Trademark and Copyright Implications of the Consolidated Appropriations Act, 2021

Legal Alert

March 8, 2021

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On December 27, 2020, Congress passed the Consolidated Appropriations Act, which in addition to providing stimulus relief for the COVID pandemic, it includes important changes to trademark and copyright law.

TRADEMARK MODERNIZATION ACT OF 2020

The Trademark Modernization Act of 2020 (TMA) amends the Trademark Act of 1946, also known as the Lanham Act, and makes significant changes to trademark law. Some of these key changes are summarized below.

Letters of Protest

The TMA authorizes a third party to submit evidence to the PTO to oppose an application for a federal trademark registration, i.e., it codifies the existing Letter of Protest procedure.

The existing procedure is informal, without a timeline for when the evidence must reach an examiner and does not require a filing fee. Under the TMA, the Director of the USPTO will have two months in which to review the evidence submitted with a letter of protest. In addition, the PTO must establish by regulation appropriate procedures for the consideration of evidence submitted with a letter of protest, and may choose to institute a filing fee.

Brand owners will want to consider making third-party submissions to offer evidence during examination of applications filed by their competitors. Evidence can relate to any ground on which an examiner could refuse registration, including conflicting senior registration(s) and evidence that a mark is not actually in use for the goods or services claimed.

Reexamination and Expungement

The TMA authorizes two new mechanisms targeting deadwood on the USPTO’s trademark register:

Reexamination

The bill establishes a procedure for any party to petition the PTO to reexamine any trademark registration on nonuse grounds.

An ex parte reexamination, would permit challenges to use-based registrations issued under Section 1(a) of the Lanham Act, or, in other words, registrations whose owners declared under oath during the application process that their marks were used in commerce. A reexamination petition must be filed within five years of the registration's issuance.

Expungement

The TMA also establishes a procedure for any party to petition the PTO to expunge a registration for a trademark that has never been used in commerce.

An ex parte expungement, would allow challenges to marks that have never been used in commerce. It would primarily target registrations issued under either Section 44(e) or Section 66(a) of the Act. An expungement petition may be filed at any time following three years after the date of registration and before the expiration of 10 years following the date of registration.

Standing would not be required to initiate either of the two proceedings. Instead, any party could initiate them by submitting to the Director of the PTO evidence or testimony establishing a “prima facie case” of nonuse of a mark in commerce as of the “relevant date,” which the TMA defines as:

the date on which an averment of use is filed in support of an application with a Section 1(a) basis; and
the third anniversary of a registration issued under either Section 44(e) or Section 66(a).

In addition, the PTO may also initiate an expungement or reexamination proceeding.

These new procedures will be less costly and time-consuming than inter partes

cancellation proceedings before the Trademark Trial and Appeal Board.

Trademark owners may wish to file such a petition against a registration where it is believed the mark has not been used as required and/or where the registration is blocking their own application.

Injunctive Relief

The TMA reestablishes the standard for obtaining injunctive relief in litigation under the Lanham Act, restoring the rebuttable presumption of irreparable harm in those jurisdictions that have rejected it.

Courts have required that, to obtain an injunction against an infringer, the trademark owner must prove that it will be “irreparably harmed” if the infringer is not enjoined from further use of the infringing mark. The TMA provides that a trademark owner who proves infringement will enjoy a legal presumption that the harm caused by continued infringement will be irreparable, thereby increasing the trademark owner’s likelihood of obtaining injunctive relief in appropriate cases.

Flexible Office Action Deadlines

The TMA grants the PTO greater flexibility in setting office action response deadlines. Specifically, it authorizes the PTO to shorten response periods, by regulation, for a time period between 60 days and six months, so long as applicants can receive extensions of time to respond, up to the traditional full six-month period.

COPYRIGHT ALTERNATIVE IN SMALL-CLAIMS ENFORCEMENT ACT OF 2020

The Copyright Alternative in Small-Claims Enforcement Act (CASE Act) establishes a small claims court within the Copyright Office to hear infringement disputes valued under $30,000. A Copyright Claims Board is established, comprised of at least three Copyright Claims Officers and two Copyright Claims Attorneys appointed by the Librarian of Congress. The Copyright Claims Officers will have many powers similar to those of a federal judge, with the specific purpose of facilitating the settlement of a claim or a resolution on the merits.

The CASE Act provides expedited procedures to keep litigation costs low, allowing Claims Board Officers to hold conferences to address case management or discovery issues, but not formal motion practice as in federal court.

Claims of copyright infringement, declaratory relief, misrepresentation in connection with Section 512 of the Digital Millennium Copyright Act (DMCA), certain compulsory counterclaims, and legal and equitable defense may all be brought before the Copyright Claims Board.

Participation is voluntary with an opt-out procedure for defendants, and parties may choose instead to have a dispute heard in court. If the parties agree to have their dispute heard by the board, they shall forego the right to be heard before a court and the right to a jury trial.

PROTECTING LAWFUL STREAMING ACT OF 2020

Protecting Lawful Streaming Act of 2020 (“PLSA”) creates a felony criminal liability for willful streaming of pirated content for commercial purposes. The violator(s) must engage in large-scale streaming of copyright material willfully, and for purposes of commercial advantage or private financial gain, offer or provide to the public a streaming service primarily designed or provided for the purpose of infringing copyrights, or that has no other commercially significant purpose, or that is intentionally marketed for use in connection with copyright infringement, is now a felony offense.

It will be up to the U.S. Department of Justice to enforce this provision, which may be asserted against digital transmission services, as opposed to consumers of the content.

Our intellectual property practitioners are here to help all clients navigate these new laws, and protect and enforce their trademarks and copyrights pursuant to these amendments.