Spring cleaning is upon us, and now is a good time to clean up your trademark registrations as well. Otherwise, you may end up paying the U.S. Patent and Trademark Office (USPTO) to do it for you.
A thorough internal audit is especially important for mark owners who have acquired marks from third parties or have many goods or services listed in their registrations. Why? Through its Post Registration Audit Program (Program), the USPTO has been steadily collecting what are effectively punitive fees from mark owners who haven't aligned the current use of their marks with the goods and services listed in their registrations. The Program was launched in November 2017 and aims to prevent mark owners from retaining registrations for goods and services they don't actually sell, as U.S. mark owners must provide every good or service listed under their mark to maintain their registration. See TMEP § 901. However, it is common for mark owners to shift how their marks are used over time, phase out a product line or modify their goods and services to meet their customers' needs. But doing so without also ensuring that the list of goods or services in your registration remains accurate comes with the risk that the USPTO will audit your mark and charge you a fee to correct the registration (or cancel it entirely in some cases). Currently, the USPTO charges $250 for each class in which goods or services are deleted during a post-registration audit. In some instances, mark owners will be charged a $100 "deficiency surcharge" as well.
If you think you may be at risk for an audit that requires you to delete goods or services, you're not alone — nearly 50% of all registrants who were audited from November 2017 to December 2023 were required to delete some goods or services from their registration (and of course pay the USPTO for doing so). USPTO, Post Registration Audit Program Statistics, Post registration audit program statistics | USPTO (last accessed May 8, 2024). Internal audits involving proactive amendments to your registrations before the USPTO may decide to audit your marks render the fee-paying portion of a USPTO audit entirely preventable.
In addition, an internal audit will help identify trademark ownership issues. We have recently seen several acquisitions where an assignment has been executed between the parties but not recorded with the USPTO. As a result, the incorrect owner remains listed in the USPTO trademark database. This can result in a host of issues, including missed correspondence from the USPTO regarding those marks. Moreover, if it comes time to further transfer or license the marks, an assignment reflecting the correct owner will need to be recorded then. Recording the assignment with the USPTO at the outset is an inexpensive and simple task that will mitigate headaches down the road.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.