The Trademark Modernization Act (TMA) was signed into law on December 27, 2020, and the United States Patent & Trademark Office (USPTO) recently announced its final rules for implementing the TMA, the majority of which will take effect on December 18, 2021. The TMA has several important implications for brand owners. The most significant changes involve the introduction of two new ex parte proceedings, which will provide a cheaper, more efficient alternative for cancelling registrations of marks that have not been properly used in commerce, but also means that applicants must take more care when filing new applications. In addition, the TMA restores the rebuttable presumption of irreparable harm for seeking injunctive relief under the Lanham Act, which will ease the burden on plaintiffs in trademark infringement cases. 

Expungement and Reexamination Proceedings

The TMA allows for two new ex parte, or non-adversarial, proceedings for cancelling U.S. trademark registrations that will go into effect on December 18, 2021:

  • Expungement will allow for cancellation of registrations for marks that have never been used in commerce. This ex parte action must be requested between three and 10 years after the registration date.
  • Reexamination will allow for cancellation of registrations for marks that were never used in commerce as of the application date or deadline to file a statement of use, depending on the filing basis. This ex parte action must be requested within the first five years of registration.

Both proceedings allow any party to petition for cancellation of some or all of the goods or services listed in a registration, following a reasonable investigation into the use of the mark for those goods or services. If the USPTO determines that the petitioner has established a prima facie case of non-use, the registrant will have an opportunity to present evidence of use, after which the USPTO will make a final decision regarding cancellation.

Expungement, in particular, is directed at registrations obtained by foreign applicants, who, unlike U.S.-domiciled applicants, are not required to show use of a mark in commerce to obtain a federal registration. Even if the marks have never been used in commerce, these registrations can still block later applications, with cancellation due to abandonment or fraud the only method for removing them before the TMA. The new expungement proceeding brings the U.S. in line with other jurisdictions that allow for the cancellation of a registration after a certain period of non-use, regardless of whether the registrant has any intent to resume or commence use of the mark.

Both expungement and reexamination will be invaluable tools to brand owners whose applications are refused based on a likelihood of confusion with a registered mark. Instead of filing a cancellation proceeding against a registrant at the Trademark Trial and Appeal Board, which could be expensive and lengthy, brand owners can make use of these new ex parte procedures. These proceedings could also be useful to parties when facing a cease-and-desist letter or infringement lawsuit that purports to claim priority based on a registered mark.

Potential applicants should also keep these proceedings in mind when clearing new marks. If a similar prior mark is identified in clearance searches, care should be taken to ascertain whether the mark has been used in commerce, as well as when the mark was first used. Third-party investigations into the use of marks may be useful when the information is not readily available. Further, these investigations will assist in meeting the USPTO's "reasonable investigation" requirement for both expungement and reexamination petitions.

As registrants could find that a reexamination petition has been filed against their registration, care should also be taken when one is preparing an application and making claims that a mark has been used in commerce. Applicants should ensure that they have offered each of the goods and services identified in the application under the applied-for mark, and across state lines, when making such claims. While the USPTO only requires specimens showing use of a mark for a single item within each class of a trademark filing, applicants may wish to submit evidence of use on additional items to stave off reexamination requests. 

A Rebuttable Presumption of Irreparable Harm

The TMA also restores the rebuttable presumption of irreparable harm for plaintiffs seeking injunctive relief under the Lanham Act. Section 34(a) of the Lanham Act now provides that a plaintiff is entitled to a rebuttable presumption of irreparable harm upon a finding of a likelihood of success on the merits in the case of a motion for a preliminary injunction, or a finding of infringement in the case of a motion for a permanent injunction. 

Thus, the TMA resolves a circuit split that developed following the Supreme Court's decision in eBay Inc. v. MercExchange, LLC, 547 U.S. 388 (2006), which held that a plaintiff must prove irreparable harm to obtain a permanent injunction even after infringement is found. With this codification, brand owners should find it easier to obtain injunctive relief, especially when the harm to a plaintiff's reputation from likelihood of confusion with an infringer's mark cannot be adequately remedied by monetary damages.

For more information about the Trademark Modernization Act of 2020 and the USPTO's final rules, you may view our recent trademark webinar using this link, which will remain active through March 8, 2022. CLE credit is available with registration.

Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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