Update: “Digitally Altered” Specimen Refusals, Applicant Country, and Maintaining a Cleaner Registry

In July 2019, we took a look at “digitally altered” specimen refusals from the PTO. At the time, the Office had only just published its formal guidance on this new issue. In those early days, Chinese applicants were getting plenty of refusals, but generally overcame them pretty well.

This blog post does a deeper dive to see how often Chinese applicants are getting and faring with this refusal, and how those rates compare to US-based applicants. This only looks at the “digitally altered” refusal, not related issues with website specimen inadequacies like insufficient date / URL information. The “digitally altered” refusal is a “tougher” refusal — the Examiner is saying “this looks fake” rather than just “you forgot to include some key details.”

I. How Common are “Digitally Altered” Refusals?

We looked at applications that had digitally altered specimen refusals issued in 2020, broken down goods-classes vs. service-classes refusals. The final counts of the still-pending applications are considerable; whether these end up moving through to registration or going abandoned will make a big difference in assessing the impact of this examination priority. These counts looked at the refusal ratio as a percentage of the overall applications that had use claims at some point in the application; obviously, 1(b) or 44(e)-only or 66(a) applications won’t get this refusal.

Overall, currently or formerly use-based applications in the goods classes are getting a ton more “digitally altered” specimen refusals than specimen-class applications. That makes sense; most service-class specimens are websites anyway, and it’s just as easy to put up a crummy real website that will pass examination muster as it is to mock up a crummy fake website. Refusals of US applications with Chinese applicants were about twice as high as the rate of refusals of applications owned by US-based applicants for goods-based applications (15% vs. 8%) and about 10 times as high for services-based applications (10% vs. 1%). Because use-based applications in the goods classes from Chinese-based applicants actually outnumber such applications from US-based applicants since July 2019, when the USPTO announced this new prosecution focus, this means that almost twice as many these “digitally altered” refusals (by raw number counts) have gone out on applications where the applicant is based in China than to applications where the applicant is based in the US.

II. What Happens After Refusals?

So, what happens once these refusals are issued? A pretty good percentage of the applications that get those refusals are still pending – about 40% of applications from China-based applicants, and about 50% applications from US-based applicants. Of the rest, more applications are “fixing” the issue and getting through to registration, including a slightly higher percentage for China-based applicants overall (though very few of the smaller service-class dataset) than for US-based applicants.

III. Impact of the Rule

So, what is the impact of this rule? It has resulted in the abandonment of almost 6,200 applications from China-based applicants and almost 3,000 applications from US-based applicants. The sheer number of applications going abandoned that would have otherwise moved through to registration with a probably-fake specimen of use is a win for the goal of having a good, clean registry.

Does the rule occasionally impact “good-faith” applicants? Sure! It may cause a bit of inconvenience for a “legitimate” applicant where the goods are shown in a “glamour shots” on a pristine white background, US counsel can help train their clients to provide an appropriate specimen from the outset or in response to the Office Action.

IV. What Else Can Be Done?

Is this sufficient? Hell, no. There are plenty of sketchy specimens (from applicants of all nationalities!) that never generate a refusal, suspicious applications for a random assortment of letters for a list of goods that is very close to a class header, an epidemic of “use claims” that are far more broad than could ever be justified, and a raft of Section 8 and Section 71 claims that are way to broad and get trimmed sharply back every time the USPTO conducts a use claim audit (we blogged about audits in February). I’d love to see aggressive examination of broad use claims and specimens, even if it puts a greater burden on applicants and their counsel. I also believe that a change in the law to allow registrations under 44(e) or 66(a) to be trimmed back to reflect marketplace use essentially immediately after registration, putting them back on more even footing with US applications that claim use for goods or services where there is none, would be a net benefit and give us a cleaner registry. In fact, I’d love to see consequences from over-broad use claims beyond just deletion of the goods that are not in use.

Even if it’s not nearly enough, the digitally altered specimen rule has helped give trademark owners, applicants, and counsel a somewhat cleaner registry that more accurately reflects the real world of US commerce, and that’s a good thing.

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