Battling the Backlogs

Backlogs at trademark offices can frustrate practitioners, but the unpredictability of filings and other external factors indicate the issue is not always easy to fix, as Peter Scott finds out.

“The rise in applications was underpinned by an enormous growth in entrepreneurialism …”
David Gooder, United States Patent and Trademark Office (US)

What is the right amount of time for a trademark to proceed from application to registration or first office action? The United States Patent and Trademark Office (USPTO), historically seen as one of the best-performing intellectual property (IP) offices, has a target of between 2.5 months and 7.5 months from filing.

According to statistics from the World Intellectual Property Office, which has data up to 2020 on pendency from 94 IP offices worldwide, typical ranges are from about 50 to 180 days, with some, such as Canada (703 days) and Vietnam (832 days) reporting much longer pendency. This data is for first office action and does not reflect possible further delays later in the process.

But the last few years have shown that things can change, for better and worse, and that long pendency times need not be permanent.

For many years, Ghana was notorious for the length of its application backlog; applications could take as long as three years. But, strategic changes seem to have made a big difference in that country. Perhaps most notable among these was the decision in January 2019 to give Ghana’s Industrial Property Office (IPO) its own premises, moving it into a separate building from the Registrar General’s Department.

According to Ghana’s IPO Head Grace Issahaque, the separation “enabled the IPO staff to concentrate on handling only IP applications including trademarks.”

Today, she said, there is no backlog of live trademark applications in Ghana, and any delays are typically due to the failure of an agent to furnish the Office with power of attorney, priority documents, and any conditions that may be required by the Office.

Additionally, the digitization of trademark applications into the Intellectual Property Administration System (IPAS), which began in 2020, “improved greatly the processing time of applications,” Ms. Issahaque noted.

However, there is still work to be done, observed Abena Ntrakwah-Mensah, partner at Ntrakwah & Co (Ghana), citing the example of trademark searches at the Office. At present, the process is difficult and would be greatly improved by being available online.

She explained that applicants need to write a letter, say that they want to do a search, and then submit it to the old registry, where the office was before. Then the registry must transmit the letter to the new premises, which means “it takes a couple of days before they start working on it, and usually, if you want a search done, you’re looking at about three weeks to get results.”

Further digitization is one of the Office’s key aims, but funding is an issue, according to Ms. Issahaque. She would like applications from 2019 and earlier to be digitized into IPAS, which would “help in handling renewals and other amendments and improve document retrieval,” but for now those remain on paper.

“Joining the Madrid Protocol increased the number of applications received by the office, data quality has been enhanced, and there has been improved processing time.”
Grace Issahaque, Ghana Industrial Property Office

In the Thick of It

While Ghana is a good example of a country that has improved its trademark backlog in recent years, and other countries such as Australia, Brazil, and China have also made progress, others have faced new challenges that have increased the backlog. The USTPO maintains particularly good pendency times in comparison to many international offices, but by its own standards it has undergone a challenging couple of years.

According to its trademark dashboard, pendency to first office action rose from 2.4 months in the third quarter of 2019 to 7.4 months in the first quarter of 2022. During the same period, the number of applications awaiting examination surged from 127,436 to 525,396.

There are lots of varied reasons for this, according to USPTO Commissioner for Trademarks David Gooder. He joined the Office in February 2020, just before the pandemic, and around the time that pendency rates started to rise.

“The pandemic changed things immensely,” he noted, highlighting that after an initial drop in registrations, applications began rising by the end of spring 2020, with huge surges in September and December of that year. That final surge “kept on going for a while,” he said.

Indeed, applications counted by classes increased by just under 10 percent in 2020 compared to 2019, despite the initial pandemic-induced slowdown, and then by a further 27.9 percent in 2021 versus 2020. The Office received 270,695 more applications in 2021 than it had in 2019.

This unprecedented rise can be explained by a variety of factors, Mr. Gooder said. Among the most important was “the immense growth” in cross-border e-commerce, which led to more applications, as well as “a number of provinces in China that offered incentives” for people to file applications, whether or not those were successful.

Most importantly, the rise in applications was underpinned by “an enormous growth in entrepreneurialism”—a result, he suggested, of many people having time and money unlike in previous crises such as the credit crunch.

“There is nothing to stop people from misusing the backlog by filing frivolous oppositions. They can stall the application for an indefinite period.”
Debjoyti Sarkar, S. Majumdar & Co. (India)

Does it Matter?

Increased pendency times sound like a bad thing, and there are good reasons why they might be, but not everyone sees it that way.

Caroline Chicoine, of counsel, Husch Blackwell LLP (US), noted that “there are clients who are happy to have them dragging their feet.” This is especially the case when there is intent to use the mark but no use yet—as might occur with entrepreneurs just starting out, or pharmaceutical companies waiting for regulatory approvals before marketing their products. But these are the exceptions, especially when, in the U.S., owners are allowed three years after registration to demonstrate use.

Indeed, for many young companies—especially in e-commerce—any delay can be a huge problem. Ms. Chicoine noted that Amazon’s Brand Registry requires a live trademark registration for a brand to be registered on it.

“Especially for start-ups where it may be their only platform, and they don’t have any sort of brick-and-mortar stores, getting through faster is better, and it’s necessary for them to survive,” she said.

Ms. Chicoine praised the USPTO’s transparency on the backlog and noted that the Office is “the front runners when it comes to creating mechanisms for dealing with bad faith filings from China,” not least because “examiners have to examine all cases, first in, first out, so whether they’re good or bad, it takes time to review them.”

Backlogs can also be good news for bad actors, according to Debjyoti Sarkar, IP lawyer at S. Majumdar & Co. (India). In India, the backlog is not at the examination stage—indeed, applications are examined relatively quickly – but further along the process, especially if the mark is opposed.

Mr. Sarkar explained that there are delays of five years or more in hearing oppositions—adversarial proceedings that can only be heard by officers of a certain seniority, which can open the door for opposers to “take advantage” of the situation.

“Some local companies and some foreign companies have taken advantage of it, since filing an opposition is much cheaper and you don’t face costs awards,” he said. This means that “there is nothing to stop people from misusing the backlog by filing frivolous oppositions. They can stall the application for an indefinite period. Parties have used their financial power to block marks without fear of sanction.”

Mr. Sarkar chairs INTA’s Trademark Office Practices Committee, India IPO Subcommittee, and noted that the Subcommittee is preparing a position paper which will suggest ways of dealing with this issue in India, including empirical data sourced from countries with mechanisms to entice stakeholders to settle disputes amicably instead of going through a protracted dispute.

In India, there are currently no provisions to encourage alternative dispute resolution (ADR) for oppositions. “The moment you file an opposition you are expected to complete detailed pleadings and then wait until a hearing officer calls you for an oral hearing,” he said.

Mr. Sarkar would also like to see penalties introduced into the legislation so that “parties who file frivolous oppositions can be punished.”

“Especially for startups where it may be their only platform, and they don’t have any sort of bricks-and-mortar stores, getting through faster is better, and it's necessary for them to survive.”
Caroline Chicoine, Husch Blackwell LLP (US)

Changing for the Better

In the meantime, India’s Trade Marks Registry is taking steps to address the backlog, launching a recruitment drive late last year to fill an additional 30 hearing officer posts, with the intention of having eight people qualified to hear oppositions in each of its five local offices.

“This will certainly bring the backlog down,” Mr. Sarkar said.

Recruitment is part of the solution for the USPTO, too. Mr. Gooder explained that the Office has grown its examiner pool in response to the surge in applications. In fact, he said, the pandemic-induced embedding of hybrid or work-from-home practices (the Office was already embracing work-from-home before the pandemic began) means it is now able to hire more people in more parts of the country, “allowing us to extend the pool of people.”

“The problem with trying to hire your way out of things like this is that you miss the opportunities to actually improve the system,” he said, noting that the USPTO has been focused on that too.

For example, it launched a robotic process automation (RPA) tool which automates some of the things that take examiners time. So, for instance, if there was an application that was blocked by an application in front of it, it would get suspended. “Having to go back and check to see if it was still suspended takes time, and it’s unproductive time,” Mr. Gooder said. “So, there’s now an RPA tool that will automatically do that.”

He also pointed to the Office’s efforts to engage contractors to provide “extra bandwidth in areas that will help us move faster,” such as dealing with fraud and other issues which slow things down.

In the longer term, the aim is to empower examiners to “push back more on behaviors that slow things down.” One is so-called “application stuffing,” in which an applicant puts lots of classes of goods into one application unnecessarily.

“We like to help applicants, but there is a point where you see that coming from lawyers who should know better,” Mr. Gooder said. “It’s forcing the examiner to do a bunch of work for goods that are classes that aren’t ever paid for—and it eats a lot of time and effort that could have been used for somebody else.”

Finally, he noted, the Office has engaged an external consulting firm to assess the entire examination process as if the paper process never existed “to help us identify points in the process where we can make changes that shave time off.” These changes will not happen overnight, but Mr. Gooder hopes that many of them will take place during the next fiscal year.

What Does Success Look Like?

For the USPTO, the aspiration is clear. “We aren’t happy with the current pendency,” Mr. Gooder said. He expects dealing with the backlog to remain a priority under incoming USPTO Director Kathi Vidal.

There are lots of variables that affect pendency rates, he noted, but recent trends in applications are more in line with the long-term pattern. “If that holds, then pendency will come down,” he added.

Historically, those offices that have successfully reduced their backlogs have done so through active decision making and by being given the resources to do so.

In Brazil, Erika Marchetto Alhadas, partner at Araripe & Associados (Brazil), said that applications received at Brazil’s Patent and Trademark Office (BPTO) used to take up to six years to process, but that came down to around six months prior to the pandemic (it has risen again slightly during the pandemic, she noted).

According to Ms. Alhadas, as soon as the negotiations for Brazil to join the Madrid Protocol started [the country acceded in 2019], BPTO established a goal to reduce its backlog and increased the numbers of examiners. Gradually, the backlog fell to six or seven months for applications with no oppositions.

Similarly, in Ghana, the active decision to separate the IPO from the Registrar General’s Office has paid off and joining the Madrid Protocol in 2008 also helped.

“Joining the Madrid Protocol increased the number of applications received by the Office, data quality has been enhanced, and there has been improved processing time,” Ms. Issahaque noted.

In India, “we now have some legislative will,” to tackle those who abuse the opposition process, Mr. Sarkar said. That, coupled with recruitment efforts, should help bring down the opposition backlog.

The ideal pendency time is hard to define and depends on a given office’s ability to ensure quality at a faster pace, but, as Ms. Chicoine said: “I think we’re used to being in a world where we want immediate responses. Clearly, sooner is better.”

Footage used under license from Adobe Stock / kinomaster

Saturday, April 30, 2022

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