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Thoroughly Modern! The Trademark Modernization Act Offers New Tools for Trademark Owners

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Sterne, Kessler, Goldstein & Fox

Trademark owners and practitioners have some extra reasons to celebrate this year, as the majority of the Trademark Modernization Act went into effect on December 18, 2021. Among other benefits for trademark infringement actions and federal trademark examination, the TMA also created two valuable new mechanisms – ex parte expungement and reexamination proceedings – to clear unused (and even fraudulent) trademark registrations from the federal trademark Register. 
 
The USPTO will start accepting petitions requesting expungement or reexamination on or after December 27, 2021 – so which one may be the right course for your enforcement strategy?
 
Expungement petitions are appropriate when you believe that a registered mark has never been used in commerce with some or all of the goods/services covered by a federal registration. For the next two years (i.e., until December 27, 2023), an expungement petition can be filed against any registration that is at least three years old; after that date, the proceeding is only available against registrations between three and ten years old. 
 
Reexamination petitions are aimed at registrations for which the mark was not in use at the application filing date (for a use-based application) or the Amendment to Allege Use filing date/Statement of Use expiration date (for an intent-to-use application). A reexamination petition may only be filed within the first five years after registration.
 
Both of these enforcement tools are available to any person or company, and may be requested anonymously unless otherwise required by the Director. As with federal trademark applications, potential petitioners domiciled outside of the U.S. must file these petitions through U.S. licensed counsel. 
 
These petitions may be filed online through the USPTO’s Trademark Electronic Application System (TEAS), and must include all of the following requirements:

  1. A verified statement that the petitioner conducted a “reasonable investigation” into whether the trademark had been used in commerce with the applicable goods/services, including a concise factual statement detailing the basis for the petition;
  2. Evidence supporting a prima facie case of nonuse in commerce ("a reasonable predicate"); and
  3. A fee of $400 per class of goods/services challenged.

The USPTO will email the registrant or its attorney a copy of the petition (if an email address is on file), and all correspondence related to the petition will be visible in the Trademark Status and Document Retrieval (TSDR) system.
 
Once the USPTO institutes an expungement or reexamination proceeding, an Examining Attorney will issue an Office Action requiring a response – within three months – with evidence of use and/or excusable non-use (for expungement proceedings involving registrations with underlying §44(e) or §66(a) applications). The registrant may also request a one-month extension of time to respond with the payment of $125. 
 
If the registrant does not respond, the USPTO will terminate the proceeding and cancel the registration in whole or in part, as requested – but if the registrant does respond, the USPTO will consider the potential use/non-use evidence and issue a decision.

Of note, as part of its efforts to clear the federal register of unused marks, the USPTO Director may also request and initiate expungement and reexamination proceedings on its own if a prima facie case of nonuse is established.
 
Here are some important considerations to keep in mind for these new tools:

  • Hire an experienced trademark lawyer: For both potential petitioners who may wish to request expungement or reexamination, and registrants seeking to defend against such a proceeding, it is important to consider hiring a trademark attorney/firm to: (1) investigate the potential claims of nonuse and build the necessary record of evidence; and (2) protect the petitioner’s identity (unless specifically required by the USPTO), avoiding potential negative publicity and retribution.
  • Conduct clearance searches prior to filing an application: This is always advisable and, as these new expungement and reexamination tools could remove the blocking registration(s), a clearance search may alert brand owners about an identical/similar mark that registered without use in commerce.
  • Brand owners in the cannabis and CBD industries have new opportunities to clear the register for their brands in the future: For brand owners who have not been able to register their marks because of the federal legal framework around cannabis products and CBD-ingredient consumables, reexamination proceedings could be useful for removing recently registered marks for goods/services that were registered based on a fraudulent statement or are for goods that may not be lawfully used in commerce.
  • Brand owners must archive their use of their marks: In addition to being prepared to institute enforcement actions if merited, brand owners must now (more than ever) be prepared to respond to such a proceeding, if one is initiated against your registration. Thus, as always, we recommend that brand owners take care to maintain: (1) examples of use of marks on all relevant goods/services covered by your registrations, including different photographs, brochures, and relevant materials showing use for the same goods/services; (2) documentation, photographs, and screenshots of updated uses, e.g., an updated website; and (3) information regarding the discontinuation of use of marks on particular goods/services – this is particularly critical at the time of filing a Declaration of Continued Use on its own or with a Renewal Application.

This article appeared in the December 2021 issue of MarkIt to Market®. To view our past issues, as well as other firm newsletters, please click here.