[Federal Register Volume 85, Number 222 (Tuesday, November 17, 2020)]
[Rules and Regulations]
[Pages 73197-73218]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-25222]
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DEPARTMENT OF COMMERCE
Patent and Trademark Office
37 CFR Parts 2 and 7
[Docket No. PTO-T-2019-0027]
RIN 0651-AD42
Trademark Fee Adjustment
AGENCY: United States Patent and Trademark Office, Department of
Commerce.
ACTION: Final rule.
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SUMMARY: The United States Patent and Trademark Office (Office or
USPTO) is setting or adjusting certain trademark fees, as authorized by
the Leahy-Smith America Invents Act (AIA), as amended by the Study of
Underrepresented Classes Chasing Engineering and Science Success Act of
2018 (SUCCESS Act). The changes will allow the USPTO to continue to
recover the prospective aggregate costs of strategic and operational
trademark and Trademark Trial and Appeal Board (TTAB or Board) goals
(based on workload projections included in the USPTO fiscal year (FY)
2021 Congressional Justification), including associated administrative
costs. They will also further USPTO strategic objectives by better
aligning fees with costs, protecting the integrity of the trademark
register, improving the efficiency of agency processes, and ensuring
financial sustainability to facilitate effective trademark operations.
USPTO has weighed carefully current economic conditions and the
potential hardship that the fee increase could create for businesses
and individuals. The Office paused development of the fee rule because
of uncertainty about the economy earlier this year. The latest economic
data point to continued recovery in many sectors of the economy.
Because of this and the relatively small annual cost to businesses and
individuals from USPTO's trademark applications and maintenance fees,
the Office has decided to finalize the fee rule for implementation in
January 2021.
DATES: This rule is effective on January 2, 2021.
FOR FURTHER INFORMATION CONTACT: Catherine Cain, Office of the Deputy
Commissioner for Trademark Examination Policy, at 571-272-8946, or by
email at [email protected].
SUPPLEMENTARY INFORMATION: The USPTO conducted a fee review in FY 2019
that formed the basis for this regulatory process to adjust and set new
trademark user fees. While trademark-related costs of operations have
risen, trademark fees have not changed since January 2017. The revenue
and workload assumptions in this rule are based on the assumptions
found in the FY 2021 Congressional Justification (i.e., the USPTO's FY
2021 budget submission to Congress). However, projections of aggregate
revenues and costs are based on point-in-time estimates, and the
circumstances surrounding these assumptions can change quickly.
Notably, since the FY 2021 Congressional Justification was published,
some fee collections have been lower than anticipated, due to lower
than expected post-registration and Madrid filings.
Although economic circumstances have changed substantially since
the FY 2021 budget was developed, the USPTO determined it remains the
most appropriate starting point for developing this Final Rule. First,
the USPTO's projections of aggregate revenues and costs are necessarily
estimates that can change substantially from one point in time to the
next due to numerous factors outside the USPTO's control, including
cyclical economic changes or exogenous shocks, such as COVID-19,
changes in the laws governing USPTO revenues or expenditures, and other
events. Nevertheless, the USPTO has historically used its most recent
budget assumptions when setting fees because they are the most recent
complete evaluation of the USPTO's budget expectations and
requirements, and they provide assumptions for stakeholders to use when
formulating their comments. Those projections were developed in late
calendar year 2019, prior to the COVID-19 outbreak, and they assumed
continuing stable economic growth, not the sharp economic downturn and
rebound of 2020.
As part of the multi-year fee-setting process, the Trademark Public
Advisory Committee (TPAC) held a public hearing at the USPTO on
September 23, 2019. The Office considered and analyzed all comments,
advice, and recommendations received from the TPAC in proposing the
fees set forth in the notice of proposed rulemaking (NPRM) published in
the Federal Register on June 19, 2020, at 85 FR 37040. In formulating
this rule, the USPTO considered the state of the U.S. economy, the
operational needs of the agency, and public comments submitted pursuant
to the NPRM and made adjustments to the substance of this rule based on
these considerations.
The USPTO has considered the state of the U.S. economy, the
operational needs of the agency, and the comments and advice received
from the public during the 45-day comment period. The current economic
conditions illustrate the need for the increases set forth in this
rule. The majority of USPTO's trademark revenue comes from new
applications, but the initial costs to examine applications exceed the
revenues from those applications. These examination costs have been
increasing over the years while the USPTO has kept filing fees low
enough to encourage broad public participation in the trademark system
by offsetting examination costs with revenues generated with intent-to-
use (ITU) and maintenance filings. Despite this balancing of front- and
back-end costs, the USPTO has been observing multi-year consistent
trends that have begun to adversely affect this model. The USPTO is
receiving record levels of new trademark application filings, carrying
with them larger front-end examination costs, while the percentage of
ITU and maintenance filings are decreasing, resulting in less back-end
revenue. With larger net costs that are not being offset by back-end
revenue, the USPTO would be unable to maintain an operating reserve,
which puts the Office on an unsustainable funding model.
The USPTO has observed these trends taking place whether the
economy is doing well or facing turmoil, but the present situation is
particularly challenging in light of the impact of the pandemic and its
effect on the economy and filings. In particular, over the last six
months, the USPTO has experienced a surge in new applications while
maintenance filings continue to be impacted by lower rates of payment
from one-time filers and individual applicants. The surge is also
undermining the other traditional revenue sources that have
historically offset front-end costs, such as ITU, since the USPTO is
receiving more use-based applications, especially from foreign filers.
While the USPTO is observing a surge in filings at present, given past
experience, we expect a future decline to bring filings in line with
the underlying economic dynamism. Although the timing and the magnitude
of a future correction may be difficult to anticipate with complete
accuracy, given past experience, the USPTO anticipates that a
correction in filing
[[Page 73198]]
levels could generate funding shortfalls that quickly drain our
reserves and affect our operations and financial stability.
The USPTO received some comments urging the Office not to raise any
fees. As noted below, in the discussion of the Regulatory Flexibility
Act, one regulatory alternative that was considered was to leave all
trademark fees as currently set. This alternative was rejected because,
due to changes in demand for certain services and rising costs
described herein, the Office has determined that a fee increase is
needed to meet future budgetary requirements as described in the FY
2021 Congressional Justification. As discussed further below, the
alternative of making no changes to trademark fees would not have
achieved the goals of this rulemaking. Those goals are to assist in
promoting access to the trademark system, protect the integrity of the
register, and promote the efficiency of the trademark registration
process by incentivizing: (1) Maintenance of registrations for goods
and services for which marks are actually in use, (2) more timely
filing of applications and other documents, and (3) faster resolution
of appeals and inter partes proceedings at the TTAB.
USPTO has weighed carefully current economic conditions and the
potential hardship that the fee increase could create for businesses
and individuals. The USPTO has undertaken many efforts to provide
various types of relief, including deadline extensions and fee
postponements. Additionally, in the FY 2021 Congressional
Justification, implementation of the fee rule was slated for August of
2020. Considering the impact of the pandemic, uncertainty about the
economy, and stakeholder feedback, the USPTO paused development of the
fee rule over the summer of 2020. The latest economic data point to
continued recovery in many sectors of the economy. Because of this and
the relatively small annual cost to businesses and individuals from
USPTO's trademark applications and maintenance fees, the Office has
decided to finalize the fee rule for implementation in January 2021.
I. Purpose: The USPTO protects consumers and provides benefits to
businesses by effectively and efficiently carrying out the trademark
laws of the United States. As a fee-funded agency, appropriate fees are
critically important for the USPTO to maintain the quality and
timeliness of examination and other services, and to stabilize and
modernize aging information technology (IT) infrastructure on which the
Office and its customers rely. The fee schedule enacted in this
rulemaking is estimated to provide aggregate revenue to recover the
USPTO's aggregate estimated future costs and ensure the USPTO can
achieve strategic and operational goals. These goals include
effectively using resources to maintain low trademark pendency and high
quality, fostering business effectiveness, stabilizing and modernizing
trademark IT systems, continuing programs for stakeholder and public
outreach, enhancing operations of the TTAB, and ensuring financial
sustainability to facilitate effective trademark operations.
Section 10 of the AIA authorizes the Director of the USPTO
(Director) to set or adjust by rule any fee established, authorized, or
charged under the Trademark Act of 1946, 15 U.S.C. 1051 et seq., as
amended (the Trademark Act or the Act) for any services performed by,
or materials furnished by, the Office. See section 10 of the AIA,
Public Law 112-29, 125 Stat. 284, 316-17, as amended by the SUCCESS
Act, Public Law 115-273, 132 Stat. 4158. Section 10 of the AIA
prescribes that trademark fees may be set or adjusted only to recover
the aggregate estimated costs to the USPTO for processing, activities,
services, and materials related to trademarks, including administrative
costs to the USPTO with respect to such trademark and TTAB operations.
This authority includes the flexibility to set individual fees to
advance key policy objectives. Thus, the Director may set individual
fees at, below, or above their respective associated costs, while
taking into account the aggregate estimated costs to the USPTO.
The USPTO estimates, based on the assumptions found in the FY 2021
Congressional Justification, that the additional aggregate revenue
derived from the fee schedule set forth here will recover the future
costs of implementing strategic and operational goals, including the
cost of necessary IT stabilization and modernization activities. Also,
the additional revenue will allow the USPTO to achieve sustainable
funding by gradually building the operating reserve, which mitigates
the risk of immediate unplanned financial disruptions that can
adversely affect pendency and quality. Based on the assumptions found
in the FY 2021 Congressional Justification, the Office estimates
reaching the optimal six-month trademark operating reserve level in FY
2025. However, projections of aggregate revenues and costs are based on
point-in-time estimates, and the circumstances surrounding these
assumptions can change quickly. Notably, since the FY 2021
Congressional Justification was published, some fee collections have
been lower than anticipated, due to lower than expected post-
registration and Madrid filings.
II. Summary of Major Provisions: The USPTO is setting or adjusting
trademark fees codified in 37 CFR parts 2 and 7. Fees are increased for
all application filing types (i.e., paper applications, applications
filed via the Trademark Electronic Application System (TEAS), and
requests for extension of protection under section 66(a) of the
Trademark Act, 15 U.S.C. 1141f). The per-class fee increases range from
$25 for a TEAS Plus application to $150 for a paper application. In
addition, fees for filing affidavits or declarations of use or
excusable non-use under section 8 or section 71 of the Act (section 8
or section 71 affidavits), 15 U.S.C. 1058, 1141k, are increasing by
$100 per class. As described in further detail below, these increases
address policy considerations related to ensuring a more accurate
register as well as reflecting increased processing costs to the Office
in handling these filings.
This rule creates two levels of fees for petitions. There is one
fee for petitions to the Director under Sec. Sec. 2.146 and 2.147, and
a lower fee for a petition to revive an abandoned application under
Sec. 2.66. Currently, the fees for these petitions are $200 if filed
on paper and $100 if filed through TEAS. This rule sets the fee for
petitions under Sec. Sec. 2.146 and 2.147 at $350 if filed on paper
and $250 if filed through TEAS. The fees for a petition to revive under
Sec. 2.66 are set at $250 if filed on paper and $150 if filed through
TEAS. These fees take into account the different processing costs of
these filings.
The USPTO is also setting a new $50 fee for filing a letter of
protest, along with new regulations that codify letter-of-protest
procedures. The new fee and procedures are designed to help offset
processing costs and deter the filing of unsupported or irrelevant
letters of protest, while not discouraging the filing of relevant,
well-supported letters of protest. The new regulatory section is based
on existing, longstanding procedures for letters of protest, which are
currently set forth in the Trademark Manual of Examining Procedure
(TMEP), as well as the procedures set out in the patents rules in 37
CFR 1.290 and 1.291 and the Manual of Patent Examining Procedure (MPEP)
governing third-party submissions concerning pending applications,
which serve a function similar to letters of protest.
As discussed further below, some of the fee adjustments made in
this rule are meant to adjust applicant behaviors that
[[Page 73199]]
put an undue burden on the trademark system and that can adversely
affect the quality and integrity of the trademark register. Some of
these behavior adjustments are accomplished with new fees (e.g., post
audit deletion of goods and services) or with targeted increases (e.g.
TEAS Plus vs. TEAS Standard to promote more efficient, higher quality,
and most cost effective filings, especially for small businesses, or
increases for paper filing fees to encourage electronic filing). As a
further example, the rule also sets a new fee structure to encourage
registrants to perform due diligence before filing a section 8 or
section 71 affidavit to maintain a registration, so as to determine the
goods or services for which the registered mark is no longer in use and
to delete those goods, services, and/or classes from the registration.
The rule sets two fee levels for amendments to registrations to delete
goods, services, and/or classes that depend on when the amendment is
submitted. The first is a $0 fee if the only amendment made in a
request under section 7 of the Act (section 7 request), 15 U.S.C.
1057(e), that is filed prior to submission of a section 8 or section 71
affidavit, is the deletion of goods, services, and/or classes. The
current practice that results in no amendment fee for section 8 or
section 71 affidavits that specify fewer than all of the goods or
services listed in the registration when the affidavit is filed, which
results in the deletion of goods, services, and/or classes not included
in the affidavit from the registration, is unchanged. However a fee
will be assessed if goods, services, and/or classes are deleted in
either a section 7 request, a response to an Office action, or a
voluntary amendment filed after submission, but prior to acceptance, of
a section 8 or section 71 affidavit. This is a per-class fee of $250
for submissions filed through TEAS and $350 for submissions permitted
to be filed on paper. To implement the new fee requirement,
corresponding new regulations are enacted at Sec. Sec. 2.161(c) and
7.37(c). In addition, the rule revises the section titles and
restructures Sec. Sec. 2.161 and 7.37 to set out the requirements for
section 8 and section 71 affidavits more clearly. Except for the new
provision regarding the fee required for deletions made after
submission and prior to acceptance of the affidavit, the substantive
text of Sec. Sec. 2.161 and 7.37 is not otherwise revised.
Finally, as discussed below, 16 fees related to TTAB filings (8 for
electronic filings and 8 for paper filings) are established or adjusted
in this rule. Ten existing fees (5 electronic/5 paper) are increased,
specifically, those for initiating an ex parte appeal from an examining
attorney's refusal to register a mark, for initiating an opposition
proceeding, for initiating a cancellation proceeding, and for filing
each of two different types of extensions of time to oppose. Six new
filing fees (3 electronic/3 paper) are established, which are explained
below. The new and adjusted fees are generally designed to recover more
of the costs of TTAB procedures, reduce the extent to which they are
subsidized by other trademark fee collections, and advance policy
objectives. The USPTO also revises Sec. 2.114(a) to provide that a
partial refund of the filing fee for a petition to cancel may be made
in cases involving only a nonuse or abandonment claim, when default
judgment is entered in the case, where there was no appearance by a
defendant, and where no filings were made other than the petition to
cancel.
III. Rulemaking Goals and Strategies: Consistent with federal fee
setting standards, the Office conducted a biennial review of fees,
costs, and revenues that began in FY 2019 and found that fee
adjustments were necessary to provide the resources needed to improve
trademark operations and to implement the USPTO 2018-2022 Strategic
Plan (Strategic Plan). As a result, the fee adjustments in this rule
directly align with the Office's strategic goals and key objectives as
outlined in this section. Consistent with the USPTO's strategic goals
and obligations under the AIA, the overall objective of this rule is to
ensure the fee schedule generates sufficient revenue to recover the
prospective aggregate costs of trademark and TTAB strategic
improvements and operations, including the associated administrative
costs. Fees must be set at levels projected to cover the cost of future
budgetary requirements and maintain an operating reserve at a
sufficient level.
Trademark applications in FY 2019 represented filings in a record
number of over 673,000 classes of goods/services. During ordinary
economic times, application filings generally have increased by an
average historical rate of between 7% and 8% per year. To ensure its
ability to keep pace with demand, the USPTO is in the midst of a multi-
year IT systems and infrastructure upgrade, which is critical to the
future of the U.S. trademark registration system and represents a
significant cost to the Office.
Trademark filings--and, therefore, total revenue--are sensitive to
general economic conditions. In the last two recessions, new
application filings declined (2001, by -21.0%; 2002, by -12.7%; and
2009, by -12.3%). So far, in the current uncertain economic
environment, trademark application filings are showing some resilience;
however, with a protracted pandemic, the risk of a major filing decline
remains high. The USPTO anticipates a return to historical growth rates
as trademark applicants return to expected activities. However, current
fees have not kept up with increases in salary, IT and other costs, and
a return to traditional growth rates means a return to additional costs
for new staff and supporting resources including information
technology. In general, the proposed increases are commensurate with
the size of the cost recovery shortfalls in trademark examination and
TTAB proceedings. As discussed above, with the larger net costs from
applications, revenue surpluses derived from other services, such as
ITU and maintenance payments, are being reduced. The increases in this
rule are designed to address those shortfalls, which as noted above are
projected to increase in the future without the fee adjustments being
made in this rule.
The USPTO, as a fully fee-funded agency, retains an operating
reserve to ensure sufficient financial resources are available to
support and promote public confidence in the U.S. intellectual property
(IP) system. The operating reserve enables the USPTO to maintain
operations by absorbing and responding to immediate and temporary
changes in its economic and operating environments or circumstances,
such as unexpected economic downturns, reducing the risk for short-term
financial actions and providing the security for long-term strategic
investments, such as IT development projects that are crucial to
operations and customer support. An adequate operating reserve also
allows the USPTO to continue serving its users in the event of a short-
term lapse in congressional appropriations or other disruptions to the
agency's cash flow.
The fee schedule in effect prior to this rulemaking was
insufficient to satisfy future budgetary requirements to: (1) Meet the
expenses that will result from projected filings; (2) recover the costs
necessary to support trademark and TTAB operations and administrative
services; (3) make necessary investments in IT systems, IP policy, and
USPTO programs related to trademark and TTAB operations; and (4)
achieve optimal operating reserve levels to ensure financial
sustainability. Budgetary requirements increased to address unplanned
pay raises,
[[Page 73200]]
additional review of filings for potential fraud, post-registration
audits, agency administrative operations, and continued investments in
IT that required additional funding beginning in FY 2020. IT
investments include modernization of IT systems to create a fully
electronic workflow and state-of-the-art technological resources for
external and internal users. New systems will also be deployed that
enhance access for external trademark customers and stakeholders.
Operational gains from these IT investments will allow for a broader
public base to more efficiently and effectively apply for, register,
and maintain trademark registrations and to continue to invest in and
reap the benefits of strong brands, which will ultimately benefit
American consumers and sustain economic activities.
Without the fee adjustments enacted in this rule, based on the
assumptions found in the FY 2021 Congressional Justification, budgetary
requirements would exceed revenues and available operating reserve
balances beginning in FY 2022 through FY 2025 (see Table 1).
Table 1--Trademark Financial Outlook Without Final Rule Fees--FY 2021-FY 2025
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Dollars in millions
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FY 2021 FY 2022 FY 2023 FY 2024 FY 2025
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Projected Fee Collections....... $367 $390 $412 $430 $447
Other Income.................... 6 6 6 6 6
Total Projected Fee Collections 373 396 418 436 453
and Other Income...............
Budgetary Requirements.......... 419 460 462 478 497
Funding to (+) and from (-) (46) (64) (44) (42) (44)
Operating Reserve..............
Operating Reserve Balance....... 26 (38) (81) (123) (167)
Over/(Under) Minimum Level...... (49) (113) (156) (198) (242)
Over/(Under) Optimal Level...... (184) (268) (312) (362) (415)
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Table 2 below shows the available revenue and operating reserve
balances by fiscal year, after including the new fee rates in the
projected fee collections. The numbers in the table below were
developed in late calendar year 2019, prior to the COVID-19 pandemic,
in support of the FY 2021 Congressional Justification, and have been
updated to remove the previously proposed fee for requests for
reconsideration filed more than three months from the date of issuance
of a final Office action. Under current circumstances, it is difficult
to predict what the actual numbers will be. However, since the USPTO
was projecting insufficient funding even during an economic expansion
(see Table 1), and the trademark financial outlook has worsened since
the onset of the pandemic, the fee increase is a necessary step to put
the Office on a sustainable financial path.
Table 2--Trademark Financial Outlook Including Final Rule Fees--FY 2021-FY 2025
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Dollars in millions
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FY 2021 FY 2022 FY 2023 FY 2024 FY 2025
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Projected Fee Collections....... $443 $471 $497 $518 $538
Other Income.................... 6 6 6 6 6
Total Projected Fee Collections 449 477 503 524 544
and Other Income...............
Budgetary Requirements.......... 419 460 462 478 497
Funding to (+) and from (-) 30 17 41 46 47
Operating Reserve..............
Operating Reserve Balance....... 101 118 159 206 253
Over/(Under) Minimum Level...... 26 43 84 131 178
Over/(Under) Optimal Level...... (108) (112) (72) (33) 4
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Additional information on estimated costs can be found in the USPTO
FY 2021 Congressional Justification at https://www.uspto.gov/about-us/performance-and-planning/budget-and-financial-information, which
includes two revenue estimates, one based on the current fee schedule
and another based on the fee schedule proposed in the NPRM (see
Appendix IV: USPTO Fees--Change from FY 2020 PB to FY 2021 PB).
Another fee setting goal of this rulemaking is to set individual
fees to further key IP protection policy objectives while taking into
account the cost of a particular service. The USPTO seeks to enhance
trademark protection for IP rights holders by offering application
processing options and promoting IP protection strategies.
A. Aligning Fees With Costs: The first fee setting policy
consideration is to set and adjust trademark fees to more closely align
them with the costs of providing the relevant services. The overall
goal is to achieve total cost recovery from fee collections for
trademark and TTAB operations, including associated administrative
services. In determining which fees to set or adjust, this rule targets
changes to the category of fees in which the gap between the cost of
the service and the current fee rate is the greatest, and where
narrowing that gap serves policy objectives. As noted above,
application filing fees, petition fees, and TTAB fees do not fully
cover the costs of processing and examination for those services.
Instead, these costs are recovered or subsidized from fees paid for
intent-to-use and post-registration maintenance filings that return
more than the costs of processing such filings. As noted above, the
USPTO anticipates, based on current trends, that this shortfall in cost
recovery for these front-end services will continue absent the fee
adjustments made in this rule. For example, using FY 2019 earned
revenue compared to costs or expenses, application filing fees
recovered 65% of expenses, petition (trademark processing) fees
recovered 50% of expenses, and TTAB fees recovered just 31% of expenses
(see Table 3).
[[Page 73201]]
Table 3--Earned Revenue vs. Expense by Trademark Product
[Dollars in millions]
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Earned revenue
FY 2019 earned FY 2019 FY 2019 vs. expense or
Trademark products revenue expense variance cost recovery
(percent)
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Application Filings......................... $190 $292 $(102) 65
Intent to Use/Use Fees...................... 50 17 33 291
Trademark Processing Fees................... 3 5 (2) 50
Maintaining Exclusive Rights................ 80 14 66 571
Madrid Protocol............................. 4 1 3 427
Other Trademark Fees........................ 11 9 2 119
Trademark Trial and Appeal Board............ 8 28 (20) 31
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Total................................... 346 366 (20) 95
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The fee schedule enacted in this rule will increase the percentage
of fee revenues collected over a five year period for application
filings by 21%, for petition filings by 73%, and for TTAB filings by
58% overall, thereby increasing the cost recovery for these services
(see Table 4).
Table 4--Increase in Cumulative Revenue Over Five Years, by Product
[Dollars in millions]
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Projected cumulative revenue,
FY 2021-FY 2025
--------------------------------
Trademark products Current fee % Increase
rates Final fee
(baseline) rates
----------------------------------------------------------------------------------------------------------------
Application Filings............................................. $1,079 $1,301 21
Maintaining Exclusive Rights.................................... 518 659 27
Intent to Use/Use............................................... 293 293 0
Madrid.......................................................... 29 42 45
TTAB............................................................ 53 83 58
Petition........................................................ 18 30 73
Other Processing Fees........................................... 58 58 0
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Total....................................................... 2,047 2,467 20
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Estimated revenues account for adjustments made to fee rates after
considering public comments received in regard to this rulemaking.
B. Protecting the Integrity of the Trademark Register: The second
fee setting policy consideration is to set or adjust fees to provide
resources necessary to improve the accuracy of the trademark register.
The trademark register is a reflection of marks that are actually in
use in commerce in the United States for the goods and/or services
identified in the registrations and its accuracy serves a critical
purpose for the public and for all registrants. An accurate register
allows the public to rely on the register to determine potential
trademark rights. By registering trademarks, the USPTO has a
significant role in protecting consumers, as well as providing
important benefits to American businesses, by allowing them to
strengthen and safeguard their brands and related investments. The
public relies on the register to determine whether a chosen mark is
available for use or registration. When a person's search of the
register discloses a potentially confusingly similar mark, that person
may incur a variety of resulting costs and burdens, such as those
associated with investigating the actual use of the disclosed mark to
assess any conflict, initiating proceedings to cancel the registration
or oppose the application of the disclosed mark, engaging in civil
litigation to resolve a dispute over the mark, or changing business
plans to avoid the use of that person's chosen mark. In addition, such
persons may incur costs and burdens unnecessarily if a registered mark
is not actually in use in commerce in the United States or is not in
use in commerce in connection with all the goods and/or services
identified in the registration. An accurate and reliable trademark
register helps avoid such needless public costs and burdens.
This rule sets and adjusts fees to encourage actions by trademark
filers that help facilitate more efficient processing and the prompt
conclusion of application prosecution by assessing fees for second and
subsequent extension requests to file appeal briefs. In addition,
filings that may result in a less accurate register, including post-
registration filings to maintain registrations that may include goods
or services for which the mark is no longer in use, are among those
filings targeted under this objective. The new fee structure for
requests to delete goods, services, and/or classes from a registration
will protect and improve the integrity of the register and the
efficiency of the process by incentivizing both more timely filings and
proactive action by registrants to ensure the accuracy of their
registrations. The increased efficiencies realized through this rule
will benefit all applicants and registrants by allowing registrations
to be granted sooner and more efficiently by removing unused marks and
unsupported goods and services from the register. In addition, revenue
generated by this rule allows for continuing development of methods
[[Page 73202]]
for detecting and addressing filing practices that threaten the
integrity of the register.
C. Improving the Efficiency of USPTO Processes: The third fee
setting policy consideration pertains to improving the efficiency of
the trademark and TTAB processes. To that end, this rule targets
changes to fees that will administratively improve application and
appeal processing by incentivizing more complete and timely filings and
prosecution. For example, TEAS Plus, the lowest-cost TEAS application
filing option, has more stringent initial application requirements and
thus tends to result in a more complete application, which expedites
processing, shortens pendency, minimizes manual processing and the
potential for data-entry errors, and is thus more efficient for both
the filer and the USPTO. While the per-class fee for TEAS Plus is
increasing by $25 (to $250) under this rule, the per-class fee for TEAS
Standard, which has less stringent initial application requirements, is
increasing by $75 (to $350), resulting in a difference of $100 in the
per-class fees of the respective filing options (double the current
difference of $50), providing a greater financial incentive to choose
the more efficient TEAS Plus filing option.
D. Ensuring Financial Sustainability to Facilitate Effective
Trademark Operations: The fourth fee setting policy consideration
pertains to ensuring sufficient revenue to recover the aggregate costs
of Trademark and TTAB operations in future years. Additional resources
are necessary to fund the multi-year project to upgrade IT systems and
infrastructure and other business improvements, while also maintaining
a sufficient operating reserve balance to ensure sustainable funding
that will mitigate the risk of unplanned financial disruptions that
could threaten operations and planned investments.
Operating reserves are intended to mitigate operational risk caused
by a lack of financial resources. The USPTO defines an optimal balance
and a minimum acceptable balance for the trademark operating reserve.
The optimal balance sets the goal for building and maintaining the
operating reserve--it defines the desired level of operating reserves
the USPTO wishes to maintain. The USPTO analyzes risks related to
spending and fee collections, considering the likelihood and
consequence of each and its impact to financial stability, in
determining the optimal reserve level. The USPTO has determined six
months of operating or budgetary requirements to be the optimal
trademark reserve.
This rule will provide a stable financial foundation to fulfill the
USPTO mission and maintain performance. The budgetary requirements of
the USPTO are comprised of substantial fixed costs, which require
increased fee rates to ensure revenue sufficient to recover aggregate
costs. Based on the assumptions found in the FY 2021 Congressional
Justification, this rule will produce sufficient revenue to recover the
aggregate costs of Trademark and TTAB operations, including executing
USPTO strategic goals, policy objectives, and initiatives; creating a
better and fairer cost-recovery system that balances subsidizing costs
to encourage broader usage of IP rights-protection mechanisms and
participation by more trademark owners; promoting a strong incentive
for more efficient filing behaviors; and protecting the federal
trademark register as a reliable indicator of marks in use in commerce.
Based on the assumptions found in the FY 2021 Congressional
Justification, the USPTO projects that trademark fee collections in
total would increase by an average of 20% per year, or $76 million to
$91 million per year, over the five-year planning period as compared to
the baseline (see Table 5).
Table 5--Annual Increases in Aggregate Revenue
[Dollars in millions]
--------------------------------------------------------------------------------------------------------------------------------------------------------
FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 Average
--------------------------------------------------------------------------------------------------------------------------------------------------------
Aggregate Revenue--Baseline............................. $367 $390 $412 $430 $447 $409
Aggregate Revenue--Final Rule........................... $443 $471 $497 $518 $538 $493
$ Increase.............................................. $76 $81 $85 $88 $91 $83
% Increase.............................................. 21% 21% 20% 20% 20% 20%
--------------------------------------------------------------------------------------------------------------------------------------------------------
The projections of both aggregate revenues and costs are based on
point-in-time estimates and assumptions that are subject to change.
There is considerable uncertainty in estimating both fee collections
and budgetary requirements in ordinary times, and even more so now. In
addition to the COVID-19 pandemic, a number of other risks could
materialize (e.g., lower application volumes, decreased renewals,
recompetition of major contracts, lease renewals, changing assumptions
about presidentially authorized or congressionally mandated employee
pay raises, etc.) that could change the USPTO's budgetary outlook.
These estimates are refreshed annually in the formulation of the
USPTO's Budget, and the USPTO continues to gain new data as the
pandemic unfolds.
IV. Comments and Responses: In response to the NPRM published on
June 19, 2020, the USPTO received comments from four intellectual
property organizations and fifteen individual commenters, representing
law firms, small business owners, and individuals. These comments are
posted on the Regulations.gov website at https://beta.regulations.gov/document/PTO-T-2019-0027-0001.
The Office received comments both generally supporting the need to
increase fees and objecting to particular proposed fee increases. Four
major user groups representing thousands of trademark professionals and
trademark owners, who run the gamut from large corporations, to small
businesses and individuals submitted comments on behalf of their
members. The user groups generally acknowledged and supported the need
to increase fees to further USPTO's strategic objectives and facilitate
effective operations, including encouraging e-filing and enabling
needed improvements in technology and technology infrastructure.
However, the user groups objected to or had comments regarding some
specific fee increases, as discussed below. In addition, at least one
user group noted that some business owners struggle to pay the current
fees and suggested that the USPTO consider the state of the U.S.
economy before issuing the final rule. Several of the other commenters
objected to any increase in fees, as they believed such increases
placed hardships on small business owners. Multiple commenters
requested additional information on the rationales for the increases
and that the Office take
[[Page 73203]]
the current economy into consideration before issuing a final rule.
The USPTO appreciates the commenters' support of the need to
increase revenue as well as their concerns regarding the impact of the
rule on small businesses owners. As noted above, in formulating this
rule, the USPTO considered the state of the U.S. economy, the
operational needs of the agency, and comments submitted in response to
the NPRM. The USPTO is also mindful of the current difficulties many
USPTO users are experiencing as a result of the COVID-19 pandemic. The
USPTO has undertaken many efforts to provide various types of relief,
including deadline extensions and fee postponements. Additionally, in
the FY 2021 Congressional Justification, implementation of the fee rule
was slated for August of 2020. Considering the impact of the pandemic,
and in response to the stakeholder feedback, the USPTO paused
development of the fee rule over the summer of 2020 and deferred the
timing of implementation of the fee rule from August 2020 to January
2021. This is the first change of trademark fee rules in almost four
years. Fees were adjusted in January 2017, and many of those changes
were to encourage electronic filing by increasing fees for certain
paper submissions. See 81 FR 78042 and FR 81 72694. Since that time,
the USPTO has made electronic filing mandatory except in limited
circumstances.
Further, after considering all comments, the Office has withdrawn
the proposed fee for requests for reconsideration filed more than three
months from the date of issuance of a final Office action, which
commenters noted are a frequently used option for applicants
prosecuting applications.
It should also be noted that USPTO's fees for trademark services
remain relatively small compared to the legal fees many applicants
incur in seeking those services. Many applicants engage attorneys to
handle their filing with the Office, and based on data concerning the
cost of trademark representation, including from the American
Intellectual Property Law Association's 2019 Report of the Economic
Survey, USPTO understands that trademark fees represent a small
fraction of the legal fees a filer would generally pay to have an
attorney represent them during the application process. In a TTAB
proceeding, where even more time and work is required by an attorney
representing a party before the Board, the fees for TTAB services would
generally be an even smaller fraction of attorney fees associated with
the representation. Understanding that legal fees are a significant
expense, the USPTO will continue to help to minimize the cost of the
application process for small businesses through the USPTO's law school
clinic program, which enables qualified individuals and small
businesses in need of trademark legal services to receive pro bono
assistance in filing applications and responding to Office actions in
trademark applications.
The Office also notes that some of the fees being increased in this
rule are paid by only a relatively small number of applicants--such as
TTAB fees and letter of protest fees, which are not incurred by the
majority of applicants with trademark business before the Office--and
therefore these fee increases are unlikely to impact a large number of
applicants, including small business owners.
Some commenters also expressed concerns with specific individual
fees. In the interest of providing context, when the USPTO received
comments about a specific fee, they are summarized, and the USPTO's
responses are provided, in the discussion below of the individual fee
rationale.
V. Individual Fee Rationale: Based on the assumptions found in the
FY 2021 Congressional Justification, the USPTO projects the aggregate
revenue generated from this rule will recover the prospective aggregate
costs of its trademark and TTAB operations and associated
administrative services. However, each individual fee is not
necessarily set at an amount equal to the estimated cost of performing
the activities related to the fee. Instead, as described above, some of
the fees are set to address increases in budgetary requirements as well
as balance several key policy considerations, and executing these
policy considerations through the trademark fee schedule is consistent
with the goals and objectives outlined in the Strategic Plan. Once the
cost recovery and key policy considerations are factored in, fees are
set at, above, or below individual cost-recovery levels for the service
provided. Additional details on the cost methodologies used to derive
the historical fee unit expenses can be found in ``USPTO Fee Setting--
Activity Based Information and Trademark Fee Unit Expense Methodology''
at http://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting.
A. Trademark application filing fees: This rule increases all
application filing fees by varying amounts. The filing fee for a paper
trademark application is increasing by $150, from $600 per class to
$750 per class. The TEAS Plus application filing fee is increasing by
$25, from $225 per class to $250 per class. The TEAS Standard
application filing fee is increasing by $75, from $275 per class to
$350 per class. The fee for filing an application under section 66(a)
of the Act is increasing by $100, from the equivalent of $400 per
class, as paid in Swiss francs, to the equivalent of $500 per class, as
paid in Swiss francs.
Comments: One commenter expressed support for the increase in the
paper application filing fee. Four commenters expressed concerns about
the increase in electronic initial application fees. Of those four
comments, one generally commented that increases will impact small
businesses, while the others expressed concern about the amount of the
increase in the TEAS Standard application and resulting gap in cost
between TEAS Plus and TEAS Standard applications.
Response: The USPTO appreciates the commenter's support of the need
to increase the paper application fee. The USPTO also appreciates
commenters' concerns regarding the increase in the TEAS Standard fees
and impact on small business owners. Initial application fees are
generally kept lower than the full processing cost in order to enable
broader participation in the trademark registration system. The
increase in the fees will help close the gap between the processing
cost and incoming revenue while still keeping the fees below the full
processing cost. The USPTO also notes that filers continue to have the
option to select TEAS Plus, which is only increasing by $25, from $225
per class to $250 per class, which is less than current TEAS Standard
fee rates, and encourages filers, including individuals and small
business owners, to use this less expensive filing option.
This rule also decreases the processing fee for failure to meet the
filing requirements under Sec. 2.22(a) for a TEAS Plus application
from $125 to $100 per class. Thus, if the processing fee is required in
a TEAS Plus application, the resulting per-class fee will equal the
per-class fee for a TEAS Standard application. If a decrease in the
processing fee were not enacted, the per-class fee for an application
initially filed as TEAS Plus would exceed the fee for a TEAS Standard
application, creating a disincentive to choose TEAS Plus, which, as
noted above, tends to be more efficient for both filers and the USPTO.
B. Fees for Paper Trademark Filings: This rule maintains the cost
differential for all paper filings to better align fees with costs by
setting all trademark processing fees for paper filings $100 to
[[Page 73204]]
$200 higher than the corresponding electronic filing fees (per class,
when applicable). Overall, it is more costly for the USPTO to process
paper filings than electronic filings, and that cost is not recovered
by the current fees for paper filings. Raising the fees for paper
filings will help offset the higher processing costs and move the USPTO
closer to total cost recovery.
A final rule published on July 31, 2019 (84 FR 37081), which became
effective on February 15, 2020 (84 FR 69330), requires applicants and
registrants to file electronically through TEAS all trademark
applications based on section 1 and/or section 44 of the Act, 15 U.S.C.
1051, 1126, and all submissions filed with the USPTO concerning
applications or registrations, with limited exceptions. This followed a
final rule published on October 7, 2016 (81 FR 69950), which became
effective on January 14, 2017, requiring all parties in TTAB
proceedings to file electronically through the Electronic System for
Trademark Trials and Appeals (ESTTA). At present, the vast majority of
filings are submitted electronically. For example, in FY 2019, less
than 0.02% of initial applications were filed on paper. Thus, an
increase in paper filing fees will have no impact on the vast majority
of applicants, registrants, and parties to Board proceedings, who
already meet the requirement to file documents electronically.
C. Other Trademark Processing Fees: This rule also increases
certain other trademark processing fees to further key policy goals.
The rule sets out increases to the fees for petitions to the Director
as well as section 8 and section 71 affidavits. In addition, the rule
sets new fees and procedural regulations for filing a letter of
protest, and for deleting goods, services, and/or classes from a
registration after submission and prior to acceptance of a section 8 or
section 71 affidavit. Finally, the USPTO decided not to implement the
proposed new fee for a request for reconsideration filed more than
three months, but within six months, after the issue date of a final
action or with a petition to revive an abandoned application.
(1) Petitions to the Director in Trademark Matters: This rule
separates petitions to the Director into two types. Each type has a new
and distinct fee amount with different levels of increases from the
current single fee. The rule increases the fee for filing a petition to
the Director for petitions filed under Sec. Sec. 2.146 or 2.147 by one
amount and establishes a separate fee code for petitions to revive
filed under Sec. 2.66 that increases the fee by less than the fee for
petitions filed under Sec. Sec. 2.146 or 2.147. The fees enacted
herein are intended to facilitate effective trademark operations. The
fee for electronically filing a petition to the Director under
Sec. Sec. 2.146 or 2.147 is increasing from the current fee of $100 to
$250, and the fee for filing on paper is increasing from $200 to $350.
The fee for electronically filing a petition to revive an abandoned
application under Sec. 2.66 is increasing from the current fee of $100
to $150, and the fee for filing on paper is increasing from $200 to
$250.
Generally, petitions under Sec. Sec. 2.146 or 2.147 extend the
trademark registration and post-registration processes by introducing
additional processing and examination into the timeline, which may lead
to applications and registration maintenance documents remaining in a
pending status for longer periods of time, potentially blocking others.
They can also be used to delay processing of TTAB matters. By
increasing fees for these filings, the USPTO discourages misuse of the
process through unnecessary filings that delay prosecution of an
application or registration maintenance document.
Comments: One commenter indicated that they did not oppose the
increase to the fee for petitions to the Director under Sec. 2.66 to
revive an abandoned application and also generally supported or are
neutral regarding the increase in the fee for petitions to the Director
under Sec. Sec. 2.146 and 2.147. Another commenter noted that the
amount of the increase for petitions under Sec. Sec. 2.146 and 2.147,
from $100 to $250, seems significantly beyond the rate that is
appropriate for periodic increases.
Response: The USPTO appreciates the feedback regarding the increase
in fees for a petition to the Director. The fee for filing a petition
to the Director has not increased since the fee was established, more
than 30 years ago. Under this rule, petitions to the Director have been
separated by type. Petitions under Sec. 2.66 to revive an application
abandoned for failure to respond to an Office action or notice of
allowance are increased by a smaller amount because they cost less to
process. These petitions generally require less processing when the
filer complies with certain criteria in the submission itself.
Petitions to the Director under Sec. Sec. 2.146 and 2.147 usually
include unique facts that require a lengthier review process. The
increase in the fees for each type of petition will help to recoup more
of the costs to process these filings. Additionally, the increase will
further policy considerations consistent with the goals and objectives
outlined in the Strategic Plan because this fee should discourage
misuse of the petition process through unnecessary filings that delay
prosecution of an application or registration maintenance document, or
an appeal or trial proceeding before the TTAB.
(2) Section 8 or Section 71 Affidavits: Fees from post-registration
filings have historically been set to recover more than the costs of
processing the filings. The fees are used to help offset the cost of
application processing and examination as well as TTAB trial
proceedings and appeals--services for which the fees charged generally
do not recover the full cost. In general, fewer post-registration
maintenance filings are made by pro se and foreign registrants, who
comprise a growing share of new applicants. Based on recent pre-
pandemic trends, the overall percentage of registrations being
maintained is decreasing. Therefore, the USPTO anticipates that it will
face a continuing decrease in revenue from maintenance filings going
forward if adjustments are not made. Increasing fees for section 8 and
section 71 affidavits is necessary to continue to enable the USPTO to
achieve aggregate cost recovery while allowing other fees to remain
below their individual unit costs.
This rule also increases the fees for these filings in part because
of the post-registration audit program, which was implemented as a
result of the 2012 Post Registration Proof of Use Pilot Program (pilot
program). During the pilot program, section 8 or section 71 affidavits
for 500 registrations were reviewed as to actual use of the marks in
connection with the goods and/or services identified in the
registrations in order to assess the accuracy and integrity of the
trademark register. The findings of the pilot program demonstrated a
need for ongoing measures for additional review of these filings on a
permanent basis. Since codifying the authority to require additional
information and evidence concerning the use of registered marks in
connection with section 8 and 71 maintenance filings in 2017 (82 FR
6259), the USPTO has conducted additional reviews of the actual use of
the marks in 8,276 section 8 or section 71 affidavits through January
1, 2020. In more than 50% of the registrations undergoing the
additional review, the registrations have either been removed from the
register or had goods or services deleted, resulting in a more accurate
trademark register. The fee increases implemented in this rule will
also support the cost of this additional review.
[[Page 73205]]
Comments: Three commenters expressed concerns about the increase in
fees for filing a section 8 or section 71 affidavit. One commenter
stated that the increase of $100 is excessive in light of the $25
increase four years ago. A second commenter indicated the increases
will decrease renewal filings, particularly among small business
owners. The third commenter stated that the increase in fees is
significant. This commenter also mentioned increases to the section 15
fee. The USPTO notes that although an increase to the section 15 fee
was initially considered, it was not proposed in the NPRM.
Response: The USPTO appreciates the commenters' concerns regarding
the increase in the fees. These post-registration filing fees have
historically been set to recover more than the costs of processing the
filings in order to offset costs in other parts of the process. In
addition, these fees are increasing to offset the cost of the legal
examination required to conduct the post registration audit program, a
valuable tool for improving the accuracy and integrity of the trademark
register.
Costs for this additional examination were discussed in the last
fee adjustment in 2017. At that time, the Office was in the process of
reviewing the findings from the pilot program and codifying regulations
for the permanent audit program. The results of this ongoing audit
program indicate that not only should this program continue, but also
that the need for legal examination of an increasing number of filings
is warranted. Based on these findings, the increase in fees is
necessary to help offset costs for this program and allow other fees to
remain below their individual unit costs.
(3) Letters of Protest in Trademark Applications: This rule sets a
new $50 fee for filing a letter of protest. A letter of protest allows
a third party to bring to the attention of the USPTO evidence bearing
on the registrability of a mark in a pending application. In this way,
the letter-of-protest procedure can potentially improve the quality of
the examination of a given application. The procedure is not, however,
a substitute for the statutory inter partes opposition and cancellation
procedures available to third parties who believe they would be damaged
by the registration of the involved mark. A letter of protest, properly
supported, should aid in examination without causing undue delay or
compromising the integrity and objectivity of the ex parte examination
process, which is designed to involve communications regarding an
application only between the applicant and the Office. For this reason,
the protestor is not permitted to submit legal arguments, contact the
examining attorney assigned to the subject application, or participate
in any Office proceedings relating to the protest or the application to
which it is directed. The limited involvement of the third party ends
with the filing of the protest. The questions of whether evidence is
relevant to a ground for refusal appropriate in ex parte examination,
whether a refusal should be made, or whether a registration will issue
are matters for the Office to determine during the ex parte examination
process that occurs between the applicant and the Office acting on
behalf of the public.
The Office incurs costs associated with the work of reviewing and
processing each letter. The filing volume for letters of protest has
steadily increased in recent years, with the USPTO receiving 2,726 in
FY 2017; 3,480 in FY 2018; and 4,106 in FY 2019. Thus, letters of
protest continue to generate increasing additional expenses, which will
likely further increase in the future.
Comments: The Office received comments both generally supporting
and objecting to the new fee to file a letter of protest. Commenters
supporting the fee stated that the amount is reasonable and appropriate
to recoup costs. Two of the commenters indicated that the fee should be
kept as low as possible, with one suggesting that the fee should be set
at $25 instead of $50, and one suggesting that the fee should be
refunded if the letter of protest is granted. Several other commenters
expressed concerns about the impact to small businesses by requiring a
fee to file a letter of protest. These commenters also noted that
letters of protest aid the Office by bringing to light information and/
or refusals that an examining attorney may miss. These commenters
stated that the Office should not charge a fee for a process that
allows the public to aid in the registration process.
Response: The USPTO understands the desire to keep the fee low so
as to not discourage the use of the letter-of-protest process. However,
given the costs to process these filings, the USPTO has determined that
a fee is necessary to help offset some of the processing costs. Similar
to petitions under Sec. Sec. 2.146 and 2.147, review of letters of
protest cannot be automated because they include unique facts requiring
review by staff attorneys to ensure guidelines are met before the
information is sent to the examining attorney for review. In FY 2019,
the evidence in approximately 25% of pre-publication letters of protest
and 94% of post-publication letters of protest was not forwarded to the
examining attorney. This suggests that a significant portion of filings
do not contain relevant information or evidence, do not meet the
requirements for a letter of protest, or are otherwise unnecessary.
These filings generate additional costs without a proportionate
corresponding benefit. The fee set by this rule is below the amount
required to recoup the full processing cost. The fee is intended to be
at a level high enough to partially offset processing costs and deter
the filing of unsupported or irrelevant filings, but low enough so as
not to discourage the filing of relevant, well-supported letters of
protest. This fee is also consistent with the recommendations contained
in the TPAC report that it fall within the $20 to $100 fee range. The
USPTO does not anticipate that the letter of protest fee will impact a
large number of parties with business before the Office. The letter of
protest is a purely voluntary process that most applicants and
registrants do not use. In addition, the letter of protest process was
developed many years ago when examining attorneys had limited resources
for gathering evidence to support refusals of registration. The tools
available to examining attorneys today are far more advanced, reducing
the need for letters of protest.
In connection with this fee, the USPTO also codifies a new
regulatory section at 37 CFR 2.149, which sets out the procedures for
letters of protest. The new regulatory section is based on the existing
longstanding procedures for letters of protest, which are currently set
forth in the TMEP, with appropriate modifications that more closely
align the procedures with those for similar third-party submissions and
protests in patent applications under 37 CFR 1.290 and 1.291 and as set
out in MPEP Sec. Sec. 1134 and 1901. This action is being undertaken
at this time due to the rising volume of letters of protest in recent
years, which has resulted in the need to codify procedures for
submission of such protests in the regulations and to adjust those
procedures to deal efficiently with this higher volume of filings.
Under the procedures set forth in the regulatory text at Sec.
2.149, a letter of protest must be timely filed through TEAS and must
include: (1) The fee; (2) the serial number of the pending application
that is the subject of the protest; (3) an itemized evidence index that
includes identification of the documents, or portions of documents,
being submitted as evidence and a
[[Page 73206]]
concise factual statement of the relevant grounds for refusal of
registration appropriate in ex parte examination that each identified
item supports; and (4) a clear and legible copy of the supporting
evidence identified in the evidence index. If the letter of protest is
filed before publication of the subject application, the evidence must
be relevant to the identified ground(s) for refusal. If filed on the
date of or within 30 days after publication of the subject application,
the evidence must establish a prima facie case for refusal on the
identified grounds, such that failure to issue a refusal or make a
requirement would likely result in issuance of a registration in
violation of the Act or regulations.
The letter-of-protest process is intended to provide an opportunity
for the protestor to efficiently and effectively provide relevant
evidence in support of the proposed legal grounds for refusing
registration of the application identified in the submission. It is
inappropriate for the protestor to ``dump'' evidence and leave it to
the Office to determine its possible relevance. Therefore, an index is
required for all submissions listing the documents submitted as
evidence and the ground(s) for refusal each item of evidence supports.
In addition, the procedures also require that the submission not total
more than 10 items of evidence in support of a specified ground of
refusal and not more than 75 total pages of evidence without a detailed
and sufficient explanation that establishes the special circumstances
that necessitate providing more than 10 items of evidence per refusal
ground or more than 75 total pages of evidence. This requirement
encourages the submission of evidence that is succinct, not
duplicative, and limited to the most relevant evidence. It should be a
rare situation in which more than 10 items of evidence or 75 total
pages of evidence is necessary to support the proposed legal grounds
for refusal. However, some examples of situations that might constitute
such special circumstances are when: (1) A subject application includes
multiple classes and the protestor needs to provide evidence of
relatedness of the goods and/or services for all classes in the
application; (2) evidence submitted to support a refusal for
descriptiveness consists of fewer than 10 discrete items, but each item
comprises multiple pages, totaling more than 75 pages; or (3) a
protestor raises more than one ground for refusal and the evidence
necessary to support all grounds raised totals more than 10 items or 75
pages.
A letter of protest submitted by a third party is not made part of
the application record to preserve the ex parte nature of examination.
If the USPTO determines that the submission complies with the proposed
regulations, only the specified grounds for refusal and the provided
evidence relevant to the grounds for refusal would be included in the
application record for consideration by the examining attorney. A third
party filing a letter of protest will not receive any communication
from the USPTO relating to the submission other than acknowledgement
that it has been received by the Office and notification of whether the
submission is found to be compliant or non-compliant. Also, the Office
will not accept amendments to a non-compliant submission that was
previously filed or requests to reconsider a compliance determination.
Rather, the third party may submit a new letter of protest that is
compliant if the time period for submitting a letter of protest has not
closed. A protestor does not, by the mere filing of a protest, obtain a
``right'' to argue the protest before the Office. As noted above, the
questions of whether evidence is relevant to a refusal ground
appropriate in ex parte examination, whether a refusal will be made, or
whether a registration will issue are matters for the Office to
determine as part of the ex parte examination process that occurs
between the applicant and the Office acting on behalf of the public.
Therefore, the procedures also provide that: (1) The Office's
determination whether to include submitted evidence in the record of an
application would be final and non-petitionable, (2) the limited
involvement of the third party ends with the filing of the letter of
protest, and (3) the third party may not directly contact the examining
attorney assigned to the application.
(4) Requests for Reconsideration in Trademark Applications: The
USPTO has decided not to implement the proposed new fee for a request
for reconsideration filed more than three months, but within six
months, after the issue date of a final action or with a petition to
revive an abandoned application. The proposed fee was $400 for a TEAS
submission and $500 for a paper submission. No fee was proposed to be
incurred for requests filed within three months of the issue date of a
final action.
Comments: Seven commenters objected to and expressed a variety of
concerns regarding implementation of a fee for requests for
reconsideration of a trademark application. One commenter noted that
the proposed fee would impose a significant financial burden late in
the process. Another commenter noted that the proposed fee would be
higher than the initial application fee.
Response: After further review, the USPTO has determined that the
proposed fee might not provide significant enhancement to the
timeliness or quality of the examination process and would impose an
additional financial burden to administer. Given these considerations
and the public concerns about such a fee, including the impact of
potential fee increases on small businesses and individuals, the USPTO
withdraws this proposed fee.
(5) Deletion of Goods, Services, and/or Classes from Registrations:
Currently, amendments to registrations may be made by filing a section
7 request for amendment or correction of a registration for $100, if
submitted through TEAS, or $200, if filed on paper. This rule sets a $0
fee for a section 7 request that is filed through TEAS prior to the
submission of a section 8 or section 71 affidavit and that consists
only of a request to delete specified goods, services, and/or classes.
As noted above, the current practice that results in no additional
amendment fee for section 8 or section 71 affidavits that specify fewer
than all of the goods or services listed in the registration when the
affidavit is filed, which results in the deletion of goods, services,
and/or classes not included in the affidavit from the registration, is
unchanged. However, a fee will be assessed if goods, services, and/or
classes are deleted in a section 7 request, a response to an Office
action, or a voluntary amendment filed after submission, but prior to
the acceptance, of a section 8 or section 71 affidavit. This rule sets
a new fee of $250 per class, if filed through TEAS, or $350 per class,
if a paper filing is permitted, for deleting goods, services, and/or
classes from the registration under such circumstances.
The $0 fee option is available to, and the $250 (or $350) per-class
fee will be assessed against, all registrants. Thus, the fees are not
related to the post-registration audit program or a TTAB finding. The
fees are intended to improve the accuracy and integrity of the register
by encouraging all registrants to perform due diligence before filing a
section 8 or section 71 affidavit to maintain a registration, so as to
determine the goods, services, and/or classes for which the registered
mark is no longer in use and to delete them from the registration.
Comments: One commenter indicated support for a $0 fee for a
section 7 request to delete goods or services prior to filing a section
8 or 71 affidavit. Two commenters expressed concern for
[[Page 73207]]
offsetting the cost to the USPTO to mail an updated paper registration
certificate to filers who take advantage of the $0 fee.
Response: The comments have been considered; however, the USPTO
anticipates that other fees will help offset these costs. The decision
to implement this fee as proposed prioritizes the key policy objective
of incentivizing improvement of the accuracy and integrity of the
register.
Comments: Five commenters expressed concerns regarding the new fee
to delete goods, services, and/or classes from a registration after a
section 8 or 71 affidavit has been submitted. One commenter indicated
there should be no fee for changes made online. Three commenters
indicated the amount of the fee is too high, with two commenters
suggesting the fee should be $100 per class. Finally, one commenter
expressed concerns regarding the post-registration audit program and
use of the fee to incentivize an increase in audited files.
Response: Applicants and registrants are required to submit all
trademark filings electronically (i.e., online). 37 CFR 2.23. Since the
fee is intended to incentivize all registrants to perform the due
diligence necessary to ensure that the mark is in use on all goods and/
or services recited in the registration prior to the submission of a
section 8 or 71 affidavit, not implementing the fee for an electronic
filing would undermine the USPTO's express purpose in proposing the
fee. Further, the fee is not charged if the registrant performs its due
diligence and deletes any goods, services, and/or classes for which the
mark is not in use within the section 8 or 71 affidavit at the time of
filing.
As noted above, the fee structure for requests to delete goods,
services, and/or classes from a registration will protect and improve
the integrity of the register and the efficiency of the process by
incentivizing both more timely filings and proactive action by
registrants to ensure the accuracy of their registrations. Undermining
the quality of the register will generate potentially exorbitant undue
costs and hardship on registrants, applicants, and the agency. The new
fee needs to be high enough to reflect the significance of incomplete
due diligence. At the same time, the fee should not be so low as to
have limited deterrence. The USPTO believes that $250 is the
appropriate fee to incentivize the desired practices. Further, the
increased efficiencies realized through this rule will benefit all
applicants and registrants by allowing registrations to be granted
sooner and more efficiently by removing unused marks and unsupported
goods and services from the register. In addition, revenue generated by
this rule allows for continuing development of methods for detecting
and addressing filing practices that threaten the integrity of the
register.
The USPTO assures the public that any decision to increase the
number of registrations audited after submission of a post-registration
maintenance document would be made to promote the accuracy and
integrity of the register and not because of the possibility that it
might increase revenue. As noted above, the no-fee option is available
to, and the $250 (or $350) per-class fee will be assessed against, all
registrants. The fee is applied to all registrations in which goods or
services are deleted after submission, but prior to acceptance, of a
section 8 or 71 affidavit, not only to deletions in registrations being
audited.
When filing a section 8 or 71 affidavit, all registrants are
required to specify the goods and/or services for which the mark is in
use in commerce. These fees will serve to improve the integrity and
quality of the register by incentivizing all registrants to perform the
due diligence necessary before submission of a section 8 or 71
affidavit to maintain a registration. Thus, registrants who ensure that
their marks are in use in commerce in connection with the goods and/or
services listed in the registration before the submission of a section
8 or 71 affidavit, and who delete those goods, services, and/or classes
for which the mark is not in use when the affidavit is submitted, are
not subject to this fee. However, registrants who later determine,
either as part of an audit or not, that some of the goods, services,
and/or classes included in the affidavit must be deleted are subject to
the fee.
D. TTAB Fees: This rule sets or adjusts 16 TTAB-related fees (8 for
electronic filings and 8 for paper filings). Ten existing fees (5
electronic/5 paper) are increased, specifically, those for initiating
an ex parte appeal from an examining attorney's refusal to register a
mark, for initiating an opposition proceeding, for initiating a
cancellation proceeding, and for filing each of two different types of
extensions of time to oppose. Six new filing fees (3 electronic/3
paper) are established, and are explained below. The rule also codifies
that the TTAB has discretion to grant a refund of a portion of the
filing fee for a petition to cancel. While the percentage increase for
a number of TTAB fees is larger than the application filing fees
discussed above, the USPTO notes that many of the TTAB fees remain
below cost recovery, considering the significant costs the Board incurs
in conducting proceedings. In addition, TTABs fees are a small
percentage of the total litigation costs incurred by a party before the
Board, considering the attorney fees and other expenses of litigation.
(1) Existing Fees for Trial Cases: To better align the costs of
providing TTAB services with the fees charged for them, this rule
increases the fee for petitions for cancellation and notices of
opposition by $200 per class. The rule also amends Sec. 2.114(a) to
allow the USPTO discretion to refund a portion of the petition fee in
cases of default judgment where there is no appearance by a defendant
and no filings are made other than the petition to cancel, reflecting
reduced work needed on the part of the TTAB. The resulting lower net
fee for a petition to cancel that meets these characteristics also
furthers the policy goal of not discouraging the filing of petitions to
cancel by petitioners with knowledge that a registered mark is no
longer in use, or was never put to use, and therefore should be removed
from the register. The refund will be in the amount of $200 per class,
as explained below.
Comments: Four IP stakeholder organizations provided comments on
the proposed $200 per class increases in the fees for trial cases
(Notices of Opposition and Petitions for Cancellation). Three of the
four noted the increases of four years ago, and stated that they
consider the proposed increases ``steep'' or ``excessive.''
Response: The percentage of TTAB costs associated with processing
of trial cases varies a great deal, as compared to the uniform per
class filing fee. Clearly, in an opposition or cancellation case in
which no appearance by a defendant is made, no filing other than the
plaintiff's initial complaint is made, and the case is decided by way
of default judgment, a higher percentage of TTAB operational costs is
covered than in a case involving significant motion practice and a full
trial. The original set of fee proposals discussed in the TPAC fee
setting hearing with the public and stakeholders included a discussion
of shifting some of the costs of TTAB trials to heavier users of trial
case services, for example, by requiring a fee for the filing of a
motion for summary judgment. However, initial stakeholder input during
the fee setting hearing clearly indicated a preference for more uniform
filing fees and fewer user fees for particular filings.
The costs associated with processing trial cases are more
substantial than with appeal cases because of the larger number of
trial cases and the procedural complexities. For example, the Board's
[[Page 73208]]
staff of 18 interlocutory attorneys exists primarily to handle
contested motions in trial cases. Since parties in trial cases pay no
fees associated with the myriad motions, voluminous evidentiary
submissions, and many briefs that can be filed, trial case filing fees
need to be set for all commenced trial cases at a level that furthers
cost recovery for all such cases. In addition, as noted above, USPTO
initial fees for filing trial cases at the TTAB, compared to other
costs associated with financing litigation, such as attorney fees,
remain a small part of overall litigation costs.
As noted in the NPRM, TTAB fee revenue presently covers only 31% of
TTAB operating costs. Applicants and registrants making filings in the
trademark operation, the vast majority of whom do not use TTAB
services, subsidize TTAB costs. The TTAB can recover a more substantial
percentage of its operating costs, thereby reducing the subsidization
of TTAB operations, while still keeping TTAB filing fees low as a
portion of the overall cost of litigation by attaching fees to the TTAB
filings that are significant enough in number to bring in appreciable
revenue. The most effective means for raising revenue that will allow
the Board to recover more of its operating costs lies in filing fees
for trial cases, and in particular, oppositions
(2) Partial Refunds of Qualifying Cancellation Fees:
Comments: Three IP stakeholder organizations addressed the proposal
to grant the TTAB discretion to provide partial refunds in cancellation
cases asserting abandonment or nonuse of a registered mark, where there
is no appearance by a defendant, no filings are made other than the
petition to cancel, and where a default judgment is entered. Commenters
sought clarification regarding how the Board would exercise such
discretion, whether the refund would be processed as a matter of course
by the Board, or whether a refund request must be filed and whether the
refund of $200 is per class or per proceeding. One of these commenters
also sought clarification as to whether the petitioner would need to
have a deposit account for the refund to issue.
Response: First, the Office is granted discretion under revised
Sec. 2.114(a) precisely because it must have the discretion to refund
any portion of a fee otherwise required. The TTAB will process refunds
as a matter of course during the process of termination of a
cancellation case, so long as the stated requirements are met.
Paralegals will have no need to exercise individual discretion to
determine whether to provide a refund or not.
Second, refunds will be handled by TTAB paralegals, during the
process of terminating cancellation proceedings. The petitioner will
not have to request the refund. The refund will be processed in the
same way that refunds now are processed for cases that should not have
been instituted and are dismissed as a nullity. Therefore, a filer who
did not use a deposit account to pay the filing fee would not need to
establish an account just for the purpose of receiving a refund.
Third, as explained in the NPRM, under this rule a petitioner
filing only an abandonment or nonuse claim, where no other filings are
made, and in which a default judgment is entered, would receive a $200
per class refund of the filing fee. That is, the net filing fee would
be the same as it was prior to this rule. Notwithstanding the pressing
need to cover more of the TTAB's operating costs, the refund of a
portion of the fee for a petition to cancel provided for by this rule,
under defined circumstances, means that many filers of petitions for
cancellation will see no increase in the filing fee for such cases.
Comments: One commenter sought clarification as to what would
happen if the Board granted a motion to reopen a case in which the
Board had entered default judgment.
Response: To ensure that cancellation petitioners who do not obtain
default judgments are treated equally, if a motion to reopen was
granted in a cancellation case that was originally decided by default,
the petitioner would be assessed the amount of the refund processed at
the time of default.
Comments: One commenter suggested that the refund conditions be
expanded to allow for filing of some documents prior to entry of a
default judgment (e.g., ``no substantive filings'' were made or only
``simple, procedural'' filings were made).
Response: The Office appreciates the comment that some cancellation
cases asserting only abandonment or nonuse claims may have few filings
and no ``substantive'' filings prior to entry of default judgment.
However, the refund procedure is established with clear guidelines for
determining when a refund will be provided to avoid case-by-case
discretionary judgments on whether a filing was substantive or a
``simple, procedural filing.''
The Office will not expand the refund process to cancellation cases
asserting abandonment that involve filing of more than just the initial
complaint prior to entry of judgment. Extending the refund to
cancellation cases asserting abandonment and that involve filings other
than the initial complaint would require time-consuming case-by-case
judgments regarding whether the filings were substantive or not or were
simple and procedural. Moreover, cases that did not involve substantive
filings might still involve many procedural filings that could cause
the case to remain pending for a long period of time, and the refund
proposal is designed to benefit cases that are terminated rapidly. In
addition, decisions by TTAB personnel regarding whether filings were
substantive or simple could then be subject to review on petition and
would result in additional delays prior to termination.
Comments: Commenters also proposed that a refund should be
available in opposition cases and for all cases of default judgment,
regardless of the grounds asserted by the plaintiff. Of the two
stakeholder organizations that addressed the issue of the frequency
with which default judgment is entered in opposition proceedings, one
stated that the reported experience of its members is that default
judgments are just as frequent in opposition proceedings as they are in
cancellation proceedings. In contrast, the other acknowledged that
default judgments are rare in opposition proceedings.
Response: The TTAB's expedited cancellation proceeding pilot
confirmed only the high rate of default judgment in cancellation cases
asserting abandonment or nonuse alone. Thus, the Board did not have any
basis to propose refunds in opposition cases or in cancellation cases
asserting other grounds. The NPRM refund proposal was limited to
cancellation cases asserting only abandonment or nonuse, in which the
defendant does not enter an appearance, the only filing was the initial
complaint, and that results in default judgment. This was rooted in the
recognition of the high number of abandonment or nonuse claims, the
high rate of default in cases in which those are the only claims, and
the ability to handle refund processing in the normal course of
terminating a cancellation proceeding. Based on statistics from the
TTAB's recent two-year expedited cancellation proceeding pilot program,
abandonment is the most common claim in cancellation proceedings,
appearing in 34% of filings. The default rate in cancellation cases in
which abandonment is the only claim is 60%. The decision to process
refunds in such cases results in no net increase in the cancellation
filing fee for many petitioners and also encourages filings that help
ensure the integrity of the register. Cancellation cases
[[Page 73209]]
involving assertion of other grounds serve other purposes that may be
unrelated to the integrity of the register. Opposition cases typically
do not involve abandonment claims and, even if they result in default
judgments do not result in removal of registered but unused marks from
the register.
(3) Fees for Extensions of Time to Oppose: This rule also increases
fees for filing requests for an extension of time to file an
opposition. Prior to enactment of this rule, applicants could request:
(1) An initial 30-day extension for no fee, (2) a subsequent 60-day
extension (or an initial 90-day extension) for a fee of $100 for
electronic filings and $200 for paper filings, and (3) a final 60-day
extension for a fee of $200 for electronic filings and $300 for paper
filings. This rule maintains this tiered structure with an increase of
$100 for the first 60-day (or initial 90-day) electronic extension and
$200 for the final 60-day electronic extension. Paper-filed extension
requests will increase by $200 for each filing. The fees are per
application, not per class.
These fees are designed to yield efficiencies by encouraging
potential opposers to make decisions regarding filing an opposition
sooner, thus reducing delays to applicants whose filings have been made
the subject of extensions of time to oppose. Additionally, by
encouraging earlier decisions to initiate proceedings, the uncertainty
experienced by these applicants will be ameliorated by having their
applications proceed to determination on the merits sooner. This will
also help protect the integrity of the trademark register by
encouraging timely decisions and filings to ensure that the rights of
other applicants and the public are not adversely affected.
Further, currently about two-thirds of the cost of TTAB operations
is subsidized by revenue from other trademark processing fees. The
increases in existing TTAB fees set by this rule, and the new fees set
by this rule, will not recover the full costs of TTAB operations, but
they are estimated to increase cost recovery by 7% and to bring the
TTAB incrementally closer to full cost recovery.
Finally, the extension of time to oppose fees will help offset TTAB
processing costs. In FY 2019, the USPTO received 20,502 requests for
extensions of time to file a notice of opposition. It is customary for
requests that delay processing of records, such as extensions, to incur
a fee, which offsets costs associated with processing the filing, as
well as the overall cost of processing appeals and trials. These fees
are necessary to help achieve primary Office goals of recovering the
aggregate costs of operations, along with key policy considerations,
such as encouraging efficient processing.
Comments: Two IP stakeholder organizations and one law firm
provided comments on the extension of time to oppose fees. One
stakeholder organization noted only the proposed fee for the final 60-
day extension of time to oppose, and it is unclear whether the
organization's comment concerns only that extension or both types of
extensions that carry fees. All commenters noted that fees for these
filings were first levied four years ago and that the proposed
increases are, percentage-wise, substantial. Comments also suggested
that an applicant engaged in settlement talks with a potential opposer
could attempt to force an increase in costs for the potential opposer
to continue settlement talks by not responding to attempts to settle
the parties' differences. The law firm suggested that potential
opposers might proceed to file a notice of opposition rather than pay
the increased fees for the extensions of time to oppose. The law firm
also suggested that processing of extensions of time to oppose is
largely automated and, therefore, the fee increase cannot be justified
on the grounds of cost recovery.
Response: Many potential opposers are aware of applications that
have been filed and that are perceived as potentially conflicting well
before a mark is published for opposition, as demonstrated by the large
number of Letters of Protest filed each year, many of which seek to
ensure an examining attorney is aware of the protestor's prior
registration or other concerns. A potential opposer and an applicant
can initiate settlement discussions as soon as the application is
approved for publication in the Trademark Official Gazette and before
it actually publishes. Then, upon publication, there is a 30-day
opposition period, and a 30-day extension of that period can be
obtained at no cost. Extension of time to oppose fees do not apply
until 60 days after the date of publication. The additional 60 days
that can be obtained for the period covering 60-120 days from
publication carry a fee that is charged per application, not per class
of goods or services in the application. A final extension for another
60 days can be obtained for a higher fee, also per application, not per
class. The fee structure encourages parties to discuss settlement of
differences, but charges more the longer the discussions go on and
applications are delayed.
When fees for extensions were first proposed, commenters posited
that potential opposers might file oppositions rather than pay the
extension fees. The Board has not seen any evidence of a significant
change in practice. On the contrary, the number of extensions of time
to oppose filed has generally increased on an annual basis. Opposition
fees are paid per class for the opposed application, while fees that
are required for extensions of the opposition period accrue on a per-
application basis. As such, filing an opposition to avoid paying an
extension fee when negotiations to avoid commencement of an opposition
are progressing would in most instances cost a potential opposer more.
When negotiations are not progressing, the potential opposer may wish
to consider an earlier determination as to whether filing of an
opposition is desirable. In trial cases, it is not unusual for the
Board to be informed that an adversary is not willing to engage in
settlement talks. The Board has limited ability to force such
discussions. In addition, the Board has received objections to its
approval of extensions of time to oppose from applicants who assert
that the potential opposer has no real basis for an opposition and
seeks only to delay the application. Thus, the extension fees are
intended to facilitate earlier discussion of settlement and recognize
that delay can be a concern for both parties.
As noted above in the discussion of increases in filing fees for
trial cases, cost recovery by the TTAB is not assessed solely on the
basis of each particular type of filing or Board proceeding. As
stakeholders have indicated a preference for spreading out cost
recovery over many filings, rather than be faced with steeply higher
costs for involved and protracted proceedings, cost recovery for all
Board operations is facilitated by apportionment of fees on filings
that are most frequently made. Extensions of time to oppose are filed
on an annual basis at three times the rate of the filing of notices of
opposition. Therefore, they are a logical type of filing for which to
charge nominal fees for longer extensions. In addition, the fact that
processing of extensions of time to oppose is largely automated does
not mean that there are no costs associated with their processing.
Development and enhancements of automated processing systems cost a
great deal.
(4) Fees for Filing an Appeal Brief: This rule increases the fee
for filing a notice of appeal by $25 per class, based on inflation, and
establishes new fees for filing an appeal brief of $300 per class if
filed on paper and $200 per class if filed through ESTTA. These fees
[[Page 73210]]
address the TPAC report recommendations to apply the majority of the
aggregate increases in appeal fees to the costs incurred when an appeal
brief is filed, which increases the likelihood that the appeal will
have to be decided on the merits.
(5) Fees for Filing Requests for Extension of Time to File an
Appeal Brief: This rule sets fees for second and subsequent requests
for extensions of time to file an appeal brief at $200 per application
if filed on paper and $100 per application if filed through ESTTA.
These fees yield efficiencies by encouraging applicants to move forward
with their appeals, resulting in a quicker resolution of the appeal,
the pendency of which can adversely impact the rights of other
applicants and registrants. Implementing a tiered fee structure
minimizes costs to all applicants, including smaller entities, as there
is no fee for a first request for extension of time to file the appeal
brief.
(6) Fees for Oral Hearing: This rule sets the fee for a request for
an oral hearing at $500 per proceeding. Oral hearings are not requested
in the vast majority of cases before the TTAB. They are optional and
are most useful when cases involve complex issues, a complex record, or
highly technical goods and/or services. This fee will help offset the
costs of scheduling and conducting the hearing, as well as the
maintenance of equipment for remote participation.
Comments: Two IP stakeholder organizations and one law firm
addressed the proposed fee for an oral hearing in an ex parte appeal or
trial case. One organization noted its concern but did not provide an
explanation of the basis for its concern, though it did suggest
limiting the fee to in-person arguments. The other organization
concluded that the fee will discourage the use of oral hearings and
could weaken a party's chance of success in a matter before the TTAB.
The law firm considers trademark cases to be inherently complex and
long and the fee to be a disservice to the bar, to the parties, and to
fair determinations of cases.
Response: This fee appropriately places Board costs on actual users
of this service. Approximately 100 hearings have been requested on an
annual basis in recent years. While some practitioners routinely
request an oral argument for cases in which they are involved, most do
not. The Board has no evidence that outcomes for parties that request
an oral argument are appreciably different than for those that do not.
No Board case is decided without thorough review of the record and
briefs, which, as frequently stated, are of paramount importance.
However, hearings are available for those who request them.
Because there is no current fee for requesting an oral hearing, it
is not unusual for a party to request one only to cancel shortly before
the hearing. Charging a fee for requesting a hearing may help deter
requests for hearings that could later be cancelled. Hearings incur
costs that are not associated with cases submitted for decision on the
briefs. The scheduling and running of hearings requires a dedicated
staff position, and the TTAB must maintain a hearing room for use when
in-person hearings are held and the technical infrastructure necessary
to offer parties the option to appear by video rather than incur the
costs associated with having to travel to the USPTO. This
infrastructure has a finite lifespan and needs regular upgrading or
replacement.
Discussion of Rule Changes
The USPTO revises Sec. 2.6(a)(1)(i) to increase the per-class fee
for filing an initial application on paper from $600 to $750.
The USPTO revises Sec. 2.6(a)(1)(ii) to increase the per-class fee
for filing an application under section 66(a) of the Act from $400 to
$500.
The USPTO revises Sec. 2.6(a)(1)(iii) to increase the per-class
fee for filing a TEAS Standard application from $275 to $350.
The USPTO revises Sec. 2.6(a)(1)(iv) to increase the per-class fee
for filing a TEAS Plus application from $225 to $250.
The USPTO revises Sec. 2.6(a)(1)(v) to decrease the processing fee
under Sec. 2.22(c) from $125 to $100 per class.
The USPTO adds Sec. 2.6(a)(11)(iii) to establish a fee of $0 for
filing a section 7 request to amend a registration through TEAS prior
to submission of a section 8 or section 71 affidavit and that consists
only of the deletion of goods, services, and/or classes.
The USPTO revises Sec. 2.6(a)(12)(i) and (ii) to increase the per-
class fee for filing a section 8 affidavit from $225 to $325 for a
paper submission and from $125 to $225 for a TEAS submission.
The USPTO adds Sec. 2.6(a)(12)(iii) and (iv) to establish fees for
the deletion of goods, services, and/or classes after submission and
prior to acceptance of a section 8 affidavit. The addition of Sec.
2.6(a)(12)(iii) and (iv) sets the per-class fee at $350 for a paper
submission and $250 for a TEAS submission.
The USPTO revises Sec. 2.6(a)(15) to establish separate fees for
petitions to the Director under Sec. Sec. 2.146 or 2.147 and petitions
to revive an abandoned application under Sec. 2.66. The revisions to
Sec. 2.6(a)(15)(i) and (ii) set the fee for filing a petition to the
Director under Sec. Sec. 2.146 or 2.147 at $350 for a paper submission
and $250 for a TEAS submission. The addition of Sec. 2.6(a)(15)(iii)
and (iv) sets the fee for filing a petition to revive an abandoned
application under Sec. 2.66 at $250 for a paper submission and $150
for a TEAS submission.
The USPTO revises Sec. 2.6(a)(16)(i) and (ii) to increase the per-
class fee for filing a petition to cancel from $500 to $700 for a paper
submission and from $400 to $600 for an ESTTA submission.
The USPTO revises Sec. 2.6(a)(17)(i) and (ii) to increase the per-
class fee for filing a notice of opposition from $500 to $700 for a
paper submission and from $400 to $600 for an ESTTA submission.
The USPTO revises Sec. 2.6(a)(18) to increase the fee for filing
an ex parte appeal and to establish new fees for requests for an
extension of time to file an appeal brief and for filing a brief in an
ex parte appeal. The revisions to Sec. 2.6(a)(18)(i) and (ii) increase
the per-class fee for filing an ex parte appeal from $300 to $325 for a
paper submission and from $200 to $225 for an ESTTA submission. The
addition of Sec. 2.6(a)(18)(iii) sets the per-application fee for
filing a first request for an extension of time to file an appeal brief
at $0. The addition of Sec. 2.6(a)(18)(iv) and (v) sets the per-
application fee for filing a second or subsequent request for an
extension of time to file an appeal brief at $200 for a paper
submission and $100 for an ESTTA submission. The addition of Sec.
2.6(a)(18)(vi) and (vii) sets the per-class fee for filing a brief in
an ex parte appeal at $300 for a paper submission and $200 for an ESTTA
submission.
The USPTO revises Sec. 2.6(a)(22)(i) and (ii) to increase the fee
for filing a request for an extension of time to file a notice of
opposition pursuant to Sec. 2.102(c)(1)(ii) or (c)(2) from $200 to
$400 for a paper submission and from $100 to $200 for an ESTTA
submission.
The USPTO revises Sec. 2.6(a)(23)(i) and (ii) to increase the fee
for filing a request for an extension of time to file a notice of
opposition pursuant to Sec. 2.102(c)(3) from $300 to $500 for a paper
submission and from $200 to $400 for an ESTTA submission.
The USPTO adds Sec. 2.6(a)(24) to establish a fee for filing a
request for an oral hearing before the TTAB of $500 per proceeding.
The USPTO adds Sec. 2.6(a)(25) to establish a fee of $50 for the
filing of a letter of protest per subject application.
The USPTO revises Sec. 2.114(a) to provide that a partial refund
of the fee for a petition to cancel, equal to the
[[Page 73211]]
increase in that fee otherwise enacted in this rulemaking, may be made
in cases of default judgment where there was no appearance by a
defendant and no filings are made other than the petition to cancel.
The USPTO adds Sec. 2.149, which codifies the procedures and
requirements for letters of protest.
The USPTO revises the section title and restructures Sec. 2.161 to
set out the requirements for section 8 affidavits or declarations more
clearly. The USPTO also adds, at revised Sec. 2.161(c), a provision
stating that if goods, services, and/or classes are deleted from a
registration after submission and prior to the acceptance of a section
8 affidavit or declaration, the deletion must be accompanied by the
relevant fee under Sec. 2.6(a)(12)(iii) or (iv) for each class from
which goods, services, and/or classes are deleted.
The USPTO revises Sec. 7.6(a)(6)(i) and (ii) to increase the per-
class fee for filing a section 71 affidavit from $225 to $325 for a
paper submission and from $125 to $225 for a TEAS submission.
The USPTO adds Sec. 7.6(a)(6)(iii) and (iv) to establish fees for
the deletion of goods, services, and/or classes after submission and
prior to acceptance of a section 71 affidavit. The added Sec.
7.6(a)(iii) and (iv) set the per-class fee at $350 for a paper
submission and $250 for a TEAS submission.
The USPTO revises the section title and restructures Sec. 7.37 to
set out the requirements for section 71 affidavits or declarations more
clearly. The USPTO also adds, at revised Sec. 7.37(c), a provision
stating that if goods, services, and/or classes are deleted from a
registration after submission and prior to acceptance of a section 71
affidavit or declaration, the deletion must be accompanied by the
relevant fee under Sec. 7.6(a)(6)(iii) or (iv) for each class from
which goods, services, and/or classes are deleted.
Rulemaking Requirements
A. America Invents Act: This rulemaking sets and adjusts fees under
section 10(a) of the AIA as amended by the SUCCESS Act. Section 10(a)
of the AIA authorizes the Director to set or adjust by rule any
trademark fee established, authorized, or charged under the Trademark
Act for any services performed by, or materials furnished by, the USPTO
(see section 10 of the AIA, Pub. L. 112-29, 125 Stat. 284, 316-17, as
amended by Pub. L. 115-273, 132 Stat. 4158). Section 10(e) of the AIA
sets forth the general requirements for rulemakings that set or adjust
fees under this authority. In particular, section 10(e)(1) requires the
Director to publish in the Federal Register any proposed fee change
under section 10 and include in such publication the specific rationale
and purpose for the proposal, including the possible expectations or
benefits resulting from the proposed change. For such rulemakings, the
AIA requires that the USPTO provide a public comment period of not less
than 45 days.
The TPAC advises the Under Secretary of Commerce for Intellectual
Property and Director of the USPTO on the management, policies, goals,
performance, budget, and user fees of trademark operations. When
adopting fees under section 10 of the AIA, the AIA requires the
Director to provide the TPAC with the proposed trademark-related fees
at least 45 days prior to publishing them in the Federal Register. The
TPAC then has at least 30 days within which to deliberate, consider,
and comment on the proposal, as well as hold a public hearing(s) on the
proposed fees. The TPAC must make a written report available to the
public of the comments, advice, and recommendations of the committee
regarding the proposed fees before the USPTO issues any final fees. The
USPTO will consider and analyze any comments, advice, or
recommendations received from the TPAC before finally setting or
adjusting fees.
Consistent with the requirements of the AIA, on August 28, 2019,
the Director notified the TPAC of the USPTO's intent to set or adjust
trademark fees and submitted a preliminary trademark fee proposal with
supporting materials. The preliminary trademark fee proposal and
associated materials are available at http://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting.
The TPAC held a public hearing in Alexandria, Virginia, on
September 23, 2019. Transcripts of this hearing and comments submitted
to the TPAC in writing are available for review at http://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting. The TPAC subsequently issued a report, dated October 31,
2019, regarding the preliminary proposed fees. The report can be found
online at http://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting.
B. Final Regulatory Flexibility Analysis: The USPTO publishes this
Final Regulatory Flexibility Analysis (FRFA) as required by the
Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.) to examine the
impact of the USPTO's proposed changes to trademark fees on small
entities. Under the RFA, whenever an agency is required by 5 U.S.C. 553
(or any other law) to publish an NPRM, the agency must prepare and make
available for public comment a FRFA, unless the agency certifies under
5 U.S.C. 605(b) that the proposed rule, if implemented, will not have a
significant economic impact on a substantial number of small entities
(see 5 U.S.C. 603, 605). The USPTO published an Initial Regulatory
Flexibility Analysis (IRFA), along with the NPRM, on June 19, 2020 (85
FR 37040). The USPTO received no comments from the public directly
applicable to the IFRA, as stated below in Item 2.
Items 1-6 below discuss the six items specified in 5 U.S.C.
604(a)(1)-(6) to be addressed in a FRFA. Item 6 discusses alternatives
considered by the Office.
1. Succinct statement of the need for, and objectives of, the rule:
The USPTO is setting and adjusting certain trademark fees as
authorized by section 10 of the AIA, as amended by Public Law 115-273,
132 Stat. 4158 (the SUCCESS Act). The fee schedule established under
section 10 in this rulemaking will, based on the assumptions found in
the FY 2021 Congressional Justification, recover the aggregate
estimated costs to the USPTO while achieving strategic and operational
goals, such as implementing measures to maintain trademark pendency and
high trademark quality, modernizing the trademark IT systems,
continuing important programs for stakeholder and public outreach,
enhancing operations of the TTAB, and maintaining a sufficient
operating reserve. Aggregate costs are estimated through the USPTO
budget formulation process with the annual preparation of a five-year
performance-based budget request. Revenues are estimated based on the
projected demand (workload) for trademark products and services and fee
rates.
The policy objectives of the rule are to: (1) Better align fees
with costs, (2) protect the integrity of the trademark register, (3)
improve the efficiency of USPTO processes related to trademark and TTAB
operations, and (4) ensure financial sustainability to facilitate
effective trademark operations. The legal basis for the rule is section
10 of the AIA, as amended, which provides the authority for the
Director to set or adjust by rule any fee established, authorized, or
charged under the Trademark Act of 1946, 15 U.S.C. 1051 et seq., as
amended. See also section 31 of the Trademark Act, 15 U.S.C. 1113.
2. A statement of the significant issues raised by the public
comments in response to the initial regulatory flexibility analysis, a
statement of the assessment of the agency of such issues,
[[Page 73212]]
and a statement of any changes made in the proposed rule as a result of
such comments:
The USPTO did not receive any public comments in response to the
IRFA. However, the Office received comments about fees in general, as
well as particular fees, and their impact on small entities, which are
further discussed in the preamble.
3. The response of the agency to any comments filed by the Chief
Counsel for Advocacy of the Small Business Administration in response
to the proposed rule, and a detailed statement of any change made to
the proposed rule in the final rule as a result of the comments:
The USPTO did not receive any comments filed by the Chief Counsel
for Advocacy of the Small Business Administration in response to the
proposed rule.
4. Description of and an estimate of the number of small entities
to which the rule will apply or an explanation of why no such estimate
is available:
The USPTO does not collect or maintain statistics in trademark
cases on small- versus large-entity applicants, and this information
would be required in order to determine the number of small entities
that would be affected by the proposed rule.
This rule applies to any entity filing trademark documents with the
USPTO. The USPTO estimates, based on the assumptions found in the FY
2021 Congressional Justification, that during the first full fiscal
year under the fees as proposed, the USPTO would expect to collect
approximately $76 million more in trademark processing and TTAB fees in
FY 2021. The USPTO would receive an additional $40 million in fees from
applications for the registration of a mark, including requests for
extension of protection and subsequent designations; $2 million more
from petitions and letters of protest; and $27 million more for section
8 and section 71 affidavits. TTAB fees would increase by $6 million.
Trademark fees are collected for trademark-related services and
products at different points in time in the trademark application
examination process and over the lifecycle of the registration.
Approximately 55% of all trademark fee collections are from application
filing fees. Fees for TTAB proceedings and appeals comprise 2.5% of
revenues. Fees from other trademark activities, petitions, assignments
and certifications, and Madrid processing are approximately 5% of
revenues. Fees for filing post-registration and intent-to-use filings,
which subsidize the costs of filing, search, examination, and TTAB
activities, comprise 37.5%.
The USPTO's five-year estimated aggregate trademark fee revenue is
based on the number of trademark applications and other fee-related
filings it expects to receive for a given fiscal year and work it
expects to process in a given fiscal year (an indicator of future fee
workload and budgetary requirements). Within the iterative process for
estimating aggregate revenue, the USPTO adjusts individual fee rates up
or down based on policy and cost considerations and then multiplies the
resulting fee rates by appropriate workload volumes to calculate a
revenue estimate for each fee, which is then used to calculate the
aggregate revenue. Additional details about the USPTO's aggregate
revenue, including projected workloads by fee, are available at https://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting.
5. Description of the reporting, recordkeeping, and other
compliance requirements of the final rule, including an estimate of the
classes of small entities which will be subject to the requirement and
the type of professional skills necessary for preparation of the report
or record:
The final rule imposes no new reporting or recordkeeping
requirements. The main purpose of the final rule is to set and adjust
trademark fees. The final rule also codifies new procedural regulations
at 37 CFR 2.149 for the submission of letters of protest. The USPTO
does not collect or maintain statistics in trademark cases on small-
versus large-entity applicants and is unable to provide an estimate of
the classes of small entities that will be subject to the new
procedural requirements. However, the USPTO does not anticipate that
the final rule would have a disproportionate impact upon any particular
class of small or large entities.
6. Description of the steps the agency has taken to minimize the
significant economic impact on small entities consistent with the
stated objectives of applicable statutes, including a statement of the
factual, policy, and legal reasons for selecting the alternative
adopted in the final rule and why each one of the other significant
alternatives to the rule considered by the agency which affect the
impact on small entities was rejected:
The USPTO considered four alternatives, based on the assumptions
found in the FY 2021 Congressional Justification, before enacting this
rule: (1) The adjustments included in this final rule, (2) an across-
the-board adjustment of 22%, (3) the unit cost of providing services
based on FY 2019 costs, and (4) no change to the baseline of current
fees. The alternatives are each explained here with additional
information regarding how each alternative was developed and the
aggregate revenue estimated. A description of the Aggregate Revenue
Methodologies is available at http://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting.
The USPTO is setting or adjusting trademark fees codified in 37 CFR
parts 2 and 7. Fees are adjusted for all application filing types
(i.e., paper applications, applications filed via TEAS, and requests
for extension of protection under section 66(a) of the Trademark Act
(15 U.S.C. 1141f)). The USPTO also sets or adjusts certain other
trademark processing fees to further effective administration of the
trademark system. For example, the rule increases the fees for certain
petitions to the Director as well as section 8 and section 71
affidavits, sets a new fee and proposes procedural regulations for
filing a letter of protest, and sets new fees for deleting goods,
services, and/or classes from a registration after submission and prior
to acceptance of a section 8 or section 71 affidavit.
The USPTO chose the alternative established in this rule because it
will enable the Office to achieve its goals effectively and efficiently
without unduly burdening small entities, erecting barriers to entry, or
stifling incentives to innovate. The alternative established here
secures the USPTO's objectives for meeting the strategic goals of
encouraging broader usage of IP rights-protection mechanisms and
participation by more trademark owners and more efficient resolution of
appeals and inter partes proceedings at the TTAB by increasing revenue
to meet the Office's aggregate future costs. In particular, the new fee
structure for requests to delete goods, services, and/or classes from a
registration will protect the integrity of the register and the
efficiency of the process by incentivizing both more timely filings and
proactive action by applicants and registrants. The increased
efficiencies realized through this rule will benefit all applicants and
registrants by allowing registrations to be granted in a timely manner
and more efficiently by removing unused marks and unsupported goods and
services from the register. All trademark applicants and registrants
should benefit from the efficiency that will be realized under the
final rule.
With regard to the new regulations governing the filing of letters
of protest,
[[Page 73213]]
the USPTO anticipates that the impact to affected entities will be
small. The proposed fee of $50 is set at a level high enough to
recognize there are processing costs and deter the filing of
unsupported or irrelevant filings, but low enough so as not to
discourage the filing of relevant, well-supported letters of protest.
In addition, the new procedural regulations for filing letters of
protest are not anticipated to significantly impact affected entities
because the new regulations are based on existing informal procedures
set out in the TMEP.
Finally, the new provision at Sec. 2.114(a) provides that a
partial refund of the fee for a petition to cancel may be made in cases
of default judgement where there was no appearance by a defendant and
no filings were made other than the petition to cancel. This change
will balance the cost recovery obtained from the increase in the fee
for a petition to cancel, a case type that has increased markedly in
recent years, against the benefit of having petitions to cancel filed
to remove registrations from the register when petitioners have
determined through their investigations that the registered marks are
no longer in use. In such situations, default judgments often result,
efficiently clearing the register of marks that would otherwise stand
as potential bars to applications seeking to register similar marks.
This reduces costs for applicants filing such applications.
The fee schedule for this alternative (labeled ``Alternative 1--
Final Rule'') is available in the document entitled ``Final Regulatory
Flexibility Act Tables'' at http://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting.
Another alternative to setting and adjusting fees that was
considered was to increase all fees by the same 22% across the board.
This alternative would maintain the status quo structure of cost
recovery, where processing and examination costs are subsidized by fees
paid for intent-to-use and post-registration maintenance filings (both
of which exceed the cost of performing these services), given that all
fees would be adjusted by the same escalation factor. This structure
would promote innovation strategies and allow applicants to gain access
to the trademark system through fees set below cost, while registrants
would pay maintenance fees above cost to subsidize the below-cost
front-end fees. This alternative was ultimately rejected. Although this
alternative generates sufficient aggregate revenue to recover aggregate
operating costs, unlike the final rule fee structure, there would be no
improvements in fee schedule design. As such, this alternative would
not accomplish the stated objective of enhancing the integrity of the
register by incentivizing users to maintain accurate goods and/or
services. Further, it would not enhance the efficiency of the process,
as it would offer no new incentives for users to timely file
applications and other filings or to resolve appeals and inter partes
proceedings at the TTAB more expeditiously. The fee schedule for this
alternative (labeled ``Alternative 2--Across-the-Board Adjustment'') is
available in the document entitled ``Final Regulatory Flexibility Act
Tables'' at http://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting.
A third alternative that was considered was to set all trademark
fees to allow for the USPTO to recover 100% of the unit costs
associated with each product or service provided, based on the
historical unit costs of the products and services provided by the
USPTO. The USPTO uses activity based information to determine the unit
costs of activities that contribute to the services and processes
provided by individual fees. It is common practice in the Federal
Government to set a particular fee at a level that recovers the cost of
a given good or service. In Office of Management and Budget (OMB)
Circular A-25, User Charges, the OMB states that user charges (fees)
should be sufficient to recover the full cost to the Federal Government
of providing the particular service, resource, or good, when the
Government is acting in its capacity as sovereign. Under the unit cost
recovery alternative, fees are generally set in line with the FY 2019
cost of providing the product or service. The USPTO recognizes that
this approach does not account for changes in the fee structure or
inflationary factors that could likely increase the costs of certain
trademark services and necessitate higher fees in the out-years.
However, the USPTO contends that the FY 2019 data is the best unit cost
data available to inform this analysis. This alternative would produce
a structure in which application and processing fees would increase
significantly for all applicants, and intent-to-use and post-
registration maintenance filing fees would decrease dramatically when
compared with current fees. In addition, these fees would change from
year to year based on the number of applications submitted. This
alternative was rejected because it was determined that the unit costs
for any given product or service can vary from year to year, such that
a yearly review of all, and an adjustment to many, trademark fees would
be continually required and could also lead to consumer confusion
regarding the amount at which any given trademark fee was currently set
and what the relevant fee would be in the future. Additionally, this
alternative does not address improvements in fee design to accomplish
the stated objectives of encouraging broader usage of IP rights-
protection mechanisms and participation by more trademark owners as
well as practices that improve the efficiency of the process. The fee
schedule for this alternative (labeled ``Alternative 3--Unit Cost
Recovery'') is available in the document entitled ``Final Regulatory
Flexibility Act Tables'' at http://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting.
A final alternative to setting and adjusting fees would be to take
no action at this time regarding trademark fees and to leave all
trademark fees as currently set. This alternative was rejected because,
due to changes in demand for certain services and rising costs, the
Office has determined that a fee increase is needed to meet future
budgetary requirements as described in the FY 2021 Congressional
Justification. Further, as previously explained, the fee schedule
established in this final rule will assist in promoting access to the
trademark system, protecting the integrity of the register, and
promoting the efficiency of the trademark registration process by
incentivizing: (1) Maintenance of registrations for goods and services
for which marks are actually in use, (2) more timely filing of
applications and other documents, and (3) faster resolution of appeals
and inter partes proceedings at the TTAB. The fee schedule for this
alternative (labeled ``Alternative 4--Baseline--Current Fee Schedule'')
is available in the document entitled ``Final Regulatory Flexibility
Act Tables'' at http://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting.
C. Executive Order 12866 (Regulatory Planning and Review): This
rule has been determined to be Significant for purposes of Executive
Order 12866 (Sept. 30, 1993).
D. Executive Order 13563 (Improving Regulation and Regulatory
Review): The USPTO has complied with Executive Order 13563 (Jan. 18,
2011). Specifically, the USPTO has, to the extent feasible and
applicable: (1) Made a reasoned determination that the benefits justify
the costs of the rule; (2) tailored the rule to impose the least burden
on society consistent with obtaining the regulatory objectives; (3)
[[Page 73214]]
selected a regulatory approach that maximizes net benefits; (4)
specified performance objectives; (5) identified and assessed available
alternatives; (6) provided the public with a meaningful opportunity to
participate in the regulatory process, including soliciting the views
of those likely affected prior to issuing a notice of proposed
rulemaking, and provided online access to the rulemaking docket; (7)
attempted to promote coordination, simplification, and harmonization
across government agencies and identified goals designed to promote
innovation; (8) considered approaches that reduce burdens and maintain
flexibility and freedom of choice for the public; and (9) ensured the
objectivity of scientific and technological information and processes,
to the extent applicable.
E. Executive Order 13771 (Reducing Regulation and Controlling
Regulatory Costs): This final rule is not subject to the requirements
of Executive Order 13771 (Jan. 30, 2017) because this final rule
involves a transfer payment.
F. Executive Order 13132 (Federalism): This rule does not contain
policies with federalism implications sufficient to warrant preparation
of a Federalism Assessment under Executive Order 13132 (Aug. 4, 1999).
G. Executive Order 13175 (Tribal Consultation): This rulemaking
will not: (1) Have substantial direct effects on one or more Indian
tribes; (2) impose substantial direct compliance costs on Indian tribal
governments; or (3) preempt tribal law. Therefore, a tribal summary
impact statement is not required under Executive Order 13175 (Nov. 6,
2000).
H. Executive Order 13211 (Energy Effects): This rulemaking is not a
significant energy action under Executive Order 13211 because this
rulemaking is not likely to have a significant adverse effect on the
supply, distribution, or use of energy. Therefore, a Statement of
Energy Effects is not required under Executive Order 13211 (May 18,
2001).
I. Executive Order 12988 (Civil Justice Reform): This rulemaking
meets applicable standards to minimize litigation, eliminate ambiguity,
and reduce burden as set forth in sections 3(a) and 3(b)(2) of
Executive Order 12988 (Feb. 5, 1996).
J. Executive Order 13045 (Protection of Children): This rulemaking
does not concern an environmental risk to health or safety that may
disproportionately affect children under Executive Order 13045 (Apr.
21, 1997).
K. Executive Order 12630 (Taking of Private Property): This
rulemaking will not affect a taking of private property or otherwise
have taking implications under Executive Order 12630 (Mar. 15, 1988).
L. Congressional Review Act: Under the Congressional Review Act
provisions of the Small Business Regulatory Enforcement Fairness Act of
1996 (5 U.S.C. 801 et seq.), prior to issuing any final rule, the USPTO
will submit a report containing the final rule and other required
information to the United States Senate, the United States House of
Representatives, and the comptroller general of the Government
Accountability Office. The changes in this rulemaking are not expected
to result in an annual effect on the economy of $100 million or more, a
major increase in costs or prices, or significant adverse effects on
competition, employment, investment, productivity, innovation, or the
ability of United States-based enterprises to compete with foreign-
based enterprises in domestic and export markets. Therefore, this
rulemaking is not expected to result in a ``major rule'' as defined in
5 U.S.C. 804(2).
M. Unfunded Mandates Reform Act of 1995: The changes set forth in
this rulemaking do not involve a Federal intergovernmental mandate that
will result in the expenditure by State, local, and tribal governments,
in the aggregate, of $100 million (as adjusted) or more in any one
year, or a Federal private sector mandate that will result in the
expenditure by the private sector of $100 million (as adjusted) or more
in any one year, and will not significantly or uniquely affect small
governments. Therefore, no actions are necessary under the provisions
of the Unfunded Mandates Reform Act of 1995. See 2 U.S.C. 1501 et seq.
N. National Environmental Policy Act of 1969: This rulemaking will
not have any effect on the quality of the environment and is thus
categorically excluded from review under the National Environmental
Policy Act of 1969. See 42 U.S.C. 4321 et seq.
O. National Technology Transfer and Advancement Act of 1995: The
requirements of section 12(d) of the National Technology Transfer and
Advancement Act of 1995 (15 U.S.C. 272 note) are not applicable because
this rulemaking does not contain provisions that involve the use of
technical standards.
P. Paperwork Reduction Act of 1995: This final rule involves
information collection requirements that are subject to review and
approval by OMB under the Paperwork Reduction Act of 1995 (44 U.S.C.
3501 et seq.). The collections of information involved with this final
rule have been reviewed and previously approved by OMB under OMB
control numbers 0651-0009, 0651-0027, 0651-0028, 0651-0040, 0651-0050,
0651-0051, 0651-0054, 0651-0055, 0651-0056, and 0651-0061. This final
rule establishes and adjusts certain trademark fees, which updates the
total annual non-hour cost burdens by $33,440,550 as set out in the
following table:
------------------------------------------------------------------------
Estimated
update in
total annual
OMB control No. Information collection non-hour cost
title burdens (fees)
due to final
rule
------------------------------------------------------------------------
0651-0009....................... Applications for $22,853,750
Trademark
Registration.
0651-0027....................... Recording Assignments. 0
0651-0028....................... Fastener Quality Act 0
Insignia Recordal
Process.
0651-0040....................... Trademark Trial and 4,904,000
Appeal Board (TTAB)
Actions.
0651-0050....................... Response to Office -4,300
Action and Voluntary
Amendment Forms.
0651-0051....................... Madrid Protocol....... 3,205,450
0651-0054....................... Substantive 148,400
Submissions Made
During Prosecution of
the Trademark
Application.
0651-0055....................... Post Registration 2,159,000
(Trademark
Processing).
0651-0056....................... Submissions Regarding 0
Correspondence and
Regarding Attorney
Representation.
0651-0061....................... Trademark Petitions... 174,250
------------------------------------------------------------------------
[[Page 73215]]
This estimated cost burden increase is based on the current OMB
approved response volumes associated with these information
collections, which may be slightly different than the workflow
forecasts cited in other parts of this rule. In addition, updates to
the aforementioned information collections as a result of this final
rule will be submitted to OMB for approval prior to the rule's
effective date.
Notwithstanding any other provision of law, no person is required
to respond to nor shall a person be subject to a penalty for failure to
comply with a collection of information subject to the requirements of
the Paperwork Reduction Act unless that collection of information has a
currently valid OMB control number.
List of Subjects
37 CFR Part 2
Administrative practice and procedure, Courts, Lawyers, Trademarks.
37 CFR Part 7
Administrative practice and procedure, Trademarks.
For the reasons stated in the preamble and under the authority
contained in section 10(a) of the AIA; 15 U.S.C. 1113, 1123; and 35
U.S.C. 2, as amended, the USPTO amends parts 2 and 7 of title 37 as
follows:
PART 2--RULES OF PRACTICE IN TRADEMARK CASES
0
1. The authority citation for part 2 is revised to read as follows:
Authority: 15 U.S.C. 1113, 1123; 35 U.S.C. 2; sec. 10, Pub. L.
112-29, 125 Stat. 284, unless otherwise noted. Sec. 2.99 also issued
under secs. 16, 17, 60 Stat. 434; 15 U.S.C. 1066, 1067.
0
2. Amend Sec. 2.6 by:
0
a. Revising paragraphs (a)(1)(i) through (v);
0
b. Adding paragraph (a)(11)(iii);
0
c. Revising paragraphs (a)(12), (15) through (18), (22), and (23); and
0
d. Adding paragraphs (a)(24) and (25).
The revisions and additions read as follows:
Sec. 2.6 Trademark fees.
(a) * * *
(1) * * *
(i) For filing an application on paper, per class--$750.00
(ii) For filing an application under section 66(a) of the Act, per
class--$500.00
(iii) For filing a TEAS Standard application, per class--$350.00
(iv) For filing a TEAS Plus application under Sec. 2.22, per
class--$250.00
(v) Additional processing fee under Sec. 2.22(c), per class--
$100.00
* * * * *
(11) * * *
(iii) For filing an amendment to a registration prior to submission
of an affidavit under section 8 or section 71 of the Act and consisting
only of the deletion of goods, services, and/or classes--$0.00
(12) Affidavit under section 8. (i) For filing an affidavit under
section 8 of the Act on paper, per class--$325.00
(ii) For filing an affidavit under section 8 of the Act through
TEAS, per class--$225.00
(iii) For deleting goods, services, and/or classes after submission
and prior to acceptance of an affidavit under section 8 of the Act on
paper, per class--$350.00
(iv) For deleting goods, services, and/or classes after submission
and prior to acceptance of an affidavit under section 8 of the Act
through TEAS, per class--$250.00
* * * * *
(15) Petitions to the Director. (i) For filing a petition under
Sec. 2.146 or Sec. 2.147 on paper--$350.00
(ii) For filing a petition under Sec. 2.146 or Sec. 2.147 through
TEAS--$250.00
(iii) For filing a petition under Sec. 2.66 on paper--$250.00
(iv) For filing a petition under Sec. 2.66 through TEAS--$150.00
(16) Petition to cancel. (i) For filing a petition to cancel on
paper, per class--$700.00
(ii) For filing a petition to cancel through ESTTA, per class--
$600.00
(17) Notice of opposition. (i) For filing a notice of opposition on
paper, per class--$700.00
(ii) For filing a notice of opposition through ESTTA, per class--
$600.00
(18) Ex parte appeal. (i) For filing an ex parte appeal to the
Trademark Trial and Appeal Board on paper, per class--$325.00
(ii) For filing an ex parte appeal to the Trademark Trial and
Appeal Board through ESTTA, per class--$225.00
(iii) For filing a first request for an extension of time to file
an appeal brief, per application--$0.00
(iv) For filing a second or subsequent request for an extension of
time to file an appeal brief on paper, per application--$200.00
(v) For filing a second or subsequent request for an extension of
time to file an appeal brief through ESTTA, per application--$100.00
(vi) For filing an appeal brief on paper, per class--$300.00
(vii) For filing an appeal brief through ESTTA, per class--$200.00
* * * * *
(22) Extension of time for filing a notice of opposition under
Sec. 2.102(c)(1)(ii) or (c)(2). (i) For filing a request for an
extension of time to file a notice of opposition under Sec.
2.102(c)(1)(ii) or (c)(2) on paper--$400.00
(ii) For filing a request for an extension of time to file a notice
of opposition under Sec. 2.102(c)(1)(ii) or (c)(2) through ESTTA--
$200.00
(23) Extension of time for filing a notice of opposition under
Sec. 2.102(c)(3). (i) For filing a request for an extension of time to
file a notice of opposition under Sec. 2.102(c)(3) on paper--$500.00
(ii) For filing a request for an extension of time to file a notice
of opposition under Sec. 2.102(c)(3) through ESTTA--$400.00
(24) Oral hearing. For filing a request for an oral hearing before
the Trademark Trial and Appeal Board, per proceeding--$500.00
(25) Letter of protest. For filing a letter of protest, per subject
application--$50.00
* * * * *
0
3. Amend Sec. 2.114 by revising paragraph (a) to read as follows:
Sec. 2.114 Answer.
(a)(1) If no answer is filed within the time initially set, or as
later may be reset by the Board, the petition may be decided as in the
case of default. The failure to file a timely answer tolls all
deadlines, including the discovery conference, until the issue of
default is resolved.
(2) If the cancellation proceeding is based solely on abandonment
or nonuse and default judgment is entered with no appearance by the
defendant, and no filings are made other than the petition to cancel,
$200 per class of the petition to cancel fee may be refunded.
* * * * *
0
4. Add Sec. 2.149 before the center heading ``Certificate'' to read as
follows:
Sec. 2.149 Letters of protest against pending applications.
(a) A third party may submit, for consideration and entry in the
record of a trademark application, objective evidence relevant to the
examination of the application for a ground for refusal of registration
if the submission is made in accordance with this section.
(b) A party protesting multiple applications must file a separate
submission under this section for each application.
(c) Any submission under this section must be filed no later than
30 days after the date the application is published for opposition
under section 12(a) of the
[[Page 73216]]
Act and Sec. 2.80 of this part. If the subject application cannot be
withdrawn from issuance of a registration while consideration of the
protest is pending, the protest may be considered untimely.
(d)(1) If the letter of protest is filed before publication of the
subject application, the evidence must be relevant to the identified
ground(s) for refusal, such that it is appropriate for the examining
attorney to consider whether to issue a refusal or make a requirement
under the Act or this part.
(2) If the letter of protest is filed on or within 30 days after
the date of publication of the subject application, the evidence must
establish a prima facie case for refusal on the identified ground(s),
such that failure to issue a refusal or to make a requirement would
likely result in issuance of a registration in violation of the Act or
parts 2 or 7 of this section.
(e) Filing a submission under this section does not stay or extend
the time for filing a notice of opposition.
(f) Any submission under this section must be made in writing,
filed through TEAS, and include:
(1) The fee required by Sec. 2.6(a)(25);
(2) The serial number of the pending application that is the
subject of the protest;
(3) An itemized evidence index that does not identify the protestor
or its representatives, does not contain legal argument, and includes:
(i) An identification of the documents, or portions of documents,
being submitted as evidence. The submission may not total more than 10
items of evidence in support of a specified ground of refusal and more
than 75 total pages of evidence without a detailed and sufficient
explanation that establishes the special circumstances that necessitate
providing more than 10 items of evidence per refusal ground or more
than 75 total pages of evidence; and
(ii) A concise factual statement of the relevant ground(s) for
refusal of registration appropriate in ex parte examination that each
item identified supports; and
(4) A clear and legible copy of each item identified in the
evidence index where:
(i) Copies of third-party registrations come from the electronic
records of the Office and show the current status and title of the
registration;
(ii) Evidence from the internet includes the date the evidence was
published or accessed and the complete URL address of the website; and
(iii) Copies of printed publications identify the publication name
and date of publication.
(g) Any submission under this section may not be entered or
considered by the Office if:
(1) Any part of the submission is not in compliance with this
section;
(2) The application record shows that the examining attorney
already considered the refusal ground(s) specified in the submission;
or
(3) A provision of the Act or parts 2 or 7 of this chapter
precludes acceptance of the submission.
(h) If a submission is determined to be in compliance with this
section, only the specified ground(s) for refusal and the provided
evidence relevant to the ground(s) for refusal will be included in the
application record for consideration by the examining attorney. An
applicant should not reply to the entry into the application record of
evidence entered under this section.
(i) Any determination whether to include in an application record
the ground(s) or evidence for a refusal of registration in a submission
under this section is not petitionable.
(j) A third party filing a submission under this section will not
receive any communication from the Office relating to the submission
other than acknowledgement that it has been received by the Office and
notification of whether the submission is found to be compliant or non-
compliant with this section. Communications with the third party will
not be made of record in the application. The Office will not accept
amendments to a non-compliant submission that was previously filed.
Instead, a third party who previously filed a non-compliant submission
may file another submission that meets the requirements of paragraph
(f) of this section, provided the time period for filing a submission
in paragraph (c) of this section has not closed.
(k) The limited involvement of the third party ends with the filing
of the submission under this section. The third party may not directly
contact the examining attorney assigned to the application.
0
5. Revise Sec. 2.161 to read as follows:
Sec. 2.161 Requirements for a complete affidavit or declaration of
use in commerce or excusable nonuse; requirement for the submission of
additional information, exhibits, affidavits or declarations, and
specimens; and fee for deletions of goods, services, and/or classes
from a registration.
(a) Requirements for a complete affidavit or declaration. A
complete affidavit or declaration under section 8 of the Act must:
(1) Be filed by the owner within the period set forth in Sec.
2.160(a);
(2) Include a verified statement attesting to the use in commerce
or excusable nonuse of the mark within the period set forth in section
8 of the Act. This verified statement must be executed on or after the
beginning of the filing period specified in Sec. 2.160(a);
(3) Include the U.S. registration number;
(4)(i) Include the fee required by Sec. 2.6 for each class that
the affidavit or declaration covers;
(ii) If the affidavit or declaration is filed during the grace
period under section 8(a)(3) of the Act, include the grace period
surcharge per class required by Sec. 2.6; and
(iii) If at least one fee is submitted for a multiple-class
registration, but the fee is insufficient to cover all the classes, and
the class(es) to which the fee(s) should be applied is not specified,
the Office will issue a notice requiring either submission of the
additional fee(s) or specification of the class(es) to which the
initial fee(s) should be applied. Additional fees may be submitted if
the requirements of Sec. 2.164 are met. If the additional fee(s) is
not submitted within the time period set out in the Office action, and
the class(es) to which the original fee(s) should be applied is not
specified, the Office will presume that the fee(s) covers the classes
in ascending order, beginning with the lowest numbered class;
(5)(i) Specify the goods, services, or nature of the collective
membership organization for which the mark is in use in commerce, and/
or the goods, services, or nature of the collective membership
organization for which excusable nonuse is claimed under paragraph
(a)(6)(ii) of this section; and
(ii) Specify the goods, services, or classes being deleted from the
registration, if the affidavit or declaration covers fewer than all the
goods, services, or classes in the registration;
(6)(i) State that the registered mark is in use in commerce; or
(ii) If the registered mark is not in use in commerce on or in
connection with all the goods, services, or classes specified in the
registration, set forth the date when such use of the mark in commerce
stopped and the approximate date when such use is expected to resume,
and recite facts to show that nonuse as to those goods, services, or
classes is due to special circumstances that excuse the nonuse and is
not due to an intention to abandon the mark; and
(7) Include one specimen showing how the mark is in use in commerce
for each class in the registration, unless excusable nonuse is claimed
under paragraph (a)(6)(ii) of this section. When requested by the
Office, additional
[[Page 73217]]
specimens must be provided. The specimen must meet the requirements of
Sec. 2.56.
(8) Additional requirements for a collective mark: In addition to
the above requirements, a complete affidavit or declaration pertaining
to a collective mark must:
(i) State that the owner is exercising legitimate control over the
use of the mark in commerce; and
(ii) If the registration issued from an application based solely on
section 44 of the Act, state the nature of the owner's control over the
use of the mark by the members in the first affidavit or declaration
filed under paragraph (a)(1) of this section.
(9) Additional requirements for a certification mark: In addition
to the above requirements, a complete affidavit or declaration
pertaining to a certification mark must:
(i) Include a copy of the certification standards specified in
Sec. 2.45(a)(4)(i)(B);
(A) Submitting certification standards for the first time. If the
registration issued from an application based solely on section 44 of
the Act, include a copy of the certification standards in the first
affidavit or declaration filed under paragraph (a)(1) of this section;
or
(B) Certification standards submitted in prior filing. If the
certification standards in use at the time of filing the affidavit or
declaration have not changed since the date they were previously
submitted to the Office, include a statement to that effect. If the
certification standards in use at the time of filing the affidavit or
declaration have changed since the date they were previously submitted
to the Office, include a copy of the revised certification standards;
(ii) State that the owner is exercising legitimate control over the
use of the mark in commerce; and
(iii) Satisfy the requirements of Sec. 2.45(a)(4)(i)(A) and (C).
(10) For requirements of a complete affidavit or declaration of use
in commerce or excusable nonuse for a registration that issued from a
section 66(a) basis application, see Sec. 7.37.
(b) Requirement for the submission of additional information,
exhibits, affidavits or declarations, and specimens. The Office may
require the owner to furnish such information, exhibits, affidavits or
declarations, and such additional specimens as may be reasonably
necessary to the proper examination of the affidavit or declaration
under section 8 of the Act or for the Office to assess and promote the
accuracy and integrity of the register.
(c) Fee for deletions of goods, services, and/or classes from a
registration. Deletions by the owner of goods, services, and/or classes
from a registration after submission and prior to acceptance of the
affidavit or declaration must be accompanied by the relevant fee in
Sec. 2.6(a)(12)(iii) or (iv).
PART 7--RULES OF PRACTICE IN FILINGS PURSUANT TO THE PROTOCOL
RELATING TO THE MADRID AGREEMENT CONCERNING THE INTERNATIONAL
REGISTRATION OF MARKS
0
6. The authority citation for part 7 continues to read as follows:
Authority: 15 U.S.C. 1123, 35 U.S.C. 2, unless otherwise noted.
0
7. Amend Sec. 7.6 by revising paragraph (a)(6) to read as follows:
Sec. 7.6 Schedule of U.S. process fees.
(a) * * *
(6) Affidavit under section 71. (i) For filing an affidavit under
section 71 of the Act on paper, per class--$325.00
(ii) For filing an affidavit under section 71 of the Act through
TEAS, per class--$225.00
(iii) For deleting goods, services, and/or classes after submission
and prior to acceptance of an affidavit under section 71 of the Act on
paper, per class--$350.00
(iv) For deleting goods, services, and/or classes after submission
and prior to acceptance of an affidavit under section 71 of the Act
through TEAS, per class --$250.00
* * * * *
0
8. Revise Sec. 7.37 to read as follows:
Sec. 7.37 Requirements for a complete affidavit or declaration of use
in commerce or excusable nonuse; requirement for the submission of
additional information, exhibits, affidavits or declarations, and
specimens; and fee for deletions of goods, services, and/or classes
from a registration.
(a) Requirements for a complete affidavit or declaration. A
complete affidavit or declaration under section 71 of the Act must:
(1) Be filed by the holder of the international registration within
the period set forth in Sec. 7.36(b);
(2) Include a verified statement attesting to the use in commerce
or excusable nonuse of the mark within the period set forth in section
71 of the Act. The verified statement must be executed on or after the
beginning of the filing period specified in Sec. 7.36(b). A person who
is properly authorized to sign on behalf of the holder is:
(i) A person with legal authority to bind the holder;
(ii) A person with firsthand knowledge of the facts and actual or
implied authority to act on behalf of the holder; or
(iii) An attorney, as defined in Sec. 11.1 of this chapter, who
has an actual written or verbal power of attorney or an implied power
of attorney from the holder;
(3) Include the U.S. registration number;
(4)(i) Include the fee required by Sec. 7.6 for each class that
the affidavit or declaration covers;
(ii) If the affidavit or declaration is filed during the grace
period under section 71(a)(3) of the Act, include the grace period
surcharge per class required by Sec. 7.6;
(iii) If at least one fee is submitted for a multiple-class
registration, but the fee is insufficient to cover all the classes, and
the class(es) to which the fee(s) should be applied is not specified,
the Office will issue a notice requiring either submission of the
additional fee(s) or specification of the class(es) to which the
initial fee(s) should be applied. Additional fees may be submitted if
the requirements of Sec. 7.39 are met. If the additional fee(s) is not
submitted within the time period set out in the Office action, and the
class(es) to which the original fee(s) should be applied is not
specified, the Office will presume that the fee(s) covers the classes
in ascending order, beginning with the lowest numbered class;
(5)(i) Specify the goods, services, or nature of the collective
membership organization for which the mark is in use in commerce, and/
or the goods, services, or nature of the collective membership
organization for which excusable nonuse is claimed under paragraph
(a)(6)(ii) of this section; and
(ii) Specify the goods, services, or classes being deleted from the
registration, if the affidavit or declaration covers fewer than all the
goods, services, or classes in the registration;
(6)(i) State that the registered mark is in use in commerce; or
(ii) If the registered mark is not in use in commerce on or in
connection with all the goods, services, or classes specified in the
registration, set forth the date when such use of the mark in commerce
stopped and the approximate date when such use is expected to resume,
and recite facts to show that nonuse as to those goods, services, or
classes is due to special circumstances that excuse the nonuse and is
not due to an intention to abandon the mark; and
(7) Include one specimen showing how the mark is in use in commerce
for each class in the registration, unless excusable nonuse is claimed
under
[[Page 73218]]
paragraph (a)(6)(ii) of this section. When requested by the Office,
additional specimens must be provided. The specimen must meet the
requirements of Sec. 2.56 of this chapter.
(8) Additional requirements for a collective mark: In addition to
the above requirements, a complete affidavit or declaration pertaining
to a collective mark must:
(i) State that the holder is exercising legitimate control over the
use of the mark in commerce; and
(ii) State the nature of the holder's control over the use of the
mark by the members in the first affidavit or declaration filed under
paragraph (a)(1) of this section.
(9) Additional requirements for a certification mark: In addition
to the above requirements, a complete affidavit or declaration
pertaining to a certification mark must:
(i) Include a copy of the certification standards specified in
Sec. 2.45(a)(4)(i)(B) of this chapter;
(A) Submitting certification standards for the first time. In the
first affidavit or declaration filed under paragraph (a)(1) of this
section, include a copy of the certification standards; or
(B) Certification standards submitted in prior filing. If the
certification standards in use at the time of filing the affidavit or
declaration have not changed since the date they were previously
submitted to the Office, include a statement to that effect. If the
certification standards in use at the time of filing the affidavit or
declaration have changed since the date they were previously submitted
to the Office, include a copy of the revised certification standards;
(ii) State that the holder is exercising legitimate control over
the use of the mark in commerce; and
(iii) Satisfy the requirements of Sec. 2.45(a)(4)(i)(A) and (C) of
this chapter.
(b) Requirement for the submission of additional information,
exhibits, affidavits or declarations, and specimens. The Office may
require the holder to furnish such information, exhibits, affidavits or
declarations, and such additional specimens as may be reasonably
necessary to the proper examination of the affidavit or declaration
under section 71 of the Act or for the Office to assess and promote the
accuracy and integrity of the register.
(c) Fee for deletions of goods, services, and/or classes from a
registration. Deletions by the holder of goods, services, and/or
classes from a registration after submission and prior to acceptance of
the affidavit or declaration must be accompanied by the relevant fee in
Sec. 7.6(a)(6)(iii) or (iv).
Andrei Iancu,
Under Secretary of Commerce for Intellectual Property and Director of
the United States Patent and Trademark Office.
[FR Doc. 2020-25222 Filed 11-16-20; 8:45 am]
BILLING CODE 3510-16-P