A Guide To The Trademark Modernization Act Of 2020 | USPTO - Drishti Law

The rapidly evolving business landscape requires intellectual property laws to be robust and cater to evolving needs. Keeping this factor in view, the United States House of Representatives and Senate made certain amendments to the Trademark Act 1946 – also known as the Lanham Act – in the form of the Trademark Modernization Act of 2020. The primary purpose of this amendment was to remove inactive and fraudulent trademarks from the United States Patent and Trademark Office (USPTO) register and improve the reliability of the trademark registration process. In this blog, we will understand what amendments were brought by this Act and what can the trademark owners expect from this.

What is the purpose of the Trademark Modernization Act of 2020?

The Act was passed with four important purposes in mind.

  • First, the Act codified the “letter of protest” process which was previously not a formal part of the registration process.
  • Second, the response time for office action was reduced, thereby providing relief to the trademark examining attorneys.
  • Third, an alternative was provided to the otherwise time-consuming and expensive Trademark Trial and Appeal Board (TTAB) cancellation process in the form of ‘expungement and reexamination proceedings’.
  • Fourth, relief was given to the brand owners by codifying the threshold of “irreparable harm” for the trademark injunction suits.

Codification of the “Letter of Protest” procedure

The codification came as a major relief to the third parties who had to adopt the informal method of sending a letter of protest to the USPTO for challenging a pending mark on “any reasonable ground for refusal appropriate in ex parte examination” prior to its publication or registration. The method, although inexpensive as compared to the TTAB cancellation proceedings, was used only by those who were aware of this route (as it was a relatively obscure method and not a codified part of the law) and its acceptance was largely dependent on the “discretion of the USPTO”. This often put the small businesses at a disadvantage as they were not aware of this method and therefore, couldn’t benefit from it equally.

The Act has now amended those disadvantages by codifying the process. Now, any party can submit evidence to support a reasonable ground of refusal along with an explanation in this regard, for a nominal fee of $50. Afterwards, the Director of the USPTO would decide in two months whether to accept the evidence or not. The director’s decision has been termed as final and non-reviewable however parties are still allowed to raise issues in this regard. Thus, the amendment has established a balance to the interests of the applicants and the third parties by providing them with such a powerful tool.

Reduction in the Response Time for Office Action

This relief has been granted to the USPTO specifically. Previously, the law had stipulated a strict period of six months as a response time for the office action, regardless of the complexity of the matter/application. However, the  Trademark Modernization Act now grants the USPTO flexibility in the timing i.e., it would “allow the office to set response periods, by regulation, for a time period between 60 days and six months, with the option for an applicant to request extensions to a full six-month period.”

Expungement and Reexamination Proceedings

A rise in incidents was seen where the foreign applicants, in order to demonstrate their mark’s use in commerce for goods and services, used fake specimens. Furthermore, there was also the issue of inactive trademarks leading to clutter in the USPTO register. Previously, the way to challenge such registrations was only by initiating cancellation proceedings before the TTAB or by filing a lawsuit in court. The process, overall, was severely time-consuming and overly expensive for trademark owners. Particularly, the ones impacted by this were small businesses that had a harder time in challenging such marks. Hence, the Act provided two new procedures to amend the issue.

First is the expungement proceeding in which a mark’s registration can be challenged on the basis that the mark has never been used in commerce. Any person can submit a petition in this regard along with evidence for “reasonable investigation”. The Director, on finding a prima facie case, will initiate the proceedings against such mark.

Second is the reexamination proceeding, which is similar to the abovementioned with the difference that it can be used for challenging on the grounds that the mark had no usage prior to the stipulated registration date. Similar to the previous method, the petitioner has to supply evidence in support, and the Director will initiate the proceedings on finding a prima facie case.

Presumption of Irreparable Harm

The last key amendment by the Act was to codify a historical principle currently frustrated by the Supreme Court ruling in Ebay v. Merc Exchange, LLC, 547 U.S. 388 (2006). The court ruled in this case that an injunction should not be granted on finding patent infringement – which was subsequently applied in trademark cases also. This nullified the presumption of irreparable harm available in trademark proceedings. As a result, trademark litigants were forced to satisfy the stringent four-part standard to prove their case for an injunction claim. Practically, instead of the earlier presumption of irreparable harm, this later strict standard proved problematic and harmful to numerous trademark cases.

The Act granted much-needed relief in the form of its codification and restored the earlier common practice in trademark cases.

Conclusion

The implementation of the Trademark Modernization Act of 2020 holds a significant value in Trademark law because of its adaption of the practical realities of modern intellectual property issues. The Act has paved the way for small businesses and legitimate third parties to counter fraudulent trademark registrations and applications through cheaper and more efficient alternatives.

In order to better understand how these changes impact you as a business owner, the best route available to you is to seek legal advice from an experienced trademark attorney.  Book a free consultation today with Drishti Law to learn how our experienced principal attorney can help you in effectively protect your trademark and enforce your rights in light of the new laws. We provide a variety of services which can meet the specific legal needs of your brand.