Irina D. Manta is an Assistant Professor at the Case Western Reserve University School of Law.

It is a common misconception in the United States that while applications for patent registration suffer delays, problems with the much simpler process of trademark registration are few and far between. As a result, scholars and practitioners have started issuing calls for patent reform, but only a minority has begun paying attention to the consequences of having an average processing time of fifteen months for trademark applications at the U.S. Patent and Trademark Office (USPTO).

The USPTO’s failure to make a timely decision with regard to a mark’s registrability prevents a mark from truly fulfilling functions such as identifying a product, guaranteeing the product’s quality, and promoting it as part of advertising. It is dangerous for someone to invest in a mark that may need to be changed a year or two later, when the USPTO has finally completed its review of the trademark application. All three functions of identification, guarantee, and advertising are disrupted when a registrant has to change a mark. Consumers may be confused and have to be educated about name changes. The longer a mark is in use, the more expensive a name change is likely to be. Thus, increased delays in application processing result in costlier refusals for mark holders.

The problem is not unique to the United States. In Great Britain, for instance, Financial Times editor Andrew Gowers wrote a report commissioned by the government in which he called for the introduction of a “fast track” system for trademark applications. The Canadian Intellectual Property Office has such a procedure, but decided to restrict its accessibility because of concerns that putting an application at the front of the line would push others to its end. Indeed, barring the investment of near-infinite resources, as long as one government entity performs all registrations, expedited review for one applicant comes at the expense of another.

There are, however, alternative models that would diminish these types of problems. Particularly, if the registration process was opened to private actors, the pressure on any given registrar would be diminished. Not only would private entities provide a more reliable chance at a speedy outcome, but application fees would likely drop from where they currently stand (e.g. in the hundreds of dollars per mark in the United States). Further, registrars could set different prices and processing times for applications that vary in type and complexity. Private registrars are likely to provide a significant number of choices in these areas. The USPTO and similar governmental offices are simply unable to match the expedited processes, reduced prices, and variety of other options that private registrars could offer.

A number of existing privatization measures in the intellectual property world – such as ICANN, certification marks, and the peer-to-patent project – could provide guidance as to the best way to effectuate such a change. One of the key priorities would be to implement mechanisms that prevent private registrars from abusing their powers and registering improper marks to collect more revenues from fees. For instance, registrars could face large fines and potential loss of license for improper actions, may have to reimburse via liability insurance those mark owners who face litigation as a result of inappropriate registrations, and would receive ratings through a publicly accessible eBay-style feedback mechanism both right after registration and every number of years thereafter. These and other measures would allow a privatized system to flourish while keeping in check bad behavior on the part of registrars.

While the advent of electronic filing has shortened waiting times to some extent over the last few years, the number of trademark applications continues to rise, and there is a ceiling to the improvements that technological changes alone can produce. Allowing and encouraging private actors to provide registration services could create a level of service difficult to achieve through any other route and would help trademarks to better fulfill their purpose in the marketplace. Legislators in the United States and abroad will hopefully recognize these benefits and enact laws that pave the way toward a more effective system of trademark registration.

A detailed presentation of this proposal is available in print at Privatizing Trademarks, 51 ARIZONA LAW REVIEW 381 (2009), and online at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1225923

Posted in IP, Trademarks