Is Peloton Spinning Its Wheels? Peloton Petitions to Cancel “SPINNING” Registrations
Audits: They’re Not Just for the IRS Any More
Recently, the United States Patent and Trademark Office (the "PTO") issued its 5,000,000th registration. (Congratulations to the owner of COASTAL TACO BAR + CHILL!). It took until 1974 for the PTO to issue the 1,000,000th registration, but only about five years lapsed between the 4,000,000th and 5,000,000th registrations. Not only is the number of trademark registrations growing, the rate of growth is increasing too.
The ease of electronic filing and other factors likely contribute to the rapidly growing number of federal trademark registrations. The register is getting crowded, raising questions about whether all those registered marks are really in use with all those recited goods and services.
In an effort to preserve the integrity of the register, the PTO has proposed a new rule to make permanent a pilot program it ran four years ago. Through the pilot program, the PTO audited declarations of use associated with 500 registrations for marks that included more than one good or service in a particular class. As you know, to maintain a registration, it is necessary to file a declaration of use between the fifth and sixth anniversaries and every tenth anniversary of the registration date. This requires submitting a specimen showing the mark in use and declaring under oath that the mark is in use with all the goods and services set forth in the registration. During the program, for the PTO required registrants for randomly-selected registrations to submit proof of use of two more goods or services in the registration (besides those shown in the specimen originally submitted). If the proof was inadequate or if the registrant requested deletion of the additional goods or services, the PTO selected an additional two for proof of use. In the end, 422 of the 500 registrations received notices of acceptance of their declaration of use. But just over half of the audited registrations were left with at least one good or service deleted as a result of the audit.
If the audit program is made permanent, the PTO could ask up to 10% of the registrants filing a declaration of use to submit additional proof (information, exhibits, declarations, or specimens) to support use of the mark on specified goods and services beyond that shown in the specimen originally submitted. If registrants cannot satisfy the PTO's request, they will have to narrow the identification of goods and services in the registration or allow it to be canceled.
This measure will probably have the intended effect of confining audited registrations only to the goods and services with which the mark is in use (though there will surely be some unfortunate casualties as well). While the proposed program may impose some additional time and expense on the audited registrants, overall, it may save others the time and expense associated with avoiding or removing an unnecessary obstacle to registration.
This is just one more reminder to be conscientious about what goods or services are set forth in the application, statement of use, and declaration of use and to be prepared to prove use for all goods and services in the registration.
The PTO has published the proposed rule for comment. Comments must be received by August 22, 2016 and may be submitted in a number of ways, including email at [email protected] and should include the number PTO-T-2016-0002.