The latest COVID relief bill, more properly known as the “Consolidated Appropriations Act, 2021,” contains a great many provisions that have nothing to do with COVID-19.
The 5,593-page bill, which was passed by Congress on December 22 and subsequently signed into law by President Trump, makes a number of changes to intellectual property law, including trademark law.
The Trademark Monetization Act (TMA) will become effective in December 2021 and makes major amendments to the Lanham Act, which governs trademarks. This is considered the most significant overhaul of US trademark law since the Trademark Law Revision Act of 1988.
The TMA is designed to modernize trademark examination and to fight to increasing numbers of trademark registrations for marks that aren’t actually used in commerce.
In July 2019, a hearing before the House Subcommittee on Courts, Intellectual Property, and the Internet focused on the “clutter” or “deadwood” on the US Patent and Trademark Office’s (USPTO’s) trademark registers.
As USPTO Commissioner Dennison testified,
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.
He testified that recent years have seen a significant increase in the number of trademark applicants who made false or inaccurate claims in their applications.
The TMA allows both ex parte reexamination of registered marks, to check whether they were actually in use, and ex parte expungement, for removal of marks that have never been used in commerce. An expungement proceeding may be started only after a trademark registration has been in effect for three years. Both reexamination and expungement will only be available before the fifth anniversary of a trademark registration.
Any party can challenge allegedly unused marks by making a prima facie case of nonuse. The Director of the USPTO can also decide on his or own initiative that a mark hasn’t been used.
It’s then up to the owner of the mark to provide documentary evidence that a mark was actually used in commerce.
If the registration is stricken by the USPTO, the trademark owner can appeal to the Trademark Trial and Appeal Board.
The TMA also clarifies the standard that applies when a plaintiff seeks injunctive relief for Lanham Act violations.
Before the US Supreme Court’s decisions in eBay Inc. v. MercExchange LLC and Winter v. Natural Re-sources Defense Council, Inc., courts almost always recognized a presumption that a plaintiff under the Lanham Act would be irreparably harmed by continuing violations of the Act – such as trademark infringement.
However, the Supreme Court’s decisions eliminated such presumptions under patent and environmental law, and some lower courts subsequently no longer applied such presumptions in Lanham Act cases.
The TMA restores the rebuttable presumption of irreparable harm for trademark infringement and other Lanham Act violations, making it easier for successful plaintiffs to obtain injunctions against those who violate their rights.
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