The Trademark Modernization Act (TMA) amends the U.S. Trademark Act, or Lanham Act, in several important ways, most notably shifting the burden of proving irreparable harm away from trademark owners.
First, the TMA clarifies that a plaintiff seeking preliminary or permanent injunctive relief “shall be entitled to a rebuttable presumption of irreparable harm” upon a finding of infringement or a likelihood of success on an infringement claim. Since the U.S. Supreme Court's decision in eBay, Inc. v. MercExchange, 547 U.S. 388 (2006), federal appellate courts have been divided on whether irreparable harm could be presumed (which was the general rule pre-eBay), or if the strict four equitable factors commonly known as “the eBay factors” need to be weighed in each instance.
The TMA then goes one step further, noting that the newly recognized rebuttable presumption “shall not be construed to mean that a plaintiff seeking an injunction was not entitled to a presumption of irreparable harm before the date of the enactment of [the TMA].” H.R. 6196 § 6(b). This provision of the TMA takes effect immediately.
Second, the TMA establishes two new USPTO procedures, effective December 27, 2021, to review and cancel existing registrations for unused marks — namely, expungement and reexamination. The USPTO has seen a dramatic increase in foreign applications using fraudulent specimens and evidence of use, and it aims to use the new procedures to combat fraudulent marks.
Expungement is a process by which a registration can be challenged on the basis that a mark was never properly used in commerce. Any person may submit a petition identifying a registration and the specific goods or services, for which the petitioner alleges that the trademark has never been used, between three and 10 years after the mark’s registration date, except for a single exception wherein an expungement may be filed within three years of the TMA’s enactment for registrations older than 10 years. The petitioner is required to (1) identify the registration, (2) identify the goods or service that have never been used in commerce, (3) submit a verified statement summarizing the reasonable investigation that led to the nonuse claim, (4) include any supporting evidence, and (5) pay the requisite fee. This expedited expungement process provides an alternative to a cancellation action before the Trademark Trial and Appeal Board or a district court.
If the expungement is instituted by the USPTO, the registrant will have an opportunity to submit rebuttal evidence of use or excusable nonuse before an examiner decides whether a registration should be cancelled for any or all goods and services. Any potential remaining challengers are estopped from challenging a registration that is successfully defended.
Through reexamination, a challenger may request the removal of some or all goods or services in a registration, provided that it can supply evidence that a mark is not in use in commerce on or before a particular date, such as the filing date of a use-based application. The reexamination process is similar to expungement in both filing requirements and ownership implications. Reexaminations can be filed within five years of mark’s registration and the same estoppel provision applies. Both reexaminations and expungements are appealable to the Trademark Trial and Appeal Board, and then the Federal Circuit.
Third, the TMA allows for new processes in trademark prosecution before the U.S. Patent and Trademark Office. Third parties may now formally submit evidence into the record of an application if the evidence is related to a ground for refusal. It also provides for increased flexibility for examiners in setting response times to office actions. Examiners may now require a deadline shorter than six months, but it may be extended by the applicant up to a full six months. The TMA provides the USPTO a statutory basis for its longstanding “letter of protest” option, which allows third parties to submit evidence prior to examination summarizing why an examiner should refuse to register a mark. This is in contrast to reexamination and expungement, which challenge registered marks. Letters of protest must identify the legal grounds upon which the examiner can refuse registration or issue a requirement, include evidence that supports those grounds and a concise description of each piece of supporting evidence, and the party submitting the protest must pay the prescribed $50 fee. The USPTO then has two months to act on letters of protests. Any decision made on such letter of protest is final and nonreviewable. However, if a letter of protest is denied, the party that submitted it is still entitled to oppose the application, if it is published for opposition.
In conclusion, trademark owners should take note of the TMA and pay close attention to the enacting regulations as it (1) provides trademark owners with an enlarged toolbox for challenging registrations, and (2) resolves a circuit split to make it easier to prove the irreparable harm necessary for a court to enjoin an infringement.