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The Trademark Modernization Act of 2020: A Summary

The Trademark Modernization Act of 2020 (TMA), enacted on December 27, 2020 as part of the coronavirus relief bill, made significant changes to federal trademark law.  The TMA creates a handful of new tools which trademark owners can use to challenge false or inaccurate claims of trademark rights.  It also resolves a fifteen-year-old circuit split involving the issue of irreparable harm in trademark actions for injunctive relief.  Below is a summary of the TMA’s provisions and what to expect when they are implemented by the U.S. Patent and Trademark Office (USPTO) later this year.

New Petitions for Expungement, Reexamination and Cancellation

Expungement

The TMA allows anyone to file a petition to expunge (remove) good and services from a trademark registration on the basis that the mark has never been used in commerce in connection with those goods and services.  The petitioner has to conduct a “reasonable investigation” into the non-use and submit facts and supporting evidence to the USPTO.   If the Director of the USPTO determines that the petitioner has presented a sufficient case of non-use, then the registration will be examined by a USPTO examining attorney for a decision of whether to cancel the registration with respect to the relevant goods or services.  A petition can be filed anytime between the third and tenth anniversary of the registration date.  However, during the first three years of this new expungement program, a petition can be filed on registrations that are older than 10 years.  The TMA provides for a similar expungement procedure at the initiative of the Director of the USPTO rather than through a petition.

Reexamination

In addition to a petition for expungement, the TMA allows anyone to petition the USPTO to reexamine a registration on the basis that the mark was not used in commerce in connection with all or some of the goods and services listed on the registration certificate.  The procedure for reexamination is similar to the one for expungement.  For example, the petitioner must conduct a “reasonable investigation” into the non-use and present evidence of it to the USPTO, and a USPTO examining attorney will conduct a review.  However, while the request for expungement is based on the registrant having never used the mark on the goods or services, the request for reexamination is based on the registrant having not used the mark on the goods or services before a particular date.  In the case of a used-based application, the relevant date is the application filing date.  In the case of an intent-to-use application, the relevant date is the date that an amendment to allege use was filed.  A petition for reexamination can be made at any time until the fifth anniversary of the registration date.  And like an expungement review, a reexamination review can also be brought at the initiative of the Director of the USPTO.

Cancellation

Currently, except in special situations, a petition to cancel a trademark registration must be filed with the USPTO within five years of the mark’s registration date.  The TMA will allow a petition to cancel to be filed at any time after the third anniversary of a registration date on grounds that the registered mark has never been used in commerce in connection with some or all of the goods and services listed on the registration certificate.  The objective of a petition to cancel is similar to that of a petition to expunge or reexamine a registration.  However, while a petition to expunge or reexamine triggers a non-adversarial review by a USPTO examining attorney, a petition to cancel initiates an adversarial proceeding at the Trademark Trial and Appeal Board.  This sort of proceeding can ultimately be a more effective means of challenging a registration, but is more akin to litigation than is expungement or reexamination.

Why These New Procedures Matter

The TMA’s new petitions for expungement, reexamination and cancellation should be received as welcomed improvements to federal trademark law.  Inaccurate and false claims of use of registered marks on goods and services have become a major problem and decreased the reliability of the USPTO’s trademark database as source of information on use of trademarks in commerce.  These claims have also put legitimate trademark users (and intent-to-users) in difficult positions of having to alter business decisions or exercise uncertain and expensive means to challenge disingenuous trademark claims.  Hopefully these new tools established by the TMA will reduce “clutter” on the USPTO’s trademark database and increase the database’s utility to businesses.

New Shortened Response Times

Applicants are typically given six months in which to respond to application comments from USPTO examiners.  The TMA allows examiners to shorten this response deadline to as little as 60 days.  Although applicants will be permitted to extend a response deadline back out to six months, the extensions will require filings (and filing fees) with the USPTO, similar to the office action response and extension process for patent applications.  While this could be perceived as merely a new fee mechanism for the USPTO, these flexible response times available to USPTO examiners should help to resolve application issues more quickly, which will be an overall improvement to the system.

Formal Letter of Protest Procedure

The USPTO has had a longstanding but informal “letter of protest” process by which anyone can submit evidence to the USPTO that weights on the registerability of a pending trademark application.  A letter of protest can be an effective tool to a registrant who identifies a concerning third-party application in the early stages of the application process.   The TMA has formalized the letter of protest process, which, while perhaps a good thing, is unlikely to result in any significant changes to the process.  The Director of the USPTO must adopt procedures for the new formal letter of protest process, which will likely be similar to the current procedures.

What to Expect Next

The USPTO is currently drafting rules to implement the TMA’s provisions.  At the USPTO’s March 1, 2020 virtual roundtable discussion on the TMA, the USPTO indicated that the rules are likely to address issues such as: (a) what constitutes “reasonable investigation” into non-use of a trademark; (b) what are the general types of evidence acceptable to support a case for non-use; (c) what should the new response and extension times be; (d) what limits should be set on the number of petitions that can be filed against a registration; and (e) how should expungement, reexamination and cancellation proceedings relate to one another with respect to a particular trademark registration.  The USPTO also stated that it will issue public notice of its proposed rules sometime this spring, followed by the public roundtable to collect feedback on the rules.  The rules will be finalized no later than December 2021 and the TMA’s expungement, reexamination and cancellation procedures must be implemented by the USPTO no later than December 27, 2021.

Rebuttable Presumption of Irreparable Harm

Aside from its affects at the USPTO, the TMA creates a statutory presumption of irreparable harm for a plaintiff that is able to successfully show trademark infringement in an action for injunctive relief.  Previously, in the wake of the U.S. Supreme Court’s decision in eBay Inc. v. MercExchange, 547 U.S. 388 (2006), U.S. appellate courts were divided over whether irreparable harm could be presumed in trademark cases for injunctive relief.  Now that this split has been resolved, a trademark owner experiencing infringement can proceed with greater confidence in obtaining an injunction regardless of the circuit in which the proceeding is brought.  This presumption of irreparable harm went into effect along with the TMA on December 27, 2020.


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