New Response Deadlines for Trademark Office Actions on the Horizon (and Changes to Attorney Recognition)

On November 17, 2021, the USPTO published its Final Rule relating to the implementation of the Trademark Modernization Act (TMA) (part of the Consolidated Appropriations Act of 2021, Pub. L. No. 116-260 (Dec. 27, 2020) – 2,126 pages long (!) – see p. 1020 for the text of the TMA).  Nov. 17, 2021 Final Rule, “Changes To Implement Provisions of the Trademark Modernization Act of 2020,” 86 FR 64300, pp. 64300-64334 (also available in PDF form).

Prior posts on this blog previously described the two new TTAB proceedings created by the TMA (i.e., expungement and ex parte reexamination based on allegations of non-use) as well as the new non-use grounds for cancellation. This post addresses the changes in the standard deadlines to respond to an Office action issued by the Trademark Office (either during the application process or in connection with post-registration filings) (aka “flexible response periods”) and withdraws the USPTO’s stated intention to change the “attorney recognition rules” under 37 C.F.R. § 2.17(g).   Some key points are summarized below regarding these two provisions, but we recommend reading the full Final Rule (35 pages) and the USPTO’s updated Trademark Modernization Act Page in order to get a more complete picture of these two aspects of the amendments.

Flexible Response Periods

The TMA amended 15 U.S.C. § 1062(d) to permit the USPTO to reduce the periods of time to respond to Office actions to between 60 days and 6 months, although the final response periods had to be set by regulation, rather than the whim/discretion of any individual Examining Attorney on a case-by-case basis.   Prior USPTO requests for public comment on proposed rulemakings offered several options for these response periods.

In its Final Rule, the USPTO outlined the final selection: Instead of the traditional six (6) months we’ve always had to respond to any Office action issued by the USPTO, applicants for certain types of applications shall have an initial three (3) month period to respond, but a single-three (3) month extension is available upon request and payment of additional government fees ($125 for TEAS applications or $225 for paper filings).  See pages 7 and 17 of the Final Rule discussing the flexible response periods (and public comments received) in more detail, and page 26 discussing amendments to 37 C.F.R. § 2.6 for new fees to be imposed as of December 1, 2022. Failure to file a response to the Office action or to request the extension and pay the fee before the initial three-month period expires will result in abandonment of the application.

This same three-month period (followed by a single-three-month extension upon timely request and payment of the fee) will also apply to post-registration Office actions.

In contrast, however, applications filed under Section 66 (Madrid Protocol) are not subject to the shorter response period (plus extension and additional fee) apparently because of U.S. treaty obligations; those applicants can still rely on the original six-month response period.

37 C.F.R. § 2.93 (relating to responding to Office actions issued in connection with the new reexamination proceedings) has already been updated to reflect the deadline to respond and the new fee requirements for extensions. We would anticipate that the regulations implementing the flexible response periods generally will track the language of 37 C.F.R. § 2.93(b)(1).

Given the differences in response deadlines for Office actions issued in different kinds of cases, it will be very important to confirm (quickly, after an Office action is received) which response period applies so that complete responses or requests for extension (and payment of the required fee) can be accomplished timely.

As the Deputy Commissioner for Trademark Operations, Dan Vavonese confirmed during the Trademark Public Advisory Committee (TPAC) Meeting on July 29, 2022, this amendment will go into effect on December 1, 2022.

Recognition of Attorney Representation of Trademark Owner

In prior versions of (and proposed amendments to) this Rule, the USPTO stated its intention to change its practice regarding recognition of attorneys representing clients before the Trademark Office under 37 C.F.R. § 2.17(g) to be more in line with standard practice (outside of the USPTO) that attorneys continue to have obligations on behalf of their clients under the relevant Rules of Professional Conduct long after the registration issues or the application has been abandoned.

In the July 2, 2019 Final U.S. Counsel Rule, “Requirement of U.S. Licensed Attorney for Foreign Trademark Applicants and Registrants” (“U.S. Counsel Rule”), 84 FR 31498, 31498-31511 at 31501 (also available in PDF form) the following explanation appears:

  • “Prior to implementation of this rule, § 2.17(g) referred to the duration of a power of attorney. However, under § 2.17(b), a representative may be recognized by methods other than the filing of a power of attorney. Therefore, in order to respond to the commenter’s inquiry and to clarify when recognition ends, regardless of the how the representative was recognized, the USPTO felt it was necessary to amend § 2.17(g) to make clear that it refers to the duration of recognition, not just to the duration of a power of attorney.”

More recently, in the May 18, 2021 Notice of Proposed Rulemaking, “Changes to Implement Provisions of the Trademark Modernization Act of 2020,” 86 FR 26862, 26862-26888 at 26870 (also available in PDF form) the following revision was proposed:

  • “The USPTO proposes revising § 2.17(g) to indicate that, for the purposes of an application or registration, recognition of a qualified attorney as the applicant’s or registrant’s representative will continue until the owner revokes the appointment or the attorney withdraws from representation.”

This May 2021 proposal contemplated that attorneys would continue to be recognized as counsel of record on behalf of these clients (for maintenance and renewal purposes, audit responses, notifications of TTAB proceedings or litigation), even if ownership of the registration changed, until that attorney withdrew its representation, or the applicant/registrant filed a revocation of the power of attorney/appointment of new attorney. See 86 FR 26862 at 26870.

In the November 17, 2021 Final Rule, however, the USPTO withdrew that revision – and instead decided not to implement these proposed amendments to 37 CFR §2.17(g) “at this time.” (Or maybe not at all.)  The Final Rule revised 37 CFR § 2.18(a)(1) to refer to “recognition” instead of “representation” to be more consistent with “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.”  (Rule at 64307).

Note in particular that the USPTO will be corresponding directly with registrants regarding service of cancellation petitions or the institution of expungement or reexamination proceedings, and now send electronic certificates of registration to registrants’ email addresses upon issuance.  Thus, trademark owners may receive certain communications directly from the USPTO even when they are represented by counsel in connection with other trademark matters.  As a nod to practitioners’ comments to the prior iterations of this Rule, the USPTO has announced that it “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.”  Id. Both trademark owners and attorneys should review any communications received carefully to be sure that all necessary recipients have been notified and can respond timely to avoid any loss of rights.

Additional Resources:

More on the USPTO’s New Expungement and Reexamination Proceedings

Since the Trademark Modernization Act (TMA) was enacted in December 2020 (see prior post), certain of its provisions have gone into effect, and others are on the immediate horizon. For context, see the Consolidated Appropriations Act of 2021, Pub. L. No. 116-260 (Dec. 27, 2020) – 2,126 pages long (!) – and specifically p. 1020 for the text of the TMA.

Most recently, on November 17, 2021, the USPTO published its Final Rules relating to the implementation of the TMA, which primarily focus on the implementation of the new TTAB proceedings (expungement and ex parte reexamination based on allegations of non-use) as well as the new non-use grounds for cancellation.  The Rules also address letters of protest, flexible deadlines to respond to Office actions, recognition of attorneys representing trademark owners, and related fee setting (which will be covered in separate posts).

This post provides a brief update on the new expungement and reexamination proceedings.

The USPTO has continued to update its online guidance regarding the changes to Trademark Office procedure that result from the TMA.  In particular, the USPTO provides a quick reference guide explaining which proceedings are useful for which purpose and the relevant timelines for filing.  Initiating one of these proceedings requires electronic filing: https://www.uspto.gov/trademarks/apply/expungement-or-reexamination-forms.

The USPTO also published a recorded webinar on March 29, 2022 to walk through the new proceedings – along with the USPTO’s slide deck from that March 29 webinar.

Since the implementation of the new proceedings, and at the request of various stakeholder groups, the USPTO has published two tracking tools:

Next timeFlexible Response Times and Expiration of Recognition of Attorney Representation Following Registration

TTAB Refused Registration for Commonplace Phrase That Fails to Function as a Trademark

In order for a word, phrase or other device to operate as a trademark, it must convey to purchasers or potential purchasers a single source of the goods or services in connection with which the mark is used – or, simply put, it must be a “source indicator” for those goods and services.  This is true whether the trademark owner seeks to simply use a mark at common law or to apply for registration of the mark with the U.S. Patent and Trademark Office (“USPTO”).

In a recent decision, the USPTO’s Trademark Trial and Appeal Board (“TTAB” or “Board”) affirmed the Trademark Office Examining Attorney’s refusal to register the mark DESIGNED, SOURCED, AND BUILT IN THE USA in connection with the following goods:

Class 1:  “a wide variety of chemicals for a wide variety of industrial uses”;

Class 5:  “Hand-sanitizing preparations; disinfectants”;

Class 10:  “Face masks for use by health care providers; surgical masks; human face protectors, namely, transparent face shields for use in the medical and dental fields; sanitary masks for medical wellness purposes; respiratory masks for medical purposes; masks for use by medical personnel”; and

Class 20:  “Freestanding sneeze guards, namely, plastic shields for protection between retail clerks and customers; plastic shields to isolate retail clerks from customers; plastic shields to guard retail clerks against sneezes and coughs of customers; plastic dividers for protection between retail cashiers and customers”.

In re NuGeneration Technologies, LLC, 10 TTABVUE, Ser. No. 88852858, 88866690 (TTAB Apr. 7, 2022) (non-precedential) (appeal consolidated under Ser. No. 88852858); see also application file histories at Ser. Nos. 88/852,858 (Classes 1 and 5, filed March 30, 2020) and 88/866,690 (Classes 10 and 20, filed April 9, 2020).  Both applications were filed on an “intent to use” basis, but Applicant did not submit evidence of any use in commerce for either application.

The Examining Attorney essentially refused registration of the mark DESIGNED, SOURCED, AND BUILT IN THE USA on the grounds that it failed to function as a trademark – in particular because “the wording is merely informational and constitutes a commonplace phrase that is widely used in the marketplace.”  10 TTABVUE 2 (Ser. No. 88/852,858).

In affirming the refusal to register the mark, the Board agreed with the Examiner that the phrase simply conveyed “information to the consumer to support American made goods and services” that also “taps into the American consumer’s desire to purchase products of higher quality and better design, that are durable and sourced locally, ensuring safety & quality at every step of the supply chain.”  Id. at 16-17.

The Board disagreed with the Applicant’s position that the Examiner’s evidence of common usage of separate components of the mark (e.g., “designed in the USA” and “sourced in the USA”) was insufficient to show that the longer phrase, DESIGNED, SOURCED AND BUILT IN THE USA was in “widespread use.” Id. at 14.  In so doing, the Board explained that the evidence of use of these components, spanning multiple industries in connection with varied products, was “sufficient to show a marketing environment where consumers are accustomed to the use of these similar informational phrases by businesses.”  Id.

By way of comparison, the Board pointed to other marks that had been refused registration as commonly-used phrases in business that convey support for an American ideal – and do not operate as an indication of a single source of specific goods or services:

  • GOD BLESS THE USA – Ser. No. 87/168,719 (In re Lee Greenwood, 2020 USPQ2d 11439, at *3 (TTAB 2020) (considered simply an “expression of patriotism, affection, or affiliation” with the US))
  • INVESTING IN AMERICAN JOBS – Ser. No. 86/261,962 (In re Wal-Mart Stores, Inc., 129 USPQ2d 1148, 1156 (TTAB 2019))
  • PROUDLY MADE IN THE USA, Ser. No. 74/375,437 (In re Remington Prods., 3 USPQ2d 1714, 1715 (TTAB 1987)) *Westlaw account required to access this decision.

Interestingly, the Board relied on the analysis in the 1987 Remington decision for the proposition that, “[i]t is common knowledge that today’s American marketplace has a surplus of foreign-made goods and that American manufacturers are anxious to encourage purchasers to give preference to American products.”  Id. at 16 (quoting In re Remington Prods., at 1715).  Despite the passage of 35 years, this marketplace reality remains the same today.

Refusal to register the phrase DESIGNED, SOURCED AND BUILT IN THE USA was affirmed as “merely informational matter” that would not be perceived “as a source of Applicant’s goods.”  Id. at 17.  Essentially, the Board concluded that this phrase failed to function as a trademark that would allow the “relevant public, i.e., purchasers or potential purchasers of Applicant’s goods” to perceive the phrase as “identifying the source or origin of Applicant’s goods.”  See id. at 5.

Recommended Additional Reading:

  • USPTO’s Trademark Manual of Examining Procedure (TMEP) § 904.07(b) (Whether the Specimen Shows the Applied-for Mark Functioning as a Mark)
  • TMEP § 1202.04 (Informational Matter)
  • TMEP § 1202.17(c) (Failure to Function)
  • TMEP § 1301.02(a) (Matter that Does Not Function as a Service Mark)

Common Questions: What Kind of IP Protection Should I Pursue?

We frequently receive questions from business owners asking for intellectual property (“IP”) advice that combine legally unrelated terms, such as asking whether they should “copyright their logo”, or “trademark their idea”, or “get a patent on their design”.*  While it’s possible for IP owners to “layer” their protection – in other words, the same design might be protected under copyright and trademark law, and the same product configuration might be subject to a design patent as well as copyright and/or trademark protection – in many cases, a rights holder may only be exploring one kind of IP protection at a given time. This post is intended to simply define basic terms (particularly under U.S. law) to help foster conversations regarding obtaining the right protections for your IP – but if you need specific advice about what kinds of IP rights apply to your specific circumstances, you should talk with a lawyer who has experience in this area.

* Note that in some circumstances, it is possible to obtain a design patent – so asking to “patent a design” does not necessarily lead to an impossibility or a mismatch between the type of work and the applicable law. However, a mismatch occurs when the question asks whether unique artwork could be patented – where the questioner was really asking about obtaining a utility patent to protect an artistic work that has no functional elements.

Patents

Patent law governs the rights of inventors of new and useful ideas, including a process and/or machine, or an ornamental design, provided that these inventors have applied for – and been granted by the U.S. government (at the U.S. Patent and Trademark Office (USPTO)) – exclusive rights to reduce that invention to practice and exclude others from practicing the invention for a period of time set by statute. That period of time (“duration”) can be changed by Congress under certain situations. As a result, one patent’s duration might be different than another’s.

In addition, the statutory duration of a design patent currently is less than a utility patent, so it is important to consider what kind of patent has been issued before concluding that patent rights may or may not exist at any given time.

In order to obtain a patent, the inventor is required to disclose the new invention with sufficient detail that any other person skilled in this particular art would be able to recreate the invention. However, the benefit of obtaining a patent is the ability to exclude others from practicing the invention during the statutory period of exclusivity. If an inventor decides that it never wants to disclose the invention – but instead wants to protect it as a “trade secret” – then the inventor must take extreme care not to reveal the secret to others, including by publication or other disclosure, without the protections of non-disclosure agreements or security measures designed to keep the secret out of the hands of competitors or the public.

Finally, in order for patent rights to issue, an inventor cannot have already disclosed his invention to the public (with certain exceptions) before filing his application for patent protection – unlike copyrights and trademarks where the Work can have been published or the mark can have been used in commerce in connection with specific goods or services long before the application for registration is filed.

As I am not a patent lawyer, I will simply note that patent rights are not automatic; they must be applied for and granted by the USPTO through an issued patent before they can be enforced against others. Even after issuance, there may be limitations in the scope of a patent. Interested parties should consult with authorized patent practitioners (whether patent attorneys or patent agents) for any specific advice in this area.

Trademarks

Trademarks can be any word, phrase, symbol or design, sound, color or other indicia of source, or a combination of such indicia, that identifies and distinguishes the source of the goods of one party from those of others. A “service mark” performs the same basic function as a “trademark”, but applies to the source of a service rather than of a product (i.e., goods). (For simplicity, this post refers to both trademarks and service marks as “trademarks.”)

Trademarks generally must be unique enough that purchasers or potential purchasers associate them with one particular source’s goods or services – and only that source’s goods and services. While tempting, choosing a mark that describes the goods or services will not create a strong trademark and will not permit purchasers or potential purchasers to distinguish your goods from those of others – particularly if those descriptive words are commonly used by others in your industry.

Trademark rights in the U.S. require “use in commerce” – in other words, using a trademark in connection with particular goods or services offered in interstate commerce offered by a single source. Without that “use in commerce,” such words, phrases or logos/designs would not develop the goodwill associated with a mark or acquire any trademark value. You might have coined an interesting phrase, and maybe you were the first to publish it on the internet, or put it on the front of a t-shirt or on a mug – but unless the mark has been used as an “indicator of source” of particular goods or services offered to the public, then it does not function as a trademark.

Even without obtaining a federal registration, a trademark owner can establish exclusive rights to use a particular trademark based on its first use of the trademark in connection with particular goods or services in the marketplace (aka “common law trademark rights”). Relying on common law rights alone, however, may restrict your trademark rights to a particular geographic region in which use actually occurs. You could assert your common law rights against a newcomer who enters your geographic area, offering the same (or similar) goods or services under a confusingly similar mark. However, that newcomer might acquire senior rights in other geographic areas that could prevent the later expansion of your use. (Except in the case of famous marks which may be subject to broader protections in broader geographic regions, even if there is no use in commerce in that region.) Federal registration of one’s marks with the USPTO, while not required in order for trademark rights to exist, offers more comprehensive protection, including a presumption of nationwide use, than reliance upon common law rights alone.

Trademark rights can be perpetual, provided that trademark owners use their marks consistently and continuously in connection with specific goods or services in interstate commerce. If a trademark owner stops using a mark over a long period of time (generally three years or more, depending on the circumstances), with an intent not to resume use, marks can become abandoned, allowing a newcomer to step in later and start using the same mark without creating confusion with the original owner’s prior use. As with many conclusions in trademark law, the determination whether rights have lapsed is a highly fact-based determination and should be discussed with counsel if this is a concern.

Copyrights

Copyright rights exist from the moment of creation of a creative work, upon “fixing the work in a tangible medium of expression.” So, typing up a novel on paper, or saving it to disk or to the hard drive of a computer, would constitute a tangible medium of expression, just as drawing an original illustration on paper or chiseling a statue out of marble would. Copyright law does not protect the idea depicted in the creative work, but just the expression of the idea. See also a prior blog post on Can I Copyright My Knight in Shining Armor Story? (discussing common story themes and the limitation of copyright protection to the expression of the theme) and a series of posts on the copyrightability of fictional characters.

Creation of a copyrightable work entitles the author to several exclusive rights under U.S. law, including rights: (1) to reproduce (or, copy); (2) to prepare derivatives; (3) to distribute copies by sale, other transfer, rental, lease or lending; (4) to perform publicly; (5) to display publicly; and (6) (in the case of sound recordings) to perform by digital audio transmission. 17 U.S.C. § 106. Copyright owners also have the exclusive right to withhold their works from public circulation if they so choose.

Notwithstanding that copyright rights attach upon the moment of fixation of the expression in tangible form, under recent U.S. Supreme Court law, a copyright owner cannot enforce its copyright rights against others unless it is has filed for – and received – registration of its copyright rights with the U.S. Copyright Office. See Fourth Estate Public Benefit Corp. v. Wall-Street.com, LLC, 139 S.Ct. 881 (2019); see also prior posts in this blog explaining the Fourth Estate decision. Importantly, if an author happens to register its rights with the Copyright Office before the alleged infringement begins, then the author is permitted to seek statutory damages (up to $35,000 per work, or up to $150,000 per work if the infringement is found to be willful) instead of having to prove the full scope of actual monetary losses resulting from the infringement. Filing before the infringement occurs also permits the author to seek recovery of its attorney fees from the infringer if it prevails on an infringement claim (and if certain other criteria are met).

An author’s exclusive rights under the Copyright Act last for the life of the author, plus 70 years. 17 U.S.C. § 302. If a work was created as a work made for hire, anonymously or pseudonymously, then copyright protection lasts for 95 years after the date of first publication, or 120 years after the date of creation. Id. As a general rule, therefore, if an author is still living, one should assume that any tangible work created by this author is protected by copyright, and permission in advance would be required before anyone else could copy, display or distribute those works and not infringe the author’s exclusive rights.

Additional Recommended Reading

As mentioned above, the purpose of this post is to provide some guidance on the different terminology used to describe different IP rights. Some additional resources that are relevant to these basic concepts can be found below.

Trademark Modernization Act Signed Into Law

On December 27, 2020, President Trump signed into law the Consolidated Appropriations Act of 2021 (H.R. 133 – as enrolled) which included the full text of the Trademark Modernization Act of 2020 (“TMA”) as modified from the versions originally introduced on March 11, 2020 as H.R. 6196 and S. 3449. See H.R. 133 at 1019-1029; see also H. Rept. 116-645* at 37-57 (Dec. 14, 2020) (report by House Committee on the Judiciary in support of H.R. 6196).

Purpose of the TMA

At its core, the TMA provides some new tools aimed at “decluttering” the trademark Register of those registrations for which a registered mark was either (1) never used in connection with the recited goods or services, or (2) not used as of an operative date (either the filing date of the application if it was submitted based on existing use in commerce, or the date identified on a Statement of Use/Amendment to Allege Use for an intent-to-use application) – thus suggesting that these registrations should never have been issued. The House Judiciary Committee explained that these new proceedings are intended to “clear registrations from the trademark register for which proper use in commerce was not made.” H. Rept. 116-645* at 37 (Dec. 14, 2020).

Legislative history suggests that this Act was aimed at addressing the “recent rise in fraudulent trademark applications,” particularly those from China, that impede legitimate efforts to launch new marks into the marketplace. Id. at 39.  As of September 2018, applications emanating from China had increased by more than 1100% over the prior 6-year period, and investigations revealed that a significant number of these applications “have fraudulent claims of use and/or fake specimens” supporting the registration. Id. Rep. Johnson (one of the co-sponsors of the House Bill) lamented the difficulty small businesses face in obtaining registrations for “strong, commercially viable marks”, especially when “[t]his market-entry problem has been exacerbated by the recent flood of fraudulent trademark registrations from China, many of which rely on doctored photos to demonstrate use of a mark to fraudulently obtain a trademark registration.” One-Page Summary ¶ 3-4. Ideally, these new proceedings will help create a cost-effective mechanism to clear the Register of this narrow set of blocking registrations for which no valid use could be demonstrated.

Provisions of the TMA

Some highlights from the Act (H.R. 133 at 1019-1029):

  • Permits flexible response deadlines for certain Office actions issued by examining attorneys during prosecution of trademark applications – such that some responses would be due between 60 days and 6 months, instead of the standard 6 month deadlines. TMA, Sec. 224. More details about these flexible response deadlines and associated fees to request extensions up to the full 6-month period must be established by regulation within the next year.
  • Creates two new ex parte proceedings to allow for further examination or cancellation of registrations when the registered marks either have never been used in commerce (expungement), or were not used as of a relevant time period (reexamination). TMA, Sec. 225(a) and (c) (creating processes under Section 16A and 16B).
  • Creates an additional ground for cancellation in a proceeding before the Trademark Trial and Appeal Board where a mark covered by a registration was never used in connection with some or all of the goods or services covered by the registration. TMA, Sec. 225(b).
  • Codifies the rebuttable presumption of irreparable harm, resolving a Circuit split involving the standard for proving entitlement to an injunction for violations of the Lanham Act. TMA, Sec. 226.
  • Commissions a study of the effectiveness of this Act – focusing on the time period between 12 months and 30 months after enactment and addressing several targeted areas relating to attempts to reduce inaccurate and false claims of use in commerce of marks registered with the USPTO. TMA, Sec. 227.
  • Confirms the USPTO Director’s authority to “reconsider, modify or set aside” a decision of the Trademark Trial and Appeal Board in interference, opposition, concurrent use or cancellation proceedings in connection with the Principal Register, in connection with ex parte appeals of an examiner’s refusal to register the mark of an application, or the cancellation of registrations on the Supplemental Register. TMA, Sec. 228.

More On Expungements and Reexaminations

Ex Parte Expungement Proceedings

Expungement applies when a registered mark has never been used in commerce in the U.S. in connection with the goods or services covered by the registration. TMA, Sec. 225, Sect. 16A(a). There are some important exceptions for those relatively new registrations that were filed under Section 44(e) (based on a foreign registration) or under Section 66 (requesting an extension of protection from a foreign application filed under the Madrid Protocol) within the statutory period for proving use in the U.S. Id., Sect. 16A(f) (describing showings of excusable non-use).

A petitioner can only seek expungement between the third and tenth years after registration – which takes into account not only the initial three-year period following registration during which Section 44(e) or Section 66 registrations are not subject to cancellation for non-use, but also caps exposure for these ex parte claims to a maximum of ten years following registration. Id., Sect. 16A(i). In essence, expungement proceedings are intended to target those relatively new registrations for which use never occurred, and, theoretically, the registration should never have issued.

(Note that inter partes cancellation proceedings are not estopped by these proceedings; a new grounds for an inter partes proceeding seeking cancellation of registrations for which the registered marks were never used in connection with the recited goods or services was also created by this Act.  Id., Sect. 16A(b).)

Ex Parte Reexamination

Reexamination applies when a mark was not in use in U.S. commerce in connection with some or all of the goods or services recited in the challenged registration as of a relevant date.  For use-based applications, the “relevant date” is the date of filing of the initial application. For intent-to-use applications, the “relevant date” is the date on which a Statement of Use or Amendment to Allege Use is filed, or when all approved extension to file these have expired. TMA Sec. 225, Sect. 16B(b).

A petitioner can only seek reexamination within the first five years after a registration issues. Id. Sect. 16B(i). This provision aligns with the current time periods under 15 U.S.C. § 1064 for cancellation of a registration on all available grounds, given that some grounds for cancellation are not available after this initial five-year anniversary.

Features Common to These New Ex Parte Proceedings

In both cases, there are certain protections built into the process against misuse of the proceedings by bad actors, such as competitors seeking to tie up a legitimate user by maliciously invoking these proceedings. First, while any third-party can file a petition seeking expungement or reexamination, every petitioner must submit documentary evidence supporting the claim – and the Director has discretion not to institute a proceeding if the Director finds that the evidence is insufficient. The statute requires the Director to promulgate regulations within the next year defining the specific procedures, types of and volume of evidence required to support a prima facie case justifying the institution of proceedings and the requisite filing fees. TMA, Sec. 223 & Sec. 225, 16A(c) & 16B(c).

Registrants have an opportunity to submit counter evidence to prove that their marks are in use in connection with the applicable goods and/or services. Once registrants meet their burden to prove such use, no further ex parte proceedings under this section will be permitted against the same goods and services of this registration and estoppel will apply – regardless of who the petitioner is. TMA Sec. 225, 16A(j) & 16B(j).

The Director also has the discretion (1) to decline to institute proceedings, notwithstanding any evidence submitted by a petitioner, (2) to institute proceedings on the Director’s own initiative based on evidence that he or she discovers independently, and (3) to reconsider, modify or overrule a decision of the TTAB in these cases. This discretion may act as an appropriate check and balance against a potential misuse of these proceedings.

Availability of These Proceedings

Before either of these new proceedings will be available, the USPTO will have to engage in rulemaking within the next year to establish specific evidentiary requirements, procedures to challenge applicable registrations and respond to petitions filed, and the requisite filing fees. As a result, these proceedings are not scheduled to be available to interested parties until December 2021.

Potential Impact of TMA on Trademark Registrants with Legitimate Use in the U.S.

Unfortunately, while the legislative history makes clear that the sponsors intended this Act to target a narrow type of fraudulent activity by foreign actors, as written this Act has a potentially broader impact. Even registrants who can demonstrate legitimate use in the U.S. may also find themselves defending proceedings under this Act.

Accordingly, registrants should be proactive and prepare to defend such challenges by, among other steps:

  • Keeping records documenting use in the U.S. of their registered marks in connection with the goods and services recited in the registration, to be produced on demand quickly and without significant operational expenses at the time the challenge is made;
  • Carefully identifying the correct “dates of first use” on their applications to avoid exposing the resulting registrations to potential reexamination (and cancellation) if their dates prove to have been (fatally) inaccurate;
  • Regularly reviewing their portfolios and confirming that their marks remain in use in the U.S. in connection with all of the goods or services claimed in their registrations – particularly when they are required to submit Declarations of Continued Use during the maintenance periods; and
  • Any time there is no use of the registered mark in connection with specific goods or services recited in the registration, making written records of the registrant’s intent to resume use and documenting steps taken to resume use.

In light of COVID-related business interruptions, many trademark owners may have seen related supply chain interruptions that impact whether or not they can distribute goods bearing their relevant marks in the marketplace in order to preserve their trademark rights. In some instances, these kinds of interruptions might qualify for “excusable non-use” that might avoid a cancellation, but a careful evaluation of the registrant’s portfolio or pending maintenance deadlines might be in order to determine whether these exceptions might apply in a particular case.

Summary

The purpose of all of these new provisions is to strengthen the Register of marks in the USPTO’s system. It is possible that these new proceedings could be a welcome tool for trademark owners seeking cost-effective ways to clear away marks that managed to reach registration despite the registrant’s failure to properly use the marks in U.S. commerce.  In particular, these new ex parte proceedings could help clear some deadwood from the Register, since many registrants would not attempt to defend registration for marks not in use.

The U.S. registration system does not permit registrants to merely reserve rights in marks to be used at a later time in order to prevent others from using them in connection with their own goods or services – but once an application matures to registration, it becomes more difficult (and expensive) to challenge these registrations on an inter partes basis, even if there were proof of fraud.  Once the effective date for these new proceedings occurs, and following the implementation of sufficient regulations regarding the process and evidentiary requirements, these tools could prove valuable to U.S. trademark holders as cost-effective ways to clear the way for registration of their own marks.

Other USPTO Programs Designed to Combat Fraudulent Filings

  • Mandating that foreign filers must engage U.S. counsel in order to prosecute an application and requiring mandatory electronic filing for all applications and TTAB proceedings – see “USPTO Published New Exam Guide on Mandatory Electronic Filing,” Privacy and IP Law Blog (Feb. 7, 2020) (includes links to the exam guides and proposed/final Mandatory US Counsel and Mandatory Electronic Filing rules).
  • Procedures to examine questionable or fraudulent specimens – seeUSPTO’s Recently Announced Pilot Program on Fraudulent Specimens,” Privacy and IP Law Blog (June 12, 2018).
  • Developing and testing automated systems to check the validity of specimens submitted in connection with applications, called the “Automated Specimen Analysis Project” – see discussion in TPAC’s Annual Report 2020 at 14 (Nov. 3, 2020).
  • Heightened verification of declarations and specimens submitted with post-registration renewal applications through a post-registration audit program – seeUSPTO Expands Random Audit Program,” Privacy and IP Law Blog (Aug. 11, 2019).

Additional Resources regarding the TMA

* As this article went to publication, the link to House Rept. 116-645 as stored on Congress.gov did not work.  However, this link was provided in the listing of actions take in connection with H.R. 6196, a prior version of this bill.  It is hoped that the broken link to the official copy will be fixed soon.