January 18, 2022
The Trademark Modernization Act (TMA) came into force December 18, 2021. Key provisions of the TMA enlarge options for cancelling a trademark registration in whole or in part by targeting nonuse of the registered mark for some or all specified goods or services. These new options appear in the form of USPTO proceedings to expunge or reexamine issued registrations as well as a new ground for seeking cancellation based on nonuse. These new proceedings also supplement an existing USPTO audit program, which trims goods and services during maintenance, limiting the registration to only those justified by actual trademark use.
While this article focuses only on aspects of the TMA affecting practice within the USPTO, the TMA also impacts trademark litigation practice by standardizing the burdens of proof across the circuits when trademark owners seek an injunction. Under the TMA, after establishing a likelihood of success at a preliminary stage or proving infringement to the court during a later stage, the plaintiff is entitled to a rebuttable presumption of irreparable harm in seeking an injunction, which shifts the burden to the defendant.
Ex Parte Expungement and Reexamination Proceedings
The TMA introduces new avenues for both third parties and the USPTO to contest the validity of a U.S. registration by requiring the registrant to prove use of the registered mark in U.S. commerce for identified goods or services outside of established statutory maintenance periods. The proceedings can challenge the registration as a whole, or in part for certain of the goods or services associated with the -mark. For third parties, these TMA proceedings offer a viable alternative to a cancellation proceeding against, for example, a registration cited during examination of the third party’s application—saving the time, uncertainty, and expense of cancellation proceedings. Advantageously, the new proceedings will be recognized as a basis for suspending examination of the third party’s application until the outcome of the proceeding is final.
Filing a petition for ex parte expungement or, alternatively, a petition for reexamination can lead to the full or partial cancellation of a registration when prima facie evidence shows that the registered mark has not been used in commerce for one or more goods or services specified in the registration. The USPTO can also bring either proceeding on its own initiative. Unless the registrant submits evidence of timely use or excusable nonuse for all disputed specified goods or services, each good or service without adequate proof of use is subject to deletion.
Ex parte expungement and reexamination proceedings are used to address two different factual issues. Expungement is based on an allegation that a registered mark has never been used in commerce on or in connection with some or all goods or services specified in the registration. In contrast, reexamination is based on an allegation that the registered mark was not used in commerce on or in connection with specified goods or services by one of the following: the filing date of the application; the filing date of an amendment to allege use; or before the deadline for filing a statement of use.
Along with the petitioner’s contact information and a payment of $400 official fee for each International Class subject to the requested inquiry, the third-party petitioner alleges one of the two authorized bases for the proceeding, submits evidence of nonuse, and provides a declaration detailing the reasonable investigation conducted in obtaining the prima facie evidence of nonuse. The petitioner need not allege any standing or damages in requesting an inquiry, and the petitioner may be acting on behalf of another undisclosed entity. Foreign entities must be represented by U.S. legal counsel. All submissions are made via the USPTO’s website and thereafter appear in the public record of the disputed registration.
The key to an effective expungement or reexamination proceeding relies on submitting sufficient evidence to establish a prima facie case with the petition. While the exact kinds of evidence needed vary by circumstances, examples of evidence sources include trademark records from the USPTO or state registries, the registrant’s websites or social media, inquiries to registrant about product availability, records of administrative proceedings related to products, and other sources. The USPTO will correspond with the third-party and provide 30 days to complete certain deficiencies in the petition; however, any additional submissions of evidence from the petitioner will be rejected.
Upon the USPTO’s determination that a prima facie nonuse case exists, the third party has no further involvement in the proceeding. The USPTO issues an Office Action requesting that the registrant respond by providing evidence and other information to rebut the prima facie case of nonuse. The registrant then has a three-month due date for responding, extendible by one month on payment of an official fee. The registrant’s response should consist of a declaration with appropriate evidentiary proof of the mark’s use for each good or service at issue or, alternatively, excusable nonuse. The registrant may also choose to delete some or all the goods or services at issue.
It is important to note that the TMA provides limited windows of time for either third parties or the USPTO to file an ex parte expungement or reexamination proceeding. The window for filing an expungement proceeding opens three years after issuance of a registration and closes on the tenth anniversary of issuance. The TMA also provides an introductory period ending December 27, 2023 during which an expungement proceeding may be filed against any registration without being limited to the tenth anniversary of issuance. The window for initiating a reexamination proceeding opens on the issuance of a registration and closes on the fifth anniversary of issuance.
An expungement or reexamination may be brought only once against specific goods or services in a registration. If another proceeding is contemporaneously filed against a registration, the USPTO may consolidate the separate petitions into a single proceeding.
New Grounds for Cancellation
In addition to the new proceedings within the USPTO, the TMA adds a new ground for seeking cancellation against registered marks in adversarial proceedings. The petitioner for cancellation may now allege that the registered mark has never been used in U.S. commerce for one or more goods or services specified in the registration. This new ground may not be brought until at least three years after a registration issues. As an adversarial proceeding, the parties are entitled to discovery tools, such as document production and depositions, to obtain evidence relevant to the nonuse cause of action.
If the registration results from international treaty provisions under Section 44(e) or Section 66, the registrant may demonstrate that any nonuse of the mark has occurred because of “special circumstances that excuse such nonuse.” Under established excusable nonuse practice the special circumstances need to be beyond the control of the registrant, such as a trade embargo. The treaty provisions underlying Section 44(e) and Section 66 mandate the different treatment for excusable nonuse.
Trademark owners and applicants should be aware of these new proceedings, both as a means of challenging prior trademarks and as a potential risk of non-use of a registered mark that has not been used for all the goods or services registered for the mark.
For more information on the TMA, please contact Fitch Even partner John E. Lyhus, author of this alert.
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