New US Law Establishes New Procedures for Removing Trademark Registrations Due to Non-Use, but These Procedures May Become Available Only Toward the Very End of 2021

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New US Law Establishes New Procedures for Removing Trademark Registrations Due to Non-Use, but These Procedures May Become Available Only Toward the Very End of 2021

It has been a little over a month since then President Trump signed the Trademark Modernization Act of 2020 (TMA) into a law. The TMA was signed into law on December 27, 2020, and will be implemented by December 27, 2021. The one-year period is to allow the USPTO to write regulations implementing the new procedures and rules. So, trademark owners and IP practitioners have time to get ready to take advantage of new procedures introduced by this law or be ready to defend against them.

Perhaps the most important new procedures introduced by the TMA are the procedures to challenge trademark registrations on the ground of non-use of the mark in U.S. commerce. Under U.S. law, a mark generally must be in use in U.S. commerce before it can be registered (“the commercial use requirement”). When the USPTO examines trademark applications, it pretty much takes the word of applicant that the mark is in use. Hence, opportunities for fraud abound.

Also, non-U.S. owners are exempted from the commercial use requirement if they base their applications in the U.S. on registrations in their home jurisdictions. In these cases, although foreign applicants don’t need to show use of the mark in the U.S., they must maintain a bona fide intention to use the mark in the U.S. within a reasonable time (if they do not use the mark at the time of filing). Needless to say that there are a lot of deadwood, fake or semi—fraudulent registrations on the U.S. Trademark Register. To remove such deadwood or blocking fraudulent registrations an interested party currently would be required to initiate expensive proceedings either before the Trademark Trial and Appeal Board (TTAB) or in federal court. Obviously, many are discouraged by the prospect of unpredictable and expensive litigation. By contrast, the two of the three new procedures are ex parte, i.e. do not involve an adverse party. Hence such proceedings should be less expensive and more predictable.

Expungement (Removal) - new Section 16A or 15 U.S.C. 1066A

Any interested party may request that the USPTO remove 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. This new procedure must be brought between three to ten years after the registration date.

Currently, an interested party can only use an inter partes cancellation proceeding in a TTAB based on an abandonment ground or lack of bona fide intent by applicant. (Fraud is another ground, but is tough to prove.) The test for cancelling such registrations is complicated because the abandonment ground has two elements. The challenging party must not only prove non-use for three years, but the registrant has the opportunity to defend its registration if it proves that it “lacked the intent not to resume use of the mark” in the U.S. Both elements are hard to establish.

Thus, this new procedure will provide an inexpensive tool for U.S. parties as well as foreign parties to remove registrations obtained by non-U.S. parties when they don’t have to prove use of the mark in the U.S. (for example, under the Madrid system). Similar procedures are available in many other countries. It’s strange that the U.S. only now adopts it. But later better than never.

Reexamination - new Section 16B or 15 U.S.C. 1066B

Any interested party may request that the USPTO remove 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.

This procedure is intended to help to combat registrations based on actual use of the mark in the U.S. obtained fraudulently (or semi-fraudulently) usually by U.S. domestic parties or by foreign parties who for some reason do not have a registration in their home jurisdictions or proceeded with a U.S. application like a domestic applicant.

For example, this proceeding would address the date the underlying use-based application was filed, the date an amendment to allege use for an underlying intent-to-use application was filed. This new procedure must be brought within the first five years after the trademark registers and is generally directed at registrations where a questionable specimen showing use in commerce of the trademark was submitted during examination of the underlying application.

The USPTO Director can initiate either of these proceedings without a third party petition if the Director discovers information that supports a prima facie case that the trademark has never been used in commerce or has not been used in commerce as of a particular relevant date with certain goods or services covered by the registration.

New ground for a TTAB cancellation proceeding

This new ground is substantively equivalent to the expungement claim that a registered trademark has never been used in commerce, as described above, but may be brought at any time following three years from registration.

Again, these procedures are not yet available awaiting the USPTO’s issuance of regulations later this year. USPTO has created a resource page for the Trademark Modernization Act.

There are other interesting new rules and modifications to the existing procedures, which this Blog will address in upcoming postings. Stay tuned.

Text © 2021 Maxim A. Voltchenko

* This piece is not intended to be a review of U.S. law or USPTO practice. This posting may not necessarily represent the views of the author’s employing law firm. Although every effort has been made to verify the accuracy of items in the Sputnik Blog®, readers are urged to check independently on matters of specific concern or interest.