Trademark rule changes could provide more opportunities for owners

Legislation addresses unused trademarks and fake specimens of use.

Trademark owners will have to adhere to some new rules and procedures later this year, courtesy of the Trademark Modernization Act of 2020 (TMA.)

The TMA was signed into law last December and some of its measures already have been implemented, while new proposed rules and procedures — and changes to existing procedures — are being finalized by the United States Patent and Trademark Office (USPTO) and set to be instituted on Dec. 27.

Kevin McLaughlin Courtesy Laura House

“One of the main objectives of the TMA is to address the problem of unused trademarks and fake specimens of use,” said Kevin McLaughlin, owner and trademark attorney for Grand Rapids-based Crafted Law. “In recent years, the USPTO has experienced a huge rise in fraudulent applications, with a disproportionately large share of those coming from China. This clutters the trademark register and can interfere with the investment of legitimate business owners in securing and launching new brands.”

The proposed procedures include the cancellation of unused trademarks through expungement proceedings or reexamination proceedings. 

According to the USPTO, third parties will be able to request cancellation of some or all of the goods or services in a registration during an expungement proceeding because the registrant never used the trademark in commerce with those goods or services.

An expungement proceeding for the cancellation of trademark registration must be requested between three and 10 years after the registration date. Until Dec. 27, 2023, however, a proceeding may be requested for any registration at least three years old, regardless of the 10-year limit, per the USPTO.

A reexamination proceeding will allow third parties to request cancellation of some or all goods or services in a registration on the basis that the trademark was not in use in commerce with those goods or services on or before a particular relevant date. McLaughlin said this action must be brought in the first five years following registration.

Mary Bonnema, partner and intellectual property attorney for Warner Norcross + Judd, said reexamining and expungement proceedings will help to declutter the U.S. trademark register by making it easier for trademark owners to register trademarks that are not in use or that were registered based on fraud or inaccuracies. 

The change that the USPTO has made to existing procedure will require registrants to respond to office actions within three months. Registrants have the option of requesting a three-month extension to respond by submitting a $125 fee. Prior to the proposed rule, registrants were granted a six-month response time.

Mary Bonnema Courtesy Warner Norcross + Judd LLC

Bonnema said the TMA has made a clarification in trademark suits about the presumption of irreparable harm and it is now the standard across the country’s judicial system.

“When a trademark owner was a plaintiff in a trademark infringement case, the longstanding presumption had been that if the trademark owner could prove when it brought an injunction that it was likely to succeed on its infringement case that the element of irreparable harm was presumed,” she said. “About 15 years ago, the Supreme Court in a patent case, eBay Inc. v. MercExchange LLC, issued a decision that raised the bar for patents. One of the things in a trademark infringement case a plaintiff who is asking for an injunction must prove is that they are likely to suffer irreparable harm. So, the longstanding practice until this eBay decision in a patent case is irreparable harm is presumed if you are likely to succeed in your case. After the eBay case, some federal circuit courts started drifting away from that presumption and required a separate showing of irreparable harm. But our jurisdiction, for example, the Sixth Circuit Court of Appeals, continued to hold that a trademark owner is presumed to suffer irreparable harm if it could show that they would likely succeed on its infringement case. So we had circuits that were divided on how to address the issue of irreparable harm. What the TMA did was effectively restore the rebuttal presumption of irreparable harm for trademark owners, which is good news.”

McLaughlin said the rule could be a game-changer for those seeking temporary restraining orders or preliminary injunctions in federal court because the Supreme Court decisions in eBay Inc. v. MercExchange LLC and Winter v. Natural Resources Defense Council Inc. proved to be fatal for many trademark cases and put the emphasis on proving harm that was primarily reputational in nature.

“It remains to be seen to what extent the TMA will shape the future of trademark practice, but it appears as though help is on the way for trademark owners who have struggled with having applications blocked by foreign registrations that are not in use or were registered using fake or altered specimens,” he said. “It will also provide additional useful options for trademark attorneys to serve their clients.”

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