Trademark Fee Adjustment

Citation85 FR 37040
Record Number2020-13262
Published date19 June 2020
CourtPatent And Trademark Office
Federal Register, Volume 85 Issue 119 (Friday, June 19, 2020)
[Federal Register Volume 85, Number 119 (Friday, June 19, 2020)]
                [Proposed Rules]
                [Pages 37040-37057]
                From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
                [FR Doc No: 2020-13262]
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                DEPARTMENT OF COMMERCE
                Patent and Trademark Office
                37 CFR Parts 2 and 7
                [Docket No. PTO-T-2019-0027]
                RIN 0651-AD42
                Trademark Fee Adjustment
                AGENCY: United States Patent and Trademark Office, Department of
                Commerce.
                ACTION: Notice of proposed rulemaking.
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                SUMMARY: The United States Patent and Trademark Office (Office or
                USPTO) proposes to set or adjust certain trademark fees, as authorized
                by the Leahy-Smith America Invents Act (AIA), as amended by the Study
                of Underrepresented Classes Chasing Engineering and Science Success Act
                of 2018 (SUCCESS Act). The proposed fees are intended to recover the
                prospective aggregate costs of future strategic and operational
                trademark and Trademark Trial and Appeal Board (TTAB or Board) goals
                (based on workload projections included in the USPTO fiscal year (FY)
                2021 Congressional Justification), including associated administrative
                costs. The proposed fees will further USPTO strategic objectives by:
                Better aligning fees with costs, protecting the integrity of the
                trademark register, improving the efficiency of agency processes, and
                ensuring financial sustainability to facilitate effective trademark
                operations. Before a final rule is issued, the USPTO will consider the
                state of the U.S. economy, the operational needs of the agency, and
                public comments submitted pursuant to this rulemaking. The USPTO will
                make adjustments as necessary to the substance and timing of any final
                rule based on all of these considerations.
                DATES: Written comments must be received on or before August 3, 2020.
                ADDRESSES: The USPTO prefers that comments be submitted electronically
                via email to [email protected]. Written comments may also be
                submitted by mail to Commissioner for Trademarks, P.O. Box 1451,
                Alexandria, VA 22313-1451, attention Catherine Cain; by hand delivery
                to the Trademark Assistance Center, Concourse Level, James Madison
                Building-East Wing, 600 Dulany Street, Alexandria, Virginia 22314,
                attention Catherine Cain; or via the Federal eRulemaking Portal. See
                the Federal eRulemaking Portal website (https://www.regulations.gov)
                for additional instructions on providing comments via the portal. All
                comments submitted directly to the USPTO or provided on the Federal
                eRulemaking Portal should include the docket number (PTO-T-2019-0027).
                 Although comments may be submitted by postal mail, the USPTO
                prefers to receive comments electronically because the Office may more
                easily share such comments with the public. The USPTO prefers that
                comments submitted electronically be in plain text, but they also may
                be submitted in portable document format (PDF) or a word processing
                file format (DOC or DOCX). Comments not submitted electronically should
                be submitted on paper in a format that facilitates convenient digital
                scanning into PDF.
                 The comments will be available for public inspection on the USPTO's
                website at http://www.uspto.gov, on the Federal eRulemaking Portal, and
                at the Office of the Commissioner for Trademarks, Madison East, Tenth
                Floor, 600 Dulany Street, Alexandria, Virginia 22314. Because comments
                will be made available for public inspection, information that is not
                desired to be made public, such as an address or phone number, should
                not be included.
                FOR FURTHER INFORMATION CONTACT: Catherine Cain, Office of the Deputy
                Commissioner for Trademark Examination Policy, at 571-272-8946, or by
                email at [email protected].
                SUPPLEMENTARY INFORMATION: The USPTO conducted a fee assessment in
                January 2019 that formed the basis for this regulatory process to
                propose adjusting and setting new trademark user fees. While trademark-
                related costs of operations have risen, trademark fees have not changed
                since January 2017. The revenue and workload assumptions in this notice
                of proposed rulemaking (NPRM) are based on the assumptions found in the
                FY 2021 Congressional Justification. However, projections of aggregate
                revenues and costs are based on point-in-time estimates, and the
                circumstances surrounding these assumptions can change quickly.
                Notably, since the FY 2021 Congressional Justification was published,
                fee collections have been lower than anticipated, in part due to lower
                than expected application filings as a result of the COVID-19 outbreak.
                 The USPTO is also mindful of the current difficulties many USPTO
                users are experiencing as a result of the pandemic. The USPTO has
                undertaken many efforts to provide various types of relief, including
                deadline extensions and fee postponements. Ultimately, the goal of the
                USPTO is to ensure not only that businesses and entrepreneurs can
                weather this storm, but that they can hit the ground running once it
                passes.
                 The USPTO anticipates that the earliest any proposed trademark fee
                changes could take effect is October 2020. Before a final rule is
                issued, the USPTO will consider the state of the U.S. economy, the
                operational needs of the agency, and public comments submitted pursuant
                to this NPRM. The USPTO will make adjustments as necessary to the
                substance and timing of any final rule based on all of these
                considerations.
                 As part of the multi-year fee-setting process, the Trademark Public
                Advisory Committee (TPAC) held a public hearing at the USPTO on
                September 23, 2019. The Office considered and analyzed all comments,
                advice, and recommendations received from the TPAC before publishing
                this NPRM. The USPTO is now moving to the next step in the process.
                This NPRM proposes changes to fees and also proposes new fees in order
                to solicit public comment.
                 Purpose: The USPTO protects consumers and provides benefits to
                businesses by effectively and efficiently carrying out the trademark
                laws of the United States. As a fee funded agency, appropriate fees are
                critically important for the USPTO to maintain the quality and
                timeliness of examination and other services, and to stabilize and
                modernize aging information technology (IT) infrastructure. The fee
                schedule proposed in this rulemaking will recover the USPTO's aggregate
                estimated future costs and ensure the USPTO can achieve strategic and
                operational goals, such as effectively using resources to maintain low
                trademark pendency and high quality, fostering business effectiveness
                (ensuring quality results for employees and managers), stabilizing and
                modernizing trademark IT systems, continuing programs for stakeholder
                and public outreach, enhancing operations of the TTAB, and ensuring
                financial sustainability to facilitate effective trademark operations.
                 Section 10 of the AIA authorizes the Director of the USPTO
                (Director) to set or adjust by rule any fee established, authorized, or
                charged under the Trademark Act of 1946, 15 U.S.C. 1051
                [[Page 37041]]
                et seq., as amended (the Trademark Act or the Act) for any services
                performed by, or materials furnished by, the Office. See section 10 of
                the AIA, Public Law 112-29, 125 Stat. 284, 316-17, as amended by the
                SUCCESS Act, Public Law 115-273, 132 Stat. 4158. Section 10 of the AIA
                prescribes that trademark fees may be set or adjusted only to recover
                the aggregate estimated costs to the USPTO for processing, activities,
                services, and materials relating to trademarks, including
                administrative costs to the USPTO with respect to such trademark and
                TTAB operations. However, this authority includes the flexibility to
                set individual fees to advance key policy objectives. Thus, the
                Director may set individual fees at, below, or above their respective
                associated costs, while taking into account the aggregate estimated
                costs to the USPTO.
                 Section 10 of the AIA also establishes certain procedural
                requirements for setting or adjusting fee regulations, including public
                hearings by, and input from, the TPAC. See section 10(c) of the AIA,
                Public Law 112-29, 125 Stat. at 317. Accordingly, on August 28, 2019,
                the Director notified the TPAC of the USPTO's intent to set or adjust
                trademark fees and submitted a preliminary trademark fee proposal with
                supporting materials, available at http://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting.
                 On September 23, 2019, the TPAC held a public hearing in
                Alexandria, Virginia. Transcripts of this hearing and comments
                submitted to the TPAC in writing are available for review at http://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting.
                 The TPAC subsequently released a report (TPAC report), dated
                October 31, 2019, regarding the preliminary proposed fees. The report
                recognized that fee adjustments are warranted to achieve strategic and
                operational goals and evaluated the various proposed fees in view of
                the USPTO's stated rationales for setting or adjusting fees for certain
                services and activities, as well as the public comments regarding the
                fee proposals. The TPAC report expressed support for an increase in
                fees that would support USPTO operations by recovering costs and
                maintaining a sufficient operating reserve but raised concerns
                regarding some of the proposed fee increases and their potential impact
                on customers. The TPAC report offered recommendations to address these
                concerns. The report is available at http://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting.
                 After careful consideration of the comments and recommendations
                provided in the TPAC report and in testimony by users at the public
                hearing, and keeping in mind the fee setting goals of this proposed
                rule, the USPTO has made various changes to the initial fee proposal,
                including the withdrawal of proposed fees for filing a motion for
                summary judgment and for filing a request for suspension and remand and
                the proposed increase in the fee for filing an affidavit under section
                15 of the Act. Other fees in the preliminary proposal were retained or
                modified, as reflected in this proposed rule and explained in further
                detail below. The USPTO seeks comments on the fee proposals, including
                in relation to the current environment.
                 The USPTO estimates, based on the assumptions found in the FY 2021
                Congressional Justification, that the additional aggregate revenue
                derived from the proposed fee schedule will recover the future costs of
                implementing strategic and operational goals, including the cost of
                necessary IT stabilization and modernization activities, with the
                expectation that the proposal will gradually build the operating
                reserve to achieve sustainable funding that will mitigate the risk of
                immediate unplanned financial disruptions. Under this proposal, based
                on the assumptions found in the FY 2021 Congressional Justification,
                the Office estimates reaching the optimal six-month trademark operating
                reserve level in FY 2025.
                 Summary of major provisions: The USPTO proposes to set or adjust
                trademark fees codified in 37 CFR parts 2 and 7. Fees are proposed to
                be increased for all application filing types (i.e., paper
                applications, applications filed via the Trademark Electronic
                Application System (TEAS), and requests for extension of protection
                under section 66(a) of the Trademark Act, 15 U.S.C. 1141f). The
                proposed per-class fee increases range from $25 for a TEAS Plus
                application to $150 for a paper application. Fee increases of $100 per
                class are also proposed for filing affidavits or declarations of use or
                excusable non-use under section 8 or section 71 of the Act (section 8
                or section 71 affidavits), 15 U.S.C. 1058, 1141k. As described in
                further detail below, these proposed increases address policy
                considerations related to ensuring a more accurate register as well as
                reflecting increased processing costs to the Office in handling these
                filings.
                 This proposed rule creates two levels of fees for petitions, one
                for petitions to the Director under Sec. Sec. 2.146 and 2.147 and a
                lower fee for a petition to revive an abandoned application under Sec.
                2.66. Currently, the fees for these petitions are $200 if filed on
                paper and $100 if filed through TEAS. The USPTO proposes to set the fee
                for petitions under Sec. Sec. 2.146 and 2.147 at $350 if filed on
                paper and $250 if filed through TEAS. The fees for a petition to revive
                under Sec. 2.66 are proposed to be set at $250 if filed on paper and
                $150 if filed through TEAS. These proposed fees take into account the
                different processing costs of these filings.
                 New fees are proposed for requests for reconsideration under Sec.
                2.63(b)(3) that are filed more than three months after the issue date
                of a final action (at $500 for paper filing and $400 for filing through
                TEAS or the Electronic System for Trademark Trials and Appeals
                (ESTTA)). Requests for reconsideration are documents filed after a
                final action that respond to the outstanding refusals or requirements
                (see Trademark Manual of Examining Procedure (TMEP) Sec. 709.05). They
                include an applicant's request to the TTAB, filed within six months of
                the issue date of a final action, whether filed with or after a notice
                of appeal and whether it is denominated as a request for
                reconsideration or is captioned as something else, such as a request
                for remand. It does not include any filing with the TTAB after the
                applicant has filed its appeal brief (see Trademark Trial and Appeal
                Board Manual of Procedure (TBMP) Sec. 1209.04). This new proposed fee,
                imposed when the filing is more than three months after the issue date
                of a final action, is designed to encourage applicants to submit these
                filings earlier in the response period and to recover costs associated
                with processing all requests for reconsideration.
                 A new $50 fee is also proposed for filing a letter of protest,
                along with new regulations that codify letter-of-protest procedures.
                The new proposed fee and procedures are designed to help offset
                processing costs and deter the filing of unsupported or irrelevant
                letters of protest, while not discouraging the filing of relevant,
                well-supported letters of protest. The new regulatory section is based
                on existing, longstanding procedures for letters of protest, which are
                currently set forth in the TMEP, as well as the procedures set out in
                the patents rules in 37 CFR 1.290 and 1.291 and the Manual of Patent
                Examining Procedure (MPEP) governing third-party submissions concerning
                pending applications, which serve a function similar to letters of
                protest.
                 The Office proposes a new fee structure to encourage registrants to
                proactively perform sufficient due
                [[Page 37042]]
                diligence before filing a section 8 or section 71 affidavit to
                determine the goods or services for which the registered mark is no
                longer in use and delete them from the registration. The USPTO herein
                proposes two fee levels for amendments to registrations to delete
                goods, services, and/or classes. The USPTO proposes a $0 fee if the
                only amendment made in a request under section 7 of the Act (section 7
                request), 15 U.S.C. 1057(e), that is filed prior to submission of a
                section 8 or section 71 affidavit is the deletion of goods, services,
                and/or classes. As always, no additional fee would be incurred for
                section 8 or section 71 affidavits that specify fewer than all of the
                goods or services listed in the registration when the affidavit is
                filed, which results in the deletion of goods or services not included
                in the affidavit from the registration. However, if goods, services,
                and/or classes are deleted in a section 7 request, a response to Office
                action, or a voluntary amendment after submission and prior to
                acceptance of a section 8 or section 71 affidavit, the proposed per-
                class fee of $250 for submissions filed through TEAS and $350 for
                submissions permitted to be filed on paper would be charged. To
                implement the new fee requirement, corresponding new regulations are
                also proposed at Sec. Sec. 2.161(c) and 7.37(c). In addition, the
                USPTO proposes to revise the section titles and restructure Sec. Sec.
                2.161 and 7.37 to set out the requirements for section 8 and section 71
                affidavits more clearly. Except for the new provision regarding the fee
                required for deletions made after submission and prior to acceptance of
                the affidavit, the substantive text of Sec. Sec. 2.161 and 7.37 has
                not otherwise been revised.
                 Finally, as discussed below, 16 fees related to TTAB filings are
                established or adjusted in this proposed rule: 10 fees would be
                increased for initiating a proceeding, and six new filing fees would be
                established. The new and adjusted fees are generally designed to
                recover more of the costs of TTAB procedures, to reduce the extent to
                which they are subsidized by trademark fee collections, and to advance
                policy objectives. The USPTO also proposes to revise Sec. 2.114(a) to
                provide that a partial refund of the filing fee for a petition to
                cancel may be made in cases involving only a nonuse or abandonment
                claim, when default judgment is entered in the case, where there was no
                appearance by a defendant, and where no filings were made other than
                the petition to cancel.
                 Rulemaking goals and strategies: Consistent with federal fee
                setting standards, the Office conducted a biennial review of fees,
                costs, and revenues that began in 2019 and found that fee adjustments
                are necessary to provide the resources needed to improve trademark
                operations and to implement the USPTO 2018-2022 Strategic Plan
                (Strategic Plan). As a result, the proposed fee adjustments outlined in
                this proposed rule directly align with the Office's strategic goals and
                key objectives as outlined in this section. Consistent with the USPTO's
                strategic goals and obligations under the AIA, the overall objective of
                this rulemaking is to ensure the fee schedule generates sufficient
                revenue to recover the prospective aggregate costs of trademark and
                TTAB strategic improvements and operations, including the associated
                administrative costs. Fees must be set at levels projected to cover the
                cost of future budgetary requirements and maintain an operating reserve
                at a sufficient level. Trademark applications in FY 2019 represented
                filings in a record number of over 673,000 classes of goods/services.
                However, in the last two recessions, new application filings declined
                (2001, by -21.0%; 2002, by -12.7%; and 2009, by -12.3%), demonstrating
                the sensitivity of trademark filings, and therefore total revenues, to
                general economic conditions. So far, the current economic downturn has
                produced similar estimates of trademark application filing declines.
                However, during ordinary economic times, application filings generally
                have increased by an average historical rate of between 7% and 8% per
                year. USPTO anticipates a return to this historical trend as trademark
                applicants return to expected activities. To ensure its ability to keep
                pace with demand, the USPTO is in the midst of a multi-year IT systems
                and infrastructure upgrade, which is critical to the future of the U.S.
                trademark registration system and represents a significant cost to the
                Office.
                 The current fee schedule is insufficient to meet future budgetary
                requirements to: (1) Meet the expenses that will result from projected
                filings based on expectations for fee revenues; (2) recover the costs
                necessary to support trademark and TTAB operations and administrative
                services; (3) make necessary investments in IT systems, intellectual
                property (IP) policy, and USPTO programs related to trademark and TTAB
                operations; and (4) achieve optimal operating reserve levels to ensure
                financial sustainability. Budgetary requirements have increased by 22%
                from FY 2019 to FY 2020 to address unplanned pay raises, additional
                review for potential fraud, post-registration audits, agency
                administrative operations, and continued investments in IT that require
                additional funding beginning in FY 2020. Without the proposed fee
                adjustments, based on the assumptions found in the FY 2021
                Congressional Justification, budgetary requirements would exceed
                revenues and available operating reserve balances beginning in FY 2022
                through FY 2025 (see Table 1).
                 Table 1--Trademark Financial Outlook Without Proposed Fees--FY 2021-FY 2025
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                 Dollars in millions
                 -------------------------------------------------------------------------------
                 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025
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                Projected Fee Collections....... $367 $390 $412 $430 $447
                Other Income.................... 6 6 6 6 6
                Total Projected Fee Collections 373 396 418 436 453
                 and Other Income...............
                Budgetary Requirements.......... 419 460 462 478 497
                Funding to (+) and from (-) -46 -64 -44 -42 -44
                 Operating Reserve..............
                EOY Operating Reserve Balance... 26 (38) (81) (123) (167)
                Over/(Under) $75M Minimum Level. (49) (113) (156) (198) (242)
                Over/(Under) Optimal Level...... (184) (268) (312) (362) (415)
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                 Table 2 below shows the available revenue and operating reserve
                balances by fiscal year, including the proposed fee rates in the
                projected fee collections. The numbers in the table below can be found
                in the FY 2021 Congressional
                [[Page 37043]]
                Justification and were developed in late calendar year 2019, prior to
                the COVID-19 outbreak. Under current circumstances, it is difficult to
                predict what the actual numbers will be. However, since USPTO was
                projecting insufficient funding even during an economic expansion (see
                Table 1) and the trademark financial outlook has only worsened since
                the onset of the pandemic, USPTO still believes that a fee increase
                will be necessary to put the Office on a sustainable financial path.
                 Table 2--Trademark Financial Outlook Including Proposed Fees--FY 2021-FY 2025
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                 Dollars in millions
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                 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025
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                Projected Fee Collections....... $445 $472 $498 $519 $539
                Other Income.................... 6 6 6 6 6
                Total Projected Fee Collections 451 478 504 525 545
                 and Other Income...............
                Budgetary Requirements.......... 419 460 462 478 497
                Funding to (+) and from (-) 31 18 42 47 48
                 Operating Reserve..............
                EOY Operating Reserve Balance... 103 121 163 211 259
                Over/(Under) $75M Minimum Level. 28 46 88 136 184
                Over/(Under) Optimal Level...... (107) (109) (68) (28) 10
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                 Additional information on estimated costs can be found in the USPTO
                FY 2021 Congressional Justification at https://www.uspto.gov/about-us/performance-and-planning/budget-and-financial-information, which
                includes two revenue estimates, one based on the current fee schedule
                and another based on this proposed rule (see Appendix IV: USPTO Fees--
                Change from FY 2020 PB to FY 2021 PB).
                 The USPTO, as a fully fee-funded agency, retains an operating
                reserve to ensure sufficient financial resources are available to
                support and promote public confidence in the U.S. IP system. The
                operating reserve enables the USPTO to maintain operations by absorbing
                and responding to immediate and temporary changes in its economic and
                operating environments or circumstances, such as unexpected economic
                downturns, reducing the risk for short-term financial actions and
                providing the security for long-term strategic investments, such as IT
                development projects that are crucial to operations and customer
                support. An adequate operating reserve also allows the USPTO to
                continue serving its users in the event of a short-term lapse in
                congressional appropriations or a sudden economic downturn. Trademark
                filings exhibit a strong connection to domestic and global economic
                activity, responding quickly to economic shocks, as experienced in the
                2001-2002 and 2009 recessions and most recently in 2020. The operating
                reserve is the primary tool to mitigate the sudden impact of these
                unforeseen events.
                 Another fee setting goal of this rulemaking is to set individual
                fees to further key IP protection policy objectives while taking into
                account the cost of a particular service. The USPTO seeks to enhance
                trademark protection for IP rights holders by offering application-
                processing options and promoting IP protection strategies.
                 Aligning fees with costs: The first fee setting policy
                consideration is to set and adjust trademark fees to more closely align
                those fees with the costs of providing the relevant services. The
                overall goal is to achieve total cost recovery from fee collections for
                trademark and TTAB operations, including associated administrative
                services. In determining which fees to set or adjust, this proposed
                rule targets changes to the category of fees where the gap between the
                cost of the service and the current fee rate is the greatest, and
                addresses policy objectives. Application filing fees, petition fees,
                and TTAB fees do not fully cover the costs of processing and
                examination for those services. Instead, these costs are recovered or
                subsidized from fees paid for intent-to-use and post-registration
                maintenance filings that return more than the costs of processing such
                filings. For example, using FY 2019 earned revenue compared to costs or
                expenses, application filing fees recovered 65% of expenses, petition
                (trademark processing) fees recovered 50% of expenses, and TTAB fees
                recovered just 31% of expenses (see Table 3).
                 Table 3--Earned Revenue vs. Expense by Trademark Product
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                 Earned revenue
                 FY 2019 earned vs. expense or
                 Trademark products revenue FY 2019 expense FY 2019 variance cost recovery
                 (%)
                ----------------------------------------------------------------------------------------------------------------
                Application Filings..................... $190,457,284 $291,678,207 ($101,220,923) 65
                Intent to Use/Use Fees.................. 49,885,175 17,154,805 32,730,370 291
                Trademark Processing Fees............... 2,619,600 5,212,800 (2,593,200) 50
                Maintaining Exclusive Rights............ 79,942,987 13,991,853 65,951,134 571
                Madrid Protocol......................... 4,294,675 1,006,834 3,287,841 427
                Other Trademark Fees.................... 10,571,283 8,902,431 1,668,852 119
                Trademark Trial and Appeal Board........ 8,452,900 27,633,083 (19,180,183) 31
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                 Total............................... 346,223,905 365,580,013 (19,356,109) ................
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                 The proposed fee schedule would increase the percentage of fee
                revenues for application filings by 21%, for petition filings by 101%,
                and for TTAB filings by 58% overall, thereby increasing the cost
                recovery for these services (see Table 4). If the proposed fee schedule
                were implemented, based on the assumptions found in the FY
                [[Page 37044]]
                2021 Congressional Justification, the USPTO projects that trademark fee
                collections in total would increase by an average of 21% per year, or
                $77 million, to $92 million per year over the five-year planning period
                as compared to the baseline (see Table 5).
                 Table 4--Increase in Cumulative Revenue, by Product
                ----------------------------------------------------------------------------------------------------------------
                 Projected cumulative revenue, FY
                 2021-2025
                 Trademark products ------------------------------------ Increase (%)
                 Current fee
                 rates (baseline) NPRM fee rates
                ----------------------------------------------------------------------------------------------------------------
                Application Filings....................................... $1,078,986,925 $1,300,666,600 21
                Maintaining Exclusive Rights.............................. 517,806,550 659,008,548 27
                Intent to Use/Use......................................... 292,887,325 292,887,325 0
                Madrid.................................................... 29,201,550 42,258,078 45
                TTAB...................................................... 52,602,400 83,164,508 58
                Petition.................................................. 17,508,400 35,147,450 101
                Other Processing Fees..................................... 58,391,905 58,391,905 0
                 -----------------------------------------------------
                 Total................................................. 2,047,385,055 2,471,524,413 21
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                 Table 5--Annual Increases in Aggregate Revenue
                --------------------------------------------------------------------------------------------------------------------------------------------------------
                 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 Average
                --------------------------------------------------------------------------------------------------------------------------------------------------------
                Aggregate Revenue--Baseline............................. $367,001,856 $390,327,171 $412,360,921 $430,391,196 $447,303,911 $409,477,011
                Aggregate Revenue--NPRM................................. $443,946,233 $471,660,715 $497,754,151 $519,026,516 $539,136,798 $494,304,883
                $ Increase.............................................. $76,944,377 $81,333,544 $85,393,230 $88,635,320 $91,832,887 $84,827,872
                % Increase.............................................. 21.0% 20.8% 20.7% 20.6% 20.5% 20.7%
                --------------------------------------------------------------------------------------------------------------------------------------------------------
                 Estimated revenues are based on adjustments made from public
                comments included in this rulemaking.
                 Protecting the integrity of the trademark register: The second fee
                setting policy consideration is to set or adjust fees to improve the
                accuracy of the trademark register. The accuracy of the trademark
                register as a reflection of marks that are actually in use in commerce
                in the U.S. for the goods/services identified in the registrations
                listed therein serves a critical purpose for the public and for all
                registrants. An accurate register allows the public to rely on the
                register to determine potential trademark rights. By registering
                trademarks, the USPTO has a significant role in protecting consumers,
                as well as providing important benefits to American businesses, by
                allowing them to strengthen and safeguard their brands and related
                investments. The public relies on the register to determine whether a
                chosen mark is available for use or registration. When a person's
                search of the register discloses a potentially confusingly similar
                mark, that person may incur a variety of resulting costs and burdens,
                such as those associated with investigating the actual use of the
                disclosed mark to assess any conflict, initiating proceedings to cancel
                the registration or oppose the application of the disclosed mark,
                engaging in civil litigation to resolve a dispute over the mark, or
                changing business plans to avoid the use of that person's chosen mark.
                In addition, such persons may incur costs and burdens unnecessarily if
                a registered mark is not actually in use in commerce in the U.S. or is
                not in use in commerce in connection with all the goods/services
                identified in the registration. An accurate and reliable trademark
                register helps avoid such needless costs and burdens.
                 This proposed rule sets and adjusts fees to encourage actions by
                trademark filers that help facilitate more efficient processing and the
                prompt conclusion of application prosecution by assessing fees for
                requests for reconsideration filed more than three months after a final
                Office action and for second and subsequent extension requests to file
                appeal briefs. In addition, filings that may result in a less accurate
                register, including post-registration filings to maintain registrations
                that may include goods or services for which the mark is no longer in
                use, are among those filings targeted under this objective. The new fee
                structure for requests for reconsideration and requests to delete
                goods, services, and/or classes from a registration would protect the
                integrity of the register and the efficiency of the process by
                incentivizing both more timely filings and proactive action by
                applicants and registrants. The increased efficiencies realized through
                the proposed rule will benefit all applicants and registrants by
                allowing registrations to be granted sooner and more efficiently by
                removing unused marks and unsupported goods and services from the
                register.
                 Improving the efficiency of USPTO processes: The third fee setting
                policy consideration pertains to improving the efficiency of the
                trademark and TTAB processes. To that end, this proposed rule targets
                changes to fees that will administratively improve application and
                appeal processing by incentivizing more complete and timely filings and
                prosecution. For example, TEAS Plus, the lowest-cost TEAS application
                filing option, has more stringent initial application requirements and
                thus tends to result in a more complete application, which expedites
                processing, shortens pendency, minimizes manual processing and the
                potential for data-entry errors, and is thus more efficient for both
                the filer and the USPTO. While the per-class fee for TEAS Plus would
                increase by $25 to $250 under this proposal, the per-class fee for TEAS
                Standard, which has less stringent initial application requirements, is
                proposed to increase by $75 to $350, resulting in a difference of $100
                in the per-class fees of the respective filing options (double the
                current difference of $50), providing an increased financial incentive
                to choose the TEAS Plus filing option.
                 Ensuring financial sustainability to facilitate effective trademark
                operations: The fourth fee setting policy consideration pertains to
                ensuring
                [[Page 37045]]
                sufficient revenue to recover the aggregate costs of trademark
                operations in future years. Additional fees are necessary to fund the
                multi-year project to upgrade IT systems and infrastructure, while also
                maintaining a sufficient operating reserve balance to ensure
                sustainable funding that will mitigate the risk of unplanned financial
                disruptions that could threaten operations and planned investments.
                Operating reserves are intended to mitigate operational risk caused by
                a lack of financial resources. The USPTO defines an optimal balance and
                a minimum acceptable balance for each operating reserve--the patent
                operating reserve and the trademark operating reserve. The optimal
                balances set the goal for building and maintaining the operating
                reserves. The optimal trademark reserve has been determined to be six
                months of operating or budgetary requirements based on a review of
                environmental risk factors and financial volatility. Risks related to
                spending and fee collections are analyzed, considering the likelihood
                and consequence of each and its impact to financial stability, in
                determining the optimal reserve levels.
                 An increase in fees will provide a stable financial foundation to
                fulfill the USPTO mission and maintain performance. The budgetary
                requirements of the USPTO are comprised of substantial fixed costs,
                which may require increased fee rates to ensure revenue sufficient to
                recover aggregate costs. The trademark fee schedule proposed here,
                based on the assumptions found in the FY 2021 Congressional
                Justification, will produce sufficient revenue to recover the aggregate
                costs of trademark and TTAB operations, including executing USPTO
                strategic goals, policy objectives, and initiatives in FY 2020 and
                beyond; creating a better and fairer cost-recovery system that balances
                subsidizing costs to encourage broader usage of IP rights-protection
                mechanisms and participation by more trademark owners; promoting a
                strong incentive for more efficient filing behaviors; and protecting
                the federal trademark register as a reliable indicator of marks in use
                in commerce. The projections of aggregate revenues and costs are based
                on point-in-time estimates and assumptions that are subject to change.
                There is considerable uncertainty in estimating both fee collections
                and budgetary requirements in ordinary times, and even more so now. In
                addition to the pandemic, a number of other risks could materialize
                (e.g., even lower applications volumes, decreased renewals, the
                recompetitions of major contracts, lease renewals, changing assumptions
                about Presidentially authorized or congressionally mandated employee
                pay raises, etc.) that could change the USPTO's budgetary outlook.
                These estimates are refreshed annually in the formulation of the
                USPTO's Budget, and the USPTO continues to gain new data as the
                pandemic unfolds. As noted above, in addition to these dynamics
                factors, the budgetary requirements of the USPTO are comprised of
                substantial fixed costs, which could also influence increased fee rates
                to ensure aggregate revenue recovers aggregate costs.
                 Individual fee rationale: Based on the assumptions found in the FY
                2021 Congressional Justification, the USPTO projects the aggregate
                revenue generated from current and proposed trademark fees will recover
                the prospective aggregate costs of its trademark and TTAB operations
                and associated administrative services. However, each individual
                proposed fee is not set at an amount equal to the estimated cost of
                performing the activities related to the fee. Instead, as described
                above, some of the proposed fees are set to address increases in
                budgetary requirements as well as balance several key policy factors,
                and executing these policy factors through the trademark fee schedule
                is consistent with the goals and objectives outlined in the Strategic
                Plan. Once the cost recovery and key policy objectives are considered,
                fees are set at, above, or below individual cost-recovery levels for
                the service provided. Additional details on the cost methodologies used
                to derive the historical fee unit expenses can be found in ``USPTO Fee
                Setting--Activity Based Information and Trademark Fee Unit Expense
                Methodology'' at http://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting.
                 Trademark application filing fees: This proposed rule would
                increase all application filing fees by varying amounts. The filing fee
                for a paper trademark application would increase by $150, from $600 per
                class to $750 per class. The TEAS Plus application filing fee would
                increase by $25, from $225 per class to $250 per class. The TEAS
                Standard application filing fee would increase by $75, from $275 per
                class to $350 per class. The fee for filing an application under
                section 66(a) of the Act would increase by $100, from the equivalent of
                $400 per class, as paid in Swiss francs, to the equivalent of $500 per
                class, as paid in Swiss francs.
                 Also proposed is a decrease of the processing fee from $125 to $100
                per class for failure to meet the filing requirements under Sec.
                2.22(a) for a TEAS Plus application. Thus, if the processing fee is
                required in a TEAS Plus application, the resulting per-class fee would
                equal the per-class fee for a TEAS Standard application. If a decrease
                in the processing fee were not enacted, the per-class fee for an
                application initially filed as TEAS Plus would exceed the fee for TEAS
                Standard, creating a disincentive to choose TEAS Plus, which, as noted
                above, tends to be more efficient for both filers and the USPTO.
                 Fees for paper trademark filings: This proposed rule maintains the
                cost differential for all paper filings to better align fees with
                costs, with all trademark processing fees for paper filings set $100 to
                $200 higher than the corresponding electronic filing fees (per class,
                when applicable). Overall, it is more costly for the USPTO to process
                paper filings than electronic filings, and that cost is not recovered
                by the current fees for paper filings. Raising the fees for paper
                filings will help offset the higher processing costs and move the USPTO
                closer to total cost recovery.
                 At present, most filings are submitted electronically. For example,
                in FY 2019, less than 0.02% of initial applications were filed on
                paper. Moreover, a final rule published on July 31, 2019 (84 FR 37081),
                which became effective on February 15, 2020 (84 FR 69330), requires all
                applicants, registrants, and parties to TTAB proceedings to file
                electronically through TEAS all trademark applications based on section
                1 and/or section 44 of the Act, 15 U.S.C. 1051, 1126, and all
                submissions filed with the USPTO concerning applications or
                registrations, with limited exceptions. Thus, an increase to paper
                filing fees would have no impact on the vast majority of applicants and
                registrants who are required to file documents electronically.
                 Other trademark processing fees: The USPTO also proposes to
                increase certain other trademark processing fees to further key policy
                goals. This proposed rule sets out increases to the fees for petitions
                to the Director as well as section 8 and section 71 affidavits. In
                addition, this proposed rule sets new fees and procedural regulations
                for filing a letter of protest and new fees for filing a request for
                reconsideration more than three months after a final Office action, and
                for deleting goods, services, and/or classes from a registration after
                submission and prior to acceptance of a section 8 or section 71
                affidavit.
                 (1) Petitions to the Director in trademark matters: The USPTO
                proposes to establish two levels of fees for petitions. This proposed
                rule would increase the current fee for filing a
                [[Page 37046]]
                petition to the Director for petitions filed under Sec. Sec. 2.146 or
                2.147. It would also establish a separate fee for petitions to revive
                filed under Sec. 2.66 that would be less than the fee for petitions
                filed under Sec. Sec. 2.146 or 2.147. The proposed fees are intended
                to facilitate effective trademark operations. The fee for
                electronically filing a petition to the Director under Sec. Sec. 2.146
                or 2.147 would increase from $100 to $250, and the fee for filing on
                paper would increase from $200 to $350. The fee for electronically
                filing a petition to revive an abandoned application under Sec. 2.66
                would increase from $100 to $150, and the fee for filing on paper would
                increase from $200 to $250.
                 Generally, petitions under Sec. 2.146 extend the trademark
                registration and post-registration processes by introducing additional
                processing and examination into the timeline, which may lead to
                applications and registration maintenance documents remaining pending
                for longer periods of time, potentially blocking others. By increasing
                fees for these filings, the USPTO would discourage misuse of the
                process through unnecessary filings that delay prosecution of an
                application or registration maintenance document. The comments provided
                in the TPAC report received by the USPTO also generally supported the
                increases to the fees for petitions to the Director under Sec. 2.146
                and a smaller increase for petitions under Sec. 2.66.
                 (2) Section 8 or section 71 affidavits: Fees from post-registration
                filings have historically been set to recover more than the costs of
                processing the filings. The fees are used to offset cost recovery for
                application processing and examination as well as TTAB proceedings and
                appeals. In general, fewer post-registration maintenance filings are
                made by pro se and foreign registrants. Compounding this issue, pro se
                and foreign owners comprise a growing share of new applicants. Based on
                recent pre-pandemic trends, the overall percentage of registrations
                being maintained is decreasing. Therefore, the USPTO anticipates that
                it will face a continuing decrease in revenue from maintenance filings
                going forward if adjustments are not made. Increasing fees for section
                8 and section 71 affidavits is necessary to continue to provide cost-
                recovery offsets and allow other fees to remain below their individual
                unit costs.
                 Increased fees are also proposed for these filings in part because
                of the post-registration audit program, which was implemented as a
                result of the 2012 Post-Registration Proof-of-Use Pilot Program. During
                the pilot program, section 8 or section 71 affidavits for 500
                registrations were reviewed as to actual use of the marks in connection
                with the goods and/or services identified in the registrations in order
                to assess the accuracy and integrity of the trademark register. The
                findings of the pilot program demonstrated a need for ongoing measures
                for additional review of these filings on a permanent basis. Since
                codifying the authority to require additional information and evidence
                concerning the use of registered marks in connection with section 8 and
                71 maintenance filings in 2017 (82 FR 6259), the USPTO has conducted
                additional reviews of the actual use of the marks in 8,276 section 8 or
                section 71 affidavits through January 1, 2020. In more than 50% of the
                registrations undergoing the additional review, the registrations have
                either been removed from the register or had goods or services deleted,
                resulting in a more accurate trademark register. The proposed fee
                increases would support the cost of this additional review.
                 (3) Letters of protest in trademark applications: The USPTO
                proposes a new $50 fee for filing a letter of protest. A letter of
                protest allows a third party to bring to the attention of the USPTO
                evidence bearing on the registrability of a mark in a pending
                application. The letter-of-protest procedure exists for the
                administrative convenience of the Office and is not a substitute for
                the statutory opposition and cancellation procedures available to third
                parties who believe they would be damaged by registration of the
                involved mark. It is intended to aid in examination without causing
                undue delay and without compromising the integrity and objectivity of
                the ex parte examination process, which involves only the applicant and
                the Office. For this reason, the protestor is not permitted to submit
                legal arguments, contact the examining attorney assigned to the subject
                application, or participate in any Office proceedings relating to the
                protest or the application to which it is directed. The limited
                involvement of the third party ends with the filing of the protest. The
                questions of whether or not evidence is relevant to a refusal ground
                appropriate in ex parte examination, a refusal should be made, or a
                registration will issue are matters for the Office to determine during
                the ex parte examination process that occurs between the applicant and
                the Office acting on behalf of the public.
                 Filing a letter of protest currently requires no fee, but the
                Office incurs costs associated with the work of reviewing and
                processing each letter. The filing volume for letters of protest has
                steadily increased in recent years, with the USPTO receiving 2,726 in
                FY 2017, 3,480 in FY 2018, and 4,106 in FY 2019. Thus, letters of
                protest continue to generate increasing additional expenses, and under
                the current schedule where letters can be filed without any fee, these
                expenses would likely only increase in the future.
                 Many preliminary commenters expressed concerns about this proposed
                fee, noting that letters of protest provide a valuable service to the
                USPTO and should not be discouraged by requiring a fee for submission.
                The USPTO recognizes that, in many cases, letters of protest assist the
                Office in obtaining evidence to support refusals of registration,
                helping to avoid marks that are ineligible for registration being
                placed on the trademark register. Currently, all letters of protest
                must be reviewed in accordance with the procedures set out in TMEP
                Sec. 1715 to determine whether: (1) The issue raised is an appropriate
                subject for a letter of protest; (2) the protest was submitted before
                or after publication of the subject application; (3) the nature,
                amount, and format of the evidence complies with the requirements set
                out in the TMEP; and (4) the submitted evidence meets the relevant
                standard for entry in the record and review by the examining attorney.
                If the letter of protest is filed before publication of the subject
                application, the evidence must be relevant to the identified ground(s)
                for refusal, and the entry of evidence into the application record
                merely serves to bring the submitted evidence to the attention of the
                examining attorney, who determines whether a refusal or requirement
                should be raised or ultimately made final. If the letter of protest is
                filed on the date of, or within 30 days after, publication of the
                subject application, the evidence must establish a prima facie case for
                refusal on the identified ground(s), such that failure to issue a
                refusal would likely result in the issuance of a registration in
                violation of the Act or regulations under parts 2 or 7 of this section.
                 In FY 2019, the evidence in approximately 25% of pre-publication
                letters of protest and 94% of post-publication letters of protest was
                not forwarded to the examining attorney. This suggests that a
                significant portion of filings do not contain relevant information or
                evidence, or are otherwise unnecessary. These filings generate
                additional costs without a corresponding benefit.
                 Seeking to balance the commenters' concerns with the need to
                recover some costs, the proposed fee of $50 is set at a level high
                enough to partially offset processing costs and deter the filing of
                [[Page 37047]]
                unsupported or irrelevant filings, but low enough so as not to
                discourage the filing of relevant, well-supported letters of protest.
                This fee level is also consistent with the TPAC recommendations in that
                it falls within the $20 to $100 fee range suggested by the TPAC report.
                 In connection with this proposed fee, the USPTO also proposes a new
                regulatory section, at 37 CFR 2.149, which sets out the procedures for
                letters of protest. The new regulatory section is based on the existing
                longstanding procedures for letters of protest, which are currently set
                forth in the TMEP, with appropriate modifications that more closely
                align the procedures with those for similar third-party submissions and
                protests in patent applications under 37 CFR 1.290 and 1.291 and as set
                out in MPEP Sec. Sec. 1134 and 1901. This action is being undertaken
                at this time due to the rising volume of letters of protest in recent
                years, which has resulted in the need to codify procedures for
                submission of such protests in the regulations.
                 Under the procedures set forth in the proposed regulatory text at
                Sec. 2.149, a letter of protest must be timely filed through TEAS and
                must include: (1) The proposed fee; (2) the serial number of the
                pending application that is the subject of the protest; (3) an itemized
                evidence index that includes identification of the documents, or
                portions of documents, being submitted as evidence and a concise
                factual statement of the relevant grounds for refusal of registration
                appropriate in ex parte examination that each identified item supports;
                and (4) a clear and legible copy of the supporting evidence identified
                in the evidence index. As noted above, if the letter of protest is
                filed before publication of the subject application, the evidence must
                be relevant to the identified ground(s) for refusal. If filed on or
                within 30 days after publication of the subject application, the
                evidence must establish a prima facie case for refusal on the
                identified grounds, such that failure to issue a refusal or make a
                requirement would likely result in issuance of a registration in
                violation of the Act or regulations under parts 2 or 7 of this section.
                 The letter-of-protest process is intended to provide an opportunity
                for the protestor to efficiently and effectively provide relevant
                evidence in support of the proposed legal grounds for refusing
                registration of the application identified in the submission. It is
                inappropriate for the protestor to ``dump'' evidence and leave it to
                the Office to determine its possible relevance. Therefore, an index is
                required for all submissions listing the documents submitted as
                evidence and the ground(s) for refusal each item of evidence supports.
                In addition, the proposed procedures also require that the submission
                not total more than 10 items of evidence in support of a specified
                ground of refusal and more than 75 total pages of evidence without a
                detailed and sufficient explanation that establishes the special
                circumstances that necessitate providing more than 10 items of evidence
                per refusal ground or more than 75 total pages of evidence. This
                requirement encourages the submission of evidence that is succinct, not
                duplicative, and limited to the most relevant evidence. It should be a
                rare situation in which more than 10 items of evidence or 75 total
                pages of evidence is necessary to support the proposed legal grounds
                for refusal. However, some examples of situations that might constitute
                such special circumstances are when: (1) A subject application includes
                multiple classes and the protestor needs to provide evidence of
                relatedness of the goods/services for all classes in the application;
                (2) evidence submitted to support a refusal for descriptiveness
                consists of fewer than 10 discrete items, but each item comprises
                multiple pages, totaling more than 75 pages; or (3) a protestor raises
                more than one ground for refusal and the evidence necessary to support
                all grounds raised totals more than 10 items or 75 pages.
                 A letter of protest submitted by a third party is not made part of
                the application record to preserve the ex parte nature of examination.
                If the USPTO determines that the submission complies with the proposed
                regulations, only the specified grounds for refusal and the provided
                evidence relevant to the grounds for refusal would be included in the
                application record for consideration by the examining attorney. A third
                party filing a letter of protest will not receive any communication
                from the USPTO relating to the submission other than acknowledgement
                that it has been received by the Office and notification of whether the
                submission is found to be compliant or non-compliant. Also, the Office
                will not accept amendments to a non-compliant submission that was
                previously filed or requests to reconsider a compliance determination.
                Rather, the third party may submit a new letter of protest that is
                compliant if the time period for submitting a letter of protest has not
                closed. A protestor does not, by the mere filing of a protest, obtain a
                ``right'' to argue the protest before the Office. As noted above, the
                questions of whether or not evidence is relevant to a refusal ground
                appropriate in ex parte examination, a refusal will be made, or a
                registration will issue are matters for the Office to determine as part
                of the ex parte examination process that occurs between the applicant
                and the Office acting on behalf of the public. Therefore, the proposed
                procedures also provide that: (1) The Office's determination whether to
                include submitted evidence in the record of an application would be
                final and non-petitionable, (2) the limited involvement of the third
                party ends with the filing of the letter of protest, and (3) the third
                party may not directly contact the examining attorney assigned to the
                application.
                 (4) Requests for reconsideration in trademark applications: The
                USPTO proposes a new fee for a request for reconsideration filed more
                than three months, but within six months, after the issue date of a
                final action or with a petition to revive an abandoned application. The
                proposed fee is $400 for a TEAS submission and $500 for a paper
                submission. No fee would be incurred for requests filed within three
                months of the issue date of a final action.
                 As noted above, a request for reconsideration is a document filed
                within six months of the issue date of a final action that responds to
                the outstanding refusals or requirements. In some cases, it may also be
                filed with a petition to revive an application abandoned for failure to
                respond to a final action within the six-month response period. In such
                cases, the request for reconsideration would be filed more than six
                months after the issue date of the final action. It also includes an
                applicant's request to the TTAB, filed within six months of the issue
                date of a final action, whether filed with or after a notice of appeal
                and whether it is denominated as a request for reconsideration or is
                captioned as something else, such as a request for remand (see TMEP
                Sec. 709.05 and TBMP Sec. 1209.04). In some cases, multiple requests
                are filed. Examining attorneys must review the request(s) for
                reconsideration and take appropriate action, which frequently involves
                issuing a subsequent Office action that discusses any new evidence
                submitted with the request. In some circumstances, Office procedure
                requires the examining attorney to issue a new refusal, with a new six-
                month response deadline.
                 Because requests for reconsideration require additional
                examination, they generate additional costs for the USPTO. In addition,
                requests for reconsideration
                [[Page 37048]]
                lengthen the examination process, thereby increasing overall
                examination pendency, particularly when filed later in the response
                period or after the filing of a notice of appeal and prior to the
                expiration of six months from the issue date of the final action. The
                proposed fee is intended to recover costs associated with requests for
                reconsideration and encourage applicants to submit these filings
                earlier in the response period for the final action.
                 The TPAC report expressed concerns that the proposed fee was too
                high and could discourage the filing of requests for reconsideration,
                which often resolve issues and avoid the need for an appeal. The TPAC
                report therefore suggested that the Office consider not charging a fee
                for requests filed within three months of the final Office action. The
                USPTO has considered and adopted the suggestion from the TPAC report.
                 (5) Deletion of goods, services, and/or classes from registrations:
                The USPTO initially proposed fees for each good or service deleted as a
                result of a post-registration audit or an adverse TTAB finding of $200
                if submitted on paper or $100 if submitted through TEAS. The TPAC
                report expressed concerns regarding how the fees would be assessed
                because it could be difficult to determine what is a separate good or
                service in some situations, and some registrants with extensive goods
                and services could potentially be assessed onerous fees to delete
                specific goods or services within a class. The TPAC report supported a
                fee for the deletion of goods or services as a result of a post-
                registration audit if the proposed fees were charged per each class in
                which goods or services are deleted. The report also supported a no-fee
                option for voluntarily cancelling goods or services from a registration
                at any time prior to an audit. The TPAC report did not support the
                proposed new fees following an adverse TTAB finding, stating that it
                would be unclear when the fee would apply and how it would be
                implemented.
                 Currently, amendments to registrations may be made by filing a
                section 7 request for amendment or correction of a registration for
                $100, if submitted through TEAS, or $200, if filed on paper. After
                consideration of the TPAC response, the USPTO proposes to set a $0 fee
                for a section 7 request that is filed through TEAS prior to the
                submission of a section 8 or section 71 affidavit and consists only of
                a request to delete specified goods, services, and/or classes. As noted
                above, no additional fee would be incurred for section 8 or section 71
                affidavits that specify fewer than all of the goods or services listed
                in the registration when the affidavit is filed, which results in the
                deletion of goods or services not included in the affidavit from the
                registration. However, if goods, services, and/or classes are deleted
                in a section 7 request, a response to Office action, or a voluntary
                amendment filed after submission and prior to acceptance of a section 8
                or section 71 affidavit, the USPTO proposes a new fee of $250 per
                class, if filed through TEAS, or $350 per class, if a paper filing is
                permitted, for deleting goods, services, and/or classes from the
                registration.
                 The proposed no-fee option would be available to, and the $250 (or
                $350) per-class fee would be assessed against, all registrants. Thus,
                they are not related to a post-registration proof-of-use audit or a
                TTAB finding. The proposals are intended to improve the accuracy and
                integrity of the register by encouraging all registrants to proactively
                perform sufficient due diligence before filing a section 8 or section
                71 affidavit to determine the goods, services, and/or classes for which
                the registered mark is no longer in use and delete them from the
                registration.
                 TTAB fees: The Office proposes to set or adjust 16 TTAB-related
                fees: 10 fees would be increased for initiating a proceeding, and six
                new filing fees would be established. The TTAB would also obtain
                discretion to grant a refund of a portion of the filing fee for a
                petition to cancel.
                 (1) Existing fees at the TTAB: In an attempt to address better
                alignment of fees with the costs of providing TTAB services, the
                initial fee proposal presented to the TPAC included an across-the-board
                increase in TTAB fees for petitions for cancellation, notices of
                opposition, and ex parte appeals of $200 per class. The TPAC report
                generally supported an increase in filing fees for petitions to cancel
                and notices of opposition on the basis that the proposed increases are
                justified on a cost-recovery rationale, noting the high average unit
                cost for these proceedings. The TPAC report and some commenters
                observed that many petitions to cancel and notices of opposition are
                decided by default judgment. Commenters objecting to the preliminary
                proposed fee increase for petitions to cancel expressed their belief
                that the increase could deter filings based on abandonment or nonuse,
                which would impact the USPTO's objective of removing marks from the
                trademark register that are no longer being used.
                 In consideration of these observations, the Office proposes an
                increase of $200 per class for petitions for cancellation and notices
                of opposition. The Office also proposes to amend Sec. 2.114(a) to
                allow the USPTO discretion to refund a portion of the petition fee in
                cases of default judgment where there is no appearance by a defendant
                and no filings are made other than the petition to cancel, reflecting
                reduced work needed on the part of the TTAB; consequently, this amount
                is in excess of that required to offset TTAB costs. The resulting lower
                net fee for a petition to cancel that meets these characteristics also
                furthers the policy goal of not discouraging the filing of petitions to
                cancel by petitioners with knowledge that a registered mark is no
                longer in use, or was never put to use, and therefore should be removed
                from the register. The refund would be in the amount of $200. Compared
                to cancellation proceedings, an opposition is less likely to be
                determined by default judgment based on abandonment or nonuse, because
                the applicants involved tend to be actively engaged with the USPTO
                through the examination process up to the opposition, and the Office is
                not proposing to allow for refunds concerning notices of opposition.
                 The TPAC report expressed some concern about the preliminary
                proposed increase for filing a notice of ex parte appeal, noting that,
                for various reasons, many appeals are resolved before an appeal brief
                is filed. Some commenters expressed their belief that the proposed
                increase would negatively impact small businesses and individuals. In
                consideration of the comments, the Office herein proposes to increase
                the filing fees for a notice of appeal to $325 per class if filed on
                paper and $225 per class if filed through ESTTA, which is a $25
                increase (rather than the $200 increase to both fees in the preliminary
                proposal).
                 Fee increases are proposed for filing requests for an extension of
                time to file an opposition. Under the current structure, applicants may
                request: (1) An initial 30-day extension for no fee, (2) a subsequent
                60-day extension for a fee of $100 for electronic filings and $200 for
                paper filings, and (3) a final 60-day extension for a fee of $200 for
                electronic filings and $300 for paper filings. The Office proposes to
                maintain this tiered structure with an increase of $100 for the first
                60-day electronic extension and $200 for the final 60-day electronic
                extension. Paper-filed extension requests are proposed to increase by
                $200 for each filing. The current and proposed filing fees are per
                application, not per class.
                 These proposed fees are designed to yield efficiencies by
                encouraging
                [[Page 37049]]
                potential opposers to make decisions regarding filing an opposition
                sooner, thus reducing delays to applicants whose filings have been made
                the subject of extensions of time to oppose. Additionally, by
                encouraging earlier decisions to initiate proceedings, the uncertainty
                experienced by these applicants will be ameliorated by having their
                applications proceed to determination on the merits sooner. This should
                also help to protect the integrity of the trademark register by
                encouraging timely decisions and filings to ensure that the rights of
                other applicants and the public are not adversely affected.
                 The TPAC report expressed some concerns over the proposed increase
                in these fees, noting that extension fees were implemented about three
                years prior and that raising them may result in a higher number of
                oppositions being filed because the decision is rushed. Some commenters
                were concerned that the proposed increases would impact smaller
                entities and deter parties from working to settle prior to filing a
                notice of opposition. Given that the USPTO also proposes increasing the
                fee for the notice of opposition, the USPTO believes that the proposed
                fees for extensions of time to oppose should encourage earlier
                calculated decisions based on all of the available information,
                including fees. Furthermore, the tiered fee structure reduces the
                likelihood of potential opposers using the extensions merely to delay
                registration of pending applications.
                 Approximately two-thirds of the cost of TTAB operations is
                subsidized currently by revenue from other trademark processing fees.
                The proposed increases in these TTAB fees will not recover the full
                costs of TTAB operations but will increase revenues by 7% to bring fees
                closer to the costs in order to provide better alignment between costs
                and fees and bring the TTAB closer to full cost recovery. In general,
                the TPAC commenters supported most of the proposed fee increases with
                some modification because of the recognized costs for processing and
                the cost differential.
                 Finally, these fees will help offset TTAB processing costs. In FY
                2019, the USPTO received 20,502 requests for extensions of time to file
                a notice of opposition. It is customary for requests that delay
                processing of records, such as extensions, to incur a fee, which
                offsets costs associated with processing the filing, as well as the
                overall cost of processing appeals and trials. These fees are necessary
                to help attain primary Office goals of recovering the aggregate costs
                of operations, along with key policy considerations, such as
                encouraging efficient processing.
                 (2) Fees for filing an appeal brief at the TTAB: The Office
                proposes an increase in the fee for filing a notice of appeal of $25
                per class, based on inflation, and the establishment of new fees for
                filing an appeal brief of $300 per class if filed on paper and $200 per
                class if filed through ESTTA. In its initial proposal submitted to the
                TPAC, the Office had proposed raising the current fees for filing a
                notice of appeal to the TTAB by $200 per class and also instituting new
                fees for filing briefs in a notice of appeal. The TPAC supported
                maintaining the current fees for filing a notice of appeal and the
                proposed new fees for filing an appeal brief. This modification
                addresses the TPAC report recommendations to apply the majority of the
                aggregate increases in appeal fees to the costs incurred when an appeal
                brief is filed, which increases the likelihood that the appeal will
                have to be decided on the merits.
                 (3) Fees for filing requests for extension of time to file an
                appeal brief at the TTAB: New fees are proposed for second and
                subsequent requests for extensions of time to file an appeal brief. The
                proposed fees are $200 per application if filed on paper and $100 per
                application if filed through ESTTA. No fee is proposed for a first
                request for extension of time to file an appeal brief.
                 In its report on the initial proposal, the TPAC expressed support
                for the proposed new fees. Some commenters objected to the proposed new
                fees, expressing their belief that minimal USPTO resources are required
                to process such requests and that they increase the overall costs to
                smaller entities. These proposed fees yield efficiencies by encouraging
                applicants to move forward with their appeals, resulting in a quicker
                resolution of the appeal, the pendency of which can adversely impact
                the rights of other applicants and registrants. Implementing a two-
                tiered fee structure minimizes costs to smaller entities, as there is
                no fee for a first request for extension of time to file the appeal
                brief.
                 (4) Fees for oral hearing at the TTAB: A new fee is proposed for a
                request for an oral hearing. The proposed fee is $500 per proceeding.
                 In its report on the initial proposal, the TPAC expressed support
                for the proposed new fee, noting that the TTAB incurs significant costs
                in conducting oral hearings and all users subsidize the few parties
                requesting oral hearings. Some commenters opposed the fee due to the
                impact on small businesses and individuals. Oral hearings are not
                requested in the vast majority of cases before the TTAB. They are
                optional and are most useful when cases involve complex issues, a
                complex record, or highly technical goods and services. The proposed
                fee would help offset the costs of scheduling and conducting the
                hearing, as well as the maintenance of equipment for remote
                participation.
                Discussion of Proposed Rule Changes
                 The USPTO proposes to revise Sec. 2.6(a)(1)(i) to increase the
                per-class fee for filing an initial application on paper from $600 to
                $750.
                 The USPTO proposes to revise Sec. 2.6(a)(1)(ii) to increase the
                per-class fee for filing an application under section 66(a) of the Act
                from $400 to $500.
                 The USPTO proposes to revise Sec. 2.6(a)(1)(iii) to increase the
                per-class fee for filing a TEAS Standard application from $275 to $350.
                 The USPTO proposes to revise Sec. 2.6(a)(1)(iv) to increase the
                per-class fee for filing a TEAS Plus application from $225 to $250.
                 The USPTO proposes to revise Sec. 2.6(a)(1)(v) to decrease the
                processing fee under Sec. 2.22(c) from $125 to $100 per class.
                 The USPTO proposes to add Sec. 2.6(a)(11)(iii) to establish a fee
                of $0 for filing a section 7 request to amend a registration through
                TEAS prior to submission of a section 8 or section 71 affidavit and
                that consists only of the deletion of goods, services, and/or classes.
                 The USPTO proposes to revise Sec. 2.6(a)(12)(i) and (ii) to
                increase the per-class fee for filing a section 8 affidavit from $225
                to $325 for a paper submission and from $125 to $225 for a TEAS
                submission.
                 The USPTO proposes to add Sec. 2.6(a)(12)(iii) and (iv) to
                establish fees for the deletion of goods, services, and/or classes
                after submission and prior to acceptance of a section 8 affidavit. The
                proposed Sec. 2.6(a)(12)(iii) and (iv) set the per-class fee at $350
                for a paper submission and $250 for a TEAS submission.
                 The USPTO proposes to revise Sec. 2.6(a)(15) to establish separate
                fees for petitions to the Director under Sec. Sec. 2.146 or 2.147 and
                petitions to revive an abandoned application under Sec. 2.66. The
                proposed revisions to Sec. 2.6(a)(15)(i) and (ii) set the fee for
                filing a petition to the Director under Sec. Sec. 2.146 or 2.147 at
                $350 for a paper submission and $250 for a TEAS submission. The
                proposed addition of Sec. 2.6(a)(15)(iii) and (iv) set the fee for
                filing a petition to revive an abandoned application under Sec. 2.66
                at
                [[Page 37050]]
                $250 for a paper submission and $150 for a TEAS submission.
                 The USPTO proposes to revise Sec. 2.6(a)(16)(i) and (ii) to
                increase the per-class fee for filing a petition to cancel from $500 to
                $700 for a paper submission and from $400 to $600 for an ESTTA
                submission.
                 The USPTO proposes to revise Sec. 2.6(a)(17)(i) and (ii) to
                increase the per-class fee for filing a notice of opposition from $500
                to $700 for a paper submission and from $400 to $600 for an ESTTA
                submission.
                 The USPTO proposes to revise Sec. 2.6(a)(18) to increase the fee
                for filing an ex parte appeal and to establish new fees for requests
                for an extension of time to file an appeal brief and for filing a brief
                in an ex parte appeal. The proposed revisions to Sec. 2.6(a)(18)(i)
                and (ii) increase the per-class fee for filing an ex parte appeal from
                $300 to $325 for a paper submission and from $200 to $225 for an ESTTA
                submission. The proposed addition of Sec. 2.6(a)(18)(iii) sets the
                per-application fee for filing a first request for an extension of time
                to file an appeal brief at $0. The proposed addition of Sec.
                2.6(a)(18)(iv) and (v) sets the per-application fee for filing a second
                or subsequent request for an extension of time to file an appeal brief
                at $200 for a paper submission and $100 for an ESTTA submission. The
                proposed addition of Sec. 2.6(a)(18)(vi) and (vii) set the per-class
                fee for filing a brief in an ex parte appeal at $300 for a paper
                submission and $200 for an ESTTA submission.
                 The USPTO proposes to revise Sec. 2.6(a)(22)(i) and (ii) to
                increase the fee for filing a request for an extension of time to file
                a notice of opposition pursuant to Sec. 2.102(c)(1)(ii) or (c)(2) from
                $200 to $400 for a paper submission and from $100 to $200 for an ESTTA
                submission.
                 The USPTO proposes to revise Sec. 2.6(a)(23)(i) and (ii) to
                increase the fee for filing a request for an extension of time to file
                a notice of opposition pursuant to Sec. 2.102(c)(3) from $300 to $500
                for a paper submission and from $200 to $400 for an ESTTA submission.
                 The USPTO proposes to add Sec. 2.6(a)(24) to establish a fee for
                filing a request for an oral hearing before the TTAB of $500 per
                proceeding.
                 The USPTO proposes to add Sec. 2.6(a)(25) to establish a fee of
                $50 for the filing of a letter of protest per subject application.
                 The USPTO proposes to add Sec. 2.6(a)(26) to set out fees for a
                request for reconsideration filed more than three months after a final
                action and within six months of the issue date of a final action or
                with a petition to revive an abandoned application. The USPTO proposes
                to add Sec. 2.6(a)(26)(i) to establish a fee of $0 for filing a
                request for reconsideration within three months after the issue date of
                a final action through TEAS. The USPTO proposes to add Sec.
                2.6(a)(26)(ii) and (iii) to establish a fee of $500 for a paper
                submission and $400 for a TEAS or ESTTA submission for a request for
                reconsideration filed more than three months after and within six
                months of the issue date of a final Office action.
                 The USPTO proposes to revise Sec. 2.114(a) to provide that a
                partial refund of the fee for a petition to cancel, equal to the
                increase in that fee otherwise proposed by this rulemaking, may be made
                in cases of default judgment where there was no appearance by a
                defendant and no filings are made other than the petition to cancel.
                 The USPTO proposes to add Sec. 2.149, which codifies the
                procedures and requirements for letters of protest.
                 The USPTO proposes to revise the section title and to restructure
                Sec. 2.161 to set out the requirements for section 8 affidavits or
                declarations more clearly. The USPTO also proposes to add, at revised
                Sec. 2.161(c), a provision stating that if goods, services, and/or
                classes are deleted from a registration after submission and prior to
                the acceptance of a section 8 affidavit or declaration, the deletion
                must be accompanied by the relevant fee under proposed Sec.
                2.6(a)(12)(iii) or (iv) for each class from which goods, services, and/
                or classes are deleted.
                 The USPTO proposes to revise Sec. 7.6(a)(6)(i) and (ii) to
                increase the per-class fee for filing a section 71 affidavit from $225
                to $325 for a paper submission and from $125 to $225 for a TEAS
                submission.
                 The USPTO proposes to add Sec. 7.6(a)(6)(iii) and (iv) to
                establish fees for the deletion of goods, services, and/or classes
                after submission and prior to acceptance of a section 71 affidavit. The
                proposed Sec. 7.6(a)(iii) and (iv) set the per-class fee at $350 for a
                paper submission and $250 for a TEAS submission.
                 The USPTO proposes to revise the section title and to restructure
                Sec. 7.37 to set out the requirements for section 71 affidavits or
                declarations more clearly. The USPTO also proposes to add, at revised
                Sec. 7.37(c), a provision stating that if goods, services, and/or
                classes are deleted from a registration after submission and prior to
                acceptance of a section 71 affidavit or declaration, the deletion must
                be accompanied by the relevant fee under proposed Sec. 7.6(a)(6)(iii)
                or (iv) for each class from which goods, services, and/or classes are
                deleted.
                Rulemaking Requirements
                 A. America Invents Act: This rulemaking proposes to set and adjust
                fees under section 10(a) of the AIA as amended by the SUCCESS Act.
                Section 10(a) of the AIA authorizes the Director to set or adjust by
                rule any trademark fee established, authorized, or charged under the
                Trademark Act for any services performed by, or materials furnished by,
                the USPTO (see section 10 of the AIA, Pub. L. 112-29, 125 Stat. 284,
                316-17, as amended by Pub. L. 115-273, 132 Stat. 4158). Section 10(e)
                of the AIA sets forth the general requirements for rulemakings that set
                or adjust fees under this authority. In particular, section 10(e)(1)
                requires the Director to publish in the Federal Register any proposed
                fee change under section 10 and include in such publication the
                specific rationale and purpose for the proposal, including the possible
                expectations or benefits resulting from the proposed change. For such
                rulemakings, the AIA requires that the USPTO provide a public comment
                period of not less than 45 days.
                 The TPAC advises the Under Secretary of Commerce for Intellectual
                Property and Director of the USPTO on the management, policies, goals,
                performance, budget, and user fees of trademark operations. When
                adopting fees under section 10 of the AIA, the AIA requires the
                Director to provide the TPAC with the proposed fees at least 45 days
                prior to publishing them in the Federal Register. The TPAC then has at
                least 30 days within which to deliberate, consider, and comment on the
                proposal, as well as hold a public hearing(s) on the proposed fees. The
                TPAC must make a written report available to the public of the
                comments, advice, and recommendations of the committee regarding the
                proposed fees before the USPTO issues any final fees. The USPTO will
                consider and analyze any comments, advice, or recommendations received
                from the TPAC before finally setting or adjusting fees.
                 Consistent with the requirements of the AIA, on August 28, 2019,
                the Director notified the TPAC of the USPTO's intent to set or adjust
                trademark fees and submitted a preliminary trademark fee proposal with
                supporting materials. The preliminary trademark fee proposal and
                associated materials are available at http://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting.
                 The TPAC held a public hearing in Alexandria, Virginia, on
                September 23, 2019. Transcripts of this hearing and
                [[Page 37051]]
                comments submitted to the TPAC in writing are available for review at
                http://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting. The TPAC subsequently issued a report, dated October 31,
                2019, regarding the preliminary proposed fees. The report can be found
                online at http://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting.
                 B. Initial Regulatory Flexibility Analysis: The USPTO publishes
                this Initial Regulatory Flexibility Analysis (IRFA) as required by the
                Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.) to examine the
                impact of the USPTO's proposed changes to trademark fees on small
                entities and to seek the public's views. Under the RFA, whenever an
                agency is required by 5 U.S.C. 553 (or any other law) to publish an
                NPRM, the agency must prepare and make available for public comment an
                IRFA, unless the agency certifies under 5 U.S.C. 605(b) that the
                proposed rule, if implemented, will not have a significant economic
                impact on a substantial number of small entities (see 5 U.S.C. 603,
                605). This IRFA incorporates the discussion of the proposed changes in
                the preamble above.
                 Items 1-5 below discuss the five items specified in 5 U.S.C.
                603(b)(1)-(5) to be addressed in an IRFA. Item 5 below discusses
                alternatives to this proposal that the USPTO considered.
                1. Description of the Reasons That Action by the USPTO Is Being
                Considered
                 The USPTO proposes setting and adjusting certain trademark fees as
                authorized by section 10 of the AIA, as amended by Public Law 115-273,
                132 Stat. 4158 (the SUCCESS Act). The fee schedule proposed under
                section 10 in this rulemaking will, based on the assumptions found in
                the FY 2021 Congressional Justification, recover the aggregate
                estimated costs to the USPTO while achieving strategic and operational
                goals, such as implementing measures to maintain trademark pendency and
                high trademark quality, modernizing the trademark IT systems,
                continuing important programs for stakeholder and public outreach,
                enhancing operations of the TTAB, and maintaining a sufficient
                operating reserve. Aggregate costs are estimated through the USPTO
                budget formulation process with the annual preparation of a five-year
                performance-based budget request. Revenues are estimated based on the
                projected demand (workload) for trademark products and services and fee
                rates.
                2. Succinct Statement of the Objectives of, and Legal Basis for, the
                Proposed Rule
                 The policy objectives of the proposed rule are to: (1) Better align
                fees with costs, (2) protect the integrity of the trademark register,
                (3) improve the efficiency of USPTO processes related to trademark and
                TTAB operations, and (4) ensure financial sustainability to facilitate
                effective trademark operations. The legal basis for the proposed rule
                is section 10 of the AIA, as amended, which provides the authority for
                the Director to set or adjust by rule any fee established, authorized,
                or charged under the Trademark Act of 1946, 15 U.S.C. 1051 et seq., as
                amended. See also section 31 of the Trademark Act, 15 U.S.C. 1113.
                3. Description of and, Where Feasible, Estimate of the Number of
                Affected Small Entities
                 The USPTO does not collect or maintain statistics in trademark
                cases on small- versus large-entity applicants, and this information
                would be required in order to determine the number of small entities
                that would be affected by the proposed rule.
                 This proposed rule would apply to any entity filing trademark
                documents with the USPTO. The USPTO estimates, based on the assumptions
                found in the FY 2021 Congressional Justification, that during the first
                full fiscal year under the fees as proposed, the USPTO would expect to
                collect approximately $77 million more in trademark processing and TTAB
                fees in FY 2021. The USPTO would receive an additional $40 million in
                fees from applications for the registration of a mark, including
                requests for extension of protection and subsequent designations; $3
                million more from petitions, letters of protest, and requests for
                reconsideration; and $28 million more for section 8 and section 71
                affidavits. TTAB fees would increase by $6 million.
                 Trademark fees are collected for trademark-related services and
                products at different points in time in the trademark application
                examination process and over the lifecycle of the registration.
                Approximately 55% of all trademark fee collections are from application
                filing fees. Fees for TTAB proceedings and appeals comprise 2.5% of
                revenues. Fees from other trademark activities, petitions, assignments
                and certifications, and Madrid processing are approximately 5% of
                revenues. Fees for filing post-registration and intent-to-use filings,
                which subsidize the costs of filing, search, examination, and TTAB
                activities, comprise 37.5%.
                 The USPTO's five-year estimated aggregate trademark fee revenue is
                based on the number of trademark applications and other fee-related
                filings it expects to receive for a given fiscal year and work it
                expects to process in a given fiscal year (an indicator of future fee
                workload and budgetary requirements). Within the iterative process for
                estimating aggregate revenue, the USPTO adjusts individual fee rates up
                or down based on policy and cost considerations and then multiplies the
                resulting fee rates by appropriate workload volumes to calculate a
                revenue estimate for each fee, which is then used to calculate the
                aggregate revenue. Additional details about the USPTO's aggregate
                revenue, including projected workloads by fee, are available at https://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting.
                4. Description of the Reporting, Recordkeeping, and Other Compliance
                Requirements of the Proposed Rule, Including an Estimate of the Classes
                of Small Entities Which Will Be Subject to the Requirement and the Type
                of Professional Skills Necessary for Preparation of the Report or
                Record
                 The proposed rule imposes no new reporting or recordkeeping
                requirements. The main purpose of the proposed rule is to set and
                adjust trademark fees. However, the rule proposes new procedural
                regulations at 37 CFR 2.149 for the submission of letters of protest.
                The USPTO does not collect or maintain statistics in trademark cases on
                small versus large entity applicants and is unable to provide an
                estimate of the classes of small entities that will be subject to the
                new procedural requirements.
                5. Description of Any Significant Alternatives to the Proposed Rule
                Which Accomplish the Stated Objectives of Applicable Statutes and Which
                Minimize Any Significant Economic Impact of the Rule on Small Entities
                 The USPTO considered four alternatives, based on the assumptions
                found in the FY 2021 Congressional Justification, before recommending
                this proposal: (1) The adjustments included in this proposal, (2) an
                across-the-board adjustment of 22%, (3) the unit cost of providing
                services based on FY 2019 costs, and (4) no change to the baseline of
                current fees. The alternatives are each explained here with additional
                information regarding how each proposal was developed and the aggregate
                revenue estimated. A description of the Aggregate Revenue Methodologies
                is available at http://
                [[Page 37052]]
                www.uspto.gov/about-us/performance-and-planning/fee-setting-and-
                adjusting.
                 The USPTO proposes to set or adjust trademark fees codified in 37
                CFR parts 2 and 7. Fees are adjusted for all application filing types
                (i.e., paper applications, applications filed via TEAS, and requests
                for extension of protection under section 66(a) of the Trademark Act
                (15 U.S.C. 1141f)). The USPTO also proposes to set or adjust certain
                other trademark processing fees to further effective administration of
                the trademark system. For example, the proposed rule increases the fees
                for certain petitions to the Director as well as section 8 and section
                71 affidavits, sets a new fee and proposes procedural regulations for
                filing a letter of protest, and sets new fees for filing a request for
                reconsideration more than three months after a final Office action and
                for deleting goods, services, and/or classes from a registration after
                submission and prior to acceptance of a section 8 or section 71
                affidavit.
                 The USPTO chose the alternative proposed in this rule because it
                will enable the Office to achieve its goals effectively and efficiently
                without unduly burdening small entities, erecting barriers to entry, or
                stifling incentives to innovate. The alternative proposed here secures
                the USPTO's objectives for meeting the strategic goals of encouraging
                broader usage of IP rights-protection mechanisms and participation by
                more trademark owners and more efficient resolution of appeals and
                inter partes proceedings at the TTAB by increasing revenue to meet the
                Office's aggregate future costs. In particular, the new fee structure
                for requests for reconsideration and requests to delete goods,
                services, and/or classes from a registration would protect the
                integrity of the register and the efficiency of the process by
                incentivizing both more timely filings and proactive action by
                applicants and registrants. The increased efficiencies realized through
                the proposed rule will benefit all applicants and registrants by
                allowing registrations to be granted sooner and more efficiently by
                removing unused marks and unsupported goods and services from the
                register. All trademark applicants should benefit from the efficiency
                that will be realized under the proposed alternative.
                 With regard to the new regulations governing the filing of letters
                of protest, the USPTO anticipates that the impact to affected entities
                would be small. The proposed fee of $50 is set at a level high enough
                to recognize there are processing costs and deter the filing of
                unsupported or irrelevant filings, but low enough so as not to
                discourage the filing of relevant, well-supported letters of protest.
                In addition, the new procedural regulations for filing letters of
                protest are not anticipated to significantly impact affected entities
                because the proposed new regulations are based on existing informal
                procedures set out in the TMEP.
                 Finally, the proposed new provision at Sec. 2.114(a) provides that
                a partial refund of the fee for a petition to cancel may be made in
                cases of default judgement where there was no appearance by a defendant
                and no filings were made other than the petition to cancel. This change
                would likely balance the cost recovery obtained from the increase in
                the fee for a petition to cancel, a case type that has increased
                markedly in recent years, against the benefit of having petitions to
                cancel filed to remove registrations from the register when petitioners
                have determined through their investigations that the registered marks
                are no longer in use. In such situations, default judgments often
                result, efficiently clearing the register of marks that would otherwise
                stand as potential bars to applications seeking to register similar
                marks. This reduces costs for applicants filing such applications.
                 The proposed fee schedule for this alternative (labeled
                ``Alternative 1--Proposed Alternative'') is available in the document
                entitled ``Initial Regulatory Flexibility Act Tables'' at http://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting.
                 Another alternative to setting and adjusting the proposed fees that
                was considered was to increase all fees by the same 22% across the
                board. This alternative would maintain the status quo structure of cost
                recovery, where processing and examination costs are subsidized by fees
                paid for intent-to-use and post-registration maintenance filings (both
                of which exceed the cost of performing these services), given that all
                fees would be adjusted by the same escalation factor. This structure
                would promote innovation strategies and allow applicants to gain access
                to the trademark system through fees set below cost, while registrants
                pay maintenance fees above cost to subsidize the below-cost front-end
                fees. This alternative was ultimately rejected. Although this
                alternative generates sufficient aggregate revenue to recover aggregate
                operating costs, unlike the proposed fee structure, there would be no
                improvements in fee schedule design. As such, this alternative would
                not accomplish the stated objective of enhancing the integrity of the
                register by incentivizing users to maintain accurate goods and
                services. Further, it would not enhance the efficiency of the process,
                as it would offer no new incentives for users to timely file
                applications and other filings or to resolve appeals and inter partes
                proceedings at the TTAB more expeditiously. The proposed fee schedule
                for this alternative (labeled ``Alternative 2--Across-the-Board
                Adjustment'') is available in the document entitled ``Initial
                Regulatory Flexibility Act Tables'' at http://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting.
                 A third alternative that was considered was to set all trademark
                fees to allow for the USPTO to recover 100% of the unit costs
                associated with each product or service provided, based on the
                historical unit costs of the products and services provided by the
                USPTO. The USPTO uses activity based information to determine the unit
                costs of activities that contribute to the services and processes
                provided by individual fees. It is common practice in the federal
                government to set a particular fee at a level that recovers the cost of
                a given good or service. In Office of Management and Budget (OMB)
                Circular A-25, User Charges, the OMB states that user charges (fees)
                should be sufficient to recover the full cost to the federal government
                of providing the particular service, resource, or good, when the
                government is acting in its capacity as sovereign. Under the unit cost
                recovery alternative, fees are generally set in line with the FY 2019
                cost of providing the product or service. This alternative would
                produce a structure in which application and processing fees would
                increase significantly for all applicants and intent-to-use and post-
                registration maintenance filing fees would decrease dramatically when
                compared with current fees. In addition, these fees would change from
                year to year with the ebb and flow in the number of applications
                submitted. This alternative was rejected because it was determined that
                the unit costs for any given product or service can vary from year to
                year, such that a yearly review of all, and an adjustment to many,
                trademark fees would be continually required and could also lead to
                consumer confusion regarding the amount at which any given trademark
                fee was currently set and what the relevant fee would be in the future.
                Additionally, this alternative does not address improvements in fee
                design to accomplish the stated objectives of encouraging broader usage
                of IP rights-protection mechanisms and participation by more trademark
                owners as well as practices that improve the
                [[Page 37053]]
                efficiency of the process. The USPTO recognizes that this approach does
                not account for changes in the fee structure or inflationary factors
                that could likely increase the costs of certain trademark services and
                necessitate higher fees in the out-years. However, the USPTO contends
                that the FY 2019 data is the best unit cost data available to inform
                this analysis. The proposed fee schedule for this alternative (labeled
                ``Alternative 3--Unit Cost Recovery'') is available in the document
                entitled ``Initial Regulatory Flexibility Act Tables'' at http://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting.
                 A final alternative to setting and adjusting the proposed fees
                would be to take no action at this time regarding trademark fees and to
                leave all trademark fees as currently set. This alternative was
                rejected because, due to changes in demand for certain services and
                rising costs, the Office has determined that a fee increase is needed
                to meet future budgetary requirements as described in the FY 2021
                Budget. As previously explained, the proposed fee schedule will assist
                in promoting access to the trademark system, protecting the integrity
                of the register, and promoting the efficiency of the trademark
                registration process by incentivizing: (1) Maintenance of registrations
                for goods and services for which marks are actually in use, (2) more
                timely filing of applications and other documents, and (3) faster
                resolution of appeals and inter partes proceedings at the TTAB. The fee
                schedule for this alternative (labeled ``Alternative 4--Baseline--
                Current Fee Schedule'') is available in the document entitled ``Initial
                Regulatory Flexibility Act Tables'' at http://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting.
                6. Identification, to the Extent Practicable, of All Relevant Federal
                Rules Which May Duplicate, Overlap, or Conflict With the Proposed Rule
                 The proposed rule would not duplicate, overlap, or conflict with
                any other federal rules.
                 C. Executive Order 12866 (Regulatory Planning and Review): This
                rule has been determined to be Significant for purposes of Executive
                Order 12866 (Sept. 30, 1993).
                 D. Executive Order 13563 (Improving Regulation and Regulatory
                Review): The USPTO has complied with Executive Order 13563 (Jan. 18,
                2011). Specifically, the USPTO has, to the extent feasible and
                applicable: (1) Made a reasoned determination that the benefits justify
                the costs of the rule; (2) tailored the rule to impose the least burden
                on society consistent with obtaining the regulatory objectives; (3)
                selected a regulatory approach that maximizes net benefits; (4)
                specified performance objectives; (5) identified and assessed available
                alternatives; (6) provided the public with a meaningful opportunity to
                participate in the regulatory process, including soliciting the views
                of those likely affected prior to issuing a notice of proposed
                rulemaking, and provided online access to the rulemaking docket; (7)
                attempted to promote coordination, simplification, and harmonization
                across government agencies and identified goals designed to promote
                innovation; (8) considered approaches that reduce burdens and maintain
                flexibility and freedom of choice for the public; and (9) ensured the
                objectivity of scientific and technological information and processes,
                to the extent applicable.
                 E. Executive Order 13771 (Reducing Regulation and Controlling
                Regulatory Costs): This proposed rule is not expected to be subject to
                the requirements of Executive Order 13771 (Jan. 30, 2017) because this
                proposed rule is expected to involve a transfer payment.
                 F. Executive Order 13132 (Federalism): This rule does not contain
                policies with federalism implications sufficient to warrant preparation
                of a Federalism Assessment under Executive Order 13132 (Aug. 4, 1999).
                 G. Executive Order 13175 (Tribal Consultation): This rulemaking
                will not: (1) Have substantial direct effects on one or more Indian
                tribes; (2) impose substantial direct compliance costs on Indian tribal
                governments; or (3) preempt tribal law. Therefore, a tribal summary
                impact statement is not required under Executive Order 13175 (Nov. 6,
                2000).
                 H. Executive Order 13211 (Energy Effects): This rulemaking is not a
                significant energy action under Executive Order 13211 because this
                rulemaking is not likely to have a significant adverse effect on the
                supply, distribution, or use of energy. Therefore, a Statement of
                Energy Effects is not required under Executive Order 13211 (May 18,
                2001).
                 I. Executive Order 12988 (Civil Justice Reform): This rulemaking
                meets applicable standards to minimize litigation, eliminate ambiguity,
                and reduce burden as set forth in sections 3(a) and 3(b)(2) of
                Executive Order 12988 (Feb. 5, 1996).
                 J. Executive Order 13045 (Protection of Children): This rulemaking
                does not concern an environmental risk to health or safety that may
                disproportionately affect children under Executive Order 13045 (Apr.
                21, 1997).
                 K. Executive Order 12630 (Taking of Private Property): This
                rulemaking will not affect a taking of private property or otherwise
                have taking implications under Executive Order 12630 (Mar. 15, 1988).
                 L. Congressional Review Act: Under the Congressional Review Act
                provisions of the Small Business Regulatory Enforcement Fairness Act of
                1996 (5 U.S.C. 801 et seq.), prior to issuing any final rule, the USPTO
                will submit a report containing the final rule and other required
                information to the United States Senate, the United States House of
                Representatives, and the comptroller general of the Government
                Accountability Office. The changes in this rulemaking are not expected
                to result in an annual effect on the economy of $100 million or more, a
                major increase in costs or prices, or significant adverse effects on
                competition, employment, investment, productivity, innovation, or the
                ability of United States-based enterprises to compete with foreign-
                based enterprises in domestic and export markets. Therefore, this
                rulemaking is not expected to result in a ``major rule'' as defined in
                5 U.S.C. 804(2).
                 M. Unfunded Mandates Reform Act of 1995: The changes set forth in
                this rulemaking do not involve a Federal intergovernmental mandate that
                will result in the expenditure by State, local, and tribal governments,
                in the aggregate, of $100 million (as adjusted) or more in any one
                year, or a Federal private sector mandate that will result in the
                expenditure by the private sector of $100 million (as adjusted) or more
                in any one year, and will not significantly or uniquely affect small
                governments. Therefore, no actions are necessary under the provisions
                of the Unfunded Mandates Reform Act of 1995. See 2 U.S.C. 1501 et seq.
                 N. National Environmental Policy Act: This rulemaking will not have
                any effect on the quality of the environment and is thus categorically
                excluded from review under the National Environmental Policy Act of
                1969. See 42 U.S.C. 4321 et seq.
                 O. National Technology Transfer and Advancement Act: The
                requirements of section 12(d) of the National Technology Transfer and
                Advancement Act of 1995 (15 U.S.C. 272 note) are not applicable because
                this rulemaking does not contain provisions that involve the use of
                technical standards.
                 P. Paperwork Reduction Act: This rule involves information
                collection requirements that are subject to review and approval by OMB
                under the
                [[Page 37054]]
                Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.). The
                collections of information involved with this proposed rule have been
                reviewed and previously approved by OMB under OMB control numbers 0651-
                0009, 0651-0027, 0651-0028, 0651-0040, 0651-0050, 0651-0051, 0651-0054,
                0651-0055, 0651-0056, and 0651-0061. This action proposes to set or
                increase certain trademark fees, which would increase the annual non-
                hour cost burdens $42,483,850, as set out in the following table:
                ----------------------------------------------------------------------------------------------------------------
                 Estimated increase
                 in cost burdens
                 OMB control No. Information collection title (fees) due to
                 proposed rule
                ----------------------------------------------------------------------------------------------------------------
                0651-0009........................................... Applications for Trademark $23,410,200
                 Registration.
                0651-0040........................................... Trademark Trial and Appeal Board 4,833,700
                 (TTAB) Actions.
                0651-0050........................................... Response to Office Action and 7,006,500
                 Voluntary Amendment Forms.
                0651-0051........................................... Madrid Protocol....................... 325,100
                0651-0054........................................... Substantive Submissions Made During 3,045,650
                 Prosecution of the Trademark
                 Application.
                0651-0055........................................... Post Registration (Trademark 3,862,700
                 Processing).
                ----------------------------------------------------------------------------------------------------------------
                 This estimated cost burden increase is based on the currently OMB
                approved response volumes associated with these information
                collections, which may be slightly different than the workflow
                forecasts cited in other parts of this proposed rule. In addition, any
                updates to the aforementioned information collections as a result of
                this proposed rulemaking will be submitted to OMB for approval prior to
                the effective date of the final rule.
                 Comments regarding the collection of information associated with
                this proposed rule, including suggestions for reducing the burden, may
                be sent to the Commissioner for Trademarks, by mail to P.O. Box 1451,
                Alexandria, VA 22313-1451, attention Catherine Cain; by hand delivery
                to the Trademark Assistance Center, Concourse Level, James Madison
                Building-East Wing, 600 Dulany Street, Alexandria, Virginia 22314,
                attention Catherine Cain; or by electronic mail message via the Federal
                eRulemaking Portal (https://www.regulations.gov). All comments
                submitted directly to the USPTO or provided on the Federal eRulemaking
                Portal should include the docket number (PTO-T-2019-0027).
                 Notwithstanding any other provision of law, no person is required
                to respond to nor shall a person be subject to a penalty for failure to
                comply with a collection of information subject to the requirements of
                the Paperwork Reduction Act unless that collection of information has a
                currently valid OMB control number.
                List of Subjects
                37 CFR Part 2
                 Administrative practice and procedure, Courts, Lawyers, Trademarks.
                37 CFR Part 7
                 Administrative practice and procedure, Trademarks.
                 For the reasons stated in the preamble and under the authority
                contained in section 10(a) of the AIA, 15 U.S.C. 1113, 1123, and 35
                U.S.C. 2, as amended, the USPTO proposes to amend parts 2 and 7 of
                title 37 as follows:
                PART 2--RULES OF PRACTICE IN TRADEMARK CASES
                0
                1. The authority citation for part 2 continues to read as follows:
                 Authority: 15 U.S.C. 1113, 1123; 35 U.S.C. 2; sec. 10, Pub. L.
                112-29, 125 Stat. 284, unless otherwise noted. Sec. 2.99 also issued
                under secs. 16, 17, 60 Stat. 434; 15 U.S.C. 1066, 1067.
                0
                2. Amend Sec. 2.6 by:
                0
                a. Revising paragraphs (a)(1)(i) through (v);
                0
                b. Adding paragraph (a)(11)(iii);
                0
                c. Revising paragraphs (a)(12), (15) through (18), (22), and (23); and
                0
                d. Adding paragraphs (a)(24) through (26).
                 The revisions and additions read as follows:
                Sec. 2.6 Trademark fees.
                 (a) * * *
                 (1) * * *
                 (i) For filing an application on paper, per class--$750.00
                 (ii) For filing an application under section 66(a) of the Act, per
                class--$500.00
                 (iii) For filing a TEAS Standard application, per class--$350.00
                 (iv) For filing a TEAS Plus application under Sec. 2.22, per
                class--$250.00
                 (v) Additional processing fee under Sec. 2.22(c), per class--
                $100.00
                * * * * *
                 (11) * * *.
                 (iii) For filing an amendment to a registration prior to submission
                of an affidavit under section 8 or section 71 of the Act and consisting
                only of the deletion of goods, services, and/or classes--$0.00
                 (12) Affidavit under section 8. (i) For filing an affidavit under
                section 8 of the Act on paper, per class--$325.00
                 (ii) For filing an affidavit under section 8 of the Act through
                TEAS, per class--$225.00
                 (iii) For deleting goods, services, and/or classes after submission
                and prior to acceptance of an affidavit under section 8 of the Act on
                paper, per class--$350.00
                 (iv) For deleting goods, services, and/or classes after submission
                and prior to acceptance of an affidavit under section 8 of the Act
                through TEAS, per class--$250.00
                * * * * *
                 (15) Petitions to the Director. (i) For filing a petition under
                Sec. 2.146 or Sec. 2.147 on paper--$350.00
                 (ii) For filing a petition under Sec. 2.146 or Sec. 2.147 through
                TEAS--$250.00
                 (iii) For filing a petition under Sec. 2.66 on paper--$250.00
                 (iv) For filing a petition under Sec. 2.66 through TEAS--$150.00
                 (16) Petition to cancel. (i) For filing a petition to cancel on
                paper, per class--$700.00
                 (ii) For filing a petition to cancel through ESTTA, per class--
                $600.00
                 (17) Notice of opposition. (i) For filing a notice of opposition on
                paper, per class--$700.00
                 (ii) For filing a notice of opposition through ESTTA, per class--
                $600.00
                 (18) Ex parte appeal. (i) For filing an ex parte appeal to the
                Trademark Trial and Appeal Board on paper, per class--$325.00
                 (ii) For filing an ex parte appeal to the Trademark Trial and
                Appeal Board through ESTTA, per class--$225.00
                 (iii) For filing a first request for an extension of time to file
                an appeal brief, per application--$0.00
                 (iv) For filing a second or subsequent request for an extension of
                time to file an appeal brief on paper, per application--$200.00
                [[Page 37055]]
                 (v) For filing a second or subsequent request for an extension of
                time to file an appeal brief through ESTTA, per application--$100.00
                 (vi) For filing an appeal brief on paper, per class--$300.00
                 (vii) For filing an appeal brief through ESTTA, per class--$200.00
                * * * * *
                 (22) Extension of time for filing a notice of opposition under
                Sec. 2.102(c)(1)(ii) or (c)(2). (i) For filing a request for an
                extension of time to file a notice of opposition under Sec.
                2.102(c)(1)(ii) or (c)(2) on paper--$400.00
                 (ii) For filing a request for an extension of time to file a notice
                of opposition under Sec. 2.102(c)(1)(ii) or (c)(2) through ESTTA--
                $200.00
                 (23) Extension of time for filing a notice of opposition under
                Sec. 2.102(c)(3). (i) For filing a request for an extension of time to
                file a notice of opposition under Sec. 2.102(c)(3) on paper--$500.00
                 (ii) For filing a request for an extension of time to file a notice
                of opposition under Sec. 2.102(c)(3) through ESTTA--$400.00
                 (24) Oral hearing. For filing a request for an oral hearing before
                the Trademark Trial and Appeal Board, per proceeding--$500.00
                 (25) Letter of protest. For filing a letter of protest, per subject
                application--$50.00
                 (26) Request for reconsideration. (i) For filing a request for
                reconsideration within three months after the issue date of a final
                Office action through TEAS--$0.00
                 (ii) For filing a request for reconsideration more than three
                months after and within six months of the issue date of a final Office
                action, or with a petition under Sec. 2.66, on paper--$500.00
                 (iii) For filing a request for reconsideration more than three
                months after and within six months of the issue date of a final Office
                action, or with a petition under Sec. 2.66, through TEAS or ESTTA--
                $400.00
                * * * * *
                0
                3. Amend Sec. 2.114 by revising paragraph (a) to read as follows:
                Sec. 2.114 Answer.
                 (a)(1) If no answer is filed within the time initially set, or as
                later may be reset by the Board, the petition may be decided as in the
                case of default. The failure to file a timely answer tolls all
                deadlines, including the discovery conference, until the issue of
                default is resolved.
                 (2) If the cancellation proceeding is based solely on abandonment
                or nonuse and default judgment is entered with no appearance by the
                defendant, and no filings are made other than the petition to cancel,
                $200 of the petition to cancel fee may be refunded.
                * * * * *
                0
                4. Add Sec. 2.149 before the center heading ``Certificate'' to read as
                follows:
                Sec. 2.149 Letters of protest against pending applications.
                 (a) A third party may submit, for consideration and entry in the
                record of a trademark application, objective evidence relevant to the
                examination of the application for a ground for refusal of registration
                if the submission is made in accordance with this section.
                 (b) A party protesting multiple applications must file a separate
                submission under this section for each application.
                 (c) Any submission under this section must be filed no later than
                30 days after the date the application is published for opposition
                under section 12(a) of the Act and Sec. 2.80 of this part. If the
                subject application cannot be withdrawn from issuance of a registration
                while consideration of the protest is pending, the protest may be
                considered untimely.
                 (d)(1) If the letter of protest is filed before publication of the
                subject application, the evidence must be relevant to the identified
                ground(s) for refusal, such that it is appropriate for the examining
                attorney to consider whether to issue a refusal or make a requirement
                under the Act or this part.
                 (2) If the letter of protest is filed on or within 30 days after
                the date of publication of the subject application, the evidence must
                establish a prima facie case for refusal on the identified ground(s),
                such that failure to issue a refusal or to make a requirement would
                likely result in issuance of a registration in violation of the Act or
                this part.
                 (e) Filing a submission under this section does not stay or extend
                the time for filing a notice of opposition.
                 (f) Any submission under this section must be made in writing,
                filed through TEAS, and include:
                 (1) The fee required by Sec. 2.6(a)(25);
                 (2) The serial number of the pending application that is the
                subject of the protest;
                 (3) An itemized evidence index that does not identify the protestor
                or its representatives, does not contain legal argument, and includes:
                 (i) An identification of the documents, or portions of documents,
                being submitted as evidence. The submission may not total more than 10
                items of evidence in support of a specified ground of refusal and more
                than 75 total pages of evidence without a detailed and sufficient
                explanation that establishes the special circumstances that necessitate
                providing more than 10 items of evidence per refusal ground or more
                than 75 total pages of evidence; and
                 (ii) A concise factual statement of the relevant ground(s) for
                refusal of registration appropriate in ex parte examination that each
                item identified supports; and
                 (4) A clear and legible copy of each item identified in the
                evidence index where:
                 (i) Copies of third-party registrations come from the electronic
                records of the Office and show the current status and title of the
                registration;
                 (ii) Evidence from the internet includes the date the evidence was
                published or accessed and the complete URL address of the website; and
                 (iii) Copies of printed publications identify the publication name
                and date of publication.
                 (g) Any submission under this section may not be entered or
                considered by the Office if:
                 (1) Any part of the submission is not in compliance with this
                section;
                 (2) The application record shows that the examining attorney
                already considered the refusal ground(s) specified in the submission;
                or
                 (3) A provision of the Act or parts 2 or 7 of this chapter
                precludes acceptance of the submission.
                 (h) If a submission is determined to be in compliance with this
                section, only the specified ground(s) for refusal and the provided
                evidence relevant to the ground(s) for refusal will be included in the
                application record for consideration by the examining attorney. An
                applicant need not and should not reply to the entry into the
                application record of such evidence in the absence of an Office action
                issuing that includes such evidence.
                 (i) Any determination whether to include in an application record
                the ground(s) or evidence for a refusal of registration in a submission
                under this section is not petitionable.
                 (j) A third party filing a submission under this section will not
                receive any communication from the Office relating to the submission
                other than acknowledgement that it has been received by the Office and
                notification of whether the submission is found to be compliant or non-
                compliant with this section. Communications with the third party will
                not be made of record in the application. The Office will not accept
                amendments to a non-compliant submission that was previously filed.
                Instead, a third party who previously filed a non-compliant submission
                may
                [[Page 37056]]
                file another submission that meets the requirements of paragraph (f) of
                this section, provided the time period for filing a submission in
                paragraph (c) of this section has not closed.
                 (k) The limited involvement of the third party ends with the filing
                of the submission under this section. The third party may not directly
                contact the examining attorney assigned to the application.
                0
                5. Revise Sec. 2.161 to read as follows:
                Sec. 2.161 Requirements for a complete affidavit or declaration of
                use in commerce or excusable nonuse; requirement for the submission of
                additional information, exhibits, affidavits or declarations, and
                specimens; and fee for deletions of goods, services, and/or classes
                from a registration.
                 (a) Requirements for a complete affidavit or declaration. A
                complete affidavit or declaration under section 8 of the Act must:
                 (1) Be filed by the owner within the period set forth in Sec.
                2.160(a);
                 (2) Include a verified statement attesting to the use in commerce
                or excusable nonuse of the mark within the period set forth in section
                8 of the Act. This verified statement must be executed on or after the
                beginning of the filing period specified in Sec. 2.160(a);
                 (3) Include the U.S. registration number;
                 (4)(i) Include the fee required by Sec. 2.6 for each class that
                the affidavit or declaration covers;
                 (ii) If the affidavit or declaration is filed during the grace
                period under section 8(a)(3) of the Act, include the grace period
                surcharge per class required by Sec. 2.6;
                 (iii) If at least one fee is submitted for a multiple-class
                registration, but the fee is insufficient to cover all the classes, and
                the class(es) to which the fee(s) should be applied are not specified,
                the Office will issue a notice requiring either submission of the
                additional fee(s) or specification of the class(es) to which the
                initial fee(s) should be applied. Additional fees may be submitted if
                the requirements of Sec. 2.164 are met. If the additional fee(s) are
                not submitted within the time period set out in the Office action and
                the class(es) to which the original fee(s) should be applied are not
                specified, the Office will presume that the fee(s) cover the classes in
                ascending order, beginning with the lowest numbered class;
                 (5)(i) Specify the goods, services, or nature of the collective
                membership organization for which the mark is in use in commerce, and/
                or the goods, services, or nature of the collective membership
                organization for which excusable nonuse is claimed under paragraph
                (a)(6)(ii) of this section; and
                 (ii) Specify the goods, services, or classes being deleted from the
                registration, if the affidavit or declaration covers fewer than all the
                goods, services, or classes in the registration;
                 (6)(i) State that the registered mark is in use in commerce; or
                 (ii) If the registered mark is not in use in commerce on or in
                connection with all the goods, services, or classes specified in the
                registration, set forth the date when such use of the mark in commerce
                stopped and the approximate date when such use is expected to resume;
                and recite facts to show that nonuse as to those goods, services, or
                classes is due to special circumstances that excuse the nonuse and is
                not due to an intention to abandon the mark; and
                 (7) Include one specimen showing how the mark is in use in commerce
                for each class in the registration, unless excusable nonuse is claimed
                under paragraph (a)(6)(ii) of this section. When requested by the
                Office, additional specimens must be provided. The specimen must meet
                the requirements of Sec. 2.56.
                 (8) Additional requirements for a collective mark: In addition to
                the above requirements, a complete affidavit or declaration pertaining
                to a collective mark must:
                 (i) State that the owner is exercising legitimate control over the
                use of the mark in commerce; and
                 (ii) If the registration issued from an application based solely on
                section 44 of the Act, state the nature of the owner's control over the
                use of the mark by the members in the first affidavit or declaration
                filed under paragraph (a)(1) of this section.
                 (9) Additional requirements for a certification mark: In addition
                to the above requirements, a complete affidavit or declaration
                pertaining to a certification mark must:
                 (i) Include a copy of the certification standards specified in
                Sec. 2.45(a)(4)(i)(B);
                 (A) Submitting certification standards for the first time. If the
                registration issued from an application based solely on section 44 of
                the Act, include a copy of the certification standards in the first
                affidavit or declaration filed under paragraph (a)(1) of this section;
                or
                 (B) Certification standards submitted in prior filing. If the
                certification standards in use at the time of filing the affidavit or
                declaration have not changed since the date they were previously
                submitted to the Office, include a statement to that effect; if the
                certification standards in use at the time of filing the affidavit or
                declaration have changed since the date they were previously submitted
                to the Office, include a copy of the revised certification standards;
                 (ii) State that the owner is exercising legitimate control over the
                use of the mark in commerce; and
                 (iii) Satisfy the requirements of Sec. 2.45(a)(4)(i)(A) and (C).
                 (10) For requirements of a complete affidavit or declaration of use
                in commerce or excusable nonuse for a registration that issued from a
                section 66(a) basis application, see Sec. 7.37.
                 (b) Requirement for the submission of additional information,
                exhibits, affidavits or declarations, and specimens. The Office may
                require the owner to furnish such information, exhibits, affidavits or
                declarations, and such additional specimens as may be reasonably
                necessary to the proper examination of the affidavit or declaration
                under section 8 of the Act or for the Office to assess and promote the
                accuracy and integrity of the register.
                 (c) Fee for deletions of goods, services, and/or classes from a
                registration. Deletions by the owner of goods, services, and/or classes
                from a registration after submission and prior to acceptance of the
                affidavit or declaration must be accompanied by the relevant fee in
                Sec. 2.6(a)(12)(iii) or (iv).
                PART 7--RULES OF PRACTICE IN FILINGS PURSUANT TO THE PROTOCOL
                RELATING TO THE MADRID AGREEMENT CONCERNING THE INTERNATIONAL
                REGISTRATION OF MARKS
                0
                6. The authority citation for 37 CFR part 7 continues to read as
                follows:
                 Authority: 15 U.S.C. 1123, 35 U.S.C. 2, unless otherwise noted.
                0
                7. Amend Sec. 7.6 by revising paragraph (a)(6) read as follows:
                Sec. 7.6 Schedule of U.S. process fees.
                 (a) * * *
                 (6) Affidavit under section 71. (i) For filing an affidavit under
                section 71 of the Act on paper, per class--$325.00
                 (ii) For filing an affidavit under section 71 of the Act through
                TEAS, per class--$225.00
                 (iii) For deleting goods, services, and/or classes after submission
                and prior to acceptance of an affidavit under section 71 of the Act on
                paper, per class--$350.00
                 (iv) For deleting goods, services, and/or classes after submission
                and prior to acceptance of an affidavit under section 71 of the Act
                through TEAS, per class--$250.00
                * * * * *
                0
                8. Revise Sec. 7.37 to read as follows:
                [[Page 37057]]
                Sec. 7.37 Requirements for a complete affidavit or declaration of use
                in commerce or excusable nonuse; requirement for the submission of
                additional information, exhibits, affidavits or declarations, and
                specimens; and fee for deletions of goods, services, and/or classes
                from a registration.
                 (a) Requirements for a complete affidavit or declaration. A
                complete affidavit or declaration under section 71 of the Act must:
                 (1) Be filed by the holder of the international registration within
                the period set forth in Sec. 7.36(b);
                 (2) Include a verified statement attesting to the use in commerce
                or excusable nonuse of the mark within the period set forth in section
                71 of the Act. The verified statement must be executed on or after the
                beginning of the filing period specified in Sec. 7.36(b). A person who
                is properly authorized to sign on behalf of the holder is:
                 (i) A person with legal authority to bind the holder;
                 (ii) A person with firsthand knowledge of the facts and actual or
                implied authority to act on behalf of the holder; or
                 (iii) An attorney as defined in Sec. 11.1 of this chapter who has
                an actual written or verbal power of attorney or an implied power of
                attorney from the holder.
                 (3) Include the U.S. registration number;
                 (4)(i) Include the fee required by Sec. 7.6 for each class that
                the affidavit or declaration covers;
                 (ii) If the affidavit or declaration is filed during the grace
                period under section 71(a)(3) of the Act, include the grace period
                surcharge per class required by Sec. 7.6;
                 (iii) If at least one fee is submitted for a multiple-class
                registration, but the fee is insufficient to cover all the classes, and
                the class(es) to which the fee(s) should be applied are not specified,
                the Office will issue a notice requiring either submission of the
                additional fee(s) or specification of the class(es) to which the
                initial fee(s) should be applied. Additional fees may be submitted if
                the requirements of Sec. 7.39 are met. If the additional fee(s) are
                not submitted within the time period set out in the Office action, and
                the class(es) to which the original fee(s) should be applied are not
                specified, the Office will presume that the fee(s) cover the classes in
                ascending order, beginning with the lowest numbered class;
                 (5)(i) Specify the goods, services, or nature of the collective
                membership organization for which the mark is in use in commerce, and/
                or the goods, services, or nature of the collective membership
                organization for which excusable nonuse is claimed under paragraph
                (a)(6)(ii) of this section; and
                 (ii) Specify the goods, services, or classes being deleted from the
                registration, if the affidavit or declaration covers fewer than all the
                goods, services, or classes in the registration;
                 (6)(i) State that the registered mark is in use in commerce; or
                 (ii) If the registered mark is not in use in commerce on or in
                connection with all the goods, services, or classes specified in the
                registration, set forth the date when such use of the mark in commerce
                stopped and the approximate date when such use is expected to resume;
                and recite facts to show that nonuse as to those goods, services, or
                classes is due to special circumstances that excuse the nonuse and is
                not due to an intention to abandon the mark; and
                 (7) Include one specimen showing how the mark is in use in commerce
                for each class in the registration, unless excusable nonuse is claimed
                under paragraph (a)(6)(ii) of this section. When requested by the
                Office, additional specimens must be provided. The specimen must meet
                the requirements of Sec. 2.56 of this chapter.
                 (8) Additional requirements for a collective mark: In addition to
                the above requirements, a complete affidavit or declaration pertaining
                to a collective mark must:
                 (i) State that the holder is exercising legitimate control over the
                use of the mark in commerce; and
                 (ii) State the nature of the holder's control over the use of the
                mark by the members in the first affidavit or declaration filed under
                paragraph (a)(1) of this section.
                 (9) Additional requirements for a certification mark: In addition
                to the above requirements, a complete affidavit or declaration
                pertaining to a certification mark must:
                 (i) Include a copy of the certification standards specified in
                Sec. 2.45(a)(4)(i)(B) of this chapter;
                 (A) Submitting certification standards for the first time. In the
                first affidavit or declaration filed under paragraph (a)(1) of this
                section, include a copy of the certification standards; or
                 (B) Certification standards submitted in prior filing. If the
                certification standards in use at the time of filing the affidavit or
                declaration have not changed since the date they were previously
                submitted to the Office, include a statement to that effect; if the
                certification standards in use at the time of filing the affidavit or
                declaration have changed since the date they were previously submitted
                to the Office, include a copy of the revised certification standards;
                 (ii) State that the holder is exercising legitimate control over
                the use of the mark in commerce; and
                 (iii) Satisfy the requirements of Sec. 2.45(a)(4)(i)(A) and (C) of
                this chapter.
                 (b) Requirement for the submission of additional information,
                exhibits, affidavits or declarations, and specimens. The Office may
                require the holder to furnish such information, exhibits, affidavits or
                declarations, and such additional specimens as may be reasonably
                necessary to the proper examination of the affidavit or declaration
                under section 71 of the Act or for the Office to assess and promote the
                accuracy and integrity of the register.
                 (c) Fee for deletions of goods, services, and/or classes from a
                registration. Deletions by the holder of goods, services, and/or
                classes from a registration after submission and prior to acceptance of
                the affidavit or declaration must be accompanied by the relevant fee in
                Sec. 7.6(a)(6)(iii) or (iv).
                 Dated: June 12, 2020.
                Andrei Iancu,
                Under Secretary of Commerce for Intellectual Property and Director of
                the United States Patent and Trademark Office.
                [FR Doc. 2020-13262 Filed 6-18-20; 8:45 am]
                BILLING CODE 3510-16-P
                

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