On December 27, 2020, the Trademark Modernization Act (also known as 'TMA') became law in the United States as part of Congress' bipartisan effort to enact the year-end Consolidated Appropriations Act for 2021 which includes a COVID-19 relief package.
The TMA will become effective at the end of 2021 (a year after being signed into law), introducing several important amendments to the Lanham Act. Also known as the Trademark Act of 1946, the Lanham Act is a federal statute that governs trademarks, service marks, and unfair competition. The TMA amends the Lanham Act in three aspects:
- to provide for third-party submission of evidence relating to a trademark application;
- to establish expungement and ex parte proceedings relating to the validity of marks; and
- to provide for a rebuttal presumption of irreparable harm in certain proceedings.
Third-party submission of evidence relating to a trademark application
When it comes to trademark prosecution before the United States Patent and Trademark Office (USPTO), Section 3 of the TMA, which replaces Section 1 of the Lanham Act, states that a third party may formally submit evidence in the record of an application for trademark registration, provided that such evidence is relevant to grounds for refusal of registration. The TMA specifically states that, in its submission, the third-party shall identify the ground for refusal and include a concise description of each piece of evidence submitted in support of each identified ground for refusal.
In amending the Lanham Act, Section 4 of the TMS also grants USPTO Examining Attorneys with more flexibility in determining the time for responding to Office Actions. To date, Section 1 of the Lanham Act provides a trademark applicant with a term of six months to respond to an office action issued during the examination of the relevant trademark application.
In amending the Lanham Act, the TMA establishes that such deadlines may be shorter than six months, provided however that any requests for extensions will be granted to respondents up to six months in the aggregate.
Expungement and ex parte proceedings relating to the validity of marks
In Section 5, the TMA also creates new expedited and ex parte proceedings aimed at denying registration to applications in situations in which the trademark specimen provided to the USPTO is proven to be false. In addition, by introducing a new portion of Section 16 of the Lanham Act, the TMA provides that expedited and ex parte proceedings may be created for the purpose of cancelling registrations of trademarks in relation to which evidence shows that they have actually never been used in commerce prior to the relevant date of registration.
In fact, the new Section 16A of the Lanham Act establishes a third-party expungement procedure according to which "[a]ny person may file a petition to expunge a registration on the basis that the mark has never been used in commerce on or in connection with some or all of the goods or services recited in the registration."
Similarly, the new Section 16B of the Lanham Acts sets forth proceedings according to which "[a]ny person may file a petition to re-examine a registration on the basis that the mark was not in use in commerce on or in connection with some or all of the goods or services recited in the registration on or before the relevant date."
Rebuttal presumption of irreparable harm in certain proceedings
Finally, and perhaps most importantly, when it comes to trademark litigation the TMA provides for a uniform standard for obtaining injunctive relief under the Lanham Act, restoring a rebuttable presumption of irreparable harm.
In fact, in amending Section 34 of the Lanham Act, the TMA sets forth that "[a] plaintiff seeking any such injunction shall be entitled to a rebuttable presumption of irreparable harm upon a finding of a violation identified in this subsection in the case of a motion for a permanent injunction or upon a finding of likelihood of success on the merits for a violation identified in this subsection in the case of a motion for a preliminary injunction or temporary restraining order."
The aforesaid amendment to the Lanham Act marks an important step in U.S. trademark litigation since it resolves a split between Courts of Appeal that was created by the Supreme Court's decision in eBay Inc. v. MercExchange, 547 U.S. 388 (2006) which de facto eliminated such presumption in litigation. In fact, in eBay, the Supreme Court created a division on whether harm could be presumed by unanimously deciding that courts should not automatically issue an injunction on the basis of a finding of patent infringement and that, on the other hand, courts should not deny an injunction simply on the basis that the plaintiff does not exploit the patented invention.