Cancellation of Unused Marks with TMA

On December 18, 2021, the Trademark Modernization Act (TMA) went into effect. The TMA's key provisions broaden the options for canceling a trademark registration entirely or in part by focusing on the nonuse of the registered mark for some or all of the specified products or services.?

These additional alternatives include USPTO actions to erase or reconsider the already issued registrations, as well as a new ground for filing a cancellation request based on nonuse. These recent actions will also enhance an existing USPTO audit program, which cuts goods and services during maintenance and only registers those justified by actual trademark usage.

While this article focuses solely on components of the TMA that affect USPTO practice, the TMA also impacts trademark litigation practice by harmonizing the burdens of proof for trademark owners seeking injunctions across the circuits.?

Accordingly, the plaintiff is entitled to a rebuttable presumption of irreparable injury in seeking a request under the TMA, which shifts the burden of proof to the defendant after establishing a possibility of success at a preliminary stage or proving infringement to the court at a later level.

By requiring the registrant to prove the use of the registered mark in U.S. commerce for designated products or services outside of prescribed statutory maintenance periods, the TMA provides new avenues for third parties and the USPTO to challenge the validity of a U.S. registration.?

The registration can be challenged in whole or in part for specific goods or services associated with the mark. These TMA proceedings provide a realistic alternative to a cancellation proceeding against, say, a registration identified during scrutiny of the third party's application, saving time, uncertainty, and money.?

The new proceedings will be regarded as a basis for postponing the third examination, which will be advantageous. The new proceedings will be accepted as a reason for delaying the consideration of the third party's application until the conclusion of the further proceedings is final.

When prima facie evidence shows that the registered mark has not been used in commerce for one or more of the goods or services specified in the registration, a petition for ex parte expungement or a petition for reexamination can result in the full or partial cancellation of the registration.?

The USPTO may also initiate either procedure on its own. Each good or service without appropriate proof of usage is susceptible to deletion until the registrant presents evidence of timely use or excusable nonuse for all disputed specified goods or services.

Currently, the ex parte expungement and reexamination actions are used to resolve two different factual issues. The accusation that a registered mark has never been used in commerce on or in connection with part or all of the products or services mentioned in the registration is the basis for expungement.?

Reexamination, on the other hand, is based on a claim that the registered mark was not used in commerce on or in connection with specified goods or services by one of the following dates: the application's filing date; the filing date of an amendment to allege use; or the filing date of a statement of use.

The third-party petitioner alleges one of the two authorized bases for the proceeding, submits evidence of nonuse, and provides a declaration detailing the reasonable investigation conducted in obtaining the prima facie evidence of nonuse, along with the petitioner's contact information and a payment of $400 official fee for each International Class subject to the requested inquiry.?

To request an investigation, the petitioner does not need to allege any standing/damages, and the petitioner could be acting on behalf of another unnamed business. Legal counsel from the United States must represent foreign entities. All submissions are made through the USPTO's website and made public as part of the challenged registration's public record.

The submission of adequate material to establish a prima facie case with the petition is critical to an effective expungement or reexamination action. While the specific types of evidence must vary depending on the circumstances, examples of evidence sources include trademark records from the USPTO or state registries, the registrant's websites or social media, inquiries about product availability, and descriptions of administrative proceedings involving products, and other sources.?

The USPTO will communicate with the third party and give them 30 days to correct certain flaws in the petition, but any additional proof submitted from the petitioner will be rejected. The third-party has no further role in the procedure once the USPTO has determined that a prima facie nonuse case exists. A USPTO Office Action is issued by the United States Patent and Trademark Office.

The USPTO sends an Office Action to the registrant, requesting that they respond with documentation and other material to refute the prima facie allegation of nonuse. The registrant then has a three-month deadline to respond, which can be extended by one month if an official fee is paid.?

The registrant's response shall either be a declaration with acceptable evidentiary verification of the mark's use for each good or service in question or excusable nonuse. In addition, the registrant has the option of deleting part or all of the products or services in question.

It's worth noting that the TMA only gives third parties or the USPTO a limited amount of time to initiate an ex parte expungement or reexamination case.

The timeframe for launching an expungement procedure commences three years after the registration is issued and concludes ten years after that. The TMA also establishes an introductory period, which runs through December 27, 2023, during which any registration may be expunged without regard to the tenth anniversary of issuance.?

The timeframe for starting a reexamination process commences on the day registration is issued and concludes five years after that. An expungement or reexamination against specific goods or services in a register can only be done once. However, if another proceeding is filed against a registration simultaneously, the USPTO may combine the petitions into a single proceeding.

The TMA also introduces a new ground for pursuing cancellation against registered marks in adversarial proceedings, in addition to the further actions inside the USPTO. The cancellation petitioner might now claim that the registered mark has never been utilized in commerce in the United States for one or more goods or services listed in the registration.?

This new ground cannot be used for at least three years after a registration has been issued. The parties can use discovery methods such as document production and depositions in an adversarial proceeding to acquire evidence relevant to the nonuse cause of action.

Suppose the registration is based on Section 44(e) or Section 66 of an international treaty. In that case, the registrant may show that any nonuse of the mark was due to "exceptional circumstances that excuse such nonuse.

"Under established excusable nonuse practice, exceptional circumstances, such as a trade embargo must be beyond the registrant's control. The treaty provisions that underpin Sections 44(e) and 66 necessitate that excusable nonuse is treated differently.

These new actions should be familiarised by trademark owners and applicants, both as a way of disputing earlier trademarks and as a potential risk of nonuse of a registered mark that has not been used for all of the products or services for which the mark was registered.