Stopping Trademark Fraud: Trademark Modernization Act of 2020

Stopping Trademark Fraud:…

Fraudulent trademark registrations reduce the number of available trademarks that legitimate businesses could otherwise benefit from using. H.R. Rep. No. 116-645, at 8-9 (2020). See, 86 Fed. Reg. 64300 (Nov. 17, 2021). In an effort to reduce fraudulent trademark registrations, the Trademark Modernization Act of 2020 (TMA) was implemented on December 18, 2021.

With the TMA comes two new ex parte proceedings – expungements and reexaminations – for cancelling registered trademarks, in whole or in part, based on non-use of the registered mark for some or all of the identified goods and services. These two proceedings now allow third parties to challenge whether a mark is actually being used in commerce in connection with the goods and/or services identified in the registration.

So, what’s the difference between these new proceedings?

Expungement Reexamination
  • Until December 27, 2023, any registration registered for at least 3 years may be challenged.
  • After December 27, 2023, registrations can be challenged any time between 3 and 10 years following the registration date.
A registration may be challenged only within the first 5 years following the registration
Basis The mark has never been used in connection with one or more of the identified goods/services The mark was not in use in connection with one or more of the identified goods/services on the “relevant date”
  • For applications filed under § 1(a), the “relevant date” is the date on which first use is alleged.
  • For applications filed under § 1(b), the “relevant date” is the date claimed on the Allegation of Use or Statement of Use.

And what’s the same?

For both proceedings, a Petition must be filed that establishes a prima facie case of non-use. See, 86 Fed. Reg. 64303. The requirements for complete Petitions are set forth in 37 C.F.R. § 2.91(c). Namely:

  1. the required fee (currently $400 per class for either proceeding);
  2. the registration number being challenged;
  3. the basis for the petition;
  4. the petitioner’s information;
  5. an identification of each good/service challenged;
  6. a verified statement setting forth:
    1. the elements of the reasonable investigation of nonuse conducted; and
    2. a concise factual statement as to the relevant basis for the petition; and
  7. documentary evidence.

What’s a “reasonable investigation?”

According to the Final Rule, a reasonable investigation “is an appropriately comprehensive search likely to reveal use of the mark in commerce on or in connection with the relevant goods and/or services, if such use was, in fact, made.” 86 Fed. Reg. 64302. To satisfy the “reasonable investigation” requirement, “the [verified] statement must describe the sources searched, how and when the searches were conducted, and what information and evidence, if any, the searches produced.” See, United States Patent & Trademark Office Trademark Examination Guide 1-21, page 5. A Petitioner should focus on the relevant channels of trade and advertising when conducting its search.

The Takeaway

Trademark owners should be aware of these new U.S. Patent & Trademark Office proceedings, both as a means of challenging third-party registrations, and as a potential risk of not using the mark in connection with all of the identified goods/services in their own registrations.

If you have questions, or would like more information, we would be happy to speak with you.

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