Upcoming Changes to the Lanham Act: The Trademark Modernization Act of 2020

As part of Congress’ sweeping COVID-19 relief bill, it passed the Trademark Modernization Act of 2020, which makes some significant changes to the Lanham Act, particularly to certain trademark examination and maintenance procedures. Signed into law on December 27, 2020, many of the bill’s amendments to the Lanham Act will become effective at the end of this year. These amendments are, in part, designed to address the growing problem of inaccurate and false claims of use on or in connection with goods or services found in trademark applications and registrations. The ultimate goal of these amendments is to clean up the trademark register, ridding it of fraudulent marks or marks that are no longer in use with the good or services claimed in a registration.

In particular, three new amendments are designed to accomplish this goal—one establishing new procedures during the trademark examination process and two establishing new post-registration proceedings—will go into effect on December 27, 2021. These are described below:

(1) Third Party Submission of Evidence During Examination: One way the United States Patent and Trademark Office (“USPTO”) will now police trademark applications and registrations is by allowing third parties, during the application process, to submit evidence relevant to a ground for refusing registration of another’s mark. By example, a third party may submit evidence that it was using a mark prior to the applicant, or that the applicant is not actually using the mark in commerce as claimed in the application. The Director of the USPTO is expected, by December 27, 2021, to establish appropriate procedures for the consideration of evidence submitted by a third party.

(2) Ex Parte Expungement Proceedings: Third parties may now also participate in post-registration proceedings relating to others’ marks. Any person will now be able to file a petition to expunge a trademark registration on the basis that the registered mark has never been used in commerce on or in connection with some or all of the goods or services recited in the registration. This expungement petition may be filed at any time between the three and ten year anniversary of the date of registration, and must include a verified statement that identifies the investigation efforts of the petitioner 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, as well as all facts and evidence supporting such allegations.

This expungement proceeding is not limited to third parties, however. The USPTO will also be able to initiate these expungement proceedings. In either situation, whether done at the direction of a third party or the USPTO, a finding by the USPTO that the mark has never been used in commerce with the particular goods and services identified in the petition will result in cancellation of the mark with respect to those goods and services. Though, it is important to note that the registrant can challenge such a petition by offering evidence showing that any nonuse is due to special circumstances that excuse such nonuse.

(3) Ex Parte Reexaminations: Similar to an expungement, any person, or the USPTO, may file a petition to reexamine a registration of a mark on the basis that the mark was not in use in commerce on or in connection with some or all of the goods or services recited in the registration on or before the “relevant date.” The relevant date, as defined by the new amendment, is either the date the trademark application was filed (for used-based applications), or, for intent to use applications, the later of the date the trademark application was amended to allege use, or the date on which the time period for filing a statement of use expired. Compared to an expungement proceeding, there is a shorter timeframe to file a reexamination petition, as it must be filed within five years of the registration of the mark.

Currently, the USPTO is accepting public comments on the proposed regulations for these new procedures for expungement and reexamination petitions. These new procedures will both provide third parties a tool to enforce rights in their own marks and help the USPTO maintain both the principal and supplemental registers. As this year draws to a close, it will be important to look out for the implementation of these new procedures and begin preparing for the upcoming changes to trademark examination and prosecution procedures.

If you have any questions regarding these changes, if you foresee the need to challenge the trademark application or registration of a competitor or illegitimate mark holder, or if you are faced with defending against a third party challenge to one of your registrations or applications, give us a call at (804) 697-2000.