The Trademark Modernization Act: Real Change to Address the Realities of Trademark Law

5 min

On December 27, 2020 Congress enacted the Trademark Modernization Act of 2020 (TMA) as part of the Consolidated Appropriations Act of 2021. The TMA amends the Trademark Act of 1946, also known as the Lanham Act, and makes significant changes to trademark law, clarifying the burden for trademark owners seeking injunctive relief and providing new mechanisms for challenging applications and registrations on non-use grounds. The notable changes that will take effect this year impact proceedings in the USPTO and the TTAB and in federal court litigation. Key highlights are set forth below.

Rebuttable Presumption of Irreparable Harm Is Back for Injunction Litigants

Most notably for trademark litigation, the TMA amends Section 34 of the Lanham Act to clarify the standard for demonstrating irreparable harm in trademark cases seeking injunctive relief. The TMA codifies a presumption of irreparable harm that was historically afforded in federal courts up until the Supreme Court's 2006 decision in eBay, Inc. v. MercExchange, LLC, 547 U.S. 388 (2006), where the Court held irreparable harm could not be presumed and a plaintiff must affirmatively demonstrate irreparable harm to secure injunctive relief.1 Although the Court's decision in eBay was a patent infringement case, many federal courts throughout the country began departing from the long-standing presumption of irreparable harm in trademark infringement cases after eBay, causing a Circuit split on the applicability of the presumption of irreparable harm. The TMA's amendment to Section 34 makes seeking injunctive relief more feasible for litigants who present a case that is likely to succeed on the merits and removes some of the uncertainty that existed in seeking injunctive relief since eBay in 2006.

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

The TMA makes certain changes to combat fraudulent trademark applications and "clutter" on the register, allowing parties to forgo a full cancellation proceeding for marks that were never used or with improper use in commerce when full-blown cancellation proceedings "can resemble district court litigation" and "are often expensive and time consuming."2 The new procedures present a significant shift from the status quo and allow challengers to clear the register of registered marks that are not being used or are not being used for the goods or services named in the registration.

Ex Parte Expungement – To Challenge Marks Never Used in Commerce

The TMA amends the Lanham Act to add a new Section 16A ("Ex Parte Expungement"). Under the TMA the newly added Section 16A allows a challenger to move to expunge a mark on the grounds it was never used in commerce as required by the registration. An ex parte expungement petition needs to be filed after three years of registration, but within 10 years of registration. The TMA also provides a three-year window in which potential petitioners can file an ex parte expungement petition for registrations older than 10 years if the petition is filed within three years of the TMA's enactment. The TMA also establishes the requirements for the content of an ex parte expungement petition, including a "verified statement that sets forth the elements of the reasonable investigation the petition conducted to determine that the mark has never been used in commerce on or in connection with the goods and services identified in the petition."3

Ex Parte Reexamination – To Challenge Marks Improperly Used in Commerce

The TMA amends the Lanham Act to include a new Section 16B ("Ex Parte Reexamination") allowing any person to petition for reexamination of a registration on the ground that it was not properly used in commerce before the registration date. A 16B petition for reexamination must be filed within 5 years of the registration's issuance, and, like a petition under Section 16A, the petition must contain a verified statement that the challenger conducted a reasonable investigation. Under both procedures, the challenger is required to submit to the Director of the USPTO evidence or testimony establishing a prima facie case of non-use and allows the Director of the USPTO to initiate a proceeding as well.

Non-Use as a Ground for Cancellation

The TMA also includes a new ground for cancellation – "non-use," which can be brought at any time after three years post-registration. The ground for cancellation follows the never used in commerce theory, similar to a Section 16B petition for ex parte expungement. Of note, this new ground for cancellation is not time barred after 5 years post-registration – which currently affects certain grounds in cancellation proceedings. Functionally, this allows potential third parties the opportunity to cancel a mark after the five-year window on the basis that the mark had no bona fide use in commerce, and likely does not require the potential opposer to use other bases for cancellation, like fraud on the USPTO, that require much more onerous pleading obligations.

The changes implemented by the TMA are likely to bring more stability to trademark law. It is hoped that the new ex parte proceedings will reduce the presence of registered marks that are not used in commerce without forcing interested parties to undergo entire cancellation proceedings. Likewise, the return to a presumption of irreparable harm makes securing injunctive relief more attainable if a litigant is likely to succeed on the merits of their trademark claim. Going forward, as the USPTO establishes procedures to implement the TMA provisions, businesses and individuals should consult with attorneys to determine whether utilizing the new TMA procedures or seeking injunctive relief as an enforcement measure is right for them.

[1] In addition to the three other factors necessary for demonstrating injunctive relief.

[2] H.R. Rep. No. 116-645 at 11,