Behind the Scenes of the Trademark Modernization Act: An Interview with Stephen Lee
| Pages | 24-62 |
Published in Landslide, Volume 14, Number 1, 2021. © 2021 by the American Bar Association. Reproduced with permission. All rights reserved. This information or
any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written
consent of the American Bar Association.
24
Behind the Scenes of the
Trademark Modernization Act
An Interview with Stephen Lee
The Trademark Modernization Act (TMA), passed in December 2020, is one of the biggest pieces
of trademark legislation to hit in recent years. The TMA, which will be fully implemented by
December 2021, seeks to declutter the U.S. federal trademark register, amending the Lanham
Act in key respects, including by (1) instituting new tools to remove federal trademark applica-
tions and registrations that are based on inaccurate claims of use in commerce, through a broader
and easier letter of protest system, a streamlined expungement procedure, and a new proceeding
to reexamine existing registrations; and (2) providing for shortened response deadlines to ofce
actions, to eliminate applications that will ultimately be abandoned.
To take a closer look at the TMA, the reasons it was passed, and the impact it will have on
brands and trademark registrants going forward, we caught up with Stephen Lee, Chief Intellectual
Property Counsel for Target Corporation, to hear his views.
Published in Landslide, Volume 14, Number 1, 2021. © 2021 by the American Bar Association. Reproduced with permission. All rights reserved. This information or
any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written
consent of the American Bar Association.
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Image: GettyImages; image manipulation by Jill Tedhams
on pending applications, and requiring the USPTO to le an
annual report to Congress on fraudulent trademarks and efforts
to address this problem. First, giving the USPTO the abil-
ity to set a shorter timeline for each step in the examination
process is a modernization that reects how applications are
processed today: electronically. The previous timelines were
based on when trademark practitioners used to physically
mail specimens to the USPTO. Second, the reexamination and
expungement processes, as written, are relatively limited in
scope to apply to fraudulent marks, and provide another ave-
nue for brand holders to expunge fraudulent trademarks. Third,
the USPTO, which is an independent agency, has an alarming
problem related to the growth of fraudulent trademarks that the
USPTO has approved. This issue requires that the agency have
additional oversight.
While this is a strong start, more light needs to be shed
on this ever-growing crisis affecting our trademark system.
In June, the U.S. Senate debated China’s theft of U.S.-based
companies’ intellectual property. I would like to see more pro-
ceedings like these going forward—and more action to get at
the root cause of the problem.
In your view, what is the best way to continue to address
the deadwood and fraudulent lings that are cluttering the
register?
The TMA clearly empowers the USPTO director to take
unilateral action to review possible fraudulent applications
and take necessary action, if needed. When a new director
is available, I hope that leader will avail themselves of this
authority. The USPTO needs to include in their examination
of applications a review for fraud. There has been a working
assumption that applications submitted are accurate and truth-
ful, but examination needs to be viewed through the lens that
many of these applications are potentially fraudulent.
As for current decluttering efforts, I believe they are inef-
fective; and many of my intellectual property colleagues
share the same views. For example, we routinely get swept
into post-registration audits when we renew our marks based
on the number of products our trademark registrations cover.
At the same time, entities that have the telltale signs of being
fraudulent lers rarely get audited, either because they never
renew their registrations or because these fraudulent lings
are typically limited to a single class containing relatively
few goods. Decluttering is reactive—it should never reach
this point, and more scrupulous examination is needed on
the front end to prevent the problem as opposed to reactively
addressing the problem with piecemeal solutions that often
have unintended consequences for legitimate brand owners.
What didn’t get into the TMA that you wish would have? Do
you think these things will make it into a new bill?
The TMA put the responsibility on third parties to chal-
lenge fraudulent trademarks, and it does not include
requirements on the USPTO to improve detection of fraudu-
lent applications in the examination phase. The legislation
provides important, but incremental, relief that assigns
Continued on page 62
Target is one of the largest retailers in the United States,
with over 360,000 team members and 1,900 stores across
the country. What involvement did Target have in the craft-
ing and passage of the TMA?
Since 2019, Target has been educating and advocating to
Congress and the U.S. Patent and Trademark Ofce (USPTO)
about the increase in bad faith or fraudulent lings. As the
Chief Intellectual Property Counsel for Target, I testied before
the Senate Judiciary Subcommittee on Intellectual Property on
fraudulent trademarks and in support of some of the concepts
contained in the TMA. I made numerous visits to Congress, the
White House, and the USPTO, and hosted then Director Iancu
at Target headquarters as part of our effort to better educate on
this problem and its impact to brand holders.
Why was drafting and passage of the TMA important to
Target?
Target was and is continuing to seek ways to challenge
fraudulent trademarks. The passage of the TMA is an incre-
mental step in providing additional tools to legitimate brand
holders to object to fraudulent trademarks. An equally
important concern is to protect the integrity of the federal
trademark register; and there remains more work to be done
in concert with other intellectual property stakeholders.
Were fraudulent trademarks really such an issue for Tar-
get’s business that it was worth devoting resources to
changing the current law? Or, more specically, how often
did Target nd itself in a situation in which it was blocked
from a mark due to what it perceived as a fraudulent ling?
At Target, we became aware of the problem when we were
selecting a new brand for a product launch. We landed on a
preferred name, but our trademark search uncovered a prior
application that would have blocked our registration. We con-
ducted additional research and could not nd the mark in use
in the U.S. We retained a trademark investigative rm, and they
could not nd the company, its representatives, or valid con-
tact information. We had little recourse—ling a cancellation
proceeding was not practical given the time it would take to
resolve and the needs of the business in being 100 percent sure
the new mark we were adopting was available for use. Given
the uncertainty, we instead had to move on to another mark,
costing us millions of dollars in time and expense.
Since this initial nding, we did audits on 10–15 brands and
found multiple bad faith lings. In the past year of researching
and clearing trademarks, we continued to encounter multi-
ple fraudulent lings for all of our trademark launches. It is
now rare to order a trademark clearance search that does not
uncover one or more of these fraudulent lings. As one of the
top trademark lers in the U.S. and a top-ve ler globally, we
encounter fraudulent trademarks for every product launch.
What features of the TMA is Target most excited about, and
why?
Target strongly supports aspects of the TMA that in
effect modernize the examination process. These measures
include giving the USPTO the exibility to set response
timelines, allowing a third party to object and offer evidence
Published in Landslide, Volume 14, Number 1, 2021. © 2021 by the American Bar Association. Reproduced with permission. All rights reserved. This information or
any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written
consent of the American Bar Association.
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Federal Article III judges may stay civil litigation. They generally
do so either incident to their inherent power to control their own
dockets1 or via congressional prescription.2 Stays are appropriate
when another court or authority may resolve a part of or the entire
dispute before the rigors of a trial; as it stands, court dockets are
crowded with criminal and civil federal and state matters, and judges
must conserve limited judicial resources where cases are likely to
be resolved or streamlined and doing so accrues no undue prejudice.
Some statutes, as well as some district court case law and appellate
precedent, guide the courts on when to stay. But the interlocutory
nature of such decisions makes precedential decisions scarce.
The Patent Trial and Appeal Board (PTAB), an administrative body
tasked with patent post-grant review, reviews most issues of patent-
ability cheaply compared to district court review, and challenges can
estop later validity arguments. So too does the Central Reexamina-
tion Unit (CRU) launch ex parte reexaminations that often streamline
or resolve disputes between ersatz litigants. Stays for these proceed-
ings are particularly favored.
The Law of
District Court
Stays for USPTO
Proceedings
By Jonathan Stroud
Image: GettyImages
Published in Landslide, Volume 14, Number 1, 2021. © 2021 by the American Bar Association. Reproduced with permission. All rights reserved. This information or
any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written
consent of the American Bar Association.
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