Business and Legal Insights

Rebuttable Presumption of Irreparable Harm

The Trademark Modernization Act (TMA) was signed into law December 27, 2020. Importantly, the burden shifting provision for trademark owners in litigation seeking preliminary or permanent injunctive relief was made effective immediately.

Since the U.S. Supreme Court’s decision in eBay, Inc. v. MercExchange, 547 U.S. 388 (2006), there has been a split of authority among federal appellate courts on whether irreparable harm could be presumed. To resolve the split, the TMA specifically provides that a trademark owner: “shall be entitled to a rebuttable presumption of irreparable harm.” And, for the avoidance of doubt, the TMA further states that amendment in the Act “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 this Act.”

With the implementation on December 18, 2021, the TMA further amends the Trademark (Lanham) Act of 1946 in several important ways. Other key features of the TMA include new ex parte expungement and reexamination proceedings at theUnited States Patent and Trademark Office (USPTO), a new ground for cancellation at the Trademark Trial and Appeal Board (TTAB), shorter response period for Office Actions at the USPTO, and codification of the existing letter of protest procedure. 

New Procedures: Ex Parte Expungement and Reexamination Proceedings

The new procedures at the USPTO may be used to remove registrations based on inaccurate claims of use in commerce.

An ex parte expungement proceeding may be used to challenge a registration on the ground that the mark has never been used in commerce in connection with some or all of the registered goods and/or services. A petitioner may request, or the Director of the USPTO may institute on its own, expungement proceedings for registrations after three years from the registration date. Beginning December 27, 2023, an expungement proceeding may only be instituted against any registration between three and ten years after the registration date.

An ex parte reexamination proceeding is available to challenge registrations made under Section 1 of the Trademark Act in which the mark was not in use in commerce in connection with some or all of the registered goods and/or services as of the relevant date in the underlying application. For applications based on use in commerce, the “relevant date” is the filing date of the application; for applications based on an intent-to-use, the “relevant date” is the later of the filing date of the amendment to allege use or the expiration of the deadline for filing a statement of use. A petitioner may request, or the Director of the USPTO may institute on its own, a reexamination proceeding during the first five years following the registration date.

A petitioner in either of these proceedings is not required to identify the real party in interest on whose behalf the petition is filed, but the Director may require such information at its discretion. Petitions must include a verified statement of the petitioner’s reasonable investigation regarding whether the trademark had been used in commerce with the challenged goods or services and must include a concise factual statement explaining the basis for the petition. Once an expungement or reexamination proceeding is instituted, registrants will have three months to provide evidence of use to rebut the prima facie case, failing which, the registration will be cancelled in whole or in part.

What does this mean for trademark owners? Trademark owners should carefully review their portfolios for accuracy in the identification of goods and services, and to ensure the record reflects current correspondence information. Registrants should proactively delete any unused goods or services from the registration and maintain evidence of use of the mark in connection with any remaining goods and services.

Changes to Existing Procedures: New Nonuse Ground for Cancellation at the TTAB

In addition to the available grounds for cancellation, a person will now be able to file a petition to cancel a registration any time after the first three years from the registration date on the basis that the mark was never used in commerce.

Although the objective of a petition to cancel is similar to that of a petition to expunge or reexamine a registration, a petition to cancel initiates an adversarial proceeding at the TTAB.  This type of proceeding is akin to litigation and requires a petitioner’s continued involvement.

Changes to Existing Procedures: Shortened Response Period for Office Actions

The TMA also allows the USPTO to set the response period from 60 days to six months. Currently, applicants and registrants can respond to Office Actions issued during examination or post-registration for up to six months, with no extensions available. Effective December 1, 2022, applicants or registrants must respond to an Office Action within three months or request a single three-month extension of time to respond, with the payment of a fee, before the expiration of the statutory response period. If no response or extension request is filed, the application will be abandoned or the registration will be cancelled or will expire.

This shortened response period may speed up examinations, but will require applicants and registrants to promptly prepare their submissions to avoid abandonment or cancellation/expiration.

Codification of Letters of Protest Procedure

Letters of protest allows third parties to submit evidence supporting a refusal to register a mark during examination. Letters of protest may be used to challenge applications for confusingly similar marks and/or call the USPTO’s attention to fake specimens or fraudulent information. The TMA clarifies that a determination by the USPTO to include a letter of protest in the record of an application shall not prejudice any party’s right to raise any issue and rely on any evidence in any other proceeding. The Director is now required to make a determination on a letter of protest within two months from the date the letter is filed with the USPTO.

Sources: https://www.federalregister.gov/documents/2021/11/17/2021-24926/changes-to-implement-provisions-of-the-trademark-modernization-act-of-2020; https://www.congress.gov/116/cprt/HPRT42770/CPRT-116HPRT42770.pdf#page=2606