Trademark Modernization Act Provides New Tools to Cancel or Stop Trademark Registrations

The Trademark Modernization Act of 2020 (the Act), signed into law on December 27, 2020, will give trademark owners powerful new tools to cancel improperly granted trademark registrations and to stop pending registrations from being granted.  By no later than December 27, 2021, the Act requires the U.S. Patent and Trademark Office (USPTO) to implement new procedures for cancelling registrations or refusing to register pending applications.   The Act is designed to make it less time-consuming and expensive for trademark owners to cancel or prevent marks from being registered that do not have a valid basis for registration.  Prior to these procedures, the only recourse for trademark owners was to file a petition to cancel with the Trademark Trial and Appeal Board, which can be as time-consuming and expensive as filing a lawsuit in federal court.  The new procedures are a welcomed development for trademark owners frustrated by a trademark registry that contains countless fraudulent or overbroad registrations that prevent legitimate marks from being registered.       

The Act codifies an already-existing practice that allows any party to submit evidence relevant to one or more grounds for refusal of a registration.  The Act provides that this evidence must be submitted during the examination phase.  This procedure can be used to submit evidence showing a likelihood of confusion with an existing registration that the examining attorney may have missed or any other reason the registration should not issue, such as descriptiveness.  The Act requires the Director to determine within two months of submission whether or not the evidence should be included in the record.    

Two new procedures, known as “Ex Parte Expungement” and “Ex Parte Reconsideration,” will allow any party to petition to cancel a registration because the mark has never been used in commerce or the mark was not in use in commerce on or before the relevant date (the filing date of the application or the statement of use, whichever is applicable).  These procedures are designed to cancel registrations that should not have been granted because the registrant never made valid use of the mark.  During the normal examination process, the trademark examiner scrutinizes specimens to determine if the specimens show valid use of the mark in commerce.  Examiners cannot ferret out all fraudulent claims of use.  The new procedures empower others to patrol the trademark registry for registrations that should not have been granted and bring those registrations to the attention of the USPTO.

The new procedures should be especially useful in situations where the applicant includes a “laundry list” of numerous goods and services in the identification.  Generally, all that is needed to obtain a registration for all goods or services in a class is to submit a valid specimen for one item or service per class.  Once that specimen is accepted, the registration issues for all goods or services in that class, even though the mark may not be in use on or in connection with all goods or services.  In recent years, this has frustrated trademark owners because those with valid trademarks are unable to register them for their relevant goods or services because other registrations were issued for overbroad identifications.  The new procedures will allow parties to pare down the trademark registry to remove goods or services from registrations that were never used or not used on or prior to the relevant date. 

Trademark owners, applicants, and practitioners should take care to keep good records of when use of a trademark began with each good or service included in the identification.  If a registration is challenged using the new procedures, the registrant must put forth evidence showing that the mark was in use at least as early as the filing date of the application or statement of use.  It is best if all trademark use can be supported by dated, documentary evidence from several different sources. 

The USPTO is expected to issue regulations or other guidance giving details about how each of these procedures will function and the types of evidence needed to assert and rebut prima facie cases.  We will be monitoring these developments.  Please contact us if you would like our assistance with registering your mark or using one of the new procedures.

This article is provided for general information and should not be relied upon as legal advice for a specific situation. If you are in need of specific advice or legal representation, please do not hesitate to contact us.

©2021 Bea & VandenBerk

Beware of Work-for-Hire Nuances

The term “work-for-hire” is often loosely used to refer to an agreement with an author, musician, or other independent contractor to create a copyrighted work.  “Work-for-hire” agreements are routinely entered for the purpose of vesting ownership of the work with the party paying for the work.  The term “work-for-hire” has a precise meaning under the U.S. Copyright Act, and if care is not used to properly draft the agreement, the partying paying for the work may not legally own all rights to the work. 

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Special Copyright Provisions for Certain Nonprofits

As discussed in our prior article, use of a copyrighted work by a nonprofit organization will not usually qualify as a fair use. However, several statutory provisions of the Copyright Act (17 U.S.C. § 101 et seq.) allow certain nonprofit organizations to use copyrighted works without obtaining the copyright owner’s permission. Most of those provisions have very technical requirements and apply to limited circumstances. Before relying on one of those provisions, the nonprofit organization should review all statutory requirements to make sure its use qualifies. One of the more useful provisions allows a nonprofit organization to perform a nondramatic literary or musical work at fundraisers. In order to qualify for this provision, no admission fees can be charged at the showing, those performing the work must do so at no charge, and all proceeds from the performance, such as donations, must be used exclusively for charitable purposes. 

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Nonprofits and the Fair Use Defense

It is a common misconception that nonprofit organizations have special rights to use copyrighted works without permission. This misconception arises from the first fair use factor, which considers “the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes.”  As explained below, “nonprofit educational purposes” is very narrowly defined. Even if a use is actually included in “nonprofit educational purpose” the use may not qualify as a fair use if the other fair use factors weigh against fair use. While the law does not generally grant nonprofit organizations the right to use copyrighted works as a fair use, the U.S. Copyright Act does grant several statutory exemptions in limited situations.

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Brexit Changes European Trademark Registration Strategies

With the United Kingdom’s withdrawal from the European Union becoming official on January 31, 2020, trademark owners should evaluate their trademark registration strategies to ensure their marks remain protected throughout Europe. While the U.K. was a member of the E.U., trademark owners were able to protect their marks in the U.K. and all other E.U. member states with a single, European-Union trademark registration. The U.K.’s withdrawal will not bring any immediate changes to the trademark registration process, as E.U. trademark registrations will continue to be valid in the U.K. until the end of the transition period on December 31, 2020.

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Supreme Court to Hear “Not-So-Generic” Case Regarding Generic Trademarks

UPDATE: In an 8-1 decision, the Court found in favor of Booking.com and held that its trademark was entitled to registration (Patent and Trademark Office v. Booking.com B. V.). The Court reasoned that since one entity can own an Internet domain name at the same time that a domain name can serve a source-indicating function to the general public. The Court rejected the USPTO’s categorical rule against registration of a generic word following by a “.com” or other top-level domain name. Writing for the majority, Justice Ginsburg explained that the controlling test “depends on whether consumers in fact perceive that term as the name of a class or, instead, as a term capable of distinguishing among members of the class.”

The U.S. Supreme Court will hear a case that could have profound implications for owners of generic marks.  In United States Patent and Trademark Office v. Booking.com B.V., the U.S. Supreme Court will decide if adding the term “.com” to a generic word creates a protectable trademark for an online business.  This case arose when the U.S. Patent and Trademark Office (USPTO) refused registration of “Booking.com” as a trademark for an online travel website.  The USPTO determined that the word “Booking” was generic for hotel reservation services.  Adding the top-level domain “.com” to the generic word, the USPTO reasoned, did not create a distinctive mark because top-level domains do not ordinarily serve a source-indicating function.

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Supreme Court to Decide Epic 10-Year Copyright Infringement Case

UPDATE: In a 6-2 decision, the U.S. Supreme Court found in favor of Google, holding that Google’s use of the Java API qualified as a fair use. The opinion is available here.

The “copyright lawsuit of the decade” is finally coming to a conclusion, as the U.S. Supreme Court granted certiorari to Google LLC v. Oracle America, Inc.  The Court’s decision is immensely important to the computer software industry since the Court will decide if a software application programming interface (API) is protected by copyright. The Court may, for the first time in 25 years, address the copyright fair use doctrine by deciding if use of an API is a fair use. This case has a long and convoluted history, but it started in 2010 when Oracle sued Google, alleging that Google committed patent and copyright infringement by using Java application programming interface declarations in its Android platform. The patent claims were resolved, leaving the copyright infringement claim. After several rounds of decisions, the U.S. Court of Appeals for the Federal Circuit held that APIs were protected by copyright and that Google’s use of them did not constitute fair use. Google appealed to the Supreme Court seeking reversal of those decisions.

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Proposed Legislation Would Create a Small Claims Court for Copyright Disputes

The U.S. House of Representatives passed legislation that would create a small claims court for copyright disputes.  If enacted into law, the Case Act would create a dispute resolution system known as the Copyright Claims Board. The Copyright Claims Board would be housed within the U.S. Copyright Office and would be an alternate forum to resolve copyright disputes when the amount in controversy is less than $30,000. Under the legislation as currently worded, the Copyright Office would be responsible for setting up a filing system, enacting rules to govern proceedings, and appointing panels of copyright experts, called Copyright Claims Officers, to decide disputes.  Many details still need to be worked out, but all disputes would be decided based upon written submissions and Internet-based communications with no in-person appearances in court. Intellectual property practitioners are likely familiar with the Trademark Trial and Appeal Board (TTAB), which decides federal trademark registration disputes.  Trials before the Copyright Claims Board could share similarities with the TTAB.

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Beware of Copyright Trolls

Have you ever copied a photograph from a website thinking that the photograph was free to use?  You may have thought this because the photograph did not contain a watermark or copyright notice. Maybe the photograph claimed that it was “royalty free,” and you assumed that meant it was free to use for no charge.  Or, perhaps you were aware that using the photograph was not authorized, but you figured it would never be discovered. These are common mistakes that can prove to be costly.

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New Rule Requires U.S. Counsel to Represent Foreign Trademark Applicants and Registrants

The U.S. Patent and Trademark Office (USPTO) issued a new rule that requires foreign trademark applicants and registrants to be represented by an attorney licensed in the United States. Under the U.S. counsel rule, codified at 37 C.F.R. § 2.11(a), any trademark applicant or registrant domiciled outside of the United States must retain U.S. counsel to file any document before the USPTO.  This rule change is an effort to combat the unauthorized practice of law as well as the use of fake or suspicious specimens. The rule change was prompted by the USPTO’s examination of foreign trademark applications. In some cases, foreign applicants filed hundreds of trademark applications in their own names.  After reviewing those applications, the USPTO discovered that those applications were, in fact, filed by foreign practitioners.

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