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SPECIAL TO THE NATIONAL LAW JOURNAL Over the past five years, a statistic that had never been very newsworthy-the number of applications filed annually for U.S. trademark registration-has become a closely watched figure in the intellectual property field. During that period, trademark filings went on a roller coaster ride, increasing by nearly a third from 1998 to 1999, increasing again by large absolute numbers in 2000 and then plummeting in 2001. As the flow of filings went up and down, the U.S. Patent and Trademark Office (PTO) had to cope with unprecedented swings in demand for its services. Law firms beefed up their IP capacity and new players entered the game, only to find that the boom couldn’t sustain itself. Jobs came and went as the demand for new marks rocketed and then tumbled. From a broader standpoint, the last decade demonstrated that the number of new trademark filings is a barometer of business optimism-or pessimism-about the public appetite for new products and services. As these patterns unfolded over the last 10 years, it became clear that trademark filings are something of an indicator for the U.S. economy. They sagged slightly during the 1991 recession, and then marched steadily upward throughout the rest of the 1990s, as indicated in the accompanying chart. Companies and individuals can apply to register marks they plan to use months or years from now, not just brands they are currently using. Thus the flow of applications reflects plans for new product and business launches, not just current brand-name use. One can see a decade of economic bullishness reflected in the rising tide of new filings from 1992 through early 2000. And after the spring of 2000, one can witness the downturn reflected in a declining stream of applications. In 2002, people held their breath-would the numbers plunge further? Or would a sustained boost in filings signify a growing confidence in the economy? Neither happened. It was a year of relative calm (at least on the surface) with applications down only 3%. But it was hardly a year in which things got back to normal. In hindsight, one can see that for the trademark and branding professions, the years 1999 and 2000 were unquestionably a bubble, closely tracking the overall dot-com bubble. In fact, the number of trademark filings in a single month reached an all-time high in exactly the same month that the Nasdaq Composite index hit its high: March 2000. And 2002 was a year of recovery from the bursting of that bubble, the most significant course correction being a large reduction in the number of PTO examining attorneys in September. Technology marks still down In 2002 the technology sector that helped fuel the late 1990s bubble was still in a deep slump, as measured by the demand for new brand names. While the overall level of U.S. applications in 2002 was essentially flat from the year before, the flow of applications for technology-related goods and services was significantly lower than the year before. For example, applications for goods or services that mentioned computer hardware or software, or otherwise referred to computerization, rose from 65,000 to 80,100 in 2000, dropped nearly by half to 43,000 in 2001 and then went another third lower to 29,000 in 2002. A similar drop occurred in applications for products or services whose descriptions referred to the Internet. PTO nomenclature for the World Wide Web is less than uniform, but a comparison of applications that mentioned the two most frequently used expressions (“Internet” or “global computer network”) tells the tale: In 1999, there were 27,500 such filings, which rose to 41,900 in 2000, then dropped to 17,300 in 2001 and 11,400 last year. The same sad story is repeated in applications for marks for products or services defined in some way as related to “telecommuncations.” Such filings rose from 7,000 in 1999 to 11,000 in 2000, then dropped to 6,200 in 2001 and 4,100 in 2002. The trends in these sectors are particularly striking when compared with filings as a whole. In 2000, marks related to computers, the Internet and telecommunications rose much faster than applications overall-by 23%, 52% and 57%, respectively, compared to 8% overall-but in 2001 and 2002 they sank deeper than the total number of U.S. applications. Filings for computer-related marks fell by 46% between 2000 and 2001, and by 32% between 2001 and 2002; filings for Internet-related marks fell by 59% in 2001 and by 34% in 2002; and filings for telecom-related marks fell by 44% in 2001 and by 34% in 2002. Most striking, new filings in all three sectors were down by a third in 2002, even though U.S. filings as a whole were essentially even with the year before. Internet buzzwords This downward trend was reflected in the evaporation of Internet buzzwords from new brand names. In 2000, 13,400 applications were filed containing the term “.com,” but that and other new economy terms such as “cyber” and “Web” are now lingo from a bygone era, with applications falling 75% or more in just two years. Only about 1,900 “.com” applications were filed in 2002, and far fewer were filed for other terms that were hot in 1999 and 2000. For example, filings for marks containing the word “Internet” rose from 410 in 1998 to a high of 1,040 in 1999, then dropped to 1,200 in 2000, 300 in 2001 and 170 in 2002. Marks containing the word “Web” rose from 760 in 1998 to 1,800 in 1999 to a high of 1,990 in 2000, then dropped to 690 in 2001 and 490 in 2002. Not surprisingly, the bearish stock market was reflected in a deep downturn in new applications for marks for goods and services relating to mutual funds, investment advice and securities brokerage services. Marks relating to mutual funds rose from 990 in 1999 to 1,070 in 2000, then dropped to 800 in 2001 and 570 in 2002. Those relating to investment advisory services rose from 840 in 1999 to 950 in 2000, then fell to 670 in 2000 and 560 in 2002. And marks relating to securities broker services rose from 560 in 1999 to 650 in 2000, then fell to 400 in 2001 and 220 in 2002. These figures indicate that the decline in launches of new funds and investment products and services was even more pronounced in 2002 than 2001-in contrast to the technology center, where the greater part of the fall to earth occurred in 2001. There were some increases If the technology and financial sectors were trending downward at faster than the overall rate, then what sectors did better than the overall 3% drop in applications? New filings in which the products or services referred to the word “pharmaceutical” held steady. Such filings rose from 3,800 in 1999 to 4,900 in 2000, then slipped to 4,800 in 2001 and stayed at 4,800 in 2002. But for the most part, the growth in applications came in fields that were not technology-related: In 2002, filings for “beer” or “wine” rose by 9%; those for “clothing” or “apparel” rose by 7%; those for food or food-related products rose by 5%; those for “cosmetics” or “makeup” rose by 4%; and those for “perfume” or “fragrance” rose by 3%. Thus, even as the numbers suggest a profound continuing decline in new product and business launches in the technology and financial services worlds, companies in the food, beverage and personal-care segments were in fact bullish, even if modestly so. In 2002 they believed that Americans were still ready to eat and drink, even if they weren’t inclined to be particularly merry. Glenn A. Gundersen, a partner in the Philadelphia office of Dechert, is the author of the International Trademark Association’s book, Trademark Searching (2d ed. 2000), and a co-author of Intellectual Property in Mergers and Acquisitions (John Wiley & Sons 2002).

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