Trademark Modernization Act of 2020
Buried in the last round of COVID relief legislation were some major changes in the area of intellectual property law that will impact both trademarks and copyrights. This week we’re reviewing the Trademark Modernization Act of 2020 and how it might impact small businesses in particular.
The Trademark Modernization Act of 2020 (TMA) makes several updates to trademark law. But for our small business clients, we think there is one major change in particular that you should be aware of. The law has the potential to make it much easier for your competitors to challenge your trademark registration, even several years after the fact.
Challenging Existing Trademarks under the Trademark Modernization Act
The Trademark Modernization Act creates new avenues for challenging existing trademark registrations by alleging:
But the TMA could also be used by larger companies to flex their larger legal budgets against small businesses, particularly those that are less familiar with the nuances of trademark law.
Re-Examining Registered Trademarks
The TMA will allow someone to ask the USPTO to take a second look at registered trademarks and remove some or all of the goods or services in the registration by arguing that the trademark wasn’t actually in use on or before the date you claimed in your application. Remember, a trademark application requires you to identify two dates:
Prior to the TMA, “use in commerce” was considered a very low bar, and we really didn’t spend much time worrying about how “bona fide” your use of the trademark was as long as we had a use date that we could work with. But the TMA will create an avenue for challenging whether and when and to what extent you really started using your trademark. And we suspect that this will be especially problematic for smaller businesses:
Removing Registered Trademarks
The TMA will also allow someone to request the USPTO to expunge (or remove) a trademark registration by arguing that the trademark has never been used in commerce on some or all of the goods or services listed in the registration. Much like petitions to re-examine a trademark, the petitioner will have to submit a statement showing that they conducted a reasonable investigation to support the allegation along with evidence of the non-use. But unlike re-examination petitions, the petition to expunge a trademark must be submitted between 3 and 10 years after the registration date.
How might the TMA impact you in the real world?
Let’s say, for example, that you register a trademark for your new consulting business. You list in the application a variety of services that you currently provide as well as some additional services you plan to add in the future. But after your trademark is registered, you haven’t quite gotten around to adding the additional services you listed in your application. Or you’ve dropped some services as you’ve learned what works and what doesn’t in your market. Providing an exhaustive list of services in your trademark application is especially easy to do with service marks because to prove “use” in your trademark application, you often just attach samples of the advertising for your services. But advertising alone doesn’t really mean you’ve actually sold any of those services, or that you first sold those services by the date you listed in your trademark application.
These new procedures under the TMA would allow someone to challenge your “use” of the trademark and potentially cancel your registration, or at least cancel it in connection with the goods or service that aren’t in use. Alternatively, a competitor might come along and argue that you weren’t using the trademark by the date you claimed, and that they were actually using a similar trademark first. Because trademark rights are based on first use and two trademarks cannot be confusingly similar to one another, your competitor wants to get rid of your trademark registration to clear the way for their own registration.
What happens if someone files a petition against your business?
The USPTO will examine any petitions that are filed to see if they make a prima facie case (i.e. present the minimum standards to pursue a case). If so, the USPTO will grant the petition which starts a litigation-like process. You’ll be notified and required to submit evidence of your actual use of the trademark (or one of the rare excuses for non-use). And then the USPTO will decide whether you get to keep your trademark registration and, if so, on what goods or services.
When does this new law go into effect?
The Trademark Modernization Act will go into effect one year after its passage, or on December 27, 2021.
What should small businesses do to get ready?
The TMA makes it more important than ever that you monitor and maintain your trademarks.
If you have any questions about protecting your business’s brand identity,
then schedule a consultation today.