What Should Trademark Owners Know About The Trademark Modernization Act?
Published in NH Bar News - 6/16/2021  In recent years, the U.S. Patent and Trademark Office ("USPTO") has seen a substantial increase in the number of trademark applications and registration maintenance filings with fraudulent or inaccurate claims of use in commerce. Although subject to third-party cancellation challenges, inaccurate registrations clutter the trademark register and make it difficult for businesses to adopt and/or register new marks. Signed into law on December 27, 2020, the Trademark Modernization Act of 2020 ("TMA") aims to improve the accuracy of the federal trademark register. Expected to be fully implemented by the end of 2021, the TMA makes several important changes to U.S. trademark law and provides the USPTO and trademark owners with powerful new tools for challenging problematic applications and registrations. Third-party Letters of Protest  The TMA codifies the USPTO's informal "Letter of Protest" practice, allowing third parties to submit evidence regarding a mark's registrability during the examination period. In a Letter of Protest submission, a third party must (1) identify each valid, legal ground for the examining attorney to refuse registration or issue a requirement, (2) include relevant evidence supporting each ground, (3) provide an itemized index of evidence with a concise, factual description of the evidence, and (4) pay a $50 fee. Upon submission, the USPTO has two months to decide whether the evidence should be included in the record. Such determination is final and non-reviewable. If filed properly, a Letter of Protest provides trademark owners with an efficient, cost-effective way to challenge problematic applications by competitors. To meet submission deadlines, trademark owners may consider using a trademark watch service to monitor new applications conflicting with their marks. Ex Parte Cancellation Procedures  The TMA provides two new ex parte procedures for challenging existing registrations on the grounds of non-use: expungement and reexamination. Expungement challenges registration on the grounds that the mark was never used in commerce on or in connection with the goods or services listed in the registration. In contrast, reexamination targets trademarks that were not in use in commerce on or before a specific "relevant date" (e.g., the filing date for a use-based application or the stated dates of first use). An expungement proceeding may be initiated anytime between the third and tenth year following registration. However, a reexamination proceeding must be brought within five years of the registration date. Anyone may petition the USPTO to institute an expungement or reexamination proceeding  standing is not required. Petitions must include supporting evidence and a verified statement that the petitioner conducted a "reasonable investigation" to determine whether the trademark was used in commerce with the specified goods or services. If the petition establishes a prima facie case of non-use, the USPTO will institute the proceeding and provide the registrant with an opportunity to submit evidence of use or excusable non-use. Based on the evidence, the USPTO may remove some or all of the challenged goods or services in the registration. This determination is appealable to the Trademark Trial and Appeal Board ("TTAB") and the U.S. Court of Appeals. If the registrant establishes use, no new or further ex parte expungement or reexamination challenges are permitted against the same goods or services. These new ex parte procedures are more efficient and cost-effective than cancellation proceedings before the TTAB. Unlike existing cancellation procedures, third-party petitioners are not involved in expungement and reexamination proceedings after filing the petition. The USPTO may also initiate these proceedings sua sponte upon discovery of information supporting a prima facie case. While these new proceedings provide trademark owners with opportunities to challenge problematic marks blocking registration, they also expose a registrant's own registrations to opposition from competitors. If a mark is not used on or in connection with all of the goods and services listed, a registrant risks losing part or all of the registration if challenged for non-use. Moving forward, trademark owners should consider archiving evidence of use for each good and service listed in the registration as part of their portfolio maintenance. Although only one use specimen is required per class in registration and maintenance filings, regularly archiving evidence of use could help trademark owners quickly dispose of expungement and reexamination proceedings if the mark is challenged for non-use. Shortened Response Periods for Office Actions  Applicants currently have six months to respond to an office action from the USPTO. Under the TMA, the USPTO has authority to shorten these response deadlines to a period not less than 60 days. While extensions are available up to the traditional six-month period, extension fees may apply. This TMA provision intends to increase examination efficiency and quickly eliminate applications that will eventually be abandoned. The USPTO has not determined what issues could trigger a shortened response deadline. Following implementation, trademark applicants and practitioners should pay close attention to office action response deadlines and make timely extension requests when applicable. Restoration of the Presumption of Irreparable Harm  Effective upon enactment, the TMA creates a uniform rule establishing a rebuttable presumption of irreparable harm for plaintiffs seeking injunctive relief in federal trademark infringement actions. In eBay Inc. v. MercExchange. 547 U.S. 388 (2006), the Supreme Court eliminated a similar presumption in patent infringement cases. Circuit courts split on whether the eBay rule applied in trademark infringement matters, which led several courts to invalidate the presumption and encouraged forum shopping among plaintiffs. To resolve this issue, the TMA amends the Lanham Act to include a rebuttable presumption of irreparable harm upon a finding of infringement or likelihood of success upon the merits. This eases the evidentiary burden on plaintiffs and increases the likelihood of obtaining preliminary and permanent injunctive relief in trademark infringement actions. Looking Forward  While the TMA provides powerful tools and protections for legitimate trademark owners, its provisions also expose applications and registrations to new challenges by competitors. As the USPTO continues implementation efforts in the upcoming months, trademark owners will want to consider how these new rules and regulations may impact their ability to protect and advance their brands. 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.