Monday 21 May 2018

Solutions in Search of a Problem: The Trademark Register Clogged?

Commentators have debated the question of whether there are too many trademarks.  Are we going to end up in a situation where there just are not enough good trademarks left, particularly wordmarks?  Some would argue that there is an inexhaustible supply of potential trademarks, particularly when considered with words and designs in combination.  A recent Wall Street Journal article asserts that U.S. intellectual property officials are concerned about a large number of applications filed in the United States by Chinese companies and citizens.  Apparently, part of the concern is with fraudulent applications. 

One of the curbs on excessive use of trademarks in the United States is the use requirement.  For most filings in the United States, there must be a use--or eventually a use with an intent to use based application.  Interestingly, CompuMark has released a survey which states that China will become the leader in trademark filings domestically and in the world by 2020.  According to CompuMark, China has filed "nearly 120,000 foreign trademark applications in 2017."  And, the number of trademark applications in the U.S. by Chinese companies or individuals has increased by 800% since 2014.  The Chinese trademark registry now has "over 5 million new trademark applications in 2017" and sixty percent of the trademark registrations in the world are in China.  In the U.S., trademark registrations stay in effect for a basic ten year term after the first five years.  

Let's assume there is a problem.  The problem is there aren't enough good trademarks for legitimate businesses and there's a potential for hold-up of legitimate businesses by "weak" marks.  I suppose another related problem is the increase in search costs due to avoiding a massive number of marks.  Some of our solutions could include increasing filing fees and maintenance fees.  Another solution is shortening the time periods for requiring fees.  The U.S. has very long terms.  We could shorten them to two to three years.  We could increase penalties for the filing of fraudulent marks, including increased penalties for the US attorney who files the marks.  We could lower the costs for challenging existing marks.  We could also create a way to dismiss spurious suits for trademark infringement early and penalize over-enforcement through cease and desist letters.  Many of these solutions have been proposed.  Is there a problem?  

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