The USPTO’s Post Registration Audit Program
Under the USA’s Post Registration Audit Program, a declaration of use must be filed between the fifth and sixth year of the validity of the registration of the trademark. Consequently, a mark may be selected at random, and an audit may be carried out wherein the owner of the trademark (“the Applicant”) would be required to submit documents showing continuous proof of use of the mark. The Applicant has the burden of proof to show proper usage of the mark for all the goods and services provided under the relevant classes. Specimens of use must show current and actual use in commerce. Any specimens of (or featuring) internet/webpage screenshots (screen captures) must include the URL and the date of access.
If the Applicant is unable to show the use of the mark under all classes, the Audit Program provides the opportunity to delete specifications if certain goods/services are not being used for the trademark anymore.
In July 2019, through a study conducted on post-registration audit and its effects, the USPTO estimated that between November 2017 to June 2019, over 4500 first actions were issued by examiners with over 50% of registrations with a response deleting at least some of the previously claimed goods and services. These statistics are telling and reveal that even in the USA, where the registration is conditional on establishing the use of the mark in commerce, there are chances for applicants to sweep wrongful registrations under the rug.
Present Scenario in India
India, being a common law country and a first-to-use jurisdiction, one would assume that the use of a trademark would be of prime importance and would consequently, be a requirement that is constantly monitored. However, the use of a trademark is rarely monitored subsequent to its registration. In fact, it is of little to no consideration as there is no system or database to monitor the post-registration audit of trademarks in India. Under current practices, the Registry itself does not undertake suo motu cancellations of unused trademarks, so it is theoretically possible for a mark to be registered indefinitely without ever having been used in commerce.
Apart from cancellation, which can be filed by an aggrieved party if the mark has not been in use for 5 years since the date of registration of the mark (which are rather rare), there are no proper measures to ensure that a mark has been in use continuously for the period of validity of the trademark.
The need for a Post Registration Audit Program in India
The issue of non-continuous and ostensible use by claiming a use date but not continuing to use the mark is detrimental to brands and orderly competition in the market. Improper applications are more prevalent than ever with applicants filing trademarks including a user detail but not having used all the goods and services under the classes since the claimed user date. A non-user of the trademark should not be allowed to enjoy monopoly, otherwise, there is ample scope for mischief in terms of trafficking in trademarks, and preventing all bona fide parties from protecting their own brands.[1]
If a date of use is claimed, the trademark must be applied for and consequently, granted registration for the goods and services with which they are engaged under the relevant classes.
One cannot be allowed to be unjustly enriched at the cost of hindering the growth of another’s business. For instance, in certain circumstances, applicants would register an identical or deceptively similar mark which would definitely cause confusion and lead people into believing it to be associated with a famous brand belonging to a multi-million-dollar company for the sole purpose of being bought out by the company. Instead of opposing the impugned mark, the company would choose to buy the deceptively similar trademark as oppositions are tedious when compared to the seemingly easy alternative of buying the conman out.
With the advent of technology, surely it is not beyond the realm of possibility to ensure that the trademarks that have been granted registration have been put to proper, lawful use. Introducing a post-registration audit program for trademarks in India would certainly help reduce the backlog of cases pending with the Trade Marks Registry by getting rid of unused trademarks in the register. With the pandemic and the myriad problems it has created, including short-staffed offices, a post-registration audit program could serve as a welcome move creating a more accurate register of trademarks. Moreover, it could also serve as an avenue for additional revenue as the Registry could charge a fee for the deletion/modification of specifications.
Recommendations
Although the journey towards establishing a post-registration audit program in India is far from being realized, there have been considerable strides towards the regulation of the use of trademarks.
With the introduction of the Trade Marks Rules, 2017, (hereinafter the ‘Rules’) there has been a regulation in the usage dates claimed, i.e. Rule 25 provides that if a date of use has been claimed prior to the date of application, the Applicant would have to file an affidavit testifying to such use along with supporting documents. Prior to the Rules, the date of use could be claimed without proper evidence to corroborate the same.
The most elementary but necessary step to ensure that legitimate user details are provided is to check that User Affidavits are submitted along with sufficient evidence to support the date of usage for all the specifications claimed. Further, a recommendation could be prescribed stating that if the application is filed on a ‘proposed to be used’ basis, User Affidavits should be filed with the Trade Marks Registry as soon as sufficient evidence is available to prove date of first use. This would reduce the chances of evidence being fabricated and submitted at a later stage such as a hearing when evidence is required to be produced to prove use of the trademark from the claimed date of first use. If the Registry was willing to amend its current practices so as to ensure that its online records reflect a new user date after the user affidavit is filed, it would also incentivize parties to file these affidavits as soon as practicable.
Further, the Trade Marks Registry could establish checks at various stages during the process of registration and subsequent to it to ensure that the mark is/has been in use continuously.
The true intention behind the enactment of the Act must be given effect by ensuring that trademarks are being used continuously for the goods and services for which they are claiming use for. As provided in the Preamble, the Trade Marks Act, 1999, was enacted to provide for registration and better protection of trademarks for goods and services and for the prevention of the use of fraudulent marks.
On a lighter note, perhaps the Preamble ought to be amended to provide for the prevention of the fraudulent non-use of marks as well!
This article has been authored by Shana Varughese.
[1] Vishnudas Trading Vs. Vazir Sultan Tobacco co. Ltd (1997 (4) SCC 201).
