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Trademark Post Registration Audit Best Practices

It’s officially tax season, but the IRS isn’t the only government agency that can audit your business. Since November 2017, the United States Patent and Trademark Office has performed audits of trademark registrations during the Section 8 maintenance phase.  

Why Post Registration Audits Exist

 

Trademarks protect brand identifiers used in commerce. The name, tagline, color, logo, shape, or sound that identifies the source of a good or service that is available for consumer use. The protection is limited to what the trademark identifies and allows the owner to prevent others from using the same or similar identifier in the same or related way. 

Unlike other forms of intellectual property protection, trademarks can last for as long as they are used. Before a registration certificate is issued, the trademark owner must submit proof of use. After registration, the owner will continue to submit proof of use every few years. The first post-registration proof is the Section 8 maintenance declaration. The purpose of the Post Registration Audit, according to the USPTO, is to promote the accuracy and integrity of the trademark registry. 

Trademark registration in the United States is use based. During the post-registration maintenance, the trademark owner is, under oath, declaring that they are using the trademark as initially registered, which means if their registration is for skin care preparations, namely; lotions, cleansers, and toners in class 3 and clothing, namely t-shirts, hoodies, sweatpants, socks, and caps in class 25, by completing the maintenance the trademark owner is stating that they are still using the trademark to offer the same goods. But what happens if they’re not? The registry’s integrity is compromised because trademark protection is extended to protect a good not identified by the registered trademark. As we discussed earlier, this is outside the scope of protection. 

What is the Post Registration Audit

 

During the Post Registration Audit,  

  • if a Section 8 or 71 if registered through the international Madrid Protocol, maintenance is timely filed 
  • Has more than four goods or services in one class or  
  • Has two classes with more than two goods and services in each class 

It may be randomly selected to determine if they are using the trademark as initially registered. During the audit process, the audit examiner will choose two goods or services from each audited class, and the trademark owner must submit proof of use for each of the selected goods or services. 

In our previous example, the trademark was registered in two classes with more than two goods. 

Class 3: skin care preparations, namely lotions, cleansers, and toners  

Class 25: clothing, namely t-shirts, hoodies, sweatpants, socks, and caps  

Suppose the audit examiner chooses cleansers and lotion in class 3 and socks and t-shirts in class 25, and the trademark owner cannot provide proof of use for socks. In that case, they risk incurring additional fees for deleting the good they aren’t using or worse. Cancellation of their trademark if they choose to ignore the audit request. 

Post Registration Audit Fees 

 

There are no fees associated with Post Registration Audit if the trademark owner can submit the proof requested. If, however, the audit results in the trademark owner needing to delete goods and services after their declaration of use is filed, the fee is $250 per good. Depending on when the trademark owner responds to the audit, there may be an additional $100 deficiency surcharge fee. 

According to the USPTO, there have been 23,825 audit requests issued since the program began in 2017. Of those requests, 50% responded by deleting goods or services, and over 10% of the audited registrations were canceled. Wow! 

The best practices to avoid additional fees or cancellations associated with a Post Registration Audit are: 

  • Don’t register goods and services that you may offer  only the ones that you are offering
  • Delete goods and services you are no longer offering before filing your Section 8 or other maintenance declaration.  
  • Respond to the audit request, which will be issued as an office action in the allotted time. 

If your registration is audited, don’t panic. My office is here to help you. Complete the contact form below, and we will be in touch shortly. 

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