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Trademark Surge Lessens, but Backlog Leaves Long Waits for Now

Nov. 8, 2021, 10:09 AM

An unusual growth rate of U.S. trademark applications appears to be slowing, giving Patent and Trademark officials a chance to reduce processing wait times.

Trademark attorneys said they hope wait times will come down quickly, but are bracing for the possibility that it will take until next year, if not longer, to reach normal processing periods. In the meantime, the waits mean clients don’t have the benefit of a registration to help them enforce their marks. In some cases, applicants must face more expensive attorneys’ fees because attorneys are working longer on their registrations.

Examiners usually initially evaluate applications within three to four months, but since the surge the time for an initial examination has about doubled, according to the trademark office.

The steep increase in trademark applications began at the second half of 2020 and continued into 2021. Trademark applications this year increased 27.5% over the previous year

But even with continued growth, the second half of 2021 started to show signs that the surge is over, Trademark Commissioner David Gooder said at a recent Trademark Public Advisory Committee meeting.

Monthly growth rates declined in July for the first time since the surge began. In September, the latest month for data, the growth rate declined by 32% over the same month a year ago, the most dramatic drop after a 10% decrease in August and 3% in July.

Whittling Down the Backlog

The PTO now has a backlog of around 499,000 unexamined application classes, which are categories of trademarks. A usual backlog is around 150,000 classes, according to the agency.

The trademark office has reorganized staff and hired new examiners, deputy commissioner for trademark operations Dan Vavonese said at the advisory meeting.

Sixty new examiners were hired in October, and 40 more will be hired in the spring.

“We have opportunities to look at our entire examination process and find places to streamline, where we can be more efficient,” Vavonese said. “That’s what our focus is going to be this year.”

Delay Hurts Brand Owners

The delay in agency response times has made it more difficult for brand owners to get registrations and enforce their marks, said Jennifer Lantz, an intellectual property partner at Duane Morris LLP. Waiting for a registration slows clients’ abilities to go after knock-offs, Lantz said.

More applications also makes it harder to get a registration, she added.

“There are more applicants looking for the same or similar things,” Lantz said, “and so registrations are more crowded and you have to have more fights about similarities.”

Applicants wanting both international and U.S. registrations are also running into issues because of the processing times, said Sheila Fox Morrison, a trademark attorney at Davis Wright Tremaine LLP.

Applicants are having to file for international registrations before getting any initial feedback from the trademark office, which is creating more objections from the World Intellectual Property Organization. Usually, applicants receive an initial examination from the agency and can adjust their submissions before filing with WIPO.

Fixing the filing is difficult when there isn’t a U.S. examiner assigned to the application, Morrison said.

“It’s created a timing problem that has created a lot of stress and complications as we try to deal with what would otherwise be a pretty basic problem, which is classification of goods and services,” Morrison said. “It’s hundreds of dollars, thousands of dollars in legal fees that we would not normally charge to our clients because we wouldn’t be trying to solve these problems.”

Better Than Last Year

Gooder said the office is still receiving a large number of applications, but growth is declining because the rates compare to previous months that had unsustainable numbers, like the 138% rise in December 2019, which was in anticipation of the office’s higher filing fee. September 2020 saw an 88% increase.

The agency has been looking into reasons for the surge and its decline, Gooder said. The growth of online sales, new businesses started from the pandemic, and subsidies from the U.S. and Chinese governments all could have contributed, he said.

The office expects that the backlog will grow slightly, but that overall it will be able to start making headway.

“If new filings stay kind of quiet like they are right now, that will help,” Gooder said at the advisory meeting. “It’s the mouse moving through the snake. It’s going to take awhile.”

To contact the reporter on this story: Samantha Handler in Washington at shandler@bloombergindustry.com

To contact the editors responsible for this story: Renee Schoof at rschoof@bloombergindustry.com; Keith Perine at kperine@bloombergindustry.com

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