The Battle Over Domicile Disclosure by Trademark Applicants

by Dennis Crouch

In the pending appeal of In re Chestek, PLLC, No. 22-1843, a trademark applicant is opposing the USPTO requirement that all applicants must disclose their domicile address. This requirement, referred to as the “domicile address rule,” has been controversial since the USPTO adopted it in a 2019 rulemaking. For individuals, this rule requires an actual residential address.  See Requirement of U.S. Licensed Attorney for Foreign Trademark Applicants and Registrants, Final Rule, 84 Fed. Reg. 31498 (July 2, 2019).  The outcome could have significant implications for privacy and transparency in the trademark registration system.  For a variety of reasons, many people do not publicly disclose their place of residence. In the US, the most common reasons stem from domestic violence and stalking. Although the USPTO is attempting to offer a mechanism to protect domestic residence from public view, it also recently had a major data loss of that information — and effectively all domestic residence information is available in various sources online.  A decision favoring the petitioner would also be seen as bolstering the Administrative Procedure Act’s notice and comment requirements.

The best place to begin any analysis is probably with the statute. The key trademark statute followed by the USPTO is the 1946 Lanham Act.  Although the Act has been amended numerous times, since its original passage it has expressly required applicants to provide their domicile when applying for a federal trademark registration.  “The application shall include specification of the applicant’s domicile.” 15 U.S.C. § 1051(a)(2).  From the statutory standpoint, this is seemingly open and shut. But, for undisclosed reasons, the USPTO never enforced this statutory requirement by requiring the actual permanent place of residence rather than simply a mailing address.

USPTO apparently saw no need for rigorous enforcement until fraudulent foreign applications surged, raising concerns over phony addresses and shell entities.  As the agency was battling fraudulent trademark application filings, it concluded that the domicile disclosure could serve as an important tool — especially with regard to the “U.S. Counsel Rule” that requires foreign trademark applicants to designate a U.S.-licensed attorney as their representative. According to the agency, over 18,000 fraudulent trademark applications have been terminated and over 3,000 registrations sanctioned since 2019 for violations of the U.S. Counsel Rule. The USPTO maintains that scammers often provide fake U.S. mailing addresses, so verifying an applicant’s domicile is crucial to combat this fraud.

While the Lanham Act does not define “domicile,” the USPTO’s 2019 rulemaking defined it as the “permanent legal place of residence of a natural person or the principal place of business of a juristic entity.” 37 C.F.R. § 2.2(o).  Unlike traditional mailing addresses, these domicile addresses cannot be post office boxes. The USPTO states that because trademark counsel may change over a registration’s lifetime, having an applicant’s domicile helps confirm whether foreign applicants still must have U.S.-licensed representation.

The appellant in the case, Chestek PLLC, declined to provide its domicile address to the USPTO. Instead, Chestek provided a P.O. box mailing address in its trademark application. Citing privacy concerns, Chestek argued that the domicile address requirement was imposed improperly through the 2019 rulemaking.  I’ll note here that Chestek PLLC is the law firm owned by trademark attorney Pam Chestek.

Although the USPTO may have the statutory authority to demand domicile disclosure, Chestek argues that the agency must still work through the proper APA procedures before requiring the disclosure. And if followed correctly, the notice-and-comment process would have allowed likely led to critical public statements explaining why the disclosure rule is bad policy as well as suggestions for addressing the foreign-filing problems while mitigating the privacy issues.

In the briefing, Chestek noted that the original notice of proposed rulemaking did not say anything about domicile disclosure requirement or any notice that the proposed rule might require the disclosure.  This, according to Chestek, violated the Administrative Procedure Act’s (“APA”) notice-and-comment requirements. Chestek argues that the proposed rule disclaimed any new reporting requirements or any impact on domestic applicants. Chestek also argues that the final rule requiring domicile addresses is arbitrary and capricious because the USPTO provided no substantive explanation for the change between the proposed and final rules.

David Boundy filed an amicus brief arguing that the domicile address rule violates multiple federal laws governing agency rulemaking, not just the APA’s notice and comment requirements raised by Chestek. In his brief, Boundy explains that the Paperwork Reduction Act requires robust cost-benefit analysis before agencies can collect new information — an analysis skipped by the USPTO.  Boundy also alleges the USPTO evaded the Regulatory Flexibility Act’s mandate to analyze impacts of rules on small businesses. He notes most small trademark firms would be affected by the domicile requirement, yet the USPTO never considered resulting costs. Boundy ultimately contends such omissions reflect a consistent pattern of administrative law violations in recent PTO rulemakings.

In multiple recent rulemakings, the PTO has silently skipped steps, claimed exemptions from these laws for reasons that are transparently false, or claimed to be exempt for reasons having no basis in the written law. . . . [T]he domicile address rule is part of a pattern. The pattern includes errors of omission, errors of objectively false statements, and one rule where the PTO was blocked from going forward by regulation—so the PTO flew the same rule under the regulatory review radar as subregulatory “guidelines.” These statements are made to ex parte tribunals, and each has the effect of evading analysis and work that Congress required agencies to do in order to assure that the agency’s rules are in the public interest. Because the PTO’s actions in this case are part of a consistent overall pattern, the Court may fairly infer that the PTO intended to evade the law in this case.

Boundy Brief.

The Federal Circuit heard oral argument in the case in early December 2023, with Chestek’s attorney, Andrew Grossman, arguing that the domicile address requirement disproportionately affects victims of domestic violence and other at-risk individuals. He stated that the USPTO failed to consider alternatives like exempting applicants who already designated U.S. counsel.

The USPTO’s representative, Mary Beth Walker, countered that the final rule logically flowed from the proposed rule’s focus on using domicile to determine if foreign applicants had engaged U.S. counsel. “[I]t was obvious from the NPRM that to administer the requirement for foreign-domiciled filers to be represented by U.S. counsel, the USPTO would need and could require all filers to provide their domicile address. The changes to the final rule text merely clarified that fact.” Associate Solicitor Walker also contended that any applicant wanting to raise privacy concerns could have commented during the rulemaking process.

Federal judges generally take domicile privacy quite seriously because of the repeated historic threats.  In oral arguments the judges acknowledged the privacy risks.  In addition, the judges repeatedly questioned USPTO counsel about the lack of explicit justification for the requirement within the rulemaking and questioned the ‘logical outgrowth’ argument.  That said, the judges also seemed open to the PTO arguments that the domicile requirement was a simple procedural change necessary to implement the US Counsel Rule and that the requirement was “reasonably discernable” from the original notice.   So, bottom line is that it is difficult to predict the outcome of this particular case.