Congress Hands Trademark Owners New Tools to Fight Infringers and Challenge Fraudulent Registrations: The Trademark Modernization Act of 2020
The Trademark Modernization Act of 2020 (the “TMA”) was buried in the enormous COVID relief and stimulus bill (i.e., the Consolidated Appropriations Act for 2021), signed into law on December 27, 2020. The TMA amends federal trademark law in several significant ways of which trademark owners should take note.
Rebuttable Presumption of Irreparable Harm.
One of the most important types of relief trademark owners seek in litigation is injunctive relief, i.e., a court order requiring the accused infringer to stop infringing the trademark. To obtain injunctive relief, the trademark owner must convince the court that (among other things) the owner will suffer “irreparable harm” (harm that cannot be compensated by money damages) if the infringement continues. Federal appeals courts have been divided on whether irreparable harm can be presumed based on the infringement or must be determined on a case-by-case basis. The TMA amended the statute governing injunctive relief to specify that trademark owners now enjoy a rebuttable presumption of irreparable harm when: (1) seeking a permanent injunction, upon a court’s finding of trademark infringement or (2) seeking a preliminary injunction or temporary restraining order, upon showing a likelihood of success on the merits. This rebuttable presumption applies not only to trademark infringement claims, but also to claims of unfair competition, false advertising, dilution, and cyberpiracy. The amendment constitutes a major win for trademark owners who may be spared the time and expense of proving irreparable harm at the outset.
New Expungement and Reexamination Procedures for Registered Trademarks.
Prior to the TMA, registered trademarks could only be challenged by filing a lawsuit or commencing a cancellation proceeding, a dispute-resolution mechanism overseen by the U.S. Patent and Trademark Office’s (“USPTO”) Trademark Trial and Appeal Board (“TTAB”). Due to the massive number of fraudulent trademark registrations in recent years, the TMA created two new procedures to review and cancel certain existing registrations.
The first procedure allows anyone to challenge a registered trademark that was never used in commerce in connection with some or all of the goods or services identified in the registration. To do so, the challenger must submit a petition to the USPTO accompanied by a verified statement detailing the challenger’s "reasonable investigation,” sufficient to create at least an initial showing of nonuse. The USPTO will evaluate the petition and determine whether to initiate an expungement proceeding against the challenged registration. Until December 28, 2023, a petition can be filed against any registered mark that has been registered for at least three years. Beginning on December 28, 2023, petitions can only be filed against a registered mark between the third and tenth anniversary following the mark’s registration date.
The second procedure allows any person or entity to challenge a registered trademark that was not used in commerce in connection with some or all of the claimed goods or services, either before the underlying trademark application’s filing date (for trademarks filed on an “in use” basis) or its statement-of-use date (for trademarks filed on an “intent to use” basis). This procedure similarly requires submission of a petition along with a verified statement detailing the challenger’s "reasonable investigation.” The USPTO will evaluate the petition and determine whether to initiate a reexamination proceeding against the challenged registration. Under this procedure, the petition must be filed within five years after the mark’s registration date, except for registrations on the Supplemental Register (i.e., descriptive marks) which can be challenged at any time.
Each procedure should be a more efficient and less expensive alternative to a lawsuit or a TTAB cancellation proceeding. However, if the registered trademark survives a challenge brought under either of these procedures, no subsequent challenges against that same mark for the same goods and services will be allowed, regardless of the identity of the later challenger. These amendments will become effective on December 27, 2021.
Letters of Protest Now Formalized.
Prior to the TMA, the USPTO allowed any person or entity to submit a “letter of protest” regarding a pending trademark application. However, the process was not formally authorized by statute. The TMA formalizes the process to ensure the procedure will remain available to all interested parties for the foreseeable future. Any person or entity can now submit a letter of protest comprised of evidence relevant to any ground for refusing a pending trademark application (which must be identified), together with a concise description of each piece of evidence submitted. Once filed, the USPTO has two months to determine whether or not to include the letter’s evidence in the pending application’s record. This determination is final and non-reviewable. However, if the USPTO decides not to include that evidence in the record, this will not “prejudice any party’s right to raise any issue and rely on any evidence in any other proceeding.” This section will become effective on December 27, 2021. Filing a letter of protest also now requires a $50.00 filing fee.
The above changes to federal trademark law should provide trademark owners with more tools to fight infringers and challenge problematic or fraudulent trademark applications and registrations. As always, trademark owners should work with an experienced trademark attorney to properly use these new tools to meet their particular needs and situations.
About the Author: Michael B. Dvoren is a partner and intellectual property attorney at Jaburg Wilk, where he assists clients with various intellectual property and litigation matters. He has successfully registered hundreds of trademarks and can assist clients in all areas of trademark law.