Trademark Modernization Act Will Have Significant Impact on U.S. Trademark Practice
The Trademark Modernization Act (TMA), going into effect December 18, 2021, will provide a faster and less expensive method to cancel trademark registrations based on non-use and abandonment. In addition, as of December 1, 2022, the deadline to respond to Office Actions for all non-Madrid based trademark applications will be three months, with a single three-month extension of time available for $125.
After reviewing the finalized TMA, we wish to bring the following changes to your attention:
(1): Shortened Three Month Deadline for Responses to Office Actions
Currently, all trademark applicants have six months to prepare and file a response to office action at the United States Patent and Trademark Office (USPTO). This will no longer be the case.
The TMA cuts the current six-month deadline in half for trademark applications filed with a use-in-commerce basis or foreign registration basis. The USPTO will grant trademark applicants a single three-month extension of time that may be filed for a government fee of $125. Due to the extensive changes to USPTO practice, the USPTO will delay the implementation of this rule until December 1, 2022.
Importantly, this rule change has no impact on Madrid based trademark applications. After review, the USPTO determined that shortening the response period for such applications would have an adverse impact, as only 11% of Madrid based trademark applicants currently file responses to non- final office actions with multiple grounds within three months of issuance.
We believe this new procedure will have the following impact on trademark applicants:
- Speeds the process by which fraudulent or suspect trademark applications will be abandoned by failing to file timely responses.
- Unrepresented U.S. entities will unknowingly allow trademark applications to go abandoned by missing shortened three-month response to office action window.
- Increase costs related to responding to office actions, as a three-month extension of time may often be a prudent decision.
(2): Faster and Less Expensive Methods Available to Cancel Trademark Registrations Based on Nonuse and Abandonment
Currently, to challenge a trademark registration on the basis of nonuse or abandonment, an entity would need to file a formal Petition for Cancellation with the Trademark Trial and Appeal Board (TTAB). Such Cancellation proceedings have a $600 government fee per class and often result in Default Judgments months after filing the Petition.
The TMA sets forth two new procedures, effective December 18, 2021, that provide a faster, less expensive, and more efficient alternative to filing a contested cancellation proceeding at the TTAB.
(a): Ex Parte Expungement Proceeding: The USPTO must determine whether the evidence of record supports a finding that the registered mark has never been used in commerce on or in connection with some or all of the goods and/or services recited in the registration.
- Cost : $400 per class. This is less than the $600 fee per class for filing a petition for cancellation.
- Time Limit: An expungement proceeding must be requested between 3-10 years after the registration date. However, until December 27, 2023, an expungement proceeding maybe requested for any registration at least 3 years old.
(b): Ex Part Reexamination Proceeding: The USPTO must determine whether the evidence of record supports a finding that the mark registered under Section 1 of the Act was not in use in commerce on or in connection with some or all of the goods and/or services as of the filing date of the application or amendment to allege use, or before the deadline for filing a statement of use, as applicable.
- Cost: $400 per class. This is less than the $600 fee per class for filing a petition for cancellation.
- Time Limit: This new procedure must be requested within the first five years after registration.
We believe these two new proceedings will have the following impact on U.S. trademark practice:
Fewer Petitions for Cancellation will be filed with the TTAB. The Ex Parte Expungement and Reexamination Proceedings provide faster and less expensive methods to cancel trademark registrations based on nonuse or abandonment.
· Expungement Proceedings will be very popular for the first two years. Until December 27, 2023, expungement proceedings may be requested for any registration at least 3 years old. This is important because after December 27, 2023, expungement proceedings must be requested between 3-10 years after the registration date. As such, we believe there will be a significant push to file expungement proceedings against older U.S. trademark registrations on or before the December 27, 2023 date.
Nath, Goldberg & Meyer is available to assist in protecting your valuable trademark rights. Please do not hesitate to contact us should you have any questions regarding the TMA’s impact on US trademark practice.
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