The Trademark Modernization Act of 2020 (Act) aims ‘to improve and strengthen the accuracy and integrity’ of the US trade mark register. The Act introduces a number of important changes targeting applications and registrations which rely upon inaccurate claims of use and several of these changes are likely to affect foreign companies seeking to register trade marks or maintain trade mark registrations in the US.
The Act, which was signed into law on 27 December 2020 and will be implemented by 27 December 2021, affects both pending applications and registrations. The FY 2021 Final Trademark Fee Rule (Fee Rule), which was implemented on 2 January 2021, also increased various filing and maintenance fees.
Below, we summarise the new expungement and re-examination procedures, and changes to deadlines, fees and penalties introduced by the Act and the Fee Rule.
New expungement and re-examination procedures
The Act creates two new procedures allowing for some or all of the goods and services claimed by a registration to be expunged by the United States Patent and Trademark Office (USPTO), if the mark has not been used in respect of them in commerce in the US.
Any party, including the USPTO, will be able to file a petition to expunge goods or services claimed by a registration if investigations suggest that the registrant has never used the registration in commerce in respect of those goods or services. This may be limited to some of the goods or services claimed by a registration, or cover a registration in its entirety.
Registrations that are less than three years old will not be able to be the subject of expungement proceedings.
US registrations based on foreign and international registrations are likely to be targeted by this new procedure, because those registrations are not based on use in the US, unlike most domestically registered US marks.
Any party, including the USPTO, will be able to file a petition to expunge a registration if investigations suggest that the registrant did not use the mark in commerce in respect of the claimed goods and services before a sworn statement of use in support of the registration was filed.
Registrations that are older than five years will not be able to be targeted by re-examination proceedings.
This procedure will be used to target registrants of use-based registrations who filed falsified statements of use or questionable specimens of use during examination. This responds to a reported increase in the quantity of suspicious or fraudulent documentation filed at the USPTO.
Obligations of petitioner for expungement or re-examination
Both new post-registration proceedings for the expungement of unused marks will require the petitioner to submit:
- A verified statement to the effect that a reasonable investigation was conducted to determine whether the mark had been used in relation to the goods and services;
- Evidence of the investigation; and
- Payment of fees.
Obligations on registrant
In order to avoid expungement of goods or services, a registrant must show evidence of use of the mark. The use must be in commerce in respect of the relevant goods or services and prior to the date the petition was filed.
Similarly, in order to avoid expungement of goods or services in respect of which a petition for re-examination has been filed, a registrant must show use of the mark. The use must be in commerce in respect of the relevant goods or services, but in this case must predate the sworn statement in question.
Once the registrant has submitted any evidence in response, the USPTO will decide whether to remove the relevant goods or services from the registration.
Examiners can apply deadlines for responding to office actions that are shorter than the current six month period. Applicants will be able to request an extension, up to the full six months, subject to payment of the applicable fee.
Penalties for inaccurate declarations
The Act introduces a new fee of $250 per class to delete unused goods or services from a registration, effectively functioning as a penalty for inaccurate class specifications. The fee only applies if the request to delete the unused goods or services is filed after a declaration of use has been filed, but before it has been accepted.
The USPTO can audit registrations and may issue a post registration Office Action to confirm whether a use described in a declaration of use has actually occurred. The fee will be applied to each class of goods or services in respect of which use cannot be evidenced.
Accordingly, US registrations based on foreign and international registrations should be reviewed carefully and goods and services not in use in the US removed to avoid falling foul of these provisions.
Increases to existing fees
In addition to introducing the new fee for deleting good and services from a registration described above, the Fee Rule increased a range of fees, including application fees (increased from $275 to $350 per class) and declaration filing fees (increased from $125 to $225 per class).
What you need to do
As a result of these changes, applicants for, and owners of, US trade marks should:
- Ensure that the goods and services claimed by their trade marks are narrowed to those in respect of which the mark are actually used in the US; and
- Maintain evidence of use of US trade marks that are older than three years.
These changes should benefit applicants looking to remove conflicting registrations that are not in use, as there will now be a cheaper and more efficient alternative to cancellation actions.
However, they also pose a risk to owners of applications and registrations of marks that are not used in the US in respect of all goods and services claimed.
HWL Ebsworth’s intellectual property team has extensive experience assisting clients to manage their trade mark rights in the US and other international jurisdictions. Please contact us to learn more.
This article was written by Luke Dale, Partner and Kelly Williamson, Solicitor.