How COVID-19 Relief Legislation Changes Intellectual Property Law

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Tucked within the 5,593-page Consolidated Appropriations Act, 2021 (ACT) are several important intellectual property bills that Congress had been unable to pass separately for years. Below is a summary of the more significant provisions, including information from the United States Patent and Trademark Office (USPTO) about implementing some new trademark procedures.

Trademark Law: The Trademark Modernization Act (TMA)
Insuring Injunctive Relief for Trademark Infringement
The most important of the trademark provisions relates to obtaining a permanent or temporary injunction against continued trademark infringement. After the Supreme Court eliminated the presumption of irreparable harm following a finding of patent infringement in eBay v. MercExchange (2006) and therefore made it more difficult for patentees to obtain an injunction, courts questioned the application of the presumption in actions for trademark infringement. To clarify the issue, the TMA provides that, upon establishing trademark infringement or the likelihood of success of infringement on a motion for temporary injunctive relief, there is a “rebuttable” presumption of irreparable harm (eBay still applies to patent infringement cases). What remains unclear is precisely what will rebut the “rebuttable presumption” and affect the ability to obtain an injunction in a trademark infringement action.

Third-Party Challenges to Trademark Applications
Using a little known procedure, a third-party can submit a “letter of protest” challenging the registrability of a trademark in a pending trademark application by demonstrating, for example, a third-party’s earlier use of the mark. Pursuant to the TMA, the USPTO enacted rules in January to formalize the procedure. The submission must identify each of the grounds for refusing registration with supporting evidence and pay a $50 filing fee. Upon receiving an acceptable submission, the Director of the USPTO must respond to a challenge within two months. The USPTO’s decision on whether to include the evidence in the application record is final and not appealable. If the USPTO refuses the letter of protest, then filing an opposition to the application after publication on the same grounds is not likely to be successful.

Third-Party Challenges to Trademark Registrations for Nonuse
The TMA offers third-parties new procedures to cancel trademark registrations of marks based on erroneous statements of use.

Removal – Within 3 to 10 years after the registration, a third-party can request removal of some or all of the goods or services in the registration because the mark was never used with the goods or services.

Reexamination – Within 5 years after the registration, a third-party can request the removal of some or all of the goods and services in the registration because the mark was not used with the goods or services in the registration on the filing date of a use-based application or on the filing date of the amendment to allege use for an intent to use application.

The petitions will generally require a verified statement with evidence obtained after an investigation, along with a fee. Should the challenger establish a prima facie case of nonuse, the Director shall require the registrant to rebut with evidence of use. The registrant will have the ability to appeal an adverse decision to the Trademark Trial and Appeal Board (TTAB).

Cancellation Proceeding – A third-party can also initiate a proceeding with the TTAB to cancel a registration by asserting that the trademark had never been used with the goods or services in the registration. One must begin the cancellation proceeding within three years from the date of the registration.

Shortened Time to Respond to Office Actions
During prosecution of a trademark application, an Examiner may shorten the time to respond to a USPTO Office Action from 6 months to no less than 60 days. Applicants can seek to extend the response time to 6 months by paying a yet to be determined filing fee.

Copyright Law: The Copyright Alternative under the Small Claim Enforcement Act of 2020 (The CASE Act)
The Case Act, incorporating legislation pending for over a decade, offers a copyright small claims court alternative to expensive federal court litigation. Copyright officers will hear claims for copyright infringement and declarations of noninfringement as well as claims against an online service provider for failure to remove infringing content under a Digital Millennium Copyright Act (DMCA) takedown procedure or for misrepresentation in a DMCA notification of infringement or counter-notification.

With a streamlined process, there is little discovery, no motion practice, no jury and limited appeals. Unlike federal court, a suit can be initiated before the work has been registered with the Copyright Office. For works registered before infringement, damages are capped a $15,000 per work or $30,000 total; for other works, damages are capped at $7,500 per work and $15,000 total.

But within 60 days after service of the notice of claim, the defendant is free to opt-out of the procedure, leaving the plaintiff with no option but suing in federal court.

Protecting Lawful Streaming Act
Increasing the penalties applicable to for-profit digital streaming services, the Department of Justice will be able to bring felony charges against a service that knowingly offers a copyrighted work without permission, if the service knew or should have known the work was prepared for public performance. The law does not apply to individuals, non-profit companies, or simple business disputes.

Patent Law: The Purple Book Continuity Law
The only patent-related section of the Act addresses the requisite information about a biological product in the Federal Drug Administration’s “Purple Book.” It will now include the list of patents applicable to the product and the patents’ expiration dates.

Conclusion
These changes do not take effect for one year and much of the detail awaits further implementing regulations. We will be monitoring these activities and we are here to answer your questions.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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