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2004 was a very healthy year for U.S. trademarks. After several years in a slump, new applications for U.S. trademark registration made a definite rebound in 2004. More than 248,000 new applications were filed with the U.S. Patent and Trademark Office last year, a 9 percent increase from 2003. It was, in fact, the third-highest year ever, exceeded only by the dot com bubble years of 1999 and 2000. This robust increase in the quest for new marks is a certain sign of health in the economy, because patterns in PTO filings over the last decade have shown that trademark applications uncannily reflect larger economic trends. Each new application represents a potential brand name, logo or tag line for a new business, product launch, line extension or ad campaign. Looking at trends in filing volume provides a sense of whether companies are feeling optimistic or pessimistic about the public appetite for their products and services. Indeed, one can see a decade of economic optimism reflected in the rising tide of U.S. filings from 1992 through early 2000 — followed by the burst of the dot-com bubble in 2001, when applications fell by 23 percent — and then a sluggish recovery in 2002 and 2003. For evidence that Americans lack a certain stick-to-it-iveness when it comes to dieting, one need look no further than the rise and fall of “carb” marks; brand names that communicate that products are perfect for people on the Atkins, South Beach and similar diet regimens were hot in the beginning of 2004, but very quickly lost their appeal. The word “carb” appeared in just more than 100 applications in 2002, quadrupled to more than 400 in 2003, and increased by another 50 percent in 2004, with more than 625 applications filed. But the number of applications fell from 336 in the first quarter of 2004 to 197 in the second quarter, plummeted to 60 in the third, and hit bottom with 37 in the last. A mark filed in 2005 sums up the current appeal — “Carb Discard.” While 2004 was the first really good year in a while, a closer look at the trademark-filing statistics indicates that not all parts of the United States or the world are feeling equally bullish about the U.S. market. Businesses in some states and countries showed a significantly increased desire for U.S. trademark registration than others, and the overall recovery seemed to leave some industries behind. And while “blue state” voters may not have been happy with the outcome of the presidential race, they can take solace in the fact that the number of applications including the phrase “Blue State” far outpaced applications for the phrase “Red State.” The vast majority of applications filed with the PTO come from companies with U.S. addresses. Domestic applicants outnumber foreign ones by a ratio of 85 to 15. Businesses in Western Europe and Asia account for most of the filings by non-U.S. applicants, but the No. 1 filer of U.S. applications is the neighbor right across the border, as shown in the chart on Page S12. Applications from these markets were in something of a slump — while Canada, Germany and Japan registered an increase, that increase was less than the 9 percent jump in total U.S. applications. Demand for U.S. trademarks by companies in Western Europe decreased. Not every part of the world displayed such a lack of enthusiasm, however. 2004 saw an upsurge in applications filed by countries that have traditionally been manufacturers of products for others, but have not had strong brand names of their own. In absolute numbers, the big jump came from China, but India and Eastern Europe saw a marked increase as well. Applications by companies in China increased from 488 to 770 in one year, a sure sign that companies on the mainland have long-term designs to market in the United States under their own trademarks. Filings were heaviest in the electronics/computer and apparel classes. In comparison, applications from Taiwan held steady at about 1,100 in each of the past two years. India did not come close to China either in the overall number of applications or percentage increase, but still saw a very healthy 25 percent increase, rising to 233 filings. Indian applicants matched China in the number of filings for business services, data processing and software development. While U.S. filings from the largest Western European nations decreased, Eastern Europe was significantly more interested in obtaining U.S. trademark protection — Polish companies filed 78 percent more U.S. applications in 2004 and Hungarian companies were up by 67 percent. The actual number of filings was not that large — just more than 100 from Poland and 45 from Hungary, as compared with 3,600 from German businesses and 2,800 from the United Kingdom. Still, Polish filings were closing in on those from Russian applicants, which increased by 22 percent, but numbered only 134. Overall, applications from outside the United States did not grow any faster or slower than those from applicants with U.S. addresses — each registered a 9 percent overall increase. However, given that the top four countries making U.S. applications could only muster a 3 percent increase in 2004, it’s clear that the demand from other places such as China made up the difference. The decline in European filings comes as a surprise, given that the United States recently made it easier for non-U.S. applicants to file for registration here. In November 2003, the U.S. Patent and Trademark Office began accepting applications under the Madrid Protocol, which allows foreign companies to request U.S. registration as part of their home country filings if their home country is a protocol member. A significant number of Madrid filings have been made — about 1,500 in 2003 and 7,500 in 2004 — but the increased convenience of U.S. filing has not caused foreign applications to outpace the demand for new marks by American companies. Prior to the Madrid Protocol, the easiest way for a non-U.S. company to obtain U.S. registration was �44 of the Lanham Act, which allowed foreign companies to avoid proving U.S. use of the mark before obtaining registration. Many speculated that Madrid Protocol filings under Lanham Act �66 would make �44 drastically less popular, but that’s not been the case. Section 44 applications did decrease with the advent of Madrid — from 9,700 in 2002 to 9,300 in 2003 to 7,400 in 2004 — but perhaps not as much as some might have expected. One reason for the continued resilience of �44 is that countries that have not yet joined the Madrid Protocol can only file under �44 or a conventional use-based or intent-to-use application. Among these countries are Canada, the No. 1 source of foreign applications, and much of Latin America. For European applicants, the Madrid Protocol did not become an attractive alternative until October 2004, when applicants for a European Community registration were able for the first time to designate the United States under the Madrid Protocol. Before then, the Madrid option was only available if a company was filing a national application in its home country, and many such companies preferred the convenience of a community registration covering 25 countries. RED STATE/BLUE STATE Although the states that voted for George W. Bush produced more electoral votes than those that voted for John Kerry, the “blue states” produced many more trademark applications in 2004 than the “red states” — 132,000 filed by blue state applicants vs. 81,000 from businesses in the red states. Applications for marks containing the word “Blue State” have also outpaced “Red State,” with only three of the latter, but 16 of the former. Such filings are an inevitable byproduct when a new catchphrase suddenly acquires political currency — prior years have seen flurries of filings proposing to use “Osama,” “Shock & Awe” and “Desert Storm” on T-shirts, bumper stickers and other paraphernalia. Needless to say, such merchandising does not remove a well-known phrase from the public domain and bestow its applicant with the exclusive right to use it as a trademark. Such applications are typically refused registration and abandoned when the public fancy moves on. Still, a new pack of applicants materializes with each new buzzword. Two of the current applicants are apparently nonpartisan, seeking registration for both “Red State” and “Blue State,” although both are blue state residents. Others seek to register such predictable variations as “Blue State University” and Blue States of America” for clothing, although there is an application for the more creative “Blue State of Mind.” VARIETY BY REGION The healthy 9 percent increase in U.S. applications in 2004 wasn’t spread uniformly across the 50 states. Some states produce a disproportionate share of trademark applications, compared with their populations, indicating that those states have more than their share of businesses generating new marks. The top 10 states in 2004 were California, New York, Florida, Texas, Illinois, New Jersey, Pennsylvania and Massachusetts (tied), Ohio and Georgia. Overall, these 10 states account for more than 60 percent of trademark filings by U.S. companies, but only half of the U.S. population. Among the “overachievers” on this list: California accounts for 12 percent of the U.S. population, but 21 percent of its domestic trademark filings. New York accounts for 6 percent of the U.S. population but 10 percent of its domestic trademark filings. Two other Northeastern states place considerably higher on trademark applications than they do in population — New Jersey ranks sixth in marks, but ninth in population, while Massachusetts ranks 13th in population, but ties for eighth in filings. Although the list of top 10 states has not changed in 10 years, their relative pecking order has changed. California now files twice as many applications as New York, while in 1994 it had only a 40 percent edge. Applications from Florida have increased by the most of any state on the list, nearly doubling over 10 years. In contrast, businesses with Illinois addresses filed only 4 percent more applications in 2004 than they did in 1994. As a result, that state, once ranked third to California and New York, has fallen to fifth place. Although one might have expected much of the increase in trademark applications over the last 10 years to come from the Sunbelt, that was not entirely the case — New Jersey, for example, did just as well as Texas and Georgia, with a 50 percent jump from 1994 to 2004. A closer look at filings in various states shows that not all industries shared in an across-the-board recovery. For example, applications by California companies for marks in the computer and electronics class increased only 2 percent from 2003 to 2004, hovering at about 7,000. The pace of filings mentioning computers or computerization was similarly sluggish. In contrast, Californian applications in the entertainment services class went from nearly 4,400 to about 5,000 in one year, a 14 percent jump which outpaced the state’s overall increase. New York should be heartened by the numbers for applications in the financial services class — filings by companies with New York addresses rose 14 percent. There was good news as well for one of New Jersey’s bellwether industries — applications in the pharmaceuticals class by New Jersey applicants were up 16 percent. Although places like California and New York produce the lion’s share of trademark applications, the top 10 states over time have accounted for less and less of the overall application pie. Specifically, the top 10 states listed above accounted for 65 percent of total U.S. filings in 1994, but only 54 percent of total filings in 2004. Where did all the extra applications come from? Some came from outside the United States, but states beyond the top 10 have supplied a larger share of new marks. Nevada is unquestionably the overachiever recently. Filings by Nevada applicants increased from just less than 3,000 in 2003 to more than 4,100 in 2004, a 40 percent rise. Although the state accounts for less than 1 percent of the U.S. population, it accounted for 2 percent of filings by U.S. applicants last year. Not surprisingly, casino and gaming-related products and services accounted for almost one-quarter of these filings. Those applications were disproportionately responsible for the boom in Nevada filings, increasing by 69 percent in one year. Clearly, what happens in Vegas winds up at the Trademark Office. The less glamorous state of Delaware perennially produces many more trademark applications than its size would suggest. It ranks 45th in U.S. population, but 32d in trademark filings. Why? Companies with headquarters in other states have established trademark holding company subsidiaries in Delaware, and those applications bear a Delaware address. With U.S. applications increasing by 9 percent overall, it was unusual for any state’s filings to go down, but it happened — Louisiana and Wisconsin both saw declines. Leading the decline — applications by Wisconsin companies for trademarks for cheese fell by 50 percent. Glenn A. Gundersen is co-chairman of the intellectual property group in the Philadelphia office of Dechert. He is the author of the International Trademark Association’s book “Trademark Searching” (2d ed. 2000) and a co-author of “Intellectual Property in Mergers & Acquisitions” (John Wiley 2002).
Top filings by non-U.S. companies
Country 2004 2003 Increase/Decrease
1. Canada 5,400 5,000 +8%
2. Germany 3,600 3,500 +3%
3. Japan 3,000 2,900 +3%
4. United Kingdom 2,800 2,900 -3%
Filings 1998-2004
Year Number of new applications Change from previous year Percentage change
2004 248,000 +21,300 +9%
2003 227,000 +11,100 +5%
2002 215,900 -6,900 -3%
2001 222,800 -65,800 -23%
2000 288,600 +21,400 +8%
1999 267,200 +65,100 +32%
1998 202,100 +8,500 +4%
These figures, rounded to the nearest hundred, are the most recent available from the U.S. Patent and Trademark Office.

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