Category Archives: Legislation

More on the USPTO’s New Expungement and Reexamination Proceedings

by Christina Frangiosa

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 time:  Flexible Response Times and Expiration of Recognition of Attorney Representation Following Registration

Trademark Modernization Act Signed Into Law

by Christina Frangiosa

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 – see “USPTO’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 – see “USPTO 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.   

CARES Act Permits Extensions of Statutory Deadlines for Patent, Trademark and Copyright Matters

by Christina Frangiosa

The “Coronavirus Aid, Relief, and Economic Security Act” (or the “CARES Act”) has been approved by both the House and Senate, and was signed by President Trump on March 27, 2020.

While the Act significantly impacts employers, employees and individuals alike, this article will address only the impacts of the Act on the U.S. Copyright Office and the U.S. Patent and Trademark Office (“USPTO”), and the newly granted authority of the Register of Copyrights and the Director of the USPTO to amend certain timeframes to deal with the coronavirus and the effects of business closures around the country.

USPTO’s Initial Response to COVID-19

At the beginning the coronavirus outbreak, the USPTO released a statement that confirmed it considers the effects of COVID-19 to be an “extraordinary situation,” but rather than putting a moratorium on official deadlines or suspending current activities before the USPTO, the USPTO would simply “waive petition fees” relating to inadvertently abandoned or cancelled patents or trademark applications/registrations due to the coronavirus. The USPTO further acknowledged that it would not grant waivers, extensions of deadlines or any relaxation of requirements set by statute. We practitioners have heard many times that in the absence of any delegation of specific authority by the legislature, the USPTO cannot amend any statutory deadline.

According to the “Official Notice” in its March 16 statement, the USPTO would waive the filing fees for trademark applicants or registrants to petition the Director to revive an application or a registration that was abandoned/cancelled due to the inability to respond to an Office communication “due to the effects of the Coronavirus outbreak,” provided that such requests were filed within two months after the issuance of the notice of abandonment/cancellation and provided that these petitions included a statement about how the applicant/registrant was affected by the outbreak. (Official Notice at 2).

With respect to patent filings, the USPTO placed even more restrictions: the petition fee would be waived, but only if the patent applicant or patent owner was unable to respond (or was delayed in responding) to an Office communication “because the practitioner, applicant, or at least one inventor, was personally affected by the Coronavirus outbreak such that they were unable to file a timely reply.” (Id. at 1). The petition filed must include a statement that the delay in filing the reply to the Office’s communication was due to the impacts of coronavirus on the filer.

In both cases, the USPTO made it clear that statutorily-set deadlines – such as (a) the deadline to file a nonprovisional application based on a prior-filed foreign patent application, (b) the full 36-month period in which to file a statement of use for a trademark application, (c) the deadline to file declarations of continued use under Section 8, or (d) the deadline to oppose a trademark application – could not be extended by the USPTO and would remain in force. (Id. at 3)

CARES Act – Copyright Office Deadline Extensions

The Copyright Office did not announce any suspension of deadlines for applications filed with the Office as a result of the coronavirus – but instead simply announced on March 13, 2020 that the physical Office would be closed to the public and all applications and other filings could still be made through the Copyright Office’s online systems.

The Senate’s March 25, 2020 amendment to the prior House version of the CARES Act includes a delegation of authority to the Register of Copyrights to permit extensions of deadlines under certain circumstances, under a provision entitled, “National Emergency Relief Authority for the Register of Copyrights.”  Specifically, Senate Amendment 1578 (Section 19011 at p. 84 of 96) permits the Register of Copyrights to extend certain deadlines with the following caveats:

  • The Register must determine that a national emergency “generally disrupt[s] or suspend[s] the ordinary functioning of the copyright systems, or any component thereof”.
  • The “national emergency” must be declared by the President under the National Emergencies Act (50 USC § 1601 et seq.).
  • A national emergency that disrupts or suspends the copyright systems on only a regional basis could still qualify as a “national emergency” permitting the extension of deadlines.
  • The extensions of deadlines could include a toll, waiver, adjustment or modification of “any timing provision including any deadline or effective period” provided that these extensions are only temporary and last no longer than the “Register reasonably determines to be appropriate to mitigate the disruption caused by the national emergency”.
  • The Register’s authority to amend deadlines can be retroactive, provided that the “deadline has not already passed before the declaration of a national emergency described in subsection (a) of this Section.

The Amendment clarifies that statutes of limitation (by which civil actions must be commenced or federal court actions filed) cannot be extended by this provision. Id. § (d).

CARES Act – USPTO Deadline Extensions

The temporary authority given to the USPTO Director to respond to an emergency is more narrowly defined than that under the Copyright Office section. In a section entitled “Temporary Authority of Director of the USPTO During COVID-19 Emergency,” Senate Amendment 1578 (Section 12004 at p. 66 of 96) permits the USPTO Director to “toll, waive, adjust or modify any timing deadline” established by the Patent Act (Title 35), the Trademark Act (15 U.S.C. § 1051 et seq.), Section 18 of the America Invents Act (35 U.S.C. § 321) “or regulations promulgated thereunder” if the Director determines that an “emergency” (as defined under subsection (e)) has the following effects:

  1. “materially affects the functioning of the” USPTO;
  2. “prejudices the rights of applicants, registrants, patent owners, or others appearing before the Office” (which presumably would include litigants in inter partes proceedings before the Patent Trial and Appeal Board (PTAB) or the Trademark Trial and Appeal Board (TTAB)); or
  3. “prevents applicants, registrants, patent owners or others appearing before the Office from filing a document or fee with the Office.”

Id. § (a). Item 3 is not broad enough to allow the Director to extend deadlines simply due to computer system failures at the USPTO (unless they happen to occur during the COVID-19 outbreak, during the national emergency declared by the President on March 13, 2020 or during any other emergency covered by this Section). Id.

Note that the “emergency” to which this Section applies “includes” (but does not appear limited to) the emergency declared by President Trump “pursuant to the National Emergencies Act on March 13, 2020 as a result of the COVID-19 outbreak (and any renewal thereof)” and continues for a 60-day period following such declaration. Id. § (e). The authority granted by this Section expires two years after the date of its enactment. Id. § (g).

Unlike the Copyright Section, this Section does not explicitly preclude the Director of the USPTO from retroactively impacting a deadline that has already passed, although one might interpret the timing of the emergency period as beginning “on or after the date of enactment of this Section” as limiting the Director to only change current or prospective deadlines. Compare Section 19011(b) (Copyright Office provisions) with Section 12004(e) (USPTO provisions).

NEXT STEPS

Now that the final bill has been signed into law, one would expect to see official announcements from both the USPTO and the Copyright Office to identify particular extensions to be expected for specified periods of time.

One confusing provision in both the Copyright Office and the USPTO provisions is that the Register/Director is required to submit a Report to Congress no later than 20 days after the termination to change the deadlines under this Act is made – but only if the extension of time is “in effect for a consecutive or cumulative period exceeding 120 days”. Id. § (c). Assuming the timing glitch is adjusted appropriately, then the Report must contain a description of the action taken, relevant background and a rationale for why the adjustment was made. Id.

(Once the Public Law version of the bill is available, this post will be updated with a link to it.)

New Law Prohibits Non-Disparagement Provisions in Form Consumer Contracts

by Christina Frangiosa

On December 14, 2016, President Obama signed into law H.R. 5111, a bill that prohibits companies from including within their standard form contracts with its consumers a non-disparagement clause that would prevent such customers from making any statements about the company’s products, services or employees. The Consumer Review Fairness Act of 2016 (“CRFA” or “the Act”) passed overwhelmingly in both the House and the Senate, garnering bipartisan support. See also House Debate, 162 Cong. Rec. H5295-H5298 (daily ed. Sept. 12, 2016) (statements upon introduction by bipartisan cosponsors). In fact, H.R. 5111 passed in the Senate, without amendment, on Unanimous Consent on November 28, 2016. See Senate Debate, 162 Cong. Rec. S6520 (daily ed. Nov. 28, 2016). Upon signing by the president, the Bill became Public Law No. 114-258.

Provisions and Application of CRFA

The law prohibits any “person” (which could be an individual or an entity) from “offer[ing] a form contract containing a provision described as void in subsection (b).” Id. §2 (c). Such provisions that are “void from the inception of the contract” include at least one of the following prohibited characteristics: Continue reading …

Business Owners & the New Federal Claim for Trade Secret Misappropriation

by Christina Frangiosa

On May 11, 2016, Pres. Obama signed into law the Defend Trade Secrets Act of 2016, S. 1890, 114th Congr. (2d Sess. 2016) (“DTSA“), which provides for the first time a federal private right of action to litigants for trade secrets violations. Most states – except for Massachusetts and New York – have enacted versions of the Uniform Trade Secrets Act (“UTSA“) but the DTSA provides additional remedies without preempting state laws or eliminating any of the protections offered by them. Business owners will need to take some actions in the short term in order to take advantage of some of the more powerful remedies created by the DTSA.
Continue reading …