The USPTO Has Enacted the Trademark Modernization Act: But Now What?
| Author | Matthew D. Asbell, Eric Perrott, and Hannah Rosenson |
| Pages | 38-64 |
Published in Landslide, Volume 14, Number 4, 2022. © 2022 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.
38
T
he U.S. Patent and Trademark Ofce (USPTO) has been facing
a crisis. There are close to three million registered trademarks,
and new trademark applications are being led at a record
pace.
1
In 2021 alone, the USPTO registered over 367,000 applica-
tions.2 As the register grows, unused (and unwanted) trademark
registrations (“deadwood”) are a signicant problem as they make
it more difcult for new trademark applicants to protect their
own marks.
To make matters worse, many of those trademarks should not
have registered in the rst place. The USPTO has also been expe-
riencing an unprecedented surge in trademark applications from
overseas, particularly from China. Many of these applications
share a number of unusual features, including lists of goods within
a class that are unlikely to be sold together in the marketplace
and evidence of use (i.e., specimens) that appear to be mock-ups
or doctored images.
Partially to address some of these issues, in December 2020,
Congress passed the Trademark Modernization Act (TMA), which
is one of the most signicant changes to U.S. trademark law in
decades. A year later, in December 2021, the USPTO enacted the
TMA’s signature policy: trademark expungement and reexamina-
tion proceedings. These proceedings allow third parties and the
USPTO a set procedure to challenge the validity of trademark
registrations that may never have been used in commerce. This
article explores the potential benets of the newly enacted TMA
as well as the potential short-term and long-term impacts of these
new proceedings on both foreign and domestic trademark owners
and their counsel.
Use in Commerce Is a Fundamental Requirement of
U.S. Trademark Law
The TMA’s expungement and reexamination proceedings aim at
providing new tools to defend a fundamental requirement of U.S.
trademark law—that rights arise and persist when a trademark
is in use in U.S. commerce.3 When a trademark owner ceases use
of a trademark without intent to resume use, that trademark is
considered abandoned and free from the legal protections that
would prevent a new business from using a similar word, phrase,
or other source identier in the marketplace.
The USPTO’s requirements for federal trademark registra-
tions mirror this fundamental concept of U.S. trademark law. The
USPTO requires applicants to submit evidence of use prior to issu-
ing registration (the so-called “preregistration use requirement”),
but exceptions exist for U.S. trademark applications based on
foreign registrations or for extensions of international registra-
tions under the Madrid Protocol.
However, in requiring “proof of use,” the USPTO limits its
evaluation of use evidence in most instances essentially to use
that functions as a trademark to identify source. The USPTO
recently enacted pilot programs and internal policy efforts to
The USPTO Has
Enacted the
Trademark
Modernization Act
But Now What?
By Matthew D. Asbell, Eric Perrott,
and Hannah Rosenson
Image: Getty Images
Published in Landslide, Volume 14, Number 4, 2022. © 2022 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.
39
LANDSLIDE June/July 2022 39
Matthew D. Asbell is a principal at Ot Kurman in New York,
where he handles trademark, copyright, and patent advice,
prosecution, disputes, and transactions and also supports
his clients by connecting them with appropriate colleagues
in other practice areas to address their extended legal needs.
He can be reached at matthew.asbell@otkurman.com. Eric
Perrott is a partner with Gerben Perrott PLLC in Washington,
D.C., where he counsels clients on trademark and copyright
matters, including filing strategy, prosecution, and brand
protection. He can be reached at eperrott@gerbenlawfirm.
com. Hannah Rosenson is an associate at Epstein Drangel
LLP in New York, where she focuses her practice on
intellectual property. She can be reached at hrosenson@
ipcounselors.com.
recommend that examining attorneys assess whether the use
evidence is authentic, but these programs remain limited in scope
and impact. Although the USPTO is now in the process of imple-
menting technological solutions to assist its examining attorneys in
identifying obviously fraudulent specimens, it has generally taken
the position that further evaluation of use evidence would be too
burdensome on its examining attorneys.4
Rather than requiring evidence to establish that the use
occurred on or before a particular date, that it occurred within the
U.S., and that it was sufcient to qualify as use in U.S. commerce,
the USPTO relies on the sworn statements of applicants and their
counsel as to these facts.
Fraudulent Applications Are Slowing Down
Examination and Hurting the Integrity of the
Principal Register
Amidst a backdrop of registrations issuing without actual use,
whether intentionally or not, the USPTO has faced an unprece-
dented surge of applications over the past few years. It is believed
that many of these applications have been motivated by foreign
government subsidies and requirements of the Amazon.com Brand
Registry, but there have also been practitioners and organizations
adopting very low-cost, high-volume business models in handling
U.S. trademark applications for their customers.
The USPTO has taken a number of steps, including requir-
ing U.S. licensed counsel for foreign-domiciled applicants and
registrants, implementing a user verication system for access to
U.S. trademark application and registration ling, and sanction-
ing practitioners and organizations that violate the USPTO rules
and website terms and conditions. Still, many applications slip
through and end up registered. The USPTO has addressed other
efforts toward cleaning up the register, such as by implementing
auditing of use evidence in a random selection of registrations
due for maintenance or renewal and imposing a fee for deletions
occurring as a result.
Despite these efforts, the register remains cluttered by registra-
tions for marks that are not properly in use for some or all of the
goods and services recited. This impacts the ability of legitimate
applicants to clear and register new marks. Moreover, legitimate
applicants have not been motivated to challenge such registrations
because of the costs, risks, and efforts required to do so. The clut-
ter has also slowed the period between the ling of an application
and its initial examination (so-called “rst action pendency”) from
between two and three months in 2020 and beforehand to nearly
eight months as of the second quarter of 2022.5
In response to these concerns, Congress passed the TMA, which
was signed into law as part of the Coronavirus Aid, Relief, and
Economic Security (CARES) Act on December 27, 2020.6 The stat-
ute amended the Trademark Act of 1946 to establish new ex parte
proceedings to cancel U.S. trademark registrations for which the
mark was not in use for some or all of the goods and services at
a designated time. The statute required the USPTO to implement
rules establishing proceedings for expungement of registrations
not subject to the preregistration use requirement and for reex-
amination of registrations that were subject to the preregistration
use requirement. The USPTO enacted those rules, most of which
took effect on December 18, 2021.7
Timing and Procedures for New Proceedings
For marks registered on the basis of a foreign registration or under
the Madrid Protocol, the TMA established expungement proceed-
ings since those marks can be registered in the U.S. for at least three
years without commencement of use in U.S. commerce.
An expungement proceeding is initiated between the third
and 10th year following registration by any third party or by the
USPTO when the proponent establishes a prima facie showing
that the registered mark has never been used in commerce on or
in connection with some or all of the goods and services recited.
Expungement may be pursued against registrations beyond their
10th year only until December 27, 2023.
A reexamination proceeding can be initiated during the rst ve
years following registration by any third party or by the USPTO
when evidence establishes a prima facie showing that the mark
was not in use on or in connection with some or all of the goods
and services as of the ling date of the application or amendment
to allege use, if based on actual use in U.S. commerce, or before
the deadline for ling a statement of use, if the application was
based on intent to use and proceeded to allowance.
Expungement and reexamination may be sought through these
ex parte proceedings, and expungement may also be asserted as
a new ground for inter partes proceedings to cancel registrations.
Under the rules, anyone can le a petition to the USPTO to initiate
an ex parte expungement or reexamination proceeding, without
necessarily identifying the real party in interest.
The USPTO evaluates each petition to determine if a prima
facie case has been made by establishing “a reasonable predicate
concerning nonuse.”
8
Apart from petitions by third parties, the
USPTO director may institute proceedings on its own initiative
if the information and evidence available to the USPTO supports
a prima facie case of nonuse. Once the USPTO determines that a
prima facie case has been made, it issues a notice of the proceedings
to the petitioner and the registrant, at which point the petitioner
has no further involvement. The notice to the registrant is an ofce
action requiring the registrant to provide evidence of use, informa-
tion, exhibits, afdavits, or declarations as reasonably necessary
to rebut the prima facie case by establishing that the required use
was made in relation to the goods and services at issue. The regis-
trant has a period of three months to respond but may request
a one-month extension for a fee. If the USPTO determines that
the response fails to establish the requisite use, it will issue a nal
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