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Trademark Modernization Act and The CASE Act – Major Changes for Trademarks and Copyrights

By January 15, 2021 No Comments

The 5,600 page Consolidated Appropriations Act, 2021 – commonly referred to as the Coronavirus Relief Stimulus Bill that was enacted in late December 2020 – includes three major changes to U.S. intellectual property laws: the Trademark Modernization Act (TM Act), the Copyright Alternative Small-Claims Enforcement Act of 2019 (CASE Act), and the Protecting Lawful Streaming Act (PLSA).  The TM Act, CASE Act, and PLS Act contain significant modifications to existing trademark and copyright practices that are summarized below:

Trademark Modernization Act of 2020

The TM Act amends the Lanham Act to provide for third-party submission of evidence relating to trademark applications, to establish expungement and ex parte proceedings relating to the validity of marks, to provide for a rebuttal presumption of irreparable harm in certain proceedings, and a number of other changes.[1]  In other words, these changes accelerate the examination process, add a mechanism to challenge current registrations, and restore a key litigation protection for trademark owners.

Ex Parte Expungement and Reexamination Proceedings: The TM Act has added two ex parte procedures to challenge trademark registrations: expungement and reexamination proceedings.  The intent here is to remove trademark registrations based upon non-use or fraudulent specimens of use.  Such ex parte petition must include supporting evidence and must be based upon a verified statement explaining the filer’s “reasonable” investigation.  If the petition states a prima facie case, the USPTO Director may initiate a procedure to cancel the registered trademark.  It is important to note that the Director can institute such proceedings sua sponte (on her own), without relying on a third party petition.  As in the case of final office actions, adverse decisions may be appealed to the Trademark Trial and Appeals Board (TTAB), and then to the Federal Circuit.  To file an ex parte expungement petition, a filer must allege and include supporting evidence showing that the mark in the challenged registration has never been used in commerce with some or all of the goods or services listed in the identification.  To file an ex parte reexamination petition, a filer must allege and include evidence showing that the mark in the challenged registration was not in use in commerce with some or all the goods or services listed in the identification on or before the filing date of the application or the amendment to allege use (i.e. the specimen does not show use).

Letters of Protest: The TM Act formalizes the use of Letters of Protests at the USPTO.   In other words, circumstances where third parties (often competitors) submit evidence relevant to an examiner to support grounds for the refusal of a trademark application. Such evidence can be included in the examiner’s refusal of the trademark.

Flexible Response Periods: In the event an applicant is not entitled to registration, the examiner has to notify the applicant and state the reason for disqualification. Examiners will now be able to set response times to office actions between 60 days and six months. An applicant, however, will be able to request extensions of time to respond for up to the full six-month period for a fee.

Irreparable Harm: A plaintiff seeking injunctive relief for trademark infringement is now entitled to a rebuttable presumption of irreparable harm. Courts had previously backed away from such a presumption following the Supreme Court’s decision in eBay, Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006).   This effectively lowers the bar in terms of getting injunctive relief for trademark owners in that a separate showing of “irreparable harm” does not need to be shown in order to obtain such relief.

Copyright Alternative in Small-Claims Enforcement Act of 2019 (CASE Act)

The CASE Act provides copyright owners with an alternative venue to litigate copyright infringement claims before the newly created Copyright Claims Board. Within 60 days of receipt of a notice of a pending dispute, a party may choose to “opt out” and litigate in court.  Statutory damages are capped at $15,000 for each work “timely registered under section 412” and $7,500 for each work that was not timely registered.  Damages are limited to $30,000 per case, excluding legal fees. The CASE Act was enacted with the intent to streamline smaller disputes and to reduce the cost of litigation for smaller claims that may not warrant a filing in federal court.

Protecting Lawful Streaming Act (PLS Act)

In the event an individual streamed copyrighted work without permission from the owner, the Protecting Lawful Streaming Act has elevated the punishment of this crime from a misdemeanor to a felony. The idea behind the PLS Act is to scrutinize large-scale streaming services that primarily stream unlicensed works without permission for profit.

 

[1] Continuing Appropriations Act, 2021, H.R. 133, 116th Cong. (2020) at 1019-1029. The full Trademark Modernization Act (2020) bill can be viewed at: https://www.congress.gov/bill/116th-congress/house-bill/6196/text?r=1