On April 4, 2016 the United States Patent and Trademark Office (USPTO) published a Notice of Proposed Rulemaking that details proposed changes to the USPTO’s rules of practice for trademark application opposition and registration cancellation proceedings. Public comments are due by June 3, 2016. While it is possible that the rules will be modified further before being finalized based upon public comment, it is likely that the rules ultimately will take effect substantially in the form published.

Removal of “Service” Requirement for Pleadings

The regulations would significantly alter current practice by doing away with the requirement that parties commencing a proceeding “serve” (that is, share in a manner that complies with certain technical standards) a copy of its pleading on the defendant party. Instead, the Trademark Trial and Appeal Board (the Board) would take over that responsibility, and would effect service by emailing a link to the Board’s TTABVUE database, where a copy of the pleading would be available. This would be a welcome change to those who bring trademark oppositions not just because it does away with an administrative hassle, but because it would avoid the real possibility of a Notice of Opposition being dismissed as filed too late because the technical requirements relating to “serving” the Notice on an applicant were not met by the opposition deadline. There are real examples (see here and here) as to why the prospect of failing to properly serve a Notice of Opposition by the opposition deadline makes trademark practitioners anxious.

Impact of “Service” Change on Non-U.S. Trademark Registrants

The changes to the manner in which trademark registrants would be notified of petitions to cancel their registrations might impact non-U.S. rights holders in particular. Namely, the proposed rules change would shift the onus of notifying the registrant about the proceeding from the cancellation petitioner to the Board. That arguably would make it less likely that a registrant with outdated USPTO database contact information would receive timely notice of the proceedings. This risk could arise, e.g., where USPTO records include the contact information for a defunct law firm, or include the registrant’s out-of-date contact information.

Moreover, where foreign registrants have used the Madrid Protocol to extend rights under International Registrations to the U.S., it will be important particularly that the designated representative information listed in the WIPO records is up to date. It is questionable whether the Board staff will take further steps to reach the party of interest beyond an initial email to that representative. The proposed new “service” approach might increase the risk of a registrant’s discovering only when it’s too late that a cancellation action had been filed and had succeeded on a “default judgment” basis.

The above said, it is worth noting that these concerns about registrants being notified of cancellation proceedings might be offset somewhat by a separate proposed rule change. Namely, cancellation petitioners would be required to include with the Petition to Cancel the name, physical address and email address of any attorney “reasonably believed” to be representing the registrant, even if such attorney is not the correspondent of record in the USPTO records. It will be interesting to see how the “reasonably believed” standard is interpreted and applied should this rule change proposal remain in the final version of the regulations revisions.

Non-U.S. Parties Potentially at Greater Risk for Live Deposition Exposure

The new rules would impact foreign companies engaged in trademark oppositions or cancellations before the USPTO in another way. Under the present rules, Board proceeding participants cannot compel foreign adverse parties to come to the U.S. for a live “deposition” (i.e., to undergo in-person questioning about the facts underlying the case). Instead, for now depositions involving non-U.S. parties typically are carried out through an exchange of written documents. Under the proposed new rules, a non-U.S. party would need to notify the other side when its officer, director, managing agent, or “other person who consents to testify on its behalf” is in the U.S. during the discovery or testimony phases of the proceedings. That notice would allow the other side to take a live discovery deposition or a testimony deposition where the other side probably would not have had reason to know that the individual in question was to be visiting the U.S. Participation in a live deposition on U.S. soil might be more costly to the foreign party, and generally would be more effective in producing information and testimony useful to the other side.

Unilateral Declaration Testimony Possible – Good News for Non-U.S. Parties

The new Board rules would allow parties to unilaterally choose to produce trial testimony by affidavit or declaration, subject to the adverse party’s right of oral cross examination. This proposed change would impact all Board proceedings parties, but likely would be of special interest to non-U.S. parties that are not familiar with and/or are not willing to devote the significant resources usually demanded by the comparatively intricate evidence submission procedures under U.S. practice as compared with those in most non-U.S. jurisdictions. Under the present Board rules, the simpler and more cost-efficient declaration testimony option only is available where the parties stipulate to that approach.

Conclusion 

The proposed changes, which are too numerous and varied to fully address here, are on the whole sensible and likely to streamline Board proceedings. Nevertheless, potential pitfalls for practitioners remain. Stay tuned to the IP Law Bulletin blog over the coming weeks for comments about other aspects of the proposed new USPTO opposition and cancellation proceedings rule changes, including changes to the timing relating to the “discovery” process and discovery disputes.