New Trademark Rules Under the Trademark Modernization Act
The Trademark Modernization Act of 2020 (“TMA”) was passed on December 27, 2020.[1] The TMA amends the Trademark Act of 1946 to implement new procedures for trademark actions before the United States Patent and Trademark Office (“USPTO”), as well as changing existing procedures.[2] In November 2021, the USPTO issued final rules to implement the TMA, including establishing 1) ex parte expungement and reexamination proceedings, 2) new grounds for cancellation, 3) flexible office action responses, and 4) expansion of the rules for filing letters of protest.[3]
Ex Parte Expungement and Reexamination Proceedings
The TMA provides two new ex parte procedures to cancel unused registered trademarks.[4] Ex parte proceedings refer to legal actions by a single party for a decision against an applicant or registrant, whereas an inter partes proceeding involves two parties. Any goods or services that are cancelled as a result of these proceedings will no longer be covered by the trademark registration.[5] First, the expungement proceeding allows a party to request cancellation of some or all of the goods or services in a registration because the registrant never used the trademark in commerce with those goods or services.[6] The proceeding must be requested between three and ten years after the registration date.[7] However, a proceeding may be requested for any registration that is at least three years old, regardless of the ten-year limit, until December 27, 2023.[8]
Second, a new reexamination proceeding allows a party to request cancellation of some or all of the goods or services in a use-based registration on the basis that the trademark was not used in commerce with those goods or services on or before a particular relevant date. [9] The relevant date depends on the type of trademark application that was originally filed.[10] When the underlying application was first filed based on use of the trademark in commerce, the relevant date is the filing date of the application.[11] When the underlying application was filed based on an intent-to-use, the relevant date is the later of the date that an amendment to allege use was filed or the date that the deadline to file a statement of use expired.[12] This procedure must be requested within the first five years after registration.[13]
Either of these proceedings can be instituted by the USPTO Director or on a petition by a party.[14] There is a reasonable investigation requirement which requires a comprehensive search that is likely to reveal whether a mark was used in commerce or not.[15] A petition requesting one of these ex parte proceedings should include a verified statement that sets forth the elements of the reasonable investigation conducted to determine the mark was never used in commerce or never used in commerce as of the relevant date.[16] The proceedings will only be instituted when there is discovered information that supports a prima facie case, or a “reasonable predicate,” that the trademark has: 1) never been used in commerce with certain goods or services or 2) not been used in commerce as of the particular relevant date with certain goods or services listed in a registration.[17] The registrant must be given sufficient notice of the claimed nonuse to respond or rebut the claim with “competent evidence” before the USPTO can determine if cancellation is appropriate.[18]
The purpose of the new ex parte rules was to provide a more efficient and less expensive alternative to a contested inter partes cancellation proceeding at the Trademark Trial and Appeal Board (TTAB) because there has been a recent rise in fraudulent trademark applications which can be difficult to detect.[19]
New Grounds for Cancellation
Expungement is also a new ground for an inter partes TTAB cancellation proceeding.[20] This ground will be available any time after the first three years from the registration date.[21] The existing grounds for trademark cancellation for nonuse and abandonment are not affected by this new ground for cancellation.[22]
Office Actions
The TMA shortened the period for responding to an Office action from six months to three months for individuals seeking to obtain or maintain a trademark registration.[23] The response deadline can be extended for an additional three months for a fee.[24] If a response or extension is not filed within the first three months, the application will be abandoned.[25] The response period was shortened because some examination issues, such as amendments to trademark descriptions, can be resolved before the original six-month deadline.[26] However, some actions may present complex issues that require the full six-month response period to address.[27]
Letter of Protests
The TMA expands the rules for filing a letter of protest in a pending trademark application to allow third parties to submit evidence, prior to registration, relevant to a ground for refusal in examination.[28] Within two months of submission, the Director of the USPTO will determine whether the evidence should be included in the record of application.[29] The Director’s determination is final and non-reviewable.[30] The decision on whether to include the letter of protest will not affect any part’s right to raise additional issues and evidence in other proceedings.[31] The aim of this expansion is to aid in the examination process “without causing undue delay or compromising the integrity and objectivity” of the ex parte examination process.[32]
Effective Dates and Affect of the Rules
Most of the provisions went into effect December 18, 2021, except for the provision regarding response periods for office actions, which will go into effect on December 1, 2022.[33]
The passage of the TMA is going to allow for a more streamlined trademark application process. Individuals trying to gain trademark protection may have an easier path to registration, especially with the change in the office action response period. Formally allowing for third party letters of protests submissions will allow trademark owners to save time and resources when trying to enforce rights of their marks against a new applicant. The two new ex parte challenges and the new ground for cancellation will help reduce abuse of the trademark system by both applicants and registrants who have not demonstrated proper use to gain protection. Lawyers, applicants, and registrants need to familiarize themselves with these final rules to prevent a denial of a trademark application or the loss of trademark rights.
Footnotes
