US Trademark Modernization Act Establishes New Procedures

The Trademark Modernization Act of 2020 (TMA) seeks 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 should help U.S. businesses make better informed marketing and branding decisions regarding their trademarks. A major concern over the years has been how the US PTO dealt with false claims of use and fake specimens and the resulting impact on legitimate trademark owners. The TMA provides significant relief for trademark owners’ efforts to combat these fraudulent actions. As noted below, this legislation provides new mechanisms for challenging trademark applications and registrations on non-use grounds. In addition, enforcement rights are enhanced by making it easier to obtain injunctive relief in federal court.

The TMA was signed into law on December 27, 2020, and will be implemented by December 27, 2021. The text of the TMA (H.R. 6196) is available here and the key provisions are discussed below.
https://www.congress.gov/bill/116th-congress/house-bill/6196/text

Focusing on the trademark aspects the act provides for the following procedures detailed at https://www.uspto.gov/trademarks/laws/2020-modernization-act:

Two new ex parte post-registration proceedings to cancel unused trademarks
A party can file a petition to request that the USPTO Director institute a proceeding to expunge (remove) or reexamine a registration for a trademark that either has never been used in commerce or was not used in commerce before a particular relevant date. Both petitions will generally require a verified statement establishing that a reasonable investigation was conducted to determine whether the trademark had been used in commerce with specified goods or services, evidence, and associated fees.
• Expungement (Removal)
A party may request that we remove some or all of the goods or services in a registration because the registrant never used the trademark in commerce with those goods or services. This new procedure must be brought between three to ten years after the registration date.
• Reexamination
A party may request that we remove some or all goods or services in a registration on the basis that the trademark was not in use in commerce with those goods or services on or before a particular relevant date. This new procedure must be brought within the first five years after the trademark registers and is generally directed at registrations where a questionable specimen showing use in commerce of the trademark was submitted during examination of the underlying application.

New ground for a TTAB cancellation proceeding
This new ground is substantively equivalent to the expungement claim that a registered trademark has never been used in commerce, as described above, but may be brought at any time following three years from registration.

Flexible response periods for office actions
The US PTO has the authority to set office action response periods that are shorter than the current six-month response time but not less than 60 days. The applicant may request extensions to have the full six months. The Director may set the number, length and fee for extensions of time by rule.

Third-party submissions during examination (Letters of Protest)
The TMA provides statutory authority for the longstanding USPTO Letter of Protest practice that allows third parties to submit evidence to the USPTO, prior to registration, regarding a trademark’s registrability. The TMA sets a two-month deadline for the USPTO to act on these submissions and authorizes the US PTO to charge a fee for them. The TMA also provides that the USPTO’s decision on whether to include the evidence in the application record is final and non-reviewable. The USPTO has issued rules setting out procedures and a $50 fee for these submissions that went into effect on January 2, 2021. Consistent with the requirements of the TMA, the rule requires that the submission must identify each legal ground for an examining attorney to refuse registration or issue a requirement, include evidence that supports those grounds and a concise description for each piece of supporting evidence, and pay the prescribed fee. New regulations are not anticipated to implement this provision.

Creating a uniform rule establishing a rebuttable presumption of 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. This uniform rule will help trademark owners enforce their rights against infringers in federal court. No rulemaking is necessary to give effect to this provision.

If you have specific questions concerning trademark issues, please contact Terrence J. McAllister, Trademark Partner and Jeffrey J. Scepanski, Trademark Associate.

Terrence J. McAllister, Trademark Partner

Jeffrey J. Scepanski, Trademark Associate