Near the end of 2020, the US passed a $900 billion COVID-19 stimulus bill, which received global news coverage. What received less news coverage was the IP provisions tucked in the 5,593-page bill. The bill includes the Trademark Modernization Act (2020), which was signed into law on 27 December 2020 and will come into force by 27 December 2021. The Modernization Act provides new procedures to challenge pending applications and registrations. Additionally, the Modernization Act will likely impact how trademark cases may be litigated. Some key points are summarized below and more information can be found on the resource page published recently by the United States Patent and Trademark Office (USPTO).
(a) Non-Use Attack
The Modernization Act provides new procedures to allow third parties to file petitions to expunge or re-examine trademark registrations based on non-use. The new procedures aim to remove deadwood from the trademark register. The new procedures are believed to be cheaper and easier to use than the existing cancellation proceedings.
Expungement – between three to ten years after the registration date, a third party may request that the USPTO remove some or all of the listed goods and/or services in a registration because the registrant never used the trademark in commerce.
Re-examination – within five years after the registration date, a third party may request that the USPTO remove some or all goods or services in a registration on the basis that the trademark was not in use in commerce with those goods or services on or before the provided use date.
Cancellation – after three years from the registration date, a third party may request cancellation of a registration if the registered trademark has never been used in commerce. This new cancellation ground is similar to section 45 of Canada’s Trademarks Act allowing a third party to request that a trademark registration be removed from the register if the registrant is unable to show use in Canada during the three-year period preceding the date of a section 45 notice.
(b) Letters of Protest
The Modernization Act provides statutory authority for USPTO’s longstanding letters of protest practice. Third parties may submit registrability-related evidence to the USPTO before an application proceeds to registration. The USPTO indicates that the appropriate grounds include:
- The trademark in the protested application is likely to be confused with a trademark in a U.S. registration or prior pending application.
- The trademark in the protested application is merely descriptive of or generic for the identified goods or services.
- The trademark in the protested application suggests a false connection with the protestor.
- A registered trademark appears in the identification of the goods or services in the protested application.
The USPTO’s letters of protest practice is similar to Canada’s “Notification of Third Party Rights”. The relevant Practice Notice specifies three appropriate grounds:
- The trademark is confusing with a registered trademark under paragraph 12(1)(d) of the Trademarks Act(the Act).
- The applicant is not the person entitled to registration of the trademark in view of paragraph 37(1)(c) of the Act.
- Registered trademark(s) are being used in the application to describe goods or services.
(c) Response periods for Office Actions
The Modernization Act provides statutory authority to the USPTO to set response periods to be shorter than the current six-month time frame but no less than 60 days. Extensions to the full six months may be available, perhaps subject to prescribed fees.
(d) Rebuttable Presumption of Irreparable Harm
Traditionally, injunctive relief was generously granted and irreparable harm was presumed. However, the US Supreme Court decision in eBay Inc. v MercExchange, LLC, 547 US 388 (2006) changed the standard and held that trademark owners had to prove they are entitled to injunctive relief. The Modernization Act deviates from the eBay decision and provides that a trademark owner seeking injunctive relief is entitled to a presumption of irreparable harm and the accused infringer can present evidence to rebut the presumption.
This is in contrast to Canada’s injunctive relief practice. Fox on Canadian Law of Trade-marks and Unfair Competition, an authoritative text on trademark law, suggests that Canadian courts insist on clear evidence that irreparable harm has occurred or, in a quia timet action, will occur, and will ignore speculative evidence of harm.