January 21, 2021Client Alert

Trademark Modernization Act of 2020 Signed into Law, Establishing New Options and Standards for Enforcing Trademark Rights

On December 27, 2020, the Trademark Modernization Act of 2020 (TMA) was enacted into law as part of the broader COVID-19 relief legislation. The TMA addresses a number of trademark-related issues and notably (1) provides new, expedited mechanisms for opposing and canceling trademark registrations before the United States Patent and Trademark Office (USPTO), (2) grants the USPTO flexibility in setting office action response deadlines, and (3) clarifies the standard and evidentiary burden for securing injunctive relief in federal trademark infringement litigation.

Establishment of New, Expedited Ex Parte Procedures for Challenging Fraudulent or “Deadwood” Registrations

In an effort to combat the proliferation of trademark registrations fraudulently obtained by foreign applicants, the TMA provides that any party may (1) petition the USPTO to expunge a registration for a trademark that has never been used in commerce, or (2) petition the USPTO to re-examine any registration on the grounds of non-use as of the date of the registrant’s declaration under oath that the mark is in use (for up to five years from the date of such declaration). The USPTO also may initiate such an expungement or re-examination proceeding on its own. In terms of ex parte challenges, anyone may petition to expunge a registration by identifying the registration and the goods or services alleged to have never been used, and by providing evidence that the petitioner conducted a “reasonable investigation” of registrant’s non-use. If the USPTO finds that the petitioner has made a prima facie case of non-use, then the USPTO will commence expungement proceedings by notifying the registrant. However, if the challenge fails, future challenges against the same registration based on non-use of the same goods or services will be estopped.

These new procedures – which will go into effect within one year – will offer trademark holders and applicants an expedited method for expunging fraudulent registrations that otherwise may serve as a basis for refusal of their trademark applications. Such procedures are intended to be less costly and time-consuming than current trademark cancellation proceedings and are meant to address a deluge of fraudulent trademark filings in recent years, especially from abroad. The TMA requires the USPTO to, within one year, issue regulations further outlining the new expungement and re-examination proceedings.

Shortening of Office Action Response Times

The TMA authorizes the USPTO – through promulgating regulations – to set office action response deadlines for a time period ranging from 60 days to six months, depending on the type of office action. Previously, all office actions came with a six-month deadline, with no extensions possible. Under the TMA, while the initial response deadlines for some office actions may be shorter than six months, applicants may seek extensions of time to receive a six-month response period. Trademark applicants should be mindful of the potentially shorter response period when receiving office actions under the TMA.

Modification of Standard for Injunctive Relief in Trademark Infringement Litigation

Following the Supreme Court’s opinion in eBay v. MercExchange, LLC, 547 U.S. 388 (2006), the law in some federal appellate circuits required plaintiffs in trademark infringement lawsuits to establish irreparable harm prior to securing an injunction. The TMA resolves the circuit split and establishes a rebuttable presumption of irreparable harm whenever a plaintiff prevails in asserting certain trademark rights, whether for purposes of determining if the plaintiff is entitled to a preliminary injunction or permanent injunction. This rebuttable presumption of irreparable harm lowers the evidentiary burden for trademark infringement claimants seeking injunctive relief against infringers.

If you have questions about the Trademark Modernization Act or other trademark matters, please contact your Michael Best attorney.

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