Trademark Modernization Act

The U.S. Congress delivered a booster shot to our trademark laws at the end of 2020 with passage of The Trademark Modernization Act of 2020 (TMA), enabling trademark owners to better defend their brands and the integrity of the U.S. trademark system in a variety of ways, in the USPTO and in court.

The TMA provides new ways that ‘dead wood” trademark registrations, i.e., registrations for marks that are not actually used in U.S. Commerce, can be removed from the trademark register, either upon ex parte petition by an outside party, or at the initiative of the Director of Trademarks. These new procedures are styled as ‘Reexamination’ and ‘Expungement.’ Both procedures can be requested by a third party by filing the appropriate petition; the difference between them is the timing of the petition and of the alleged non-use of the mark. The PTO is directed to promulgate implementing regulations for effect from December 14, 2021.

A petition for Reexamination will assert that registration was granted on the basis of a false declaration that the mark was in use in commerce on all of the recited goods and services in the application at the ‘relevant date.’ In a challenge to a registration granted on a section 1(a) application (based on use in commerce), the relevant date is the filing date; for registration granted on a 1(b) application, the relevant date is the date of the allegation of use (whether it is a pre-publication Amendment to Allege Use or a post-publication Statement of Use). Thus, Reexamination looks essentially at whether the registrant submitted a truthful statement of use. Reexamination will be possible only in the first five years following the date of the subject registration.

The assertion in a petition for Expungement will be that the mark has never been used in U.S. commerce, and this petition can only be submitted at least three years after registration is granted, i.e., after the statutory 3-year period of non-use establishing prima facie evidence of abandonment pursuant to 15 U.S.C. § 1127. While Expungement can be aimed at any registration, it is likely to be particularly relevant to the only registrations that can be granted without an allegation of use: U.S. registrations under the Madrid Protocol. Expungement may only be requested before the expiration of ten years following the date of registration.

A positive outcome for the owner of the registration in either a Reexamination or an Expungement will have an estoppel effect for the goods or services to which the action was addressed, so they will not suffer repeated Reexamination or an Expungement challenges with respect to the same goods or services.

The TMA codifies a mechanism for third parties to submit evidence for consideration in the examination of pending trademark applications. This new feature essentially codifies Letter of Protest practice, which currently exists as an informal procedure created and administered at the discretion of the USPTO. Under this procedure, a party with evidence relevant to the prosecution of a particular application can submit that evidence to the Office of the Deputy Commissioner for Trademark Examination Policy (“Deputy Commissioner”) with the appropriate fee, an evidence index and a statement of the relevance to the examination process of each indexed item. If the Deputy Commissioner determines that the information the examining attorney should consider that information, the evidence and a statement of the relevant potential ground(s) for refusal are added to the application file for consideration by the examining attorney. The submitting third party has no further role at that point; pre-publication examination remains a strictly ex parte process. See 37CFR 149 and TMEP 1715 et seq. The Letter of Protest process procedure is now codified into law, with expanded grounds of protest available to petitioners, and the USPTO is directed to issue implementing regulations to go into effect December 14, 2021. Practitioner note: while denials of Letters of Protest are currently petitionable, the new statutory procedure is not.

On the litigation front, TMA elevates trademark owners’ ability to stop infringers, which was suppressed in some federal circuits following the 2006 U.S. Supreme Court ruling in eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388. In eBay, the Court ruled that it was wrong for lower courts to issue injunctions against patent infringement based on a presumption that infringement causes irreparable harm to the patent owner; the Court put a burden of proof on patent owners to demonstrate irreparable harm to support a request for an injunction. Until eBay, trademark owners widely benefitted from such presumption in when seeking injunctions against infringers of their marks, but some circuits applied the eBay to injunctions against trademark infringement as well as to patent infringement. Congress resolved the split between the circuits in Section 6 of the TMA, which adds to 15 U.S.C. 1116(a) a directive that restores a rebuttable presumption that irreparable harm sufficient to support an injunction flows from a showing of trademark infringement or at least a showing of a likelihood of success on the merits of the infringement case.

Finally, trademark practitioners should be aware that TMA allows the PTO to set a due date for reply to an office action sooner than the six-month statutory response time, provided that the applicant can request extensions up to the six-month maximum. Patent practitioners are long familiar with such an arrangement, in which monthly extensions of time for reply are available subject to the payment of extension fees which escalate with each month of extension.

Frederick Spaeth

Image Credit: Photo by Pressfoto on Freepik

This article is for informational purposes, is not intended to constitute legal advice, and may be considered advertising under applicable state laws. The opinions expressed in this article are those of the author only and are not necessarily shared by Dilworth IP, its other attorneys, agents, or staff, or its clients.