The following are the comments of the law firm of Erik M. Pelton & Associates, PLLC® of Falls Church, Virginia (“EMP&A”), in response to the Notice of Inquiry Regarding Adjustment of Fees for Trademark Applications published on August 16, 2012 in Volume 77, No. 159 of the Federal Register (“Notice of Inquiry”). Over the last decade, EMP&A has represented hundreds of clients, including many small businesses, in U.S. trademark prosecution, maintenance, and disputes. EMP&A clients have been issued more than 1,700 U.S. trademark registrations. Erik M. Pelton, the firm’s founder, worked as a USPTO Trademark Examiner from 1997 to 1999.
The use of reduced fees as an incentive to encourage applicants to use electronic filing is appropriate given the higher costs to the USPTO for processing paper filings and applications. However, trademark applicants should not be penalized or limited if they choose to use the electronic filing system. The current state of the identification manual used with TEAS Plus presents a real constraint on those using TEAS Plus. TEAS Plus applicants should have a better way to select and craft a complete range of acceptable identifications of goods and services. If the USPTO wishes to offer additional incentives for using TEAS Plus, it should consider providing applicants with non-financial incentives such as expedited processing.
Responses to Specific Inquiries
1. Fees for filing an application for registration of a trademark are currently set at: $375 per class for filing by a paper application; $325 per class for filing electronically using TEAS; $275 per class for filing electronically using TEAS Plus (additional requirements apply, including authorizing email communication from the USPTO, agreeing to file all subsequent documents electronically, and selecting goods/services from a pre-approved entry in the U.S. Acceptable Identification of Goods and Services Manual). Given the objective to increase end-to-end electronic processing of trademark applications, the significantly higher cost of processing paper applications, and the ability of the USPTO to offer some fee reductions, what fee amounts would you consider reasonable for the three existing methods of filing?
The existing trademark application filing fees are reasonable and fairly appropriate considering the USPTO’s objectives. However, we would prefer to see the TEAS Plus requirement of a pre-approved identification be eliminated and/or a better online identification manual made available for use by all applicants. If TEAS Plus were eliminated, perhaps all electronic filing fees could be set at $300 per class.
It is our experience that the majority of those who do not use TEAS Plus are not adverse to the authorization of entirely electronic communication, but rather choose not to use it because of the issues surrounding the identification of goods and services and/or the accounting and other difficulties that may ensue if TEAS Plus status is lost during the application process. Given the overall costs of a trademark application and the benefits it provides, the potential $50 savings is not very big and, in our opinion, does not justify the constraints.
The current limitations of the online identification manual make filing TEAS Plus applications impracticable for many of our clients. Furthermore, explaining the different filing fee options and their different requirements to clients and potential clients is burdensome and problematic and creates more of a hassle and time drain than the benefit of a $50 savings. Of course savings are wonderful, but when they cause more confusion and more work for a relatively small savings, the intended incentive may backfire. Furthermore, explaining to a client after an application has been filed that it did not sufficiently meet the TEAS Plus requirements and thus an additional $50 fee is due to the USPTO is also burdensome and difficult to communicate.
2. How much of a discount do you consider appropriate for the proposed TEAS application fee discount if the applicant authorizes email communication and agrees to file all responses and other documents electronically during the prosecution of the application?
It is our experience that the majority of those who do not use TEAS Plus are not adverse to the authorization of entirely electronic communication, but rather choose not to use it because of the issues surrounding the identification of goods and services and/or the accounting and other difficulties that may ensue if TEAS Plus status is lost during the application process. Therefore, we propose that the identification requirement be removed from TEAS Plus, or that TEAS and TEAS Plus have the same filing fees, with potentially other benefits for using TEAS Plus.
3. If you generally file trademark applications using TEAS, but not TEAS Plus, how much of a proposed discount would motivate you to authorize email communication and agree to file all responses and other documents electronically during the prosecution of a trademark application?
See responses to items 1 and 2. We generally file using TEAS, authorize email communication, and file all responses and documents electronically. We do not use TEAS Plus because of the identification requirement. While lowering the TEAS Plus fee may benefit some, we believe other options, such as lifting the identification requirement, would provide a better incentive to promote the other benefits of TEAS Plus.
4. If the TEAS Plus fee were reduced and remained the lowest fee, and the discount TEAS option were also offered, what would be the impact on the TEAS Plus filing level–i.e. would you be more likely to choose TEAS Plus as the lowest fee, or to select the discount TEAS option with its less burdensome requirements?
If the difference between TEAS Plus and TEAS filing fees were increased to an amount greater than the current $50 difference, clients and applicants would be more likely to ask about and to be concerned about the differences and choices. This could cause additional difficulties and problems for counsel explaining the pros and cons of the different filing options and complicate managing client accounts. As described above, we believe the more effective way to increase use of TEAS Plus would be to remove the identification requirement.
5. The cost of processing paper filed applications is substantially higher than electronically filed applications. If you generally file paper trademark applications, would you continue to do so even if the paper application fee were to increase, and why?
We do not generally file paper applications. But we do not believe those filing on paper should be penalized much more than they are currently. While electronic filing is wonderful for both applicants and the USPTO, paper filing should remain an option. Instead of using financial incentives for filing electronically, perhaps other incentives could be provided by the USPTO for electronic filers, such as priority in having applications and office action responses reviewed.
6. What advantages and disadvantages do you see in a fee structure that includes the TEAS application fee discount and a significantly higher fee for paper-filed applications?
We don’t believe those filing on paper should be penalized much more than they are currently. While electronic filing is wonderful for both applicants and the USPTO, paper filing should remain an option. Instead of using financial incentives for filing electronically, perhaps other incentives could be provided by the USPTO for electronic filers, such as priority in having applications and office action responses reviewed.
Additional Thoughts Regarding USPTO Trademark Filing Fees
In addition to the specific inquiries discussed above, this USPTO inquiry raises the opportunity to comment on two related issues: (A) the use of other incentives, in addition to filing fees, to encourage electronic trademark filing; and (B) the use of filing fee discounts or changes to provide other incentives to users of the trademark registration system of the USPTO.
As noted above, we believe that it would be valuable for the USPTO to provide other non-financial incentives to attract additional electronic filers. Such incentives may be more persuasive to those still filing on paper. One such incentive may be expedited handling, but other enticements may be available as well. We encourage further exploration and discussion of such incentives.
In addition, we encourage the USPTO to investigate the possibility of using reduced fees or different fee structures to provide motivation that would lead to more businesses filing for trademark registration. Since registration is not mandatory, many trademarks are used but never the subject of applications for registration at the USPTO. As a result, the federal trademark register will always be a subset of all trademarks in use in the United States. However, if the percentage of trademarks in use in the United States that are registered increases, the register will be more complete and even more valuable to all stakeholders.
In addition, financial filing fee incentives could be provided when an applicant files companion applications together that feature overlapping information, such as different descriptions of goods and/or services for the same mark, or different marks with the same description of goods and services.
An applicant files, at the same time, three applications for a name, logo, and slogan for three related applications that feature identical information other than the marks. Presumably such related applications will require less examination and expenditures from the USPTO to process.
An applicant applies to register mark XYZ in four classes in separate applications at the same time. The mark and all the information other than the goods and services are identical in each of the four applications.
If the USPTO were to reduce filing fees for these types of companion applications, it could provide incentives for businesses to file trademark applications that they would otherwise not invest in and that would otherwise never become part of the pending application database or the register.
Alternatively, the fees for multiple classes in the same application could be reduced. If the filing fee of the first Class is $325. Perhaps the filing fees for subsequent Classes could be $100 less since the burden on the USPTO is presumably less than that of an entirely new application. This would encourage applicants to be comprehensive in listing the goods and services with which they use or intend to use their marks, making for a more accurate and complete register.
Another possible incentive to increase the percentage of trademarks that are filed with the USPTO would be to provide recently established businesses a discounted filing fee. Details regarding the specific qualifications and proof necessary for the discount, as well as the amount of the discount, would of course need to be explored.
Finally, we note that the 10 year renewal fees – $500 per class – appear to be out of line with the initial application filing fees and the 6 year Section 8 filing fees. The processing of the 10 year renewal by the USPTO is not nearly as substantial or complex as the handling of initial applications, and we support a reexamination of the 10 year renewal fee.
In short, we encourage the USPTO to examine some of the many possibilities for adjusting or lowering fees to increase the number of marks on the US trademark registry. While additional electronic filing and processing would be beneficial to the USPTO, other changes to the fee structure may make an even larger impact on our trademark system. Further research is necessary to determine if and how changes to the fee structure can lead to a more thorough, accurate, and complete register; encourage small businesses to apply to register their marks; and/or spur companies to file to register the marks as early as possible. Of course, it is important that the USPTO trademark operations remain self-funded, and the filing fees should not be reduced at the expense of examination quality, processing times, and other essential services of the Office. If fee policies can be used to make the US trademark register more thorough and thus more valuable for businesses conducting trademark clearance work, the USPTO should consider such changes.
A periodic review of the USPTO trademark filing fees is a terrific idea, as is engaging the user community in the process. We support the USPTO’s use of different fee amounts for paper versus electronic filings and application prosecutions. We believe that the USPTO should also examine other non-financial incentives for applicants who prosecute their applications entirely electronically. We further encourage additional research and discussion of other potential fee incentives to encourage businesses, especially small businesses, to apply to register more trademarks in more classes, the result of which would be an even more accurate and more useful register.
Thank you for the opportunity to comment.
Erik M. Pelton
Erik M. Pelton & Associates, PLLC®
Experience is our trademark. Trademark is our experience. ®