On December 3, 2019, Senator Thom Tillis, R-NC, chaired the Senate Committee on the Judiciary Intellectual Property Subcommittee hearing entitled “Fraudulent Trademarks: How They Undermine the Trademark System and Harm American Consumers and Businesses.”
The hearing focused on ways to address fraudulent trademark filings, which have increased, particularly fraudulent filings by companies in China. According to Professor Barton Beebe, one of five witnesses who testified at the hearing, the problem is so great that “[t]wo-thirds of the applications filed in 2017 in Class 25 (apparel) were fraudulent in nature, and yet 60% of those were approved for publication by the USPTO, and 39% proceeded to registration.”
Although a rule change in August, which requires foreign trademark applicants to use U.S. Counsel, appears to have impacted the problem, it is not expected to go away. To further combat the problem witness Douglas A. Rettew of Finnegan, Henderson, Farabrow, Garrett & Dunner, LLP, recommended that Congress implement a legislative fix to the erosion of the rebuttable presumption that the holder of a trademark faces irreparable harm and is entitled to injunctive relief from a trademark infringer. Since the decision in eBay v. MercExchange, the rebuttable presumption that federal courts afforded to holders of trademarks has declined – such that some federal courts no longer even utilize it. Mr. Retew argued that restoring the presumption would provide clarity to litigants and allow trademark holders to stop infringement by fraudulent registrants. Other methods discussed to address fraudulent registration were decreasing the standard to prove fraud, creating specialized examiners, and allowing the USPTO Director to initiate the reexamination of marks.
Although no specific policy proposals have been championed, yet, this is the second hearing on the issue and legislative fixes appear forthcoming, especially given the current trade war.
If you suspect that your trademark is being infringed by fraudulent marks, or desire to check a trademark prior to starting or expanding an enterprise, contact Sherrie Flynn, Jennifer Poochigian, or Craig Tristao to inquire about Colemen & Horowitt LLP’s intellectual property services.