Trademark Modernization Act Becomes Law: Establishes New Procedures to Remove Deadwood Registrations, Restores Presumption of Irreparable Harm, and Protects the Independence of the Trademark Trial and Appeal Board

Introduction

On December 27, 2020, the Trademark Modernization Act of 2020 (“TMA”) became law after it passed Congress and was signed by the President as part of the year-end Consolidated Appropriations Act for 2021.¹ The TMA, which will become effective one year after its signature into law, introduces significant amendments to the Lanham Act² designed to modernize trademark examination procedures and combat the increasing numbers of trademark registrations covering marks not used in commerce. Of perhaps equal significance, the TMA clarifies the standard for obtaining injunctive relief in litigation under the Lanham Act, restoring the rebuttable pre-sumption of irreparable harm in those jurisdictions that have dismissed it. Finally, the TMA contains several amendments to the Lanham Act intended to immunize the Administrative Law Judges of the Trademark Trial and Appeal Board against challenges to its independence under the Appointments Clause of the Constitution.³ As discussed below in greater detail, the changes to U.S. trademark law effected by the TMA are perhaps the most consequential since the landmark Trademark Law Revision Act of 1988.⁴ Nevertheless, they do leave open certain issues, some of which may be resolved through administrative rulemaking and others of which may ultimately require judicial action.

Authorization for Office to Shorten Response Times

Section 1 of the Lanham Act requires a trademark applicant to respond to an office action issued during examination within six months.⁵ The TMA has amended that section of the Act to grant the USPTO greater flexibility in setting office action response deadlines. Specifically, the amended section authorizes the USPTO to shorten response periods, by regulation, for a time period between 60 days and six months, so long as applicants can receive extensions of time to respond, up to the traditional full six-month period. Applicants availing themselves of extensions will be required to support requests for them with filing fee to be determined through administrative rulemaking.

Codification of Letter of Protest Mechanism

The TMA also codifies the existing letter of protest procedure, which permits the submission of evidence by other parties during the trademark examination process that bears on the registrability of an applied-for mark. The existing procedure is informal, without a timeline for when the evidence must reach an examiner and does not require a filing fee. Under the TMA, the Director of the USPTO will have two months in which to review the evidence submitted with a letter of protest. In addition, the Office must establish by regulation appropriate procedures for the consideration of evidence submitted with a letter of protest, and may choose to institute a filing fee.

Ex Parte Challenges to Registrations

Many of the substantive provisions of the TMA arise from a July 18, 2019, hearing before the House Subcommittee on Courts, Intellectual Property, and the Internet on the subject of “clutter,” or “deadwood,” on the U.S. Patent and Trademark Office’s trademark registers. As most trademark professionals are aware, United States law requires applications for registration not based on foreign filings to be supported by a sworn averment that the applied-for mark is used in commerce for all the goods and services listed in the application; that sworn averment must in turn be supported by a specimen showing the mark’s use in connection with at least one good or service in each International Class covered by the application.⁶ In contrast, under Sections 44(e) and Section 66(a) of the Lanham Act,⁷ an applicant with a country of origin other than the United States may claim either a foreign registration or an International Registration covering its marks as the basis of its application, rather than a sworn averment of use in commerce. Regardless of whether a registration is based on use in commerce or a foreign registration, its owner must maintain it with periodic sworn averments of ongoing use in commerce (or excusable nonuse) under Section 8 or Section 71 of the Act.⁸

Commissioner Dennison’s testimony at the July 18, 2019, hearing highlights the use-in-commerce-based concerns underlying the most significant provisions of the TMA:

The USPTO creates and maintains the federal register of trademarks that now includes approximately 2.4 million registrations. The register itself provides notice to applicants, other trademark owners, and our examining attorneys of the registrant’s claim of ownership in a mark and allows them to search the register to determine the availability of marks for registration in the United States. The register is a valuable tool in making business decisions, and its accuracy is paramount. When businesses are selecting names for new products, they turn to the register to figure out whether their chosen mark is available for their use and registration. But, for the register to be useful, it must accurately reflect marks that are in use in the United States for the goods and services identified in the registrations. If the register is filled with marks that are not in use, or features registrations obtained by improper means, it makes trademark clearance more difficult, time-consuming and expensive. An inaccurate register also leads to expensive opposition and cancellation proceedings, or federal court litigation, to correct inaccurate registrations and to enforce rights. And, in turn, it may cause companies to alter business decisions, often at significant cost.

. . . [I]n recent years, the USPTO has seen a significant increase in the number of applicants who are not fulfilling their legal and ethical obligations to file accurately and in good faith, particularly with respect to claims that the mark is in use in commerce. The USPTO increasingly has been receiving trademark application and registration maintenance filings involving false or inaccurate use claims and submission of fake or digitally altered specimens that do not actually show use of the mark in U.S. commerce in the ordinary course of trade as required by law.⁹

The TMA addresses these issues by authorizing two new mechanisms targeting deadwood on the USPTO’s trademark registers. The first, ex parte reexamination, would permit challenges to use-based registrations issued under Section 1(a) of the Lanham Act...