United States: The Value Equation Of Trademark Oppositions: A Multinational Comparison Of Costs And Perceived Benefits

Paul Kilmer is a Partner in our Washington office

What is the purpose of trademark opposition proceedings? Considering the purpose of such proceedings, do some jurisdictions offer a better cost-to-benefit value than others? If so, why is this the case, and what factors drive that more advantageous cost-benefit result? Does an analysis of these matters tend to indicate that certain jurisdictions may need to consider reforming their opposition processes in order to deliver a better cost-benefit result?

Most oppositions are brought to determine whether one trademark is confusingly similar to another when used in relation to the goods or services of the parties. There may be a number of factors that come into play in making that determination and some variants in terms of the grounds for opposition (e.g., U.S. dilution law; lack of distinctiveness); however, the ultimate issue is seldom far from likelihood of confusion. That determination generally comes down to the similarity of the marks and the similarity of the goods/services, with other factors, such as the fame of the senior mark, actual confusion, similarity of customers and trade channels, intent to deceive and the length of time the marks at issue have been used concurrently (if at all), also having significance.

With such a relatively limited scope of analysis, how much should an opposition cost the parties involved? When does the cost of an opposition become sufficiently great to deter parties with fewer resources (such as new competitors) from pursuing or defending an opposition? Do more expensive opposition systems result in fundamental unfairness to parties with fewer resources such that any benefits the more expensive systems deliver are outweighed by their cost? Do more expensive systems cause injury to the competitive environment and diversion of resources from other desirable purposes (such as research and development and the introduction of new products or services) such that those negative consequences are sufficiently severe to warrant reform?

The small-scale, informal study carried out by the author as the basis for this article (Study) tends to indicate that the current U.S. opposition system entails such significant costs that it may deter smaller companies or those with less investment in a particular mark from pursuing or defending opposition proceedings, and might lead to unnecessary or ill-advised settlements that do not benefit or protect consumers. The Study included more than 40 participants, all of them involved in multinational trademark practice. (This is about the size of the typical "pilot" survey used to assess secondary meaning or likelihood of confusion in trademark oppositions and litigation.)

Participants were from different nations, with more participants coming from the jurisdictions under study than elsewhere. The Study focused on the cost and benefits of oppositions in Brazil, Canada, China, the European Union (OHIM), India, Japan and the United States, with a few inquiries also aimed at practice in Australia because, like the United States, that jurisdiction extends common-law rights to trademarks and its legal system has its roots in that of the United Kingdom.

The relatively negative cost-benefit ranking of U.S. opposition proceedings in this Study appears to arise from the court-like procedures of the U.S. system. However, there does not currently appear to be any significant pressure from the U.S. bar, U.S. companies, Congress or the U.S. Patent and Trademark Office (USPTO) to reform the system. In fact, in recent years the USPTO has put in place even more procedural and other requirements, which are driving opposition costs ever higher, without a perceived increase in the benefits of that system.

Specifically, results of the Study indicate that opposition proceedings in the United States are vastly more expensive than in Australia, Brazil, Canada, China, the European Union (OHIM), India and Japan. For example, an "expensive" opposition in Canada (the second-most-expensive jurisdiction after the United States) generally costs $100,000 less than an "inexpensive" proceeding in the United States. There are thus no opposition systems in commercially significant jurisdictions that cost litigants more than U.S. proceedings, and the Study indicates that U.S. proceedings cost from four to over 100 times more than oppositions in the other jurisdictions studied.

The Study indicates that the range of average costs for oppositions in the jurisdictions reviewed tends to be as follows (all estimates are in U.S. dollars and are for oppositions pursued through to an initial decision): 

  • Australia: $15,000–$30,000
  • Brazil: $1,500–$10,000
  • Canada: $20,000–$50,000 (oppositions in excess of $50,000 are relatively rare, but they do occur and seem to be increasing in number)
  • China: $2,000–$10,000
  • European Union (OHIM): $5,000–$25,000
  • India: $3,000
  • Japan: $5,000–$25,000
  • United States: $150,000–$500,000

Cost Drivers

The major cost drivers in the United States are procedural requirements of the USPTO's Trademark Trial and Appeal Board (TTAB), discovery and motions practice. The increasing use of surveys and other expert evidence in oppositions also appears to be contributing to the significant cost differential between U.S. oppositions and proceedings in other jurisdictions.

The TTAB has increased the costs of the early stages of opposition proceedings by implementing court-like procedural requirements that, the Study indicated, do not appear significantly, if at all, to lead to an early resolution of oppositions.

Before 2007, the stages of a U.S. opposition proceeding consisted of the filing of a notice of opposition, the filing of an answer by the applicant, a discovery period, a testimony period and briefing. Generous extensions of time often delayed proceedings for significant periods, but they appear to have reduced overall costs substantially and increased the likelihood of desirable settlements.

Changes to U.S. opposition procedures put in place in 2007 added requirements for an early discovery conference, initial voluntary disclosures of evidence, voluntary disclosures regarding experts and their opinions, pretrial disclosures by both parties and rebuttal disclosures by the opposer. Electronic discovery added another layer of additional cost and complexity, many times forcing a party that already had placed its trademark into use or had engaged in extensive preparations to use its mark to employ electronic discovery vendors to assist with the task of reviewing large volumes of electronic records, including emails and electronically stored documents.

In none of the other jurisdictions studied are there discovery procedures to obtain evidence from the other party. Nor is any significant level of procedural or substantive motions practice allowed in most nations, with many nations not permitting any such filings. However, some jurisdictions—such as the EU (OHIM), Australia and Canada—have other types of procedures that result in somewhat greater costs, although nothing approaching the procedural, discovery and motions practice costs in the United States.

In Canada, although evidence is submitted by affidavit, cross-examination of affiants (deponents) is permitted. In addition, survey evidence and other expert evidence are allowed. Oral hearings before the Trade-marks Opposition Board may be requested, although arguments generally are presented only in writing. Naturally, all of these procedures may increase the cost of oppositions.

In addition, in recent years the Trade-marks Opposition Board has become what one respondent called "more court-like and less tribunal-like." In this regard, the perception is that the Opposition Board has been imposing higher standards for affidavit evidence, stricter requirements for pleadings and other measures that, according to some Canadian practitioners, may be increasing costs without significantly, if at all, increasing the quality of decision making. Use of costly survey and other expert evidence also appears to be on the rise in Canada, especially in drug shape, alcoholic beverage and beer trademark oppositions.

The Canadian opposition system is under review and may be subject to some amount of streamlining in the future. However, even under existing practice in Canada, it is unlikely that opposition proceedings will exceed the equivalent of US $50,000 through a decision on the merits.

In OHIM proceedings, the applicant may request that the opponent provide proof of use of a registered mark on which the opponent has relied in bringing the opposition. This procedure will increase the costs to the opponent, especially if the "use" documents require translation. However, it is still unlikely that the cost of an OHIM opposition will exceed $20,000. This may be compared with a top-end cost of as much as $500,000 in a U.S. opposition proceeding.

Similarly, in Brazil a party may submit evidence that its mark has "renown," and this may increase the cost of an opposition proceeding to perhaps $3,000. Again, this amount pales in the face of the cost of U.S. oppositions, which may be 100 times more expensive.

Cost-Benefit Analysis—Settlement Rates

The Study indicates that oppositions in the United States are settled at a rate exceeding 90 percent of those filed. Settlement rates in the EU (OHIM) and Canada appear to exceed 80 percent, and the cost of oppositions in the EU is around 20 times less than in the United States, with the cost of proceedings in Canada being, on average, more than 65 percent less than that of U.S. proceedings. It therefore does not appear that U.S. proceedings produce a significantly higher rate of settlements than occurs in the EU or Canada, and the cost of proceedings in those two jurisdictions is considerably less than in the United States.

By contrast, the settlement rate in Brazil appears to be something between 50 and 80 percent of proceedings filed. Settlement rates in China and Japan are less than 20 percent. This may mean that, despite lower costs, China and Japan are somewhat less desirable jurisdictions in which to oppose applications, as litigants are unlikely to arrive at a settlement. Possibly that is because in China the applicant is not required to defend an opposition (thereby incurring no costs) and in Japan the success rate of oppositions is fairly low, thus giving applicants little incentive to settle.

Cost-Benefit Analysis—Perceptions of the Quality of Decisions

As to the quality of opposition decisions, although the United States is ranked well by Study participants, so are the EU (OHIM) and Canada. In fact, ratings for the quality of U.S. opposition decisions were basically the same as ratings for the quality of decisions in the EU and Canada.

China and Brazil ranked lowest in terms of the quality of decisions in the Study. Japan and India were in the middle tier.

Thus, on balance, there may be no benefit in terms of the quality of decisions in bringing an opposition in the United States versus opposing an application at OHIM or in Canada.

Cost-Benefit Analysis—Time to Decision

The EU ranked better than the United States in the Study in terms of the amount of time required to obtain an opposition decision. Canada was rated roughly the same as the United States. Japan was rated somewhat slower than Canada in reaching decisions. India, Brazil and China were rated slower than the other jurisdictions.

Therefore, in terms of the time it takes to obtain a decision, the United States does not offer significant advantages over the EU (OHIM) or Canada.

Preferred Jurisdictions

When survey participants were asked to rank selected jurisdictions in terms of where they would prefer to bring and prosecute opposition proceedings, the EU was favored by a margin of almost two to one over other forums. The United States tied with Canada for the second-most-preferred forum. However, the United States inspired the widest divide in terms of opinion as to whether it was a "preferred" jurisdiction, with a third of participants rating it at the very bottom of the studied jurisdictions, another third placing it in the middle and the final third placing it at or near the top.


The small-scale study used for this article, which includes few participants and does not test every factor in measuring the cost, benefits and value of opposition proceedings, may not be an entirely fair or accurate basis for proposing changes to any of the systems that were reviewed. However, it does raise a number of questions, particularly about the cost and benefits of U.S. opposition proceedings, which appear to merit a more expanded study and analysis.

For example, the Study suggests that the U.S. opposition system may employ procedures that increase costs without giving any greater perceptible benefits than much-less-expensive proceedings in the EU and Canada. There is also some indication that U.S. proceedings give an unfair advantage to the party that is better funded or more willing to expend resources on litigation. This may drive potential competitors from the market without providing any better protection to consumers from trademark confusion. There is also some concern that unjust or unwarranted settlements may occur in the United States simply as a result of the cost of pursuing and defending opposition proceedings.

By contrast, settlements are reached at a fairly high rate in both the EU and Canada even though costs are considerably lower than in the United States. This tends to indicate that settlements may still be reached on rational commercial grounds where the cost of oppositions is relatively moderate.

Another issue the Study raises is whether current U.S. procedural rules and discovery and motions practice are necessary or may be wasting resources that (as EU and Canadian proceedings seem to demonstrate) are not really needed to reach qualitatively good decisions in relation to the limited scope of issues that are determined in opposition proceedings.

Although more in-depth study and analysis are called for, even a small-scale study seems to raise serious questions as to whether U.S. opposition proceedings exceed in cost what they deliver in benefits to either litigants or the public.

Although every effort has been made to verify the accuracy of items in the INTA Bulletin, readers are urged to check independently on matters of specific concern or interest.

Previously published International Trademark Association Bulletin Vol. 68 No. 5 March 1, 2013 Vol. 68, No. 5


The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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