Client Alerts

The Trademark Modernization Act of 2020: What Trademark Owners Need To Know

About: Intellectual Property & Technology, Trademark/Copyright Litigation

On December 27, 2020, the Consolidated Appropriations Act, 2021, was signed into law. Most famous for the inclusion of the $900 billion COVID-19 stimulus package, the bill also included the Trademark Modernization Act of 2020 (TMA), which will be implemented on December 27, 2021. The TMA was introduced as part of a series of initiatives to strengthen the accuracy of the U.S. Patent and Trademark Office’s (USPTO) federal trademark register. The TMA strengthens a trademark owner’s ability to fight infringers and provides new means to challenge pending trademark applications and registrations.

The TMA amends federal trademark law in several significant ways for trademark owners, including:

Restoration of the Presumption of Irreparable Harm
There has long been a circuit split on whether harm could be presumed in a request for injunctive relief for a Lanham Act trademark violation, or if the equitable factors, including proof of irreparable harm, need to be weighed on a case-by-case basis. In eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006), the Supreme Court eliminated the presumption of irreparable harm in patent cases. At least two U.S. Courts of Appeals extended the eBay rule to eliminate the presumption of irreparable harm in Lanham Act trademark cases.

The TMA now clarifies that irreparable harm can be presumed in both requests for injunctive relief (upon a finding of trademark infringement) and requests for preliminary injunctive relief (upon a showing of likelihood of success on the merits). The TMA amends Section 34 of the Trademark Act to explicitly allow for a presumption of irreparable harm in federal trademark infringement actions.

This will make it much easier for trademark owners to enforce their marks, as they will no longer need to prove irreparable harm in order to get injunctions. Instead, if they can establish that their trademarks have been infringed, or if they can establish that they are likely to succeed on their trademark infringement claims, courts will be permitted to presume irreparable harm and issue the injunctions.

New Proceedings to Expunge and Reexamine Registrations
The TMA establishes two new procedures to cancel unused trademarks. These changes come as a result of a dramatic increase in applications filed by foreign applicants using fraudulent information such as doctored evidence of use of the applied-for mark in U.S. commerce. These procedures should provide a more efficient and less costly alternative to an infringement lawsuit or Trademark Trial and Appeal Board (TTAB) cancellation proceeding.

Previously, a registered trademark could be challenged only by filing a lawsuit in federal court or a TTAB cancellation petition. The TMA allows for two new procedures. First, anyone may file a petition with the USPTO to request that the USPTO Director institute a proceeding to expunge a trademark that has never been used in commerce. This petition must be filed between the third and 10th anniversaries of the registration date. Second, anyone may file a petition requesting a reexamination of a registration to remove some or all of the goods or services in the registration on the basis that the trademark was not used in commerce on or before the time the trademark owner declared to the USPTO that it was used in commerce.

Both petitions require: (1) a verified statement establishing that a reasonable investigation was conducted to determine whether the trademark had been used in commerce with the specified goods or services; (2) supporting evidence; and (3) the associated fees. If the trademark registrant is able to show proper use, no one else will be permitted to file an expungement or reexamination petition against the registration.

New Processes in Trademark Prosecution
The TMA introduced new, formalized processes in trademark prosecution, including discretionary shortened response deadlines to office actions and a formalized letter of protest procedure.

The TMA is intended to strengthen both the accuracy of the USPTO’s federal trademark register and the rights of trademark owners by providing trademark owners with new tools to fight infringers. Trademark owners should consult their trademark counsel to determine how to fully take advantage of these news procedures.