March 1, 2021

Volume XI, Number 60

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March 01, 2021

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Trademark Modernization Act Revives Presumption of Irreparable Harm, Creates New Procedures

The U.S. Patent and Trademark Office has released a summary of the Trademark Modernization Act of 2020 (the “TMA”), which enacted significant changes to trademark law and was part of the Consolidated Appropriations Act of 2021 that was signed into law on December 27, 2020.  The TMA clarifies the burden for trademark owners seeking injunctive relief, and implements new mechanisms for challenging applications and registrations on non-use grounds.  The USPTO’s summary is available here, and the full text of the TMA is available here.  Several of the TMA’s key reforms are highlighted below.

Revival of the Rebuttable Presumption of Irreparable Harm

Historically, trademark owners seeking injunctive relief were afforded a presumption of irreparable harm upon a showing of likelihood of confusion.  That changed after the Supreme Court held in a 2006 patent infringement case, eBay, Inc. v. MercExchange, that a plaintiff must prove irreparable harm to get injunctive relief.  Following eBay, a circuit split developed as to whether a presumption of irreparable harm still applies in trademark cases, with several circuit courts holding that it does not and other circuit and district courts continuing to apply the presumption.

The TMA resolves this split once and for all.  Specifically, the TMA amends Section 34(a) of the Lanham Act (15 U.S.C. § 1116(a)) to clarify that a rebuttable presumption of irreparable harm applies upon a finding of infringement in the permanent injunction context, or upon a finding of likelihood of success on the merits in the context of preliminary injunctive relief.  Because the TMA-amended provision applies to injunctive relief with respect to unfair competition, false advertising, dilution, or cyberpiracy claims brought under Section 43 of the Lanham Act in addition to trademark infringement claims, the rebuttable presumption also applies to such claims. 

By codifying this rebuttable presumption in the Lanham Act, the TMA makes it easier for trademark owners to establish entitlement to injunctive relief, regardless of jurisdiction.

New Procedures for Review and Cancellation of Marks for Non-Use

In recent years, the USPTO has grown increasingly concerned about the proliferation of fraudulent or “deadwood” trademarks – registered marks that are not being used, or not being used for the goods or services named in the registration.  The TMA helps address this problem by creating new mechanisms to challenge and cancel marks on the basis of non-use, and by adding non-use as a ground for cancellation.  These new mechanisms represent a dramatic shift from the status quo.

First, the TMA amends the Lanham Act to add a new Section 16A (“Ex Parte Expungement”). The newly added Section 16A allows any person to petition to expunge a trademark registration on the ground that the mark was never used in commerce as is required for registration.  A 16A petition can be filed beginning after three years from the date of registration, and no later than ten years after registration.  However, the legislation includes a window during the first three years after enactment, during which even older marks can be challenged or expunged under these new procedures.

Second, the TMA also amends the Lanham Act to add a new Section 16B (“Ex Parte Reexamination”).  Under the new Section 16B, any person can petition for reexamination of a registration on the ground that it was not properly used in commerce before the registration date.  A 16B petition must be filed within 5 years of the registration’s issuance.

Under both procedures, the initiating party is required to submit to the Director of the USPTO evidence or testimony establishing a prima facie case of non-use.  The new provisions also allow the Director of the USPTO to initiate a proceeding if the Director discovers information supporting a prima facie case of non-use.

In addition to the new ex parte reexamination and expungement procedures, the TMA also amends Section 14 of the Lanham Act to add non-use as a new ground for cancellation.  Under the amended Section 14, a petition to cancel a registered mark may filed at any time after 3 years from the registration date on the ground that the mark has never been properly used in commerce, though a foreign or Madrid Protocol registration under Sections 44(e) or 66 shall not be cancelled on this new ground if the registrant can demonstrate that any nonuse is due to special circumstances that excuse such non-use.

These new procedures pertaining to non-use will take effect on December 27, 2021 (the first anniversary of the date the TMA became law).

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© 2020 Proskauer Rose LLP. National Law Review, Volume XI, Number 27
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Brendan O'Rourke, Litigation Law, Proskauer Rose Law Firm
Partner

Brendan O'Rourke is co-Chair of the firm’s Litigation Department and co-head of the False Advertising & Trademark Group. From the inception of his career, Brendan has concentrated in the field of trademark, false advertising, and unfair competition law, and has provided day-to-day trademark, false advertising, and Lanham Act counseling to many Fortune 500 clients, as well as start-up companies and entrepreneurs. He is a first-rate, first-chair trial lawyer, having successfully tried numerous trademark, trade dress, unfair competition, false advertising, copyright and...

212-969-3120
Jeffrey H Warshafsky, Proskauer Law firm, Litigation Attorney
Associate

Jeffrey H. Warshafsky is an Associate in the Litigation Department, resident in the New York office. He is a commercial litigator with a particular emphasis on false advertising, trademark, and counterfeiting disputes. Jeff also advises clients on trademark portfolio management, anti-counterfeiting strategies, cybersquatting prevention, and other Internet-related trademark infringement matters.

212-969-3241
Tiffany Woo, Proskauer Rose, Litigation Department, Columbia University, Yale,
Associate

Tiffany Woo is an associate in the Litigation Department.

  • Columbia Law School, J.D., 2015

    Journal of Law and Social Problems, Executive Design & Layout Editor and Note Editor

  • Yale University, B.A., 2012

    Yale Daily News, Staff Reporter and Staff Designer

212-969-3223
Maya L. Tarr Trademark Attorney Proskauer Rose New York, NY
Special Trademark Counsel

Maya’s practice focuses on domestic and international trademark matters, including trademark clearance, prosecution, contested proceedings, domain name disputes and other enforcement matters. Maya has experience overseeing worldwide trademark programs and counseling clients regarding strategic trademark protection and enforcement. In addition, Maya provides intellectual property due diligence in corporate transactions. She has represented clients in a variety of industries, including financial services, hospitals, professional sports, fashion, cosmetics, consumer products, technology and...

212-969-3305
Anisha Shenai-Khatkhate Litigation Attorney Proskauer Rose Law Firm
Associate

Anisha Shenai-Khatkhate is an associate in the Litigation Department at Proskauer Rose LLP.

212.969.3574
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