In August, 2018, the United States Patent and Trademark Office (“USPTO”) announced that effective April 9, 2022 all parties, including lawyers, individuals or representatives of large or small businesses wishing to file a trademark application, will be required to have a USPTO.gov account and provide certain personal information to establish their identity. ID.me, a third party for-profit vendor, will collect this personal information on behalf of the USPTO. The stated purpose for these changes is to deter fraudulent trademark filings, i.e., to confirm that the filer “is who they say they are.” This new requirement raises important concerns regarding the privacy of all filers and the disproportional harm it might have on applicants of color, women and the LBGTQ+ community as well as individuals and businesses with limited financial resources or credit history.
The USPTO’s New Identity Verification Requirements
Under the new requirements filers will need a device with a front-facing camera, such as a smartphone, tablet or computer, and government issued identification, i.e., a driver's license, passport or state-issued Identification card. Filers will be directed to ID.me to provide the required information, including the filer’s social security number, credit report and biometric data, in the form of a selfie and photo identification.
What Problems are These New Requirements Designed to Address?
The USPTO did not invite comments or issue a Notice of Proposed Rulemaking in connection with the new identity verification requirements. The only justification offered is a brief statement that the new requirements are designed to prevent fraudulent filings.
Fraud in procuring a trademark registration occurs when an applicant knowingly makes false, material representations of fact in connection with the trademark application. Notably, the Table of Fraud cases on the USPTO website only references 24 cases from 1986 to 2010 and none of these related to identity fraud by the individual completing the trademark application. There is no more up-to-date information on the USTPO website.
It is also worth underscoring that the requirements apply to the filer, not the applicant. Lawyers filing on behalf of clients are already required to provide their Bar Number, year of Bar admission and state(s) where they are licensed to practice law. This information would seem to provide a deterrent and a remedy of disciplinary action, up to and including disbarment, for filing fraudulent applications. The identity of the filer only sheds light on the validity of the applicant when a third party filer is not engaged.
The USPTO, however, is not the first U.S. agency to engage ID.me for identity verification. In fact the Department of Veteran Affairs, the Social Security Administration and, most recently, the Internal Revenue Service use ID.me. The distinction here is that these agencies, unlike the USPTO, address personal benefit payments and refunds. There is an obvious nexus to insuring that payments are made to the correct individual. With the USPTO, the justification is less clear.
Given the limited history available, it is unclear what problem the USPTO is trying to solve and what unintended consequences were considered. While for many filers and/or applicants the additional requirements will not be overly burdensome, the new requirements have the potential to negatively impact all filers.
The Privacy Concerns Around the Collection of Biometric Data
Despite the USPTO assertion that ID.me uses the flier’s personally identifying information solely to verify the filer “is who you say you are,” there are no guarantees that a for-profit business will have adequate safeguards in place to protect identities or that, despite every reasonable precaution, they will not be victim to a data breach. ID.me is a particularly attractive target given its access to biometric data coupled with social security numbers and credit files.
To allay concerns, the ID.me website contains information on the steps it takes to secure personal information. In addition, once filers have met the new requirements, they have the option to request that their ID.me accounts be deleted.
Problems with Facial Recognition
Studies have shown that facial recognition tools available today are good at recognizing white males, but woefully inaccurate when applied to the images of women and particularly women of color. This design flaw may result in discrimination against both lawyers and corporate staff. If Michelle Obama, a Harvard-educated lawyer, and Oprah Winfrey, an entertainer and entrepreneur with nearly 50 registered trademarks incorporating her name, are misidentified by facial recognition as males, what identification errors are likely for the average lawyer or entrepreneur of color who are not among the most recognizable faces in the world?
Disproportional Impact on Young Entrepreneurs and Small Businesses
These additional requirements are most likely to impact individual filers and small, often start-up, businesses. Large, more established businesses and corporations traditionally retain lawyers to file their trademark applications, so the new requirements will only be felt by them indirectly, if at all. During the COVID-19 pandemic, there have been countless surveys and articles on the economic impact on small businesses and the work force. While many small businesses have struggled economically, the research also suggests a sizable portion of the workforce has transitioned to self-employment either as their sole revenue stream or as a way to supplement their income.
According to social media, many young entrepreneurs have below optimal credit ratings because of the burden of student loans coupled with entry level incomes. Moreover, it is rare that a recent college graduate or nascent business has built up a meaningful credit history even without these economic challenges. The good news is that this will be a soft credit check that will not negatively impact filers’ credit scores. The USPTO has not disclosed the purpose for pulling the credit score other than as an additional check on the filer’s identity or what, if any, credit score will be disqualifying. However, if the credit score is used to flag potentially fraudulent applications, the impact could fall disproportionately on already marginalized filers. These additional USPTO requirements will disadvantage such entrepreneurs and small businesses in relation to their larger, more well-funded competitors. The additional uncertainty and expense surrounding trademark filings will impact this cornerstone to building and maintaining a successful business.
COVID-19 Related Challenges
In the time of COVID-19, even a mere name check is likely to result in delay and uncertainty. Theoretically, this could cause confusion for women who use one name professionally and their spouse’s surname in their personal lives; for example, on passports and drivers’ licenses. A similar disconnect exists for transgender persons wishing to officially change their names but who are residents of states with barriers to doing so. While both issues can usually be resolved with some effort, the well documented delays at Departments of Motor Vehicles, Passport Services and the United States Post Office, as well as delayed implementation of Real ID drivers’ licenses, might needlessly impact the speed of obtaining a trademark registration. These COVID-19 related challenges might make what was a straightforward process lengthier because of a mismatch in names appearing on government-issued documents. Again, the USPTO has not elaborated on what if any consequences there will be in the event of names that do not match, except to say that the name on the application will apply. Unanswered is if the name on the application controls, what is gained by the name check?
Potential Delays for All USPTO Applicants
During the pandemic, the USPTO expected timeframes from the filing date to the date the application reaches a Trademark Examiner has more than doubled - from 3 months to 6.6 months. It is unclear how much additional delay will be introduced by the insertion of ID.me into the application process and whether these requirements will require the hiring of additional staff or additional workloads for existing staff. The USPTO will offer an alternative paper verification process for attorneys and trademark owners who choose not to verify electronically. The paper verification form must be notarized and will take approximately two to three weeks to process. The inevitable delay in a final decision on the registrability of a trademark will create more lengthy uncertainty for applicants investing resources in an unregistered trademark.
In Conclusion: A Slippery Slope
It seems clear that both the federal and state governments are moving towards additional use of personally identifying information in their interactions with individuals and businesses. At least in the short term, trademark applicants have the option to retain experienced intellectual property legal counsel to shield themselves and their businesses from unwanted personal intrusion. Lutzker & Lutzker is available to assist entrepreneurs and small businesses with all their trademark needs, from searches through filing applications and navigating Trademark Examiner correspondence and Office Actions.