increasing. In our experience, the USPTO is more likely to issue an Audit Notice when a trademark renewal includes numerous classes and/or a long list of goods or services in each class. Further, the USPTO is seemingly requesting additional proof of use for the more obscure goods or services in each class.
In addition to expanding the scope of the audit program, the USPTO recently implemented new fees and procedures that make the response process more time consuming and costly. For example, trademark owners must separately attach proof of use with an explanation of the attached evidence for each and every audited good and service, rather than submitting a single document for all audited items. Moreover, effective January 2, 2021, there are significant fees for deleting any goods or services from a registration in response to an Audit Notice. Trademark owners must now pay a $250 per class deletion fee for deleting any goods or services from the registration after the Section 8 or 71 Declaration of Use is filed, as well as a one-time $100 deficiency surcharge for any deletion that occurs outside of the regular statutory period for filing the renewal. Additionally, the $250 per class deletion fee is required each time the trademark owner requests or is required to delete goods or services. Therefore, in certain circumstances, the trademark owner may be required to pay the deletion fee twice for a single class or classes of goods or services.
In light of the foregoing, it is very important to confirm that clients are using the registered mark in the United States in connection with each and every product and service in the registration. If the mark is only used in connection with some of the goods or services when the renewal declaration is filed, the goods and services that are not in use should be deleted. Taking this important step will limit client exposure to the possibility of a random audit and minimize fees if an audit issues.
If you have any questions regarding the audit program or the new audit fees, please contact us at any time.