Trademark Modernization Act: a year of ‘brand housekeeping’ ahead
The USPTO’s Trademark Modernization Act (TMA) will deliver some of the most sweeping changes to federal trademark law in decades.
As a result of the act, the US Patent and Trademark Office (USPTO) will be able to use new methods to clear away unused registered trademarks from the federal trademark register and third parties will have new grounds to file trademark cancellation actions with the Trademark Trial and Appeal Board.
Haynes Boone partner and former USPTO acting director Joseph Matal explains: “For trademark attorneys and applicants, the most immediate effect of the new rules after December 1 this year is that they will have to respond to an office action within three months rather than six.
“They can get a three-month extension that will effectively entitle them to the prior law’s full six months, but they must file the request for the extension within the new three-month deadline, and they will have to pay a fee.”
The new ex parte expungement and reexamination proceedings, he predicts, should help clear the increasing amount of “deadwood” on the trademark register. “More and more prime trademark terms are being taken up by people who are not using the marks in commerce. These proceedings will provide a cheap and efficient way to challenge marks that have never been used in commerce or that were not used at the relevant time,” he explains.
According to Matal, the act will generate many benefits for brands.
“The USPTO has tailored the rules with an eye toward encouraging their robust use, and turned down several appeals from sceptics who wanted to cabin the new proceedings,” he says.
“For example, it declined to impose a limit on the number of petitions that can be filed, instead waiting to see how the proceedings are actually used; and it cut the filing fee by one third to just $400, recognising the public benefit of the use of these proceedings.”
Additionally, the office eschewed requiring the identification of the real party in interest behind a petition, so that potential users are not deterred by fear of retaliation from a registrant.
The TMA as a weapon
But according to Julia Anne Matheson, partner at Potomac Law in Washington, DC, the act could also spell trouble for brands and their IP. “In terms of trends for 2022, the big thing is going to be the impact of the TMA and its use as a weapon against legitimate trademark owners,” she says, emphasising the increased burden for brands and their counsel.
“To be expected to have specimens on hand to demonstrate use of your mark for each and every good identified in a registration dating back to the date of the use-based application—well, no company does that. Companies just don’t have the internal resources to keep track of that type of information,” she warns.
She believes that European companies, in particular, could be heading for choppy waters as many of them fail to pay sufficient attention to US use requirements—or follow the instructions of US lawyers to thoroughly scrutinise their specifications.
“I think we can anticipate seeing the TMA used against a lot of foreign trademark owners in some cases justifiably—to significantly narrow existing registrations,” predicts Matheson. who adds that the costs and time involved in defending these types of actions for foreign trademark owners and applicants will be significant.
“While the US is a multi-class country, applicants may want to consider filing single class applications moving forward for more important marks as a hedge against these types of challenges, ie, this approach would make it more complicated for challengers. It will be interesting to see how the TMA changes play out,” she concludes.
New opportunities
Also commenting on the Act’s potential impact, Finnegan of counsel Katie McKnight, a former attorney at the Trademark Trial and Appeal Board, says: “Through its attempts to clear the register, police its own marks, and sanction bad-faith filers, the USPTO may help brand owners to one day clear marks with more confidence, while also finding a way to more efficiently manage its backlog of applications.”
As the trademark rules of practice implementing the TMA have the potential to change enforcement strategy as well as portfolio management strategy, McKnight envisions that this may prompt more involvement and opportunities in the private IP sphere
“Because there is no standing requirement for these new ex parte proceedings, brand owners may enlist private law firms to file petitions for expungement and/or reexamination on their behalf to preserve their anonymity,” she reflects.
But like Matheson, she also strikes a cautionary note. “From a defensive perspective, 2022 maybe a year of housekeeping. Brand owners would be well-advised to review their portfolios to determine whether their identifications of goods and/or services accurately reflect the actual use of their marks in commerce, especially if they own registrations with expansive identifications.”
A defensive perspective
Brand owners, she advises, should also check correspondence information of record and chain of title in all registrations to ensure that their registrations aren’t cancelled for failure to respond to an office action they never received.
“Additionally, the USPTO has indicated that registrants facing an expungement or reexamination proceeding must support their case with evidence beyond the specimen of use previously submitted during prosecution/maintenance of the registration. And until December 27, 2023, expungement proceedings can be filed against ten-year-old registrations,” she cautions
This means that Brand owners, she urges, should ensure to document their use/intent to use a mark, and archive additional copies of specimens or other instances of use, to support their response to an office action received within the context of an expungement or re-examination proceeding.
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