What is the Trademark Modernization Act of 2020 and why does it matter?
By: Julie Tolek
The Trademark Modernization Act of 2020 (TMA) was signed into law on December 27, 2020 as part of the COVID-19 relief and government funding bill and will go into effect on December 27, 2021.
According to the United States Patent and Trademark Office (USPTO), the TMA contains “…initiatives to improve and strengthen the accuracy and integrity of the federal trademark register. The TMA provides new procedures to challenge applications and registrations with inaccurate claims of use. These new procedures will help U.S. businesses make better informed marketing and branding decisions regarding their trademarks.”[i]
What does this mean, practically speaking?
The TMA introduces significant amendments to the Lanham Act (also known as the Trademark Act of 1946), which is the federal statute that governs trademarks, service marks, and unfair competition. There are now several more issues and options to consider when registering your own trademark or considering issues with other trademarks. Here are a few of them:
Two New ex parte Post-Registration Proceedings to Cancel Unused Trademarks
One of the requirements to be granted trademark protection by the USPTO is that the mark must be used in commerce. For the purpose of obtaining federal registration, “commerce” means all commerce that the U.S. Congress may lawfully regulate; for example, interstate commerce or commerce between the U.S. and another country. “Use in commerce” must be a bona fide use of the mark in the ordinary course of trade, and not use simply made to reserve rights in the mark.[ii]
Under the new TMA proceedings, a third party may file an ex parte petition requesting the USPTO Director to reexamine or expunge a trademark registration that has never been used in commerce or that was not used in commerce before a specific date. [iii]
- Removal/Expungement: an expungement procedure must be brought between three and ten years after the trademark registration date. A third party may now request removal of some or all of the goods and services in a registration because the registrant never used the goods or services in commerce. [iv]
- Reexamination: A third party may now request removal of some or all of the goods and services in a registration because the registrant never used the goods or services in commerce on or before a specific relevant date. Such dates might include the date the underlying use-based application was filed, the date an amendment to allege use for an underlying Section 1(b) application was filed, and the expired period of time for filing a statement of use for an underlying Section 1(b) application. This reexamination procedure must be brought within the first five years after registration and will typically involve registrations with questionable specimens. [v]
In the case of either petition, the Director of the USPTO will determine if expungement or reexamination establishes prima facie evidence that the trademark was never used in commerce or was not used in commerce as of the date that was listed on the registration. If the Director determines this is the case, the proceeding will begin, and the registrant will be required to show evidence of use or excusable nonuse. If the registrant is unhappy with the final decision, they may appeal to the Trademark Trial and Appeal Board (TTAB).[vi]
The Director may also, independently of a third party, institute either of these proceedings if the Director discovers relevant information to establish prima facie evidence for either case.[vii]
New Ground for TTAB Cancellation
The TMA also introduces a new ground for cancellation of registered marks. This new ground is similar to an expungement claim but allows more time for the petition to be brought, at any time following three years from registration.[viii]
Response Times to Office Actions
The TMA further modifies regulation of time to respond to office actions. Trademark Office Actions at the USPTO are typically given a six-month response deadline. The USPTO will now have authority to set a shorter response time, but no less than 60 days. The applicant may submit requests for extension of time for this deadline.[ix]
A Rebuttable Presumption Against Irreparable Harm
The TMA also provides that a trademark owner seeking injunctive relief is entitled to a rebuttable presumption of irreparable harm upon a finding of infringement or a likelihood of success on the merits.[x]
These new proceedings and rule changes made available by the TMA add options and new perspectives to consider when contemplating trademark application and registration, trademark enforcement and defense, and trademark portfolio management strategy. The nuances of developing a branding and trademark filing and enforcement strategy should be an ongoing, dynamic discussion with your attorney; markets are ever evolving, and a trademark portfolio management strategy should allow the space to evolve with them.