07Jul2022

Authors: Jerry Jakubovic, Dennis S. Prahl | Practices: Trademarks | Tags: TM, TMA, Trademark, Trademarks, TTAB

THE TRADEMARK MODERNIZATION ACT: A PRIMER FOR BRAND OWNERS

Background

On December 18, 2021, the final rule implementing the Trademark Modernization Act of 2020 (TMA) went into effect, resulting in one of the most significant amendments to the rules of practice in trademark cases in decades. The TMA establishes ex parte expungement and reexamination proceedings for cancellation of a registration when the required use in commerce of the registered mark has not been made; provides for a new nonuse ground for cancellation before the Trademark Trial and Appeal Board (TTAB or Board); establishes flexible Office action response periods; and amends the existing letter-of-protest rule. The TMA also sets fees for petitions requesting institution of ex parte expungement and reexamination proceedings, and for requests to extend Office action response deadlines. The rules governing the suspension of USPTO proceedings and attorney recognition in trademark matters are also amended. Finally, a new rule is added to address procedures regarding court orders cancelling or affecting registrations.

Main Changes & Takeaways

New Procedures to Cancel Unused Registered Trademarks

Expungement: Any party may 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.
Reexamination: Any party may request cancellation of some or all of the goods or services in a use-based 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.
- Brand owners would be well served to exercise heightened diligence when crafting recitations of goods and services, making sure all of the goods and services listed in trademark filings are actually being provided, or risk exposure to their registrations being cancelled in-part or entirely.
- Brand owners with trademark filings under Section 44 should become particularly familiar with the new avenues made available to third parties to attack registrations based on non-use.

Shortened Office Action Response Deadlines

Beginning December 1, 2022, applicants (excluding Madrid Protocol applicants) or registrants must respond within three months to either office actions issued during examination of an application or post registration office actions. Brand owners can request a single three-month extension of time to respond for a fee.
- Brand owners should prepare to more carefully review and docket deadlines listed in Office Actions as much shorter response deadlines than the familiar six-months begin to issue.

Letters of Protest

Third parties can submit evidence to the USPTO, prior to registration, relevant to any ground for refusal in examination.
- Brand owners can be more proactive with their enforcement efforts by submitting a “letter of protest” to the USPTO to address a third party application for a trademark that they believe should be refused registration.
- Brand owners can provide a wide variety of evidence that the USPTO may not have otherwise had available for their consideration when examining third party applications.

Introduction to The Trademark Modernization Act

The TMA amends the Trademark Act of 1946 (the Act) to establish the following:

New ex parte expungement and reexamination proceedings to cancel, either in whole or in part, registered marks for which the required use in commerce was not made.
Amends the Act to allow a party to allege that a mark has never been used in commerce as a basis for cancellation before the TTAB.
Applicants (excluding Madrid Section 66(a) applicants) or registrants must respond within three months to either office actions issued during examination of an application or post registration office actions. They can request a single three-month extension of time to respond for a fee of $125.
Statutory authority for the USPTO’s letter-of-protest procedures, which allow third parties to submit evidence to the USPTO relevant to the registrability of a trademark during the initial examination of the application, and provides that the decision of whether to include such evidence in the application record is final and non-reviewable.
Regulations to implement the provisions relating to the new ex parte expungement and reexamination proceedings, and the letter-of-protest procedures, within one year of the TMA’s enactment.
Fees for the new ex parte expungement and reexamination proceedings and for response deadline extensions.
Rules regarding attorney recognition and correspondence to clarify that the USPTO will not recognize an attorney who has been “mistakenly, falsely, or fraudulently designated” and that an attorney need not formally withdraw under such circumstances.

Ex Parte Expungement and Reexamination Proceedings

The TMA created two new ex parte processes that will allow a third party, or the Director, to challenge whether a registrant made use of its registered trademark in commerce. If the registered mark was not properly used, the Office will be able to cancel the registration. The TMA also provides for improvements to make the trademark examination process more efficient and more effective at clearing applications that may block later-filed applications from proceeding to registration.

The two new ex parte proceedings created by the TMA—one for expungement and one for reexamination—provide new mechanisms for removing a registered mark from the trademark register, or cancelling the registration as to certain goods and/or services, when the registrant has not used the mark in commerce as of the relevant date required by the Act. In an expungement proceeding, the USPTO must determine whether the evidence of record supports a finding that the registered mark has never been used in commerce on or in connection with some or all of the goods and/or services recited in the registration.
In a reexamination proceeding, the USPTO must determine whether the evidence of record supports a finding that the mark registered under section 1 of the Act was not in use in commerce on or in connection with some or all of the goods and/or services as of the filing date of the application or amendment to allege use, or before the deadline for filing a statement of use, as applicable. If the USPTO determines that the required use was not made for the goods or services at issue in the proceeding, and that determination is not overturned on review, the registration will be cancelled in whole or in part, as appropriate.

These new proceedings are intended to provide a more efficient and less expensive alternative to a contested inter partes cancellation proceeding before the TTAB. While the authority for the expungement and reexamination proceedings is set forth in separate subsections of the Act, the procedures for instituting the proceedings, the nature of the evidence required, and the process for evaluating evidence and corresponding with the registrant, as set forth in this rule, are essentially the same. Thus, for administrative efficiency, proceedings involving the same registration may be consolidated by the USPTO for review

A. Timing for Requests for Proceedings

The TMA specifies the time periods during which a petitioner can request institution of expungement and reexamination proceedings, and during which the Director may institute such proceedings based on a petition or on the Director’s own initiative. Accordingly, a petitioner may request, and the Director may institute, an ex parte expungement proceeding between 3 and 10 years following the date of registration. However, the TMA provides that, until December 27, 2023 (3 years from the TMA’s enactment date), a petitioner may request, and the Director may institute, an expungement proceeding for a registration that is at least 3 years old, regardless of the 10-year limit. A petitioner may request, and the Director may institute, a reexamination proceeding during the first five years following the date of registration.

B. Petition Requirements

Under the TMA, any person may file a petition with the USPTO requesting institution of an expungement or reexamination proceeding. Reexamination and expungement petitions are intended to allow third parties to bring unused registered marks to the attention of the USPTO.

A petition for expungement must allege that the relevant registered trademark has never been used in commerce on or in connection with some or all of the goods and/or services listed in the registration.

A petition for reexamination must allege that the trademark was not in use in commerce on or in connection with some or all of the goods and/or services listed in the registration on or before the relevant date, which, for any particular goods and/or services, is determined as follows:

In a use-based application for registration of a mark with an initial filing basis of section 1(a) of the Act for the goods and/or services listed in the petition, and not amended at any point to be filed pursuant to section 1(b) of the Act, the relevant date is the filing date of the application; or
In an intent-to-use application for registration of a mark with an initial filing basis or amended basis of section 1(b) of the Act for the goods and/or services listed in the petition, the relevant date is the later of the filing date of an amendment to allege use identifying the goods and/or services listed in the petition, or the expiration of the deadline for filing a statement of use for the goods and/or services listed in the petition, including all approved extensions thereof.

The Director will consider only complete petitions for expungement or reexamination. If a petition does not satisfy the requirements for a complete petition, the USPTO will issue a letter providing the petitioner 30 days to perfect the petition by complying with the outstanding requirements, if otherwise appropriate.

C. Petition Fee

The TMA sets a fee of $400 per class for a petition for expungement or reexamination.

D. Reasonable Investigation Requirement

A petition requesting institution of an expungement or reexamination proceeding must include a verified statement that sets forth the elements of the reasonable investigation the petitioner conducted to determine that the mark was never used in commerce (for expungement petitions) or not in use in commerce as of the relevant date (for reexamination petitions) on or in connection with the goods and/or services identified in the petition.

A reasonable investigation is an appropriately comprehensive search likely to reveal use of the mark in commerce on or in connection with the relevant goods and/or services, if such use was, in fact, made. Thus, what constitutes a reasonable investigation is a case-by-case determination, but any investigation should focus on the mark disclosed in the registration and the identified goods and/or services, keeping in mind their scope and applicable trade channels.
The elements of a petitioner’s investigation should demonstrate that a search for use in relevant channels of trade and advertising for the identified goods and/or services did not reveal any relevant use. In addition, the petitioner’s statement regarding the elements of the reasonable investigation should specifically describe the sources searched, how and when the searches were conducted, and what information and evidence, if any, the searches produced.
Sources of information and evidence should include reasonably accessible sources that can be publicly disclosed, because petitions requesting institution of expungement and reexamination proceedings will be entered in the registration record and thus be publicly viewable through the USPTO’s Trademark Status & Document Retrieval (TSDR) database. The number and nature of the sources a petitioner must check in order for its investigation to be considered reasonable, and the corresponding evidence that would support a prima facie case, will vary depending on the goods and/or services involved, their normal trade channels, and whether the petition is for expungement or reexamination. Because nonuse for purposes of expungement and reexamination is necessarily determined in reference to a time period that includes past activities (not just current activities), a petitioner’s investigation normally would include research into past usage of the mark for the goods and/or services at issue in the petition and thus may include archival evidence.

As a general matter, a single search using an internet search engine likely would not be considered a reasonable investigation. On the other hand, a reasonable investigation does not require a showing that all of the potentially available sources of evidence were searched. Generally, an investigation that produces reliable and credible evidence of nonuse at the relevant time should be sufficient.

Appropriate sources of evidence and information for a reasonable investigation may include, but are not limited to:

State and Federal trademark records;
Internet websites and other media likely to or believed to be owned or controlled by the registrant;
Internet websites, other online media, and publications where the relevant goods and/or services likely would be advertised or offered for sale;
Print sources and web pages likely to contain reviews or discussions of the relevant goods and/or services;
Records of filings made with or of actions taken by any State or Federal business registration or regulatory agency;
The registrant’s marketplace activities, including, for example, any attempts to contact the registrant or purchase the relevant goods and/or services;
Records of litigation or administrative proceedings reasonably likely to contain evidence bearing on the registrant’s use or nonuse of the registered mark; and
Any other reasonably accessible source with information establishing that the mark was never in use in commerce (expungement), or was not in use in commerce as of the relevant date (reexamination), on or in connection with the relevant goods and/or services.

A petitioner is not required or expected to commission a private investigation but may choose to generally reference the results of any report from such an investigation without disclosing specific information that would waive any applicable privileges.

E. Director-Initiated Proceedings

The Director may institute an expungement or reexamination proceeding on the Director’s own initiative, if the information and evidence available to the USPTO supports a prima facie case of nonuse.

F. Establishing a Prima Facie Case

An expungement or reexamination proceeding will be instituted only in connection with the goods and/or services for which a prima facie case of relevant nonuse has been established. A prima facie case requires only that a reasonable predicate concerning nonuse be established.

With respect to these proceedings, a prima facie case includes sufficient notice of the claimed nonuse to allow the registrant to respond to and potentially rebut the claim with competent evidence, which the USPTO must then consider before making a determination as to whether the registration should be cancelled in whole or in part, as appropriate.

For expungement and reexamination proceedings instituted on the basis of a petition, the determination of whether a prima facie case has been made is based on the evidence and information that is collected as a result of the petitioner’s reasonable investigation and set forth in the petition, along with the USPTO’s electronic record of the involved registration.

G. Notice of Petition and Proceedings

When a petitioner files a petition requesting institution of expungement or reexamination proceedings, the petition will be uploaded into the registration record and be viewable through TSDR. The USPTO plans to send a courtesy email notification of the filing to the registrant and/or the registrant’s attorney, as appropriate, if an email address is of record. The registrant may not respond to this courtesy notice.

Once the Director has determined whether to institute a proceeding based on the petition, notice of that determination will be sent to the petitioner and the registrant, along with the means to access the petition and supporting documents and evidence.
If a proceeding is instituted, the petitioner will not have any further involvement. In the case of Director-initiated proceedings, there is no petitioner, and thus all relevant notices will be provided only to the registrant. In both types of proceedings, documents associated with the proceeding will be uploaded into the registration record and will be publicly viewable through TSDR.

H. Procedures for Expungement and Reexamination Proceedings

The Director’s determination to institute a proceeding is set forth in an Office action, which will require the registrant to provide such evidence of use, information, exhibits, affidavits, or declarations as may be reasonably necessary to rebut the prima facie case by establishing that the required use in commerce has been made on or in connection with the goods and/or services at issue, as required by the Act. While institution necessitates a response from the registrant that includes evidence rebutting the prima facie case, the ultimate burden of proving nonuse by a preponderance of the evidence remains with the Office.

The TMA provides that any documentary evidence of use provided by the registrant need not be the same as that required under the USPTO’s rules of practice for specimens of use, but must be consistent with the definition of “use in commerce” and in relevant case law. Although testimonial evidence may be submitted, it should be supported by corroborating documentary evidence.
For expungement proceedings, the registrant’s evidence of use must show that the use occurred before the filing date of the petition to expunge or before the date the proceeding was instituted by the Director under, as appropriate. For reexamination proceedings, the registrant’s evidence of use must demonstrate use of the mark in commerce on or in connection with the goods and/or services at issue on or before the relevant date established pursuant to the TMA.
A registrant in an expungement or reexamination proceeding may also respond to an Office action by deleting some or all of the goods and/or services at issue in the proceeding and that an acceptable deletion will be immediately effective, that is, upon deletion the registration is considered cancelled as to the deleted goods and/or services, and the deleted goods and/or services cannot be reinserted.
The registrant must respond to the initial Office action via TEAS within three months of the issue date, but has the option to request a one-month extension of time to respond for a fee of $125.

If the registrant timely responds to the initial Office action in the expungement or reexamination proceeding, the USPTO will review the response to determine if use of the mark in commerce at the relevant time has been established for each of the goods and/or services at issue. If the USPTO finds, during the course of the proceeding, that the registrant has demonstrated relevant use of the mark in commerce on or in connection with the goods and/or services at issue sufficient to rebut the prima facie case, demonstrated excusable nonuse in appropriate expungement cases, or deleted goods and/or services, such that no goods and/or services remain at issue, the proceeding will be terminated upon the USPTO issuing a notice of termination.

If, however, the response fails to establish use of the mark in commerce at the relevant time (or to sufficiently establish excusable nonuse, if applicable) for all of the goods and/or services at issue, or otherwise fails to comply with all outstanding requirements, the USPTO will issue a final action. In an expungement proceeding, the final action will include the examiner’s decision that the registration should be cancelled for each good or service for which the mark was determined to have never been used in commerce or for which no excusable nonuse was established. In a reexamination proceeding, the final action will include the examiner’s decision that the registration should be cancelled for each good and/or service for which it was determined the mark was not in use in commerce on or before the relevant date.

If a final action is issued, the registrant will have three months to file a request for reconsideration or an appeal to the TTAB, if appropriate. These deadlines are not extendable.

I. Estoppel and Co-Pending Proceedings

Upon termination of an expungement proceeding where it was established that the registered mark was used in commerce on or in connection with any of the goods and/or services at issue in the proceedings prior to the date a petition to expunge was filed or the Director-initiated proceedings were instituted, no further expungement proceedings may be instituted as to those particular goods and/or services.

Upon termination of a reexamination proceeding where it was established that the registered mark was used in commerce on or in connection with any of the goods and/or services at issue, on or before the relevant date at issue in the proceedings, no further expungement or reexamination proceedings may be instituted as to those particular goods and/or services. The TMA does not explicitly bar a subsequent expungement proceeding following a determination in a reexamination proceeding.

New Nonuse Ground for Cancellation Before the TTAB

The TMA creates a new nonuse ground for cancellation, allowing a petitioner to allege that a mark has never been used in commerce as a basis for cancellation before the TTAB. This ground is available at any time after the first three years from the registration date.

Flexible Response Periods

The TMA allows the USPTO to set response periods by regulation for a time period between 60 days and 6 months, with the option for extensions to a full 6-month period. Previously, applicants had six months to respond to Office actions issued during the examination of a trademark application. Many examination issues, particularly formal requirements like amendments to identifications or mark descriptions, can be resolved well before the current six-month deadline. However, the USPTO also recognizes that Office actions containing statutory refusals may present complex issues that require more time to address, and thus applicants and their attorneys may need the full response period to prepare and submit a response.

The USPTO set a response period of three months for responses to Office actions in applications under sections 1 and/or 44 of the Act.
Applicants may request a single three-month extension of this three-month deadline, subject to payment of a fee: $125 for an extension request filed through TEAS and $225 for a permitted paper-filed request.
Applications under section 66(a) of the Act will not be subject to the three-month deadline for Office action responses; the deadline will instead remain at six months.
These flexible response periods are intended to promote efficiency in examination by shortening the prosecution timeline for applications with issues that are relatively simple to address, while providing sufficient time, through an optional extension, for responses to Office actions with more complex issues.
In addition, shorter response periods may result in faster disposal of applications and thus reduce the potential delay in examination of later-filed applications for similar marks.

There is no required date of implementation for the flexible response and extension provisions––the Office intends to delay implementation of them until December 1, 2022.

Letters of Protest

The TMA amends the Act to provide express statutory authority for the USPTO’s existing letter-of-protest procedure, which allows third parties to submit to the USPTO for consideration and entry into the record evidence bearing on the registrability of a mark.

This procedure is intended to aid in examination without causing undue delay or compromising the integrity and objectivity of the ex parte examination process. The TMA also provides that the Director shall determine whether evidence should be included in the record of the relevant application within two months of the date on which a letter of protest is filed.

There is a $50 per letter-of-protest submission fee.

Suspension of Proceedings

The TMA clarifies that expungement and reexamination proceedings are included among the types of proceedings for which suspension of action by the Office or the TTAB is authorized. In addition, the USPTO revises these rules to align them with the existing practice regarding suspension of proceedings before the USPTO or the TTAB. Generally, the USPTO will suspend prosecution of a trademark application or a matter before the TTAB during the pendency of a court or TTAB proceeding that is relevant to the issue of registrability of the involved mark; therefore, this rule eliminates the limitation to other proceedings in which a party or parties are engaged.

Suspension will normally be maintained until the outcome of the proceeding has been finally determined. The expiration of time for any further review includes the time for petitioning for rehearing or U.S. Supreme Court review.
The Office will not normally lift a suspension until after the time for seeking such review has expired, a decision denying or granting such review has been rendered, and any further review has been completed.

Attorney Recognition

When a practitioner has been mistakenly, falsely, or fraudulently designated as an attorney for an applicant, registrant, or party to a proceeding without the practitioner’s prior authorization or knowledge, recognition of that practitioner shall be ineffective. In addition, the TMA revises the laws to refer to “recognition” instead of “representation.”

The term “recognition” reflects the fact that the USPTO does not control representation agreements between practitioners and clients but merely recognizes an attorney for purposes of representation before the USPTO.
Further, as with service of a cancellation petition, the USPTO may correspond directly with a registrant in connection with notices of institution of expungement or reexamination proceedings.
Accordingly, the USPTO plans to send notices of institution of expungement and reexamination proceedings to the owner currently identified in the registration record and to the attorney of record, if any, or any previous attorney of record whose contact information is still in the record.