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The Trademark Modernization Act and the USPTO’s New Final Rule: What Trademark Applicants and Owners Need to Know for 2022

In December 2020, the Trademark Modernization Act (TMA) was signed into law. The TMA made several changes to the Lanham Act, the federal law that governs trademark registration in the United States. The amendments focused on three primary objectives:

  • Clarifying the evidentiary burden a plaintiff needs to meet to obtain injunctive relief in trademark infringement lawsuits.
  • Addressing the problem of fraudulent trademark registrations – including marks that are not actually being used in commerce – by providing new procedures for canceling such registrations.
  • Streamlining and accelerating the trademark prosecution process before the U.S. Patent and Trademark Office (USPTO).

The USPTO recently published its final rule implementing the amendments contained in the TMA. Most changes became effective December 18, 2021, though certain changes won’t go into effect until December 1, 2022.

Here is what trademark applicants, trademark holders, and those claiming infringement of their marks need to know about the changes contained in the TMA and the USPTO’s final rule.

Rebuttable Presumption of Irreparable Harm in Trademark Infringement Actions

 Plaintiffs in trademark infringement lawsuits often ask the court to issue a preliminary injunction requiring the alleged infringer to cease their use of the mark or provide similar relief. To obtain such injunctive relief, a plaintiff must demonstrate that the defendant’s actions are causing them “irreparable harm.”

The TMA resolved a split between federal appellate courts about evaluating claims of “irreparable harm” by amending the Lanham Act to establish a rebuttable presumption of irreparable harm upon a finding of infringement or of likely success on the merits when seeking a preliminary injunction.

Challenging Fraudulent Marks or Those Not Being Used in Commerce

To receive a trademark registration and for a mark to remain valid going forward, the applicant/holder must demonstrate that the mark is being “used in commerce.” However, the trademark register is cluttered with marks whose owners’ claims of actual use are dubious at best, and fraudulent at worst. Often, these registered but unused marks stand in the way of applications for new marks that may be too similar in the USPTO’s view to allow for registration,

The TMA and the final rule attempt to address this issue by creating new ways for third parties (including the USPTO) to challenge and seek the cancellation of registrations based on nonuse.

Reexamination

Within the first five years of a mark’s registration, any party (or the USPTO director) can file a reexamination action seeking to cancel some or all of the goods or services contained in a use-based registration if the trademark was not in use in commerce in connection with those goods or services before either:

  • The application filing date if the application was based on Section 1(a) (Use in Commerce), or
  • The date the amendment to allege use was filed, if the application was filed based on Section 1(b) (Intent to Use), or the date the applicant needed to file a statement of use, whichever is later.

Expungement

Similarly, between the third and 10th year of a mark’s registration, any party can bring an expungement action before the USPTO seeking to cancel some or all of the goods or services covered by a registration based on the registrant never having actually used the mark in commerce in connection with the claimed goods or services. However, until December 27, 2023, a party can request an expungement action for any registered mark that is at least three years old, regardless of how long the mark has been registered.

A party seeking cancellation either through a reexamination or an expungement proceeding must pay a fee and submit a petition that contains, among other things, a verified statement of the facts, including details of the petitioner’s reasonable investigation of nonuse and a “concise, factual statement of the relevant basis for the petition.”

The USPTO director will review the petition, the submitted evidence, and the registration’s electronic record to determine whether to institute a reexamination or expungement proceeding. The director’s decisions are final and non-reviewable. If the director institutes a proceeding, the USPTO will issue an office action requiring the registrant to submit evidence rebutting the prima facie case of nonuse. If the registrant fails to establish use in commerce, the USPTO will issue a final action canceling the mark, and the registrant will have three months to file a request for reconsideration or an appeal to the Board

Shorter Three-Month Response Period for Office Actions

Starting December 1, 2022, trademark applicants (excluding Madrid Section 66(a) applicants) must respond within three months to office actions issued during examination of an application. For a $125 fee, applicants can request a single three-month extension of time to respond.

If you have questions about how the Trademark Modernization Act and the USPTO’s final rule impact your existing trademarks or pending applications, please contact the trademark attorneys at The Dobrusin Law Firm.

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