The U.S. Patent and Trademark Office is facing a backlash from its own staff and questions from Congress, WGBH News has learned, after it issued new instructions this month that seem to require trademark examiners to ask some applicants for proof of legal residence in the U.S. — an immigration provision that the examiners say has no role in trademark approval.
But the trademark office denies it is taking on immigration enforcement. It says it is just trying to stop foreigners, mostly from China, from stuffing the trademark pipeline with bogus registration applications.
“We do not require immigration status as part of an application,” USPTO Press Secretary Paul Fucito said in response to questions from WGBH News.
Trademark examiners who work for the office say they are not so sure that is still true.
The USPTO issued new rules effective Aug. 3 requiring anyone filing a trademark application from outside the United States to have a U.S.-based attorney working with them. The theory is that U.S. attorneys will not file counterfeit or otherwise improper applications. Also, having a U.S. attorney ensures that the USPTO knows how to contact an applicant if it needs to request more information.
There is broad agreement that the USPTO was right to issue new rules to address a flood of fraudulent Chinese trademark applications. But the controversy arose because of guidance sent to trademark examiners as they implement the rule changes.
Examiners were instructed that a foreign citizen applying for a trademark who declares a U.S. address as their “domicile” must provide proof of “lawful permanent residence.” The instructions note, “Foreign citizens must comply with U.S. visa immigration laws to claim the U.S. as their permanent legal residence.” That language — “permanent legal residence” — generally refers to a green card.
The guidance has raised the hackles of examiners. None of the examiners WGBH News contacted would agree to have their names published out of fear of losing their jobs.
“Trademark examiners are now required to ask questions about the immigration status of applicants living in the U.S. that have never been asked of applicants before,” said one examiner. As a result, “any immigrant who does not have a green card will likely be unable to obtain a trademark registration, even if they hire an attorney in compliance with the new rule requiring U.S. counsel,” the examiner said.
There is no requirement for an applicant for a U.S. trademark to be a U.S. citizen, or even to live in the United States. Since 1946, federal law has required an applicant for a U.S. trademark simply to declare their citizenship and “domicile.” There has been no requirement for documentation of a “domicile.”
But in recent years, the USPTO “has seen a significant increase in the number of applicants who are not fulfilling their legal and ethical obligations to file accurately and in good faith,” Mary Boney Denison, the commissioner of trademarks, told a congressional subcommittee chaired by Rep. Hank Johnson, D-Ga., in July. While some of those bogus applications are domestic, “a significant and increasing number of these come from overseas, primarily mainland China,” she said. And the flood of applications makes it more expensive and time-consuming for the trademark office to clear through the clutter and approve the valid ones.
A registered trademark is not necessary to sell a product in the U.S., but without one, it can be more difficult for a company to stop competitors from using its original name or designs. New York University Law Professor Jeanne Fromer said at the same July hearing that the United States is basically running out of usable commercial trademarks. “It is becoming increasingly difficult for new commercial entities, and particularly small businesses, to find a trademark that is competitively effective,” she said, a problem exacerbated by the deluge of Chinese trademark applications.
In 2014, the trademark office received 5,100 applications from China. In 2018, that number jumped to 54,000, more than 10 percent of the total applications that year.
Many of these Chinese applications are counterfeit or otherwise fraudulent, but each one has to be reviewed and challenged by a USPTO examiner before they can be denied and cleared out of the system.
As USPTO tries to combat spurious applications, there is concern that the new guidance will have a chilling effect on innovation in the United States. There are millions of immigrants in the U.S. who do not have “lawful permanent residence” or green cards, but are in the country legally — including students, artists and high-skilled workers who have temporary visas. This is in addition to the millions of undocumented immigrants who have no legal status.
It is not clear how many immigrants might have registered trademarks or might want to apply for trademarks; it is also not clear from the USPTO guidance whether temporary status would be enough to meet the requirement. But in the past, the visa or immigration status was never asked. Until August, trademark rules only requested citizenship and address.
Trademarks also must be renewed every few years, so anyone approved under the prior rules will now have to re-approved under the new rules.
Ka-yung Wong, a Boston attorney who practices both immigration and business law, said the new guidance to examiners is “overkill.”
“I can completely understand why they are trying to prevent fraudulent trademarks,” Wong said. “But international business does not require you to have a green card.”
Maria Eliseeva, a Boston-area patent and trademark lawyer, said the USPTO foray into immigration issues is odd. "It essentially says that you have to show us that you have lawful permanent residence in the U.S. — in essence, that you have a green card," she said. "In my view, it's a little bit of a stretch because there are plenty of people legally living in the U.S., and living here for many years on different kinds of work visas, who potentially could be applicants."
For instance, she notes that there are tens of thousands of foreigners in the U.S. on so called "O-1" visas for "workers with extraordinary ability or achievement." These are artists, athletes, musicians, chefs and others with extraordinary talents who are allowed to stay in the U.S. without sponsorship by an employer. According to the Department of Homeland Security, there were 111,000 people in the U.S. on O-1 visas in 2017.
Even if they are qualified for a trademark, the new guidance suggests that any non-permanent immigrants applying for or renewing a trademark would have to provide detailed information about their residence and their visa status, all of which would become part of the trademark office's public files and could deter people from applying.
While it is not clear how many U.S.-based trademark applicants the rules change might affect, it is very clear that immigrants make up a huge proportion of the nation’s “innovation economy.”
Harvard Business School Professor William Kerr told WGBH News that “roughly 25 percent of our patents or our business creation happen through first generation immigrants in the United States.” Kerr cautioned that data on innovation is all based on patents — the inventions, not the commercial trademarks — but he said it serves as an illustration that foreign born immigrants to the United States make up a disproportionate share of the innovation economy overall.
“That number is continuing to rise,” Kerr added. “Go back 30-40 years and it would have been significantly less.”
New American Economy, an immigration advocacy group, estimates that more than 3 million immigrants nationwide have started new companies — 64,000 of those in Massachusetts. “When you look at the role they are playing in new products or new technologies, immigrants have a very big role there,” said Executive Director Jeremy Robbins.
Robbins said that while it is completely reasonable to enforce immigration laws, “Doing it around the field of innovation is a very strange field to do it on. We absolutely want to make sure our laws are being followed, but it’s a very strange place to put the emphasis in the face of things that could benefit many Americans.”
But USPTO’s Fucito says that is not what is happening. The federal trademark law — called the Lanham Act — “has required all trademark applicants to provide their citizenship and domicile since 1946, so this is nothing new,” he said. “Those domiciled in the U.S. are eligible to receive a trademark registration,” and any foreign applicant is also eligible “when they file with U.S. counsel.”
Rep. Johnson told WGBH News last week he is looking into how USPTO is implementing its changes.
“I understand there’s a problem with fraudulent trademark applications being filed from abroad and held a hearing on that issue and how it impacts American consumers and businesses,” Johnson said. “I’m hopeful that anything the USPTO does within its executive authority is directed only to that narrow issue. The subcommittee is closely monitoring the situation and gathering more information on the new guidance.”