Trademark Modernization Act of 2020: What Brand Owners Should Know

In case you missed it, President Trump signed the Trademark Modernization Act of 2020 (TMA) into law on December 27, 2020. The TMA, which garnered bi-partisan support and was included in the COVID-19 Economic Relief Bill, establishes the following four changes to current trademark laws:

1. It formalizes a process for submitting evidence against pending third party trademark applications;
2. It enables the USPTO to shorten Office Action response deadlines from the current six-month period to anywhere between two months and six months;
3. It creates ex parte Expungement and Reexamination proceedings as new methods for seeking cancellation of a third-party trademark registration; and
4. It restores the rebuttable presumption of irreparable harm for plaintiffs seeking injunctive relief in trademark infringement cases.
    

These changes could impact brand owners in several ways, some of which are summarized below. However, a significant takeaway from these changes is that it will soon be easier to lose a trademark registration for lack of sufficient use of the mark.

Notably, the USPTO Director has one year to establish procedures and fees for many of these changes, so it likely will be some time before we start to see the TMA’s impact.

I. Submitting Evidence Against a Third-Party Application

The USPTO currently permits parties to submit a “Letter of Protest” against a third-party application any time before the application enters the publication phase. A Letter of Protest enables a party to submit evidence to the USPTO that supports a ground for refusing registration of another party’s applied-for mark. Currently, the USPTO does not have a formal process in place for submitting or reviewing Letters of Protest, which has resulted in underutilization of this process. 

To improve this process, the TMA tasks the Director of the USPTO with establishing a formal procedure for parties to submit evidence supporting a registration refusal against another party’s application. Although we do not have details on the procedure yet, the TMA requires the Director to decide whether the Director will send submitted evidence to the application’s Examining Attorney for consideration within two months of receiving a third-party submission. The Director’s decision in this regard will be final and non-reviewable. If the Director determines that the evidence should be made part of the application record, then it is likely that the Director will also direct the Examining Attorney to review that evidence within a defined period during the examination process.

Takeaway for Brand Owners: You may use this process to attempt to intervene in a third-party application for a trademark that may conflict with your mark, or that you believe should otherwise be refused registration, by asking the USPTO to consider evidence that it may not otherwise have in the examination record. Of course, this process may be disadvantageous to brand owners by making it more difficult to secure a trademark registration. To help make the most of this new process, brand owners should consider setting up trademark watch services that alert the brand owner to pending applications for marks that may conflict with the brand owner’s mark. Brand owners should also consider any potential negative consequences prior to submitting any evidence against another party's application.

II. Flexible Office Action Response Periods

Under the USPTO’s current practice, applicants must respond to issued Office Actions within six months from the issuance date to avoid the abandonment of an application. Many issues raised in Office Actions may be resolved fairly quickly, so the TMA enables the USPTO to set shorter response deadlines (anywhere between two months and six months from the office action issue date). If the USPTO issues an Office Action with a response deadline that is less than six months from the issuance date, the applicant may extend the response deadline.

Takeaway for Brand Owners: Pay attention to the response deadline if you receive an Office Action for your trademark application, as we may start seeing much shorter response periods than the six-month period to which brand owners are accustomed.

III. Ex Parte Expungement and Reexamination Proceedings

The USPTO currently permits inter partes Cancellation proceedings against trademark registrations, which occur before the Trademark Trial and Appeal Board (TTAB). There are a number of grounds on which someone may petition to cancel a third-party registration, including the registration owner’s abandonment or lack of use of the registered mark in interstate commerce. Cancellation proceedings are similar to court litigation in that both parties (the petitioner and the registration owner) engage in the proceeding and try to prove their case to the TTAB.

The TMA establishes new ex parte Expungement and Reexamination proceedings, which may also be used to seek cancellation of a registration based on the owner’s lack of use of the mark in commerce. These proceedings contrast with the existing Cancellation proceedings in that the petitioning party will not engage in the proceeding after it files its petition to the USPTO Director requesting the Director to initiate one of these proceedings. Also, in contrast to the existing Cancellation proceedings, the USPTO Director may commence an Expungement or Reexamination proceeding on his or her own initiative.

The procedures implemented by the USPTO in Expungement and Reexamination are expected to be similar, but the timing in which a party may initiate each proceeding will differ. The Expungement process may be initiated against a registration anytime between the third and tenth year following the registration date. An exception to this rule is that, within the first three years of the TMA’s enactment, an Expungement proceeding may be initiated against a registration any time after the third year following the registration date, even after the tenth year following the registration date.

In contrast, a Reexamination Proceeding may be initiated against a registration any time before the fifth year following the registration date for any registration based on use in commerce (under Lanham Act Section 1(a)), but not against a registration that is based on a foreign registration (under Lanham Act Section 44(e)) or that is based on an extension of protection of an International Registration (under Lanham Act Section 66(a)).

For both proceedings, the USPTO’s decision to cancel a registration is appealable, and these proceedings may be initiated against registrations that registered before or after enactment of the TMA.

Takeaway for Brand Owners: Be sure that you are actually providing all of the goods and services listed in your trademark filing, or risk losing part or all of the registration for lack of use in commerce.

IV. Rebuttable Presumption of Irreparable Harm for Trademark Infringement Plaintiffs

In order for a trademark infringement plaintiff to secure a court-ordered injunction against a defendant to stop the defendant from continuing to use the disputed mark, the plaintiff must prove several elements, including that the plaintiff will be irreparably harmed without the injunction. In recent years, the federal circuit courts in the United States have been split on whether the irreparable harm element should be presumed in trademark infringement cases where the court has found either infringement (in the case of a permanent injunction) or that the plaintiff is likely to be successful on the merits of its infringement claim (in the case of a preliminary injunction).

The TMA resolves this split by codifying into law that trademark infringement plaintiffs shall be entitled to a rebuttable presumption of irreparable harm without the injunction upon a finding of trademark infringement or likelihood of success on the merits, depending on whether the plaintiff is seeking a permanent or preliminary injunction.

Takeaway for Brand Owners: Regardless of venue, trademark registration owners now will have a favorable presumption of irreparable harm without a court-ordered injunction if successful or likely to be successful in proving that the defendant has infringed the trademark registration owner's trademark rights.