Pending Trademark Applications Rise 23% Causing Avoidable Registration Delays

Tiffany Valeriano,

If you thought the trademark application process couldn’t get any worse, you’re probably mistaken.

Recently, there’s been an onslaught of trademark activity worldwide. In 2007, the USPTO received 370,000 applications. In 2016, application volume increased to 500,000. With the USPTO balancing dramatic annual increases in trademark applications against the Federal hiring freeze that has left thousands of U.S. government positions unfilled, there’s some definite tension about what the future could hold.

The political and innovation climate have left the USPTO, and other global trademark bodies, in a challenging position. The USPTO’s FY 2016 Report stated a goal of reducing first office action on applications and increasing the percentage of applicants who immediately pass an examination. While there’s a possibility the Federal hiring freeze will be lifted in late April, organizations who submit a “Hail Mary” application with minimal research could discover their time to registration is much longer than historically reported USPTO averages.

How Global Trademark Offices are Responding to Increased Application Volume

The USPTO isn’t the only global trademark office trying to encourage higher-quality applications as a tool for avoiding a drastic increase in time to registration for qualified applicants. IP Australia recently announced significant changes to their fee structure. Certain actions, such as international search and Madrid designation, have decreased in price. The act of registration is also now free. However, the cost of applications to IP in Australia has nearly doubled.

In India, the annual rate of trademark registration has tripled in the past year alone. India’s Department of Industrial Policy and Promotion (DIPP) raised application fees 125% in early March. Other changes included a decision to double the fee for expedited application examination, and restructuring of their requirements for application content.

Trademark Application Quality isn’t Growing as Quickly

The dramatic increase in demand for Trademarks and Patents worldwide reflects the rate of innovation. Technological adoption, unprecedented information availability, and the globalization of everything are just three of many cultural factors that have lead to record-high numbers of trademark applications in many jurisdictions worldwide.

Still, the financial barriers to filing a trademark application are very low in most countries. In some places, like India, entrepreneurs and startups even receive a 50% discount on the listed price of application fee. This has lead to a variety of individuals and organizations snatching up trademarks, including trademark “squatters” and individuals with the intent to use. These parties have caused the number of “Hail Mary” applications to reach record highs.

Much like the football term, these applications are thrown out with very little research and clog the process for other members of the applicant pool.

Why Trademark Applications Subject to First Action Aren't Going Anywhere Quickly

USPTO data reveals that in 2016, the percentage of trademark applications that failed the first action was nearly 18%. With the volume of applications increasing, this totaled nearly 90,000 applications.

While data is only available for the first quarter of 2017, it would appear the impact of the hiring freeze is already reflected in certain USPTO time-sensitive performance metrics. For corporate trademark managers and other professionals in IP-focused roles, the messaging from global governing bodies is that it’s clearly time to step up application quality - or face a nearly endless wait for registration due to volume and staffing problems on a global scale.

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Fact: Research for a Successful Trademark Application is Increasingly Difficult

Creating applications that pass the first office action requires an effective assessment of risk, similarity, and other key factors on a global scale. Search can be done without cost using free resources such as USPTO, TESS, WIPO, and EUIPO, but these databases do not include the contextual details teams need to determine whether they can proceed with an application with confidence.

Even if your organization does not plan to distribute products or services on a global scale, you’re wise to avoid limiting your search to your own country. Globalization has significantly changed the nature of trademark infringement.

In-depth insight on the risks associated with incomplete search is detailed in The Real Cost of Incomplete Data When Searching Registered Trademarks.

You need global insights that go deeper than exact matches, to reveal other mark holder’s litigation history, distribution channels, and products. Your search needs to answer questions that address contextually-based, real world risks.

  • Does the similar mark holder operate in the same countries?
  • Do legal records reveal they file oppositions on a regular basis?
  • Do they have brands in the same countries you are targeting?

Trademark managers and intellectual property teams are now faced with difficult decisions on how to maximize their budget and resources for the best application quality possible. Avoiding first office action is a must, unless they’re willing to sit in pendency purgatory for unprecedented lengths of time.

Does Trademark Search Have to Be Difficult, Expensive, or Incomplete?

Few individuals can predict precisely what the future holds, but it’s certainly possible that global trademark offices could take additional action in the future to discourage poor-quality “Hail Mary” applications. Organizations could one day face financial penalties for first office action, but already face the risk of lengthy mark registration wait time. Trademark professionals need to invest more in research and legal review to avoid registration delays.

3 Options for Trademark Search

Option #1: The Expensive

Using a trademark search firm staffed by professionals is one option. While your costs can vary widely, and may be subject to add-on fees, this route is far from inexpensive. In “How Much Do Online Trademark Search Services Cost?,” we estimate a $40,000 price tag associated with professional cross-market search. Turn-around time can also vary, but organizations may wait several weeks or longer.

Option #2: The Time-Consuming or Incomplete

Manual search is less expensive than a professional search service. Database access starts at an estimated $5,000. However, results can take weeks to review, due to poor search results rankings, a need for multiple searches, and legal risk assessment. Manual search is less costly than a service, but it's slow. There’s risk that your organization could invest weeks into research and thousands into a legal review to find your candidate has a much higher risk profile than you’re willing to accept.

Option #3: NameCheck

Fortunately, your organization can file an application with confidence, without having to choose between trademark research that’s either time-consuming and slow or incredibly expensive (in many cases, both). NameCheck is the leading technology-assisted software solution for trademark managers who need to quickly proceed to legal review and application, without decreasing application quality.

NameCheck's search algorithm is capable of broad, cross-market search and multi-factor risk assessment, yielding results in just seconds. Trademark teams can learn whether their mark candidate has potential risk around product types, apps store usage, or global risks with a total risk score. In a global trademark environment that’s increasingly competitive, your organization can’t afford to face first office action.

NameCheck helps you avoid getting stuck in a pending status, without dramatically increased costs or slow research.

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By Tiffany Valeriano
Trademark Specialist