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Lager Than Life: $56 Million Verdict in Beer Trademark Dispute Still on Tap

by Amol Parikh | Jan 16, 2025 | Trademarks

The US Court of Appeals for the Ninth Circuit upheld a $56 million trial verdict in a trademark dispute, finding that the evidence supported the jury’s conclusion that a beer company’s rebranding of one its beers infringed a competitor’s trademark. Stone Brewing Co., LLC v. Molson Coors Beverage Company USA LLC, Case No. 23-3142 (9th Cir. Dec. 30, 2024) (Graber, Friedland, Bumatay, JJ.) (nonprecedential).

Stone Brewing sued Molson Coors in 2018 alleging that Molson changed its packaging of Keystone Light to emphasize the word “stone” in its “Own the Stone” marketing campaign, and that this change infringed Stone Brewing’s trademarks and caused consumer confusion. Molson raised a variety of defenses, all of which were rejected. A jury found infringement and ultimately awarded Stone Brewing $56 million. Molson appealed.

Molson argued that the district court erred in finding that the four-year laches clock did not bar Stone Brewing’s Lanham Act claims. The Ninth Circuit found that the laches clock began running in 2017 when Molson launched the “Own the Stone” campaign, to which all of Stone Brewing’s claims related. The Court noted that prior to 2017, Molson never referred to Keystone as anything other than Keystone in its packaging, marketing, or advertising materials, and specifically never broke up the product name “Keystone” and used the term “Stones” to refer to the number of beers in a case (“30 stones”) or as a catch phrase (e.g., “Hold my Stones”). Thus, the Court found that Stone Brewing brought the suit within the four-year statute of limitations period.

Molson also argued that the district court erred in refusing to set aside the jury verdict on the ground that Molson had a superior interest in the STONE mark. Stone Brewing applied to register the STONE mark in 1996, and the Ninth Circuit found there was substantial evidence that Molson did not approve production of packaging that used “Stone” before that date.

Molson argued that the district court erred in refusing to set aside the jury verdict on likelihood of confusion. The Ninth Circuit disagreed, explaining that Stone Brewing provided evidence from which a jury could plausibly conclude there was “actual confusion” by distributors and customers who thought that Stone Brewing sold Keystone Light. The Court noted that Molson expressly de-emphasized “Keystone” and instead highlighted “Stone” in its 2017 product refresh. The Court also explained that both brands compete in the same beer space, use the same marketing and distribution channels, and are relatively inexpensive products, all of which allowed the jury to plausibly conclude that Molson’s 2017 product refresh of Keystone Light was likely to cause consumer confusion.

Molson also challenged the damages award. At trial, Stone Brewing sought damages in three categories:

$32.7 million for past lost profits
$141.4 million for future lost profits
$41.8 million for corrective advertising.

The jury returned a verdict of $56 million in general damages, which was about one quarter of the requested damages, but did not indicate what amount came from each category. Molson argued that [...]

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Pink Is Not the New Black: See Functionality Doctrine

by Hannah Hurley | Jan 16, 2025 | Trademarks

The US Court of Appeals for the Federal Circuit affirmed a Trademark Trial & Appeal Board decision canceling trademarks for the color pink for ceramic hip components, stating that substantial evidence supported the Board’s findings that the color pink as used in the ceramic components was functional. CeramTec GmbH v. CoorsTek Bioceramics LLC, Case No. 23-1502 (Fed. Cir. Jan. 3, 2025) (Lourie, Taranto, Stark, JJ.)

Trademarks cannot be functional. The functionality doctrine prevents the registration of useful product features as trademarks. As explained by the Supreme Court (1995) in Qualitex v. Jacobson Prods.:

The functionality doctrine prevents trademark law, which seeks to promote competition by protecting a firm’s reputation, from instead inhibiting legitimate competition by allowing a producer to control a useful product feature. It is the province of patent law, not trademark law, to encourage invention by granting inventors a monopoly over new product designs or functions for a limited time, 35 U.S.C. §§ 154, 173, after which competitors are free to use the innovation. If a product’s functional features could be used as trademarks, however, a monopoly over such features could be obtained without regard to whether they qualify as patents and could be extended forever (because trademarks may be renewed in perpetuity).

CeramTec manufactures ceramic hip components made from zirconia-toughened alumina (ZTA) ceramic containing chromium oxide (chromia). The addition of chromia gives the ceramic a characteristic pink color. CeramTec obtained trademarks for the pink color as used in these components. CoorsTek Bioceramics, a competitor, challenged the trademarks, arguing that the pink color of the ceramic was functional. The Board agreed, finding that the pink color was functional because it resulted from the addition of chromia, which provided material benefits to the ceramic, such as increased hardness. CeramTec appealed.

The Federal Circuit applied the four-factor Morton-Norwich (CCPA 1982) test to determine functionality:

Existence of a utility patent
Advertising materials
Availability of functionally equivalent designs
Comparatively simple or cheap manufacture.

The Federal Circuit found the first and second Morton-Norwich prongs were strongly in CoorsTek’s favor, as CeramTec held multiple patents that disclosed the functional benefits of chromia, such as toughness, hardness, and stability of the ZTA ceramic. Similarly, the Court found that CeramTec had multiple advertising materials that promoted its product’s functional advantages.

The Federal Circuit found that there was no evidence of alternative designs that were functionally equivalent to the pink ZTA ceramic, rendering the third factor neutral. The Court also found the fourth factor neutral because there was conflicting evidence regarding whether chromia reduced manufacturing costs.

Finally, CeramTec argued that CoorsTek should be precluded from challenging the trademarks based on the doctrine of unclean hands. The Federal Circuit acknowledged that the Board spoke too strongly in suggesting that the unclean hands defense is categorically unavailable in functionality proceedings but found any error to be harmless. The Court confirmed that the Board had adequately considered the defense and found it inapplicable in this case.

Equity Is Neither a “Good” Nor a “Service” Under Lanham Act

by Cecilia Choy, Ph.D. | Jan 16, 2025 | Trademarks

The US Court of Appeals for the Ninth Circuit affirmed a district court’s decision that, in terms of trademark use in commerce, corporate equity is not a “good” or “service” under the Lanham Act. LegalForce RAPC Worldwide, PC v. LegalForce, Inc., Case No. 23-2855 (9th Cir. Dec. 27, 2024) (Thomas, Wardlaw, Collins, JJ.) (Collins, J., concurring).

LegalForce RAPC Worldwide is a California corporation that operates legal services websites and owns the US mark LEGALFORCE. LegalForce, Inc., is a Japanese corporation that provides legal software services and owns the Japanese mark LEGALFORCE.

Both parties had discussions with the same group of investors. After those meetings, LegalForce Japan secured $130 million in funding, while LegalForce USA received nothing. Thereafter, LegalForce USA brought several claims against LegalForce Japan, including a trademark infringement claim. To support its case, LegalForce USA cited LegalForce Japan’s expansion plan, a trademark application for the mark LF, website ownership, and the use of LEGALFORCE to sell and advertise equity shares to investors in California.

The district court dismissed claims related to the website for lack of personal jurisdiction and dismissed claims related to the US expansion plan, trademark application, and alleged software sales in the United States as unripe. The district court dismissed the trademark infringement claims related to the efforts to sell equity shares for failure to state a claim. The court found that advertising and selling equity cannot constitute trademark infringement because it is not connected to the sale of goods or services, and the case did not present justification for extraterritorial application of the Lanham Act. LegalForce USA appealed.

To state a claim for trademark infringement under the Lanham Act, plaintiffs must show that:

They have a protectible ownership interest in the mark, or for some claims, a registered mark
The defendant used the mark “in connection with” goods or services
That use is likely to cause confusion. 15 U.S.C. § 1114(1)(a), § 1125(a).

The Ninth Circuit agreed with the district court that LegalForce Japan had not used LegalForce USA’s mark “in connection with” goods or services, and thus LegalForce USA failed to state a claim for which relief could be granted.

The Ninth Circuit concluded that using LEGALFORCE to advertise and sell equity failed to satisfy the requirement that a defendant used the mark in connection with goods or services. Referring to the U.C.C., the Court explained that corporate equity is “not a good for purposes of the Lanham Act, because it is not a movable or tangible thing.” Equity is also not a service because it is not a performance of labor for the benefit of another. There is no “another” involved because those who buy LegalForce Japan equity are owners and so they are not legally separate “others.”

The Ninth Circuit also agreed with the district court that LegalForce Japan’s services in Japan did not satisfy the “in connection with” goods or services requirement under the Lanham Act. To determine when a statute applies extraterritorially, courts invoke the 2023 Supreme Court
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Case Closed: OpenAI Prevails on Secondary Meaning

by Hannah Hurley | Dec 5, 2024 | Trademarks

The US Court of Appeals for the Ninth Circuit affirmed a district court’s grant of a preliminary injunction (PI) in a trademark action under the Lanham Act, stating that the district court’s ruling was not clearly erroneous based on its finding that the plaintiff had likely acquired secondary meaning in the mark. OpenAI, Inc. v. Open Artificial Intelligence, Inc., Guy Ravine, Case No. 24-1963 (9th Cir. Nov. 13, 2024) (Thomas, Owens, Collins, JJ.) (per curiam) (Collins, J., dissenting) (nonprecedential).

OpenAI is the founder of ChatGPT and other artificial intelligence tools. OpenAI has used the OPENAI (no space) mark extensively in association with its goods, services, website, social media, and marketing. OpenAI first attempted to register the mark with the US Patent & Trademark Office (PTO) in 2016, but the PTO rejected the mark as being merely descriptive and potentially confusing with Guy Ravine’s prior-filed application for the mark OPEN AI (with a space). Ravine claimed to have used the mark as early as 2015, which would have predated OpenAI’s use of its mark. However, the PTO also rejected Ravine’s application for registration on the Principal Register under a similar rationale, and the OPEN AI mark was only accepted for registration on the Supplemental Register in 2017. Neither mark is registered on the Principal Register.

OpenAI filed a trademark action under the Lanham Act against Ravine’s company, Open Artificial Intelligence, and sought a PI, which the district court granted after finding that OpenAI had established that it had acquired distinctiveness in the mark. Ravine appealed the denial of Open Artificial Intelligence’s motion under Fed. R. Civ. P. 59(e) and 60(b) to amend or vacate that injunction.

A PI is granted when a plaintiff establishes that:

It is likely to succeed on the merits.
It is likely to suffer irreparable harm.
The balance of equities tips in its favor.
An injunction is in the public interest.

The Ninth Circuit applies a sliding scale approach, where a stronger showing of one factor could offset a weaker showing of another factor. To succeed on a trademark infringement claim, a plaintiff must show that it has a protectible ownership interest in the mark and that the defendant’s use of the mark is likely to cause consumer confusion.

To evaluate the claims, the district court looked at each of the parties’ history and use of the disputed marks. The district court noted that OpenAI had used its mark in connection with its most widely used product, ChatGPT, resulting in the mark becoming a household name. The district court recognized that OpenAI’s trademark was one of the most recognized in artificial intelligence (AI) history. The district court noted that OpenAI’s website was one of the most visited websites, with almost 100 million monthly active users. In contrast, the district court found that Ravine had not established that he had used the mark in commerce prior to OpenAI’s use and even took issue with Ravine’s representations regarding his use of the mark. The district court granted [...]

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Battle of the Bay: It’s Oakland Airport, Not San Francisco Bay Oakland International Airport

by Cecilia Choy, Ph.D. | Dec 5, 2024 | Trademarks

The US District Court for the Northern District of California granted the city and county of San Francisco a preliminary injunction enjoining the Port of Oakland from using the name or trademark “San Francisco Bay Oakland Airport” based on the strength of San Francisco’s mark and the proximity of goods and services. City and County of San Francisco v. City of Oakland, Case No. 3:24-cv-02311-TSH (N.D. Cal. Nov. 12, 2024) (Hixson, J.)

The city and county of San Francisco own a registered trademark for the SAN FRANCISCO INTERNATIONAL AIRPORT covering airport services. The Port of Oakland owns the OAKLAND INTERNATIONAL AIRPORT mark, also covering airport services. Based on a research study, the Port of Oakland contended that there was a lack of awareness among tourists visiting the San Francisco Bay Area, commonly known as the Bay Area, that Oakland is located in the Bay Area. The Port of Oakland notified San Francisco of its intent to rename its airport the San Francisco Bay Oakland International Airport. San Francisco objected to the name change as confusingly similar to its trademark. San Francisco sued Oakland and the Port of Oakland for trademark infringement, unfair competition/false designation of origin, and common law trademark infringement. San Francisco also filed a motion for a preliminary injunction (PI) to prevent the Port of Oakland from using the name.

Ruling on the PI motion, the district court started with whether the Port’s use of “San Francisco Bay Oakland International Airport” was likely to cause confusion. Courts in the Ninth Circuit evaluate likelihood of confusion using the nonexhaustive Sleekcraft factors (9th Cir. 1979), which include the following:

Strength of the mark.
Proximity of the goods.
Similarity of the marks.
Evidence of actual confusion.
Marketing channels used.
Type of goods and the degree of care likely to be exercised by the purchaser.
Defendant’s intent in selecting the mark.
Likelihood of expansion of the product lines.

San Francisco offered several theories supporting likelihood of confusion. San Francisco argued that the new name implied an affiliation, connection, or association between the Oakland airport (OAK) and the San Francisco airport (SFO). San Francisco also argued that the new name would cause customers to confuse OAK with SFO and cause customers to buy tickets to the wrong airport, which constituted point-of-sale and initial interest confusion.

Addressing the strength of the mark, the district court determined that although San Francisco’s trademark was descriptive, it was commercially strong. The SAN FRANCISCO INTERNATIONAL AIRPORT is widely known among travelers and appears on signs in and around the airport. San Francisco has used its trademark for decades and invests millions of dollars annually to promote the SAN FRANCISCO INTERNATIONAL AIRPORT trademark. The court found that San Francisco’s brand was routinely ranked among the top 25 airport brands.

In terms of the proximity of the goods, the district court found that the services were identical, as both names were used in connection with an airport and related services.

Turning to the similarity of the marks, the [...]

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Ghostly Misstep: No Confusion Means No Preliminary Injunction

by Sarah Mezini | Dec 5, 2024 | Trademarks

In a trademark case involving an incontestable registration, the US Court of Appeals for the First Circuit affirmed a district court ruling denying the registrant a preliminary injunction (PI) for failure to establish likelihood of confusion. US Ghost Adventures, LLC v. Miss Lizzie’s Coffee LLC, Case No. 23-2000 (1st Cir. Nov. 15, 2024) (Selya, Barron, Gelpí, JJ.)

In 1892, prosecutors alleged that Lizzie Borden hacked her parents to death in their family home. Borden was acquitted of all charges, leaving the murder unsolved. This mystery made Borden’s ancestral home a travel destination for all intrigued by the legend.

US Ghost Adventures owns a bed and breakfast located at the Lizzie Borden House in Fall River, Massachusetts. Ghost Adventures also owns an incontestable federal trademark on the LIZZIE BORDEN name as used in its services and on its hatchet logo displaying a notched blade.

Miss Lizzie’s Coffee opened a coffee shop next door to the Lizzie Borden House, displaying storefront signage with the words “Miss Lizzie’s Coffee” between a cup of coffee and a stylized hatchet spewing blood. The store also displayed a second sign claiming Miss Lizzie’s as “The Most Haunted Coffee Shop in the World,” with a similar hatchet containing a handle and dramatic blood splatters. Since the opening of Miss Lizzie’s, there has been confusion regarding its affiliation with the Lizzie Borden House.

Ghost Adventures brought a trademark infringement and unfair competition suit against Miss Lizzie’s Coffee in federal district court. Ghost Adventures also moved for a temporary restraining order and/or PI seeking to enjoin Miss Lizzie’s use of either the LIZZIE BORDEN trademark or the hatchet logo in the coffee shop’s trade names, trade dress, and marketing materials.

The district court applied the customary four-part test for PIs. The test typically emphasizes likelihood of success on the merits because if the movant cannot show a likelihood of success, the rest of the factors “become matters of idle curiosity.” The district court determined that Ghost Adventures failed to show a likelihood of success on the merits and denied the PI. Ghost Adventures appealed.

The First Circuit reviewed the district court’s finding for clear error and affirmed. The First Circuit agreed with the district court’s assertion that Miss Lizzie’s displays were neither “the trademarked hatchet nor a colorable imitation” of Ghost Adventures’ hatchet display. Further, the Court found that the Miss Lizzie’s mark was not associated with Ghost Adventures’ mark, but rather with the historical story of Lizzie Borden. The Court agreed that both businesses sold different goods to different customers. Similarly, the Court concluded that any consumer confusion was not due to the similarity of their marks but was due to non-trademarked similarities between the businesses: their proximity to one another, the use of Lizzie Borden lore, and customers’ perception of nearby cafés in association with the historical site itself. Ghost Adventures’ mark could not prevent other businesses from using the Lizzie Borden story or from conducting business near the Lizzie Borden House. Moreover, the First Circuit agreed [...]

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Time’s Up: Fifth Circuit Reinstates Original Judgment in Trademark Dispute

by Keval Amin | Dec 5, 2024 | Trademarks

The US Court of Appeals for the Fifth Circuit vacated a district court’s amended final judgment and reinstated its prior final judgment, finding that the district court overstepped its narrow mandate on remand, directly contradicting the Fifth Circuit’s earlier decision. In that earlier decision, the Fifth Circuit upheld the district court’s finding of trademark infringement but modified the scope of the injunction, approving it only in part. Rolex Watch USA, Incorporated v. BeckerTime, L.L.C., Case No. 24-10415 (5th Cir. Nov. 20, 2024) (Douglas, King, Willett, JJ.)

BeckerTime modified and sold Rolex-branded watches by adding diamonds, aftermarket bezels, and bands not authorized by Rolex. Rolex sued BeckerTime for trademark infringement, seeking an injunction and disgorgement of profits. While the district court found that BeckerTime infringed Rolex’s trademark, it declined to order disgorgement because of BeckerTime’s laches defense. In the first appeal, the Fifth Circuit upheld the infringement finding, noting that BeckerTime’s modifications of diamonds and aftermarket bezels went beyond mere repairs and restoration. However, the Fifth Circuit partially modified the district court’s injunction and issued a limited remand to clarify certain language in the injunction. On remand, Rolex and BeckerTime agreed on revised language for that portion of the injunction, which the district court approved. The district court, however, went further by amending other sections of the injunction. This appeal followed.

Both parties agreed that the district court had exceeded its mandate. The amendments permitted BeckerTime to advertise and sell Rolex watches with customized dials under certain conditions, requiring disclosures and inscriptions reading “CUSTOMIZED BY BECKERTIME.” Rolex contended – and the Fifth Circuit agreed – that this language conflicted with the prohibition (in the injunction) of all non-genuine dials, including those bearing original Rolex trademarks.

The Fifth Circuit vacated the district court’s amended judgment and reinstated its prior judgment with modifications, incorporating its earlier decision and the parties’ stipulation.

Trademark Fee Increases: The TEAS Party Is Over

by Abigail A. Rubinstein | Dec 5, 2024 | Trademarks

After a lengthy public comment and review process, the US Patent & Trademark Office (PTO) announced trademark fee increases effective January 18, 2025. The goal of PTO fee setting is to provide sufficient financial resources to facilitate the effective administration of the US intellectual property system. The PTO aspires to recover aggregate costs to:

Finance the PTO’s mission, strategic goals, and priorities.
Enable financial sustainability.
Promote efficient operations and filing behaviors.
Align fees with the costs of services provided.
Encourage access to the trademark system for all stakeholders.

The fees for filing a new trademark application via either the Trademark Electronic Application System (TEAS) or TEAS Plus will remain unchanged: $350 per class for a TEAS standard application and $250 per class for a TEAS Plus application for as long as TEAS remains available (and then using the Beta site discussed below). However, the PTO will institute surcharges for applications that are incomplete or contain custom identifications of goods or services. These application surcharges are intended to encourage more complete applications, which will improve examination efficiency and help reduce pendency.

Description Surcharge Insufficient information (Sections 1 and 44), per class $100 Using the free-form text box instead of the Trademark ID Manual within the Trademark Center to identify goods and services (Sections 1 and 44), per class $200 Each additional group of 1,000 characters in the free-form text box beyond the first 1,000 (Sections 1 and 44), per affected class $200

Since the World Intellectual Property Organization (WIPO) is currently unable to collect surcharges, the PTO will raise the fee for WIPO Madrid Trademark Applications to $600 per class.

The PTO will also raise the fees for post-registration filings to offset higher processing costs for these filings and continue balancing the cost of base applications.

Filing Current Fee Fee as of January 18, 2025 Section 9 registration renewal application, per class $300 $325 Section 8 declaration, per class $225 $325 Section 15 declaration, per class $200 $250 Section 71 declaration, per class $225 $325

The PTO has not increased the filing fees in connection with intent to use filings since 2002, although the time to examine such filings has increased exponentially because of the need to examine questionable specimens. Those fees are now set to increase as follows:

Description Current Fee Fee as of January 18, 2025 Amendment to allege use (AAU), per class $100 $150 Statement of use (SOU), per class $100 $150

The fees for requesting an extension of time are unchanged.

Finally, the number of petitions and protests have increased. The PTO will attempt to recover more of the cost of processing petitions and protests as follows:

Description Current Fee Fee as of January 18, 2025 Petition to the Director $250 $400 Petition to revive an application $150 $250 Letter of protest $50 $150

For further details, including a complete list of the fee increases, click here.

The PTO also announced that as of January 18, 2025, filers [...]

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Chill Out: Request for Profit Disgorgement Isn’t Entitled to Jury Trial

by Dexter Hamilton | Dec 5, 2024 | Trademarks

The US Court of Appeals for the Eighth Circuit affirmed a district court ruling that a plaintiff was not entitled to a jury trial regarding its trade dress infringement claim and that the plaintiff failed to prove that its trade dress had acquired the required secondary meaning. National Presto Industries Inc. v. U.S. Merchants Financial Group Inc., Case No. 23-1493 (8th Cir. Nov. 12, 2024) (Loken, Erickson, Grasz, JJ.)

National Presto manufactures household appliances, including personal electric heaters sold under the brand name “HeatDish” since 1989. These heaters had “a parabolic design that looked like a satellite dish.” National Presto supplied HeatDish heaters to Costco for many years. However, amid slumping sales, Costco began exploring alternative options. In 2017, Costco requested a “parabolic electric heater that was UL approved, had high heat, and looked industrial and robust” from another supplier, U.S. Merchants Financial Group. U.S. Merchants began development of a heater named “The Heat Machine.” Costco requested modifications to the initial design, including “changes focused on a comparison with Presto’s HeatDish.” Costco began selling The Heat Machine in 2018.

In December 2018, National Presto filed suit against U.S. Merchants asserting trade dress infringement under the Lanham Act. National Presto requested both injunctive relief and that U.S. Merchants “be required, pursuant to 15 U.S.C. § 1117, to account to National Presto for any and all profits derived by them, either individually or jointly to be ordered to disgorge, and be ordered to pay all damages sustained by National Presto by reason of Defendant’s actions complained herein.”

National Presto sought a jury trial for its trade dress claim, but the district court ruled that National Presto was seeking equitable relief and thus was not entitled to a jury trial. The district court noted that under the Lanham Act, courts generally “find that a claim for disgorgement of an infringer’s profits is an equitable claim” and therefore the Seventh Amendment does not provide the right to a jury trial for such a claim. After a bench trial, the district court ruled that National Presto failed to prove infringement because its trade dress had not acquired secondary meaning. National Presto appealed.

The Eighth Circuit affirmed. Regarding the denial of a jury trial, which the Court reviewed de novo, National Presto argued that “disgorgement is considered a legal claim when the infringer’s profits serve as a ‘proxy’ for the plaintiff’s damages.” Although the district court did not reject that legal theory, it found that the facts National Presto presented were not sufficient to support a finding that the profits were in fact serving as a proxy. The Court rejected several of National Presto’s arguments, including that “Presto’s desired remedy was legal rather than equitable because its aim was compensation rather than disgorgement of unjust enrichment.”

Regarding the district court’s secondary meaning finding, which the Eighth Circuit reviewed for clear error, the Court noted that “the chief inquiry is whether in the consumer’s mind the mark has become associated with a particular source.” In rejecting National [...]

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PTO Proposes Additional Audits to Put “Specimen Farms” Out to Pasture

by Taylor MacDonald | Nov 14, 2024 | Trademarks

In response to reports that some registrants use fraudulent specimens to prove continued use in commerce, the US Patent & Trademark Office (PTO) proposed an update to its post-registration audit process. Changes in Post-Registration Audit Selection for Affidavits or Declarations of Use, Continued Use, or Excusable Nonuse in Trademark Cases, 89 Fed. Reg. 85,435 (Oct. 28, 2024).

Since its institution in 2017, the PTO’s post-registration audit process has been essentially random. Pursuant to Section 8 of the Trademark Act, trademark owners are required to file documentation in the form of affidavits of continued use indicating that the marks remain in use in connection with goods or services covered by the registration. In turn, the public relies on the trademark register for notice of marks that may be available for use and registration. The PTO conducts random audits of submitted documentation to ensure its reliability.

Since encountering various filings that revealed “systemic efforts to subvert” a trademark’s use in commerce requirement, the PTO has taken steps to expand its audit program. For example, in 2019, the office amended its examination procedures to highlight “digitally created/altered or mockup specimens” that fraudulently indicate continued use in commerce. In 2021, the PTO became aware of “specimen farms,” which are websites designed to create the illusion of commerce without providing actual sales. To combat deceptive maintenance of obsolete marks, the PTO will no longer perform only randomized audits but will also conduct audits “directed” at items that show tell-tale signs of digital alteration or specimen farm website use.

The objective of the directed audit program is “to promote the accuracy and integrity” of the trademark register. This proposed policy is open for public comments on the Federal eRulemaking Portal until November 27, 2024.

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