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Trademark Modernization Act: New Procedures to Challenge Registrations for Non-Use

Mar 05, 2021

The Trademark Modernization Act of 2020 (“TMA”), signed into law on December 27, 2020, amends the Lanham Act to create new expungement and reexamination procedures to challenge registrations with inaccurate claims of use in commerce. The new procedures allow a party to unilaterally seek to cancel a registration in whole or in part outside of a time-consuming and contested inter partes proceeding before the Trademark Trial and Appeal Board (“TTAB”). Among other things, the new procedures are intended to remove deadwood from the register and to address the increasing number of trademark applications and registrations covering marks not in use in commerce. As detailed below, the TMA also codifies the existing Letter of Protest procedure, creates a new expungement claim before the TTAB, and restores a rebuttal presumption of irreparable harm in certain proceedings. The TMA also allows the U.S. Patent and Trademark Office (“PTO”) to set shorter office action response periods. During the next several months, the PTO will establish rules and regulations to implement the TMA, which becomes effective on December 27, 2021. 

1. Expungement & Reexamination to Cancel Registrations for Non-Use

Section 16A of the TMA creates new ex parte expungement procedure to “petition to expunge a registration on the bases that the mark has never been used in commerce on or in connection with some or all of the goods or services recited in the registration.” A petition for expungement may be filed, or instituted on the Director’s own initiative, at any time following the expiration of 3 years after the date of registration and before the expiration of 10 years following the date of registration. For a period of 3 years after the date of enactment of the TMA, a petition for expungement may be filed or instituted by the Director at any time following the expiration of 3 years after the date of registration.  A similar new expungement ground for cancellation will be available before the TTAB at any time following the expiration of 3 years after the date of registration, but not limited to before 10 years following the date of registration.  The new expungement procedure is available against registrations issued under Sections 1(a), 44(e), and 66(a).

A petition for ex parte expungement must: (1) identify each registration at issue; (2) identify each good and service recited in the registration for which it is alleged the mark was never in use in commerce; (3) include a verified statement that sets forth the reasonable investigation the petitioner conducted to determine that the mark was never in use in commerce; (4) include supporting evidence on which the petitioner relies; and (5) be accompanied by a fee prescribed by the Director. The PTO will promulgate regulations regarding fees, response times, “reasonable investigations,” and types of evidence required.

In addition, Section 16B of the TMA establishes a reexamination procedure where any person may “file a petition to reexamine a registration on the basis that the mark was not in use in commerce on or in connection with some or all of the goods or services recited in the registration on or before the relevant date.” The “relevant date” for determining use in commerce under reexamination means the date when a use-based application was initially filed under Section 1(a), the date an amendment to allege use is filed under Section 1(c), and the date a statement of use is filed under Section 1(d).  A petition for reexamination may be filed, or instituted on the Director’s own initiative, “at any time not later than 5 years after the date of registration.” The new reexamination procedure is available against registrations that ultimately issue under Section 1(a) and is not available against registrations issued under Sections 44(e) and 66(a).

The Director will determine whether the petition establishes a prima facie case to institute an expungement or reexamination proceeding and order registrant to respond with evidence showing use in commerce beyond the specimens of record. For an expungement proceeding regarding registrations issued under Section 44(e) or Section 66(a), registrant may offer evidence showing that nonuse is due to special circumstances that demonstrate excusable nonuse. After reviewing the evidence, the Director will decide whether to remove some or all of the challenged goods or services from the registration. If the Director determines that the registrant had used the trademark with some or all of the challenged goods or services, no new or further ex parte expungement challenges will be permitted, regardless of the identity of the petitioner.

If the Director grants a petition for expungement or reexamination, the registrant may appeal the decision to the TTAB, and thereafter to the U.S. Court of Appeals for Federal Circuit.

These new exparte procedures and expungement cancellation claim should help businesses clear the register of potentially conflicting marks that do not appear to have been in use in commerce on or before the relevant filing date or since registration. It will also provide another tool to challenge registrations, including those issued to foreign domiciliaries, that appear to have overbroad identifications of goods and services or digitally altered or fabricated specimens that were potentially not in actual use.

2. Codifying Letter of Protest Procedure

The TMA codifies existing Letter of Protest procedures that allows third parties to submit evidence and challenge a trademark application during the examination stage. Under the TMA, the Letter of Protest submission “shall identify the ground for refusal and include a concise description of each piece of evidence submitted in support of each identified ground for refusal.”  A Letter of Protest allows third parties to challenge a pending trademark application on grounds of likelihood of confusion with a prior registered mark, descriptiveness, genericness and other grounds, with supporting evidence attached to the Letter of Protest. See TMEP § 1715.01(a).  In a recent  “Trademark Alert,” the PTO also stated that it is discontinuing the Specimen Protest Pilot Program in favor of allowing a Letter of Protest if a party believes an application contains specimens that have been digitally altered or fabricated.  Within two months after the filing date, the PTO Director “shall determine whether the evidence should be included in the record of the application.” 

3. Flexible PTO Office Action Response Periods

Under the TMA, the PTO will have the authority to set office action response periods that are shorter than the current six-month response deadlines, but not less than 60 days.  An applicant may request extensions to have a full six months to respond.  Any extension request must be filed on or before the response deadline originally set by the PTO. The Director of the PTO will set the procedures, deadlines, and fees for extensions by rule making.

4. Rebuttable Presumption of Irrepreable Harm for Injunctive Relief

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.

Disclaimer:  This news alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice.