Trademark Modernization Act of 2020

by Heather N. Tilley

Following the CASE Act copyright bill passed as part of the Omnibus COVID-19 relief bill, Congress has taken yet another swing at intellectual property law reform with the Trademark Modernization Act (or “TMA”).

The Trademark Modernization Act was signed into law in December of 2020 as part of the year-end Consolidated Appropriations Act for 2021. Its provisions aim to unclutter the federal register and improve the federal registration process for trademarks, as well as provide brand owners with better information on marketing and branding rights in the United States.

The Trademark Modernization Act amends the Lanham Act (which governs trademark law) in three key aspects. First, it creates new tools for challenging trademark filings and registrations based on inaccurate claims of use. Second, the TMA provides for shortened response deadlines to office actions, aiming to speed up the prosecution timeline by eliminating applications from the federal registrar that will ultimately become abandoned. Third, the TMA establishes a rebuttable presumption of irreparable harm in trademark litigations, increasing the likelihood that brand owners will successfully obtain injunctive relief in jurisdictions that previously eliminated the presumption.

NEW TOOLS FOR CHALLENGING NON-USE
The Trademark Modernization Act provides two new ways in which an existing trademark registration can be challenged for non-use. These provisions appear to be aimed at targeting the substantial issue created by foreign origin trademark applications being filed in the United States with falsified or inaccurate evidence of use.

Expanded Letters of Protest

The current USPTO rules restrict Letters of Protest to issues of genericness, prior registrations, ongoing litigation, and examiner error in calculating Paris Convention priority. Currently, the rules do not provide a vehicle for addressing non-use issues such as fraudulent specimens.

The Trademark Modernization Act expands the current Letters of Protest rules by allowing interested parties to submit evidence of a conflicting prior-registration, or evidence that the applied-for mark is not actually in use for each of the goods or services identified in the application. Brand owners will now be able to use a Letter of Protest to submit evidence that relates to any ground on which an examiner can refuse registration under the Trademark Act.

New Streamlined Expungement Procedure

The Trademark Modernization Act also provides a new post-registration procedure for ex parte expungement of certain improperly granted registrations. Specifically, any party can petition the USPTO to expunge a registration, either partially or in its entirety, in instances where the trademark has never been used in U.S. commerce with respect to specified goods or services listed on the registration.

To institute a TMA expungement proceeding, the complaining party is merely required to supply evidence of a “reasonable investigation” showing that the registered mark was never used for the goods or services identified in the petition. The registrant will then be notified and provided an opportunity to submit contrary evidence of use (or excusable non-use for foreign based registrations). If the Director determines that the petition sets forth a “prima facie” case that the mark is not in use, an expungement proceeding will be instituted for a trademark examiner to determine if the registration should be cancelled.

New Grounds for Re-examination of a Registration

While the expungement procedures explicitly allow for the cancellation of a mark that has never been used in commerce with respect to some or all of the goods or services set forth in the registration, the new re-examination procedures will allow for the cancellation of a mark that was not in use on or before the relevant filing date.

The Trademark Modernization Act adds a new ground for invalidation of a registered mark that was not used in U.S. commerce for some or all of the goods or services listed in the registration as of the “relevant date” in the application process. Similar to the new expungement proceeding procedures, a complaining party can submit a petition accompanied by evidence from a “reasonable investigation” showing that the mark was not used in U.S. commerce as of the “relevant date.”

Although fraudulently obtained registrations are the obvious targets of these proceedings, they also apply to registrations that include innocent misstatements or misunderstandings about what is required for “use” in U.S. commerce. To avoid being a target for non-use proceedings, brand owners must take exceptional care when making claims that its marks are being used in U.S. commerce. Brand owners must also take care to ensure that their claims of use are true for each and every one of the goods or services listed in the application. In situations where some of the listed goods or services are not offered in U.S. commerce, brand owners can pay a fee to have the USPTO remove such goods and services from their application.

POTENTIAL FOR SHORTER PROSECUTION TIMELINES
Shortened Office Action Response Deadlines

The Trademark Modernization act requires the USPTO to implement regulations to establish several new processes by the end of 2021, including a new flexible office action response period.

Under the Trademark Office’s current practice, applicants must respond to an issued office action within six months to avoid abandonment of their application. The TMA’s new rules authorizes trademark examiners to set a much shorter response period, but not less than 60 days. Similar to current practices at the Patent Office, the applicant may request to extend the shortened response deadline, presumably upon payment of an extension fee. This new rule is intended to shorten the timeline of trademark application prosecution.

BRAND OWNERS MORE LIKELY TO OBTAIN INJUNCTIONS
Rebuttable Presumption of Irreparable Harm Established

Courts require that brand owners seeking an injunction against an infringer must prove that it will be “irreparably harmed” if the infringer is not prevented from further use of the infringing mark. The U.S. Supreme Court’s ruling in eBay Inc. v. MercExchange, 547 U.S. 388 (2006) eliminated the presumption of irreparable harm in patent cases. However, circuit courts have been inconsistent on whether eBay should also apply to trademark infringement cases. After eBay, some circuits, but not others, determined that liability for trademark infringement no longer presumptively supported injunctive relief, and that irreparable injury had to be shown independently.

The Trademark Modernization Act eliminates the circuit split following eBay by establishing a rebuttable presumption of irreparable harm when assessing injunctive relief in trademark infringement litigations. This reduces the evidentiary burden on brand owners for obtaining injunctive relief, making it more likely that a brand owner alleging infringement will be able to successfully obtain an injunction to halt the allegedly infringing conduct.

CLOSING REMARKS

The Trademark Modernization Act of 2020 should be fully implemented and take effect on December 27, 2021. If you have any questions regarding any of the TMA’s provisions, or if you have a trademark related to a brand that you would like to federally register or wish to challenge another party’s registration of a trademark, please contact us at (303) 768-0123 or send us a contact inquiry here.