What is the trademark modernization act (TMA)?

On December 27, 2020, Congress signed the Trademark Modernization Act (TMA) into law as part of the COVID-19 relief and spending measures. The TMA listed several purposes for its ratification, of which we highlight several of key importance here:

1. Resolving the Circuit Split: Reinstating Rebuttable Presumption of Irreparable Harm

Traditionally, when seeking injunctive relief, trademark owners were granted the presumption of irreparable harm upon a finding of likelihood of confusion. However, in 2006, the Supreme Court ruled, in the context of a patent case, that a plaintiff was not entitled to this presumption but rather must prove irreparable harm. (See eBay Inc. v. MercExchange, 547 U.S. 388 (2006)). Since then, courts had split on whether trademark plaintiffs must also prove irreparable harm or enjoy the presumption. The TMA resolves the issue, re-implementing the presumption of irreparable harm. The result is a plaintiff-friendly rule that should be taken into account when mark owners are determining whether to sue or defend non-frivolous suits brought against them.

2. New Ex Parte Proceedings for Cancelling Unused Trademarks after Registration

The TMA establishes two new proceedings to challenge a mark on the grounds of non-use. These mechanisms were created to combat the uptick in digitally-altered, fraudulent trademark applications to the USPTO. The two proceedings are ex parte expungement and reexamination.

Expungement: For Marks Never Used in Commerce

The ex parte expungement proceeding challenges a mark that was never used in commerce in connection with the goods and services stated in the application. The petition may be brought “at any time following the expiration of three years after the date of registration and before the expiration of ten years following the date of registration.”

Reexamination: For Marks Not in Use on the Filing Date

The ex parte reexamination proceeding challenges a mark that was not used in commerce in connection with the goods and services stated in the application on or before the relevant date. The petition can be filed “at any time not later than five years after the date of registration of a mark registered based on use in commerce.”

This is a vital development in trademark law because it represents a check against not only domestic applicants playing fast and loose with specimens and use dates but also against foreign entities and other organizations that are fraudulently registering marks seeking to corner the US market with flimsy bases to do so.

These mechanisms should be considered carefully and used effectively when legitimate mark owners find themselves unable to register their marks due to third parties’ weak or unsupportable prior applications and registrations.

3. Other Grounds for Cancellation

Although functionally similar to the expungement proceeding, above, the third mechanism for cancellation of an unused mark is available “any time after the three-year period following the date of registration, if the registered mark has never been used in commerce on or in connection with some or all of the goods or services recited in the registration.” This addition expands the narrow grounds to cancel a registered mark over five years old.

4. Codifying Letters of Protest

The TMA grants statutory authority for providing third-party submissions during the examination period, formalizing the time-honored practice of drafting letters of protest to a trademark’s registration. The TMA provides a two-month deadline for the Director to determine whether the submission should be included in the application. The Director has one year to implement the necessary measures to execute this process.

5. Providing Flexible Response Periods for Office Actions

The TMA grants the USPTO discretion to reduce the required response times for trademark applicants to respond to office actions. These new response periods can be shorter than the traditional six-month response time but must be at least 60 days. However, the applicant can request extensions to receive the full six-months.

TAKEAWAY

Overall, the TMA appears to privilege the rights of legitimate mark owners and seeks to pursue fairness in enforcing mark owners’ rights and the disposition of applications and other actions before the USPTO. Mark owners should consult carefully with counsel as to how these rules affect their rights and options, both positively and negatively, and utilize these additional enforcement mechanisms when appropriate.

Find the full text of the statute here. Find the USPTO’s overview of the new procedures here.

Interested in the value and advantages of Trademark protection or have questions regarding how the TMA applies to your IP Rights? Contact us here for questions specific to your needs.

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Zach Eyster

Partner, Trademark and Brand Management Attorney at Founders Legal

Zach’s core practice is to help clients protect and grow the value of their most important brand assets. His experience in trademark, brand, licensing, and technology runs deep, as he has operated within these very specialized, niche areas of practice over the course of his entire legal career.

Having accrued significant experience before the USPTO and Trademark Trial & Appeal Board, and in the day-to-day protection and growth of clients’ IP assets, he is well-prepared to counsel on the most efficient, cost-effective, and investment-worthy courses of action with clients at all stages of growth and maturity.