New federal law will make it easier for trademark owners to obtain injunctive relief

You would be forgiven if amidst all the hoopla surrounding the Paycheck Protection Program and other Covid-related legislation you missed the Trademark Modernization Act of 2020, but there are some things you should know about the TMA.

In a nutshell, the TMA will make it a little bit easier for trademark owners to obtain injunctive relief in court. It codifies the ability of third parties to submit evidence in opposition to proposed trademark registrations and will streamline procedures for challenging trademark registrations obtained without the requisite use in commerce of the registered mark.

Presumption of irreparable harm

The first change relates to the litigation of injunctions in trademark infringement actions. To obtain injunctive relief, the party seeking that relief must show irreparable harm by establishing that an award of money damages is an insufficient remedy for trademark infringement. It used to be that once a court had concluded that a trademark infringed upon another’s trademark rights, it was presumed that irreparable harm would result.

This makes sense because it is difficult to reduce the damage to one party’s brand to a specific dollar amount. In 2006, however, the U.S. Supreme Court decided a case called eBay v. MercExchange, in which it ruled that, in patent infringement litigation, courts could not presume irreparable harm after concluding patent infringement exists.

Because patent infringement and trademark infringement are both forms of intellectual property, some courts stopped presuming irreparable harm upon a finding of infringement in trademark cases, while others did not, leaving trademark owners uncertain how their case would be handled.

The TMA restores the presumption of irreparable harm upon a finding of infringement.

It should be noted that the presumption is rebuttable, so even if the court presumes irreparable harm, the accused party may still submit evidence rebutting it. Nevertheless, the overall impact of this change will be that it is slightly easier to obtain injunctive relief for trademark infringement.

Submitting evidence

A party seeking trademark registration from the United States Patent and Trademark Office does so by first submitting an application. The USPTO then assigns an examiner to review the application, and after clearing the initial review the mark is published for opposition.

Prior to the TMA, a practice of submitting “letters of protest” had developed before the USPTO, under which third parties could submit evidence to examiners during the review period. The TMA provides statutory authority for that process.

This change will protect a method that trademark owners used to protect their marks from confusingly similar registrations, and hopefully reduce the amount of administrative litigation before the USPTO.

The TMA requires the USPTO director to establish specific procedures for third party submissions within a year.

Streamlined procedures

To obtain trademark registration, the USPTO requires proof of use, or intent to use, the proposed mark. Use or intent to use must be established through a sworn statement and submission of a specimen.

Many registrants, often from foreign countries, have obtained registrations based upon false statements of use. These registrations can block the registration of legitimate trademark users who are actually using the mark. Even so, it had been difficult to have the improper registrations removed because it required proof of fraud on the USPTO, which is a difficult standard to meet.

The TMA will make it easier to seek cancelation of improper registrations. It allows a party to file a petition for expungement of a mark within three years of registration on the grounds that it was never used in U.S. commerce, and it allows a party to file a petition requesting that the USPTO reexamine the registration on the grounds of non-use in U.S. commerce prior to the registration date, so long as it is filed within five years of registration.

In addition, the TMA allows for cancelation proceedings based upon non-use.

Taken together, these amendments are expected to streamline procedures for clearing the registry of improperly obtained marks.

Attorney Ned Sackman, a shareholder at Bernstein Shur, works out of the firm’s Manchester office.