Amster Rothstein and Ebenstein, LLP - Intellectual Property Law

Trademark Law Alert: Big Changes Coming to U.S. Federal Trademark Practice

January 11, 2021
Author(s): Chester Rothstein, Max Vern , David P. Goldberg

The Trademark Modernization Act of 2020 (TMA) was signed into law on December 27, 2020 as part of the recently approved second coronavirus relief bill, a/k/a Consolidated Appropriations Act, 2021, H.R. 133, 116th Cong., Div. Q , Title II, Subtitle B (2020), available here
 
Perhaps because the TMA was passed as part of the lengthy COVID-19 relief and government funding package, it seems to have received only scant notice or discussion by U.S. and foreign trademark practitioners and brand owners. 
 
However, the TMA introduces big changes into U.S. federal trademark practice that address some of the many challenges faced by the U.S. Patent & Trademark Office (USPTO) and legitimate trademark owners in stopping unabated fraud by unscrupulous parties. We note that while the new rules may indeed help with the fraud problem, they will also surely lead to higher fees and shorter deadlines for all, causing significant additional burdens on applicants, both legitimate and nefarious.
 
In particular, the TMA addresses a deluge of spurious applications filed with the USPTO by foreign applicants, many China-based, who, for the first time in history are now filing more U.S. trademark applications than are domestic applicants. Numerous such applications include fraudulent specimens of use. Such filings clutter the system and create delays that impede USPTO operations and interfere with bona fide trademark owners’ rights. 
 
Before the TMA, the Trademark Laws and Rules already gave the USPTO certain tools to counter this flood, such as auditing Statements and Declarations of Use, requesting additional specimens of use, requiring applicants to provide in-house e-mail addresses, and requiring foreign trademark owners to hire U.S. counsel to handle all communications with the USPTO. Furthermore, the USPTO had already increased and introduced new fees for trademark matters (to take effect January 2, 2021), inter alia in connection with use-related issues, such as post-registration maintenance stage audits.
 
Those measures are certainly helpful, but likely insufficient to stop the deluge of use-related fraud. Hence, the TMA introduced new tools to make the USPTO more efficient, and strengthen trademark protection for legitimate rights owners. These new tools may make U.S. trademark practice more complex and costly for foreign and domestic trademark applicants and registrants alike. However, many of these new tools target use-based applications or registrations, but not Madrid Protocol IR extensions of protection or foreign registration-based marks, which are exempt from the use requirement for registration purposes until three years after registration.  

In particular: 
 
The TMA allows the USPTO to shorten the deadline for applicants to respond to Office Actions from the current 6-month period to 60 days. Applicants would be able to request extensions of time up to the maximum of 6 months from the Office Action date, however there would be a fee required to request such extensions. Practically speaking, this provision almost guarantees that trademark prosecution costs will increase and comes on top of other recent USPTO fee increases effective on January 2, 2021.

 
These sweeping changes have been introduced as the latest part of a multi-year campaign by the USPTO to discourage applicants from filing federal trademark applications with overly broad specifications, to remove the deadwood of currently unused registrations from the federal trademark register, and to make the federal trademark system more efficient in protecting those marks that are actually in use in U.S. commerce.
 
As a aside, the TMA includes provisions that purport to clarify that TTAB judges are “inferior officers” under the US Constitution by giving the USPTO’s Director discretionary power to accept, reject or modify TTAB decisions, which may insulate them from attacks similar to those leveled against Patent Trial and Appeal Board (PTAB) judges in USA v. Arthrex, Inc., no. 19-1434, which currently is pending before the U.S. Supreme Court. In this connection, we note that our firm has been active in seeking to protect the rights of our clients who have an interest in preserving the integrity of the TTAB and PTAB, and we have filed an amicus brief in the Arthrex case (read more.)
 
We will report on further developments as the regulations governing these new mechanisms are promulgated by the USPTO. In the meantime, please feel free to contact us if you have any questions about how the passage of the TMA may impact your rights.
 
 
Chester Rothstein and Max Vern are partners, and David P. Goldberg is an associate at Amster, Rothstein & Ebenstein LLP. Their practices focus on all aspects of intellectual property law, including trademarks, copyrights and patents. They can be reached at [email protected], [email protected] and [email protected]
 



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