OHIO: An Introduction to Intellectual Property

TRADEMARK MODERNIZATION ACT 

By John Zanghi & Kathryn Chambers

Trademarks protect companies and consumers by allowing consumers to identify companies’ goods and services. Trademarks that are inaccurate, fraudulent, or no longer in use make it more difficult for genuine businesses to register their own marks and for consumers to discern inaccurate marks. The Trademark Modernization Act went into effect on 18 December 18 2021, and gives interested parties additional means to remove unused trademarks from the federal trademark register.

A main goal of the Act was to create new ex parte expungement and reexamination proceedings to cancel, in whole or in part, registered marks for which the required use in commerce was not made. These proceedings allow third parties to contest the validity of registered marks more efficiently and for less money than the alternative inter partes cancellation proceeding at the Trademark Trial and Appeal Board (“TTAB”).

New expungement proceeding 

The ex parte expungement proceeding allows any party to request cancellation of some or of all of the goods and/or services in a federal trademark registration when a registrant has never used the trademark in commerce with those goods and/or services.

The US Patent and Trademark Office (USPTO) will decide whether the evidence presented on the record supports the allegations that a registered mark has never been used on or associated with some or all of the goods and/or services in the stream of commerce. Thus, to rebut such non-use allegations, a registrant must be able to show a bona fide use of the trademark in the ordinary course of trade. This prevents registrants from registering a trademark to simply reserve the rights in the mark. Verifying a 'bona fide use' of a trademark requires a two-step analysis: 1) showing that the trademark is actually used in association with the listed goods and/or services; and 2) showing that the goods and/or services are sold in interstate commerce.

There are different standards of what qualifies as using a trademark in commerce as it relates to goods versus services. For example, when using a trademark in association with goods, the trademark must appear on the goods. Alternatively, if the trademark is not displayed on the goods, the trademark must either appear on the container for the goods or on a display associated with the goods. Along with displaying the trademark, the goods must also be sold or transported in commerce. Specifically, the goods must be carried over state lines in furtherance of the sale.

With respect to using a trademark in association with services, the trademark must be used or displayed in the sale of advertising of the services. Also, the services must be rendered in commerce. Again, the services must be rendered across state lines in furtherance of a sale of those services.

An ex parte expungement proceeding must be requested between three and ten years after the registration date of the registered trademark sought to be cancelled. However, until 27 December 2023 a party may submit a petition for cancellation for any registration at least three years old, regardless of the ten-year limit.

New reexamination proceeding 

Similar to the expungement proceeding, the Act also allows any party to request a cancellation of some or all of the goods and/or services in a use-based registration through a reexamination proceeding. The request for reexamination may be brought on the basis that a registered trademark was not in fact used in commerce with the associated goods and/or services on or before a certain date. The relevant date for a trademark application that was filed based on actual use of the trademark in commerce is the filing date of the application. The relevant date for a trademark application filed based on the intention to use the trademark in commerce is the “later of the date that an amendment to allege use was filed or the date that the deadline to file a statement of use expired.”

A request for reexamination of a trademark registration must be made within the first five years after registration.

Requesting institution of proceedings 

Any party may file a petition to the USPTO requesting to cancel all or some of the goods and/or services of an unused trademark by submitting a Petition for Expungement or Reexamination requesting that the USPTO director institute a proceeding. Along with payment of a filing fee, the request must include a verified statement showing a reasonable inquiry was made concerning whether a trademark was used in commerce associated with specific goods and/or services. The party must put forth evidence supporting the allegation that a trademark was never used. The standard for establishing a prima facie case of nonuse in commerce is a 'reasonable predicate'.

If the director determines that the petitioner has established a prima facie case, the applicable proceeding will be instituted. In that case a USPTO examiner will issue an office action to the registrant. The registrant must respond within three months by showing evidence of actual use of the trademark in association with the goods and/or services. Once a decision has been made, the registrant has three months to request an appeal or a reconsideration of the decision to the TTAB. Further safeguards for registrants include the effects of estoppel, which bar the institution of a cancellation proceeding of a trademark that was already instituted and where adequate proof of actual use was provided. The estoppel provisions of the Act also bar “co-pending proceedings that involve the same registration and the same goods and/or services, and for authorizing suspension of action by the USPTO or the TTAB based on an expungement or reexamination proceeding.”

Conclusion 

The new ex parte expungement and reexamination proceedings of the Trademark Modernization Act give parties more efficient and less costly tools for contesting unused federal trademark registrations.