Trademark Fee Plan Stirs Unease Over Application, Protest Costs

A proposal to raise trademark fees—including a steep hike in costs for registration applications and letters of protest—has practitioners concerned about the burden on small businesses.

The US Patent and Trademark Office announced plans earlier this month to raise 22 trademark fees. They include a $100 increase per class of goods and services for a basic electronic application, which would make the minimum filing fee $350. The agency also wants to introduce 13 new fees, many of them penalties for application deficiencies. A public hearing on the proposal is scheduled in June.

Adding the weight of higher fees and new fines to an already-heavy burden many small businesses bear may result in some choosing not to register their marks, attorneys said. This could mean fewer small business owners applying to protect their trademarks or some choosing to hold off on registration until they can afford it, they said.

“I am concerned that this will deter certain small business owners from being able to actually file the trademarks that they need to file because of the cost concerns and because of the additional costs,” said trademark attorney Josh Gerben, founder of Gerben Perrott PLLC. “If anything, it just creates an additional burden on small businesses.”

The last time trade mark fees were increased was in 2021. These fees are necessary to sustain the work of the PTO and to ensure there is a trademark system that is capable of supporting its applicants, said Ed Timberlake of Timberlake Law, a former trademark examining attorney at the office.

Filing-Error Penalties

In addition to increases in existing fees, the agency’s plan would introduce a $100 penalty per class of goods and services for filings that include insufficient information. The proposal would add a fee for applications that exceed the current 1,000-character limit: $200 per class for each additional 1,000 characters submitted.

Such changes might be intended to discourage fraudulent filings and applications that are particularly time-consuming for the office, according to Gerben.

The start of the pandemic brought a flood of fraudulent filings from China, Gerben said. “You have all this fraud that was occurring, and that was jamming everything up because they had so many applications coming in from China,” he said.

“They had to basically rehaul how they examine every application.”

Instituting these penalty fees would permit the office to stop the examination process and stop expending resources on flagged applications until the applicant responds to the action, Gerben said.

“I think that they’re giving themselves some outs with these new fee structures,” he said.

Rachael Dickson, an attorney at Catalytic Law and former PTO trademark examiner, said it’s a good idea to impose restrictions on overly lengthy applications given the agency’s limited resources. The proposed penalty for insufficient information, though, requires more scrutiny, she said.

“We need so much more detail on that,” she said. “That is so vague. Every trademark attorney I know hones in on that and is like ‘what does that mean?’”

Discouraging Pushback

Dickson said one of her primary concerns with the proposed fee increases is the rise in the cost to file a letter of protest, which allows anyone to submit evidence to the office regarding the registrability of a proposed mark.

In 2021, the agency introduced a $50 fee to file such letters. Now, it’s proposing to boost the price by 400%.

“Raising it to $250 doesn’t make sense,” said Dickson. “It is a much larger percentage increase than I think any other fee I saw on that proposal.”

Dickson said the reason for the steep increase may be to deter groups such as “Trademark Watch Dawgs” from filing such letters. The Facebook group made up of small business owners banded together to stop trademarks such as “Mom” and “Mrs. Claus” from being registered.

“It’s really kind of doing the USPTO a favor by pointing out, this is not a valid trademark. But they seem kind of annoyed by this group,” she said.

The office attempted in 2021 to increase the letter of protest cost from free to $250, Dickson said. The move was met with protest from the Facebook group, so the agency settled on $50.

“Now they’re trying it again,” she said. “And it kind of just seems retaliatory against the group.”

Attorney Sam Castree, whose firm Castree Law focuses on business and intellectual property, said he expects the PTO to receive pushback on some of the proposed increases during the upcoming public hearing. It’s particularly likely, he said, given the lack of an alert on the issue when the proposal was first published on the website.

Impact on Small Businesses

The trademark fee proposal’s potential impact on small businesses is a major concern for some practitioners.

Higher fees could mean that those business owners would get priced out of filing a trademark application, Gerben said.

“At the end of the day, there’s a lot of small business owners that are behaving perfectly fine right now, and they’re going to bear the brunt of these costs,” said Gerben.

Castree often represents video game developers, many of whom he said require years to develop their games and file several extensions to express their intent to use trademark applications. In such situations, the $125 increase of an extension fee—to $250 for the fourth and any subsequent extensions—would add a further burden to such applicants.

There is a point to the fee increases, according to said William Stroever, chair of the intellectual property department at Cole Schotz P.C.

The PTO “is not a money hungry corporation,” Stroever said. “They’re trying to pay for what they’re providing with the fees.”

The real danger for small businesses can come later with the aggregate costs. The filing fee—the “entry fee” into an application—is usually manageable, Stroever said. But when combined with attorneys’ fees, office actions, and extensions, the costs can add up and become too much for a small business owner to handle.

“If they get blinded by the low price tag on the filing fee, sometimes they can get surprised later on and then maybe they abandon their application and they waste that money,” Stroever said.

It’s essential that attorneys ensure their clients know the true potential cost of their application, he said.

“The real change if we want to help out small businesses is to give them more guidance at the beginning of the process to basically not file things that don’t have a chance,” said Timberlake.

“If you want a system like that, and you want it to work, you have to pay for it,” he said. “That doesn’t seem unreasonable.”