On a basic level, the new expungement and reexamination proceedings provide a means for a party unilaterally to seek to remove a registration outside of the context of a contested inter partes proceeding.
Late in 2020, as part of the massive December 2020 COVID-19 relief bill[1], Congress amended the Lanham Act[2] and added new tools for parties to remove registered trademarks that may otherwise serve as obstacles to use or register their own marks. In particular, the addition of the italicized language below to the section of the Lanham Act dealing with cancellations, 15 U.S.C. § 1064 provides a further avenue to pursue cancellation of a registered mark based on claims of nonuse:
A petition to cancel a registration of a mark, stating the grounds relied upon, may… be filed as follows by any person who believes that he is or will be damaged, … (6) At any time after the 3-year period following the date of registration, if the registered mark has never been used in commerce on or in connection with some or all of the goods or services in the registration… Nothing in paragraph (6) shall be construed to limit the timing applicable to any other ground for cancellation. A registration under section 44(e) or 66 shall not be cancelled pursuant to paragraph (6) if the registrant demonstrates that any nonuse is due to special circumstances that excuse such nonuse[3].
In addition, Congress added the italicized language below to 15 U.S.C. § 1070, which addresses appeals to the Trademark Trial and Appeal Board (TTAB) in ex parte expungement and reexamination proceedings:
An appeal may be taken to the Trademark Trial and Appeal Board from any final decision of the examiner in charge of the registration of marks or a final decision by an examiner in an ex parte expungement proceeding or ex parte reexamination proceeding upon the payment of the prescribed fee[4].
On a basic level, the new expungement and reexamination proceedings provide a means for a party unilaterally to seek to remove a registration outside of the context of a contested inter partes proceeding. The new expungement procedure is best understood in the context of the differences between typical registration practice in the United States and registration practice in other countries. In the United States, use in commerce is typically required prior to granting a trademark registration. In contrast, in many foreign countries, registrations are regularly granted without evidence of use. As part of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), foreign applications can bypass the “use” requirement and register in the United States without proving use in commerce[5]. In addition, Sections 44(e)[6] and 66(a)[7] of the Lanham Act, often used by foreign applicants/registrants, provide exceptions in the United States to the typical requirement that use in commerce must be established before a registration is granted. The foreign practice and the Lanham Act’s exception to the typical requirements of use in the United States can result in a cluttered registry on which disused marks, or those that have never been used at all, remain and pose obstacles to future registrations sought by applicants who can demonstrate use in commerce.
Because of the mandate of a specimen from most filers and the requirement of all registrants to show use between the fifth and sixth anniversaries of registration as well as at every 10-year renewal, the U.S. registry had remained comparatively uncluttered. Around 2017-2018, however, this situation changed dramatically. In a recent article, Duane Morris trademark attorneys explained how the United States Patent and Trademark Office (PTO) recognized a dramatic number of bad faith filings from foreign agents.
The Ex Parte Expungement (Year 3 to 10 of Issued Registration)
The new expungement procedure addresses trademarks that have never been used in commerce. The new process allows a party to institute a challenge to a trademark by paying a minimal fee to the PTO and pleading that the mark at issue “has never been used in commerce”[8]―for some or all of the goods claimed―since the registration was issued. The PTO (and not the petitioner) then initiates a challenge with the registrant, placing the burden of proof on the registrant to offer compelling evidence that it ever used its mark or, if the registration was granted under Sections 44(e) or 66 of the Trademark Act, that there is excusable nonuse.[9] For example, a foreign wine manufacturer might overcome ex parte expungement by demonstrating that its nonuse is excusable because it is awaiting certification before national entry. The authors expect that any de minimus use in the United States will suffice to overcome these challenges, as is often the case in other countries with similar ex parte nonuse expungement proceedings.
Requests for expungement under the new rules can only be filed after the third anniversary of the registration. Following the first three years post enactment of this section, a request for expungement must be filed before the 10th anniversary of the registration[10].
This new tool should have great appeal to applicants who find their marks blocked by a registered mark that does not appear to have been used in commerce since registration. At present, such applicants must generally undertake contested cancellation proceedings in order to clear the way for registration of their marks. Such proceedings can be expensive and time consuming. Even if the registrant does not respond, it is often months before a default is granted on a cancellation petition, leading to further delay in the applicant’s ability to obtain a registration.
Coupled with the new fees levied beginning January 1, 2021, for the deletion of goods following submission of an affidavit of use, the expungement proceeding should begin to limit clutter on the registry from overbroad claims by foreign registrants and pave the way for genuine users of unregistered marks to register their marks.
The Ex Parte Reexamination
Similarly, a related procedure allows an applicant to challenge a registration when it appears that improper claims of use were accepted by the PTO as the basis for registration. Often, fraudsters manufacture specimens solely to secure registration and, because of inherent problems in proving fraud and the rules at the TTAB, absent a full inter partes cancellation proceeding, a new applicant is out of luck[11]. The current process is time consuming; it may take months or years successfully to cancel a registration.
As with expungement, ex parte reexamination allows a petitioner to file a simplified petition with the PTO that sets forth a “verified statement” of nonuse based upon facts obtained through a reasonable investigation by the petitioner[12]. The challenge can apply to some or all of the listed goods and services[13]. The new, much-simplified process results in the issuance to a registrant, post-registration, of a simple “Office Action” wherein the director notifies the trademark owner of a decision to initiate reexamination and may even provide some or all of the evidence given by a nonsilent petitioner[14]. Unlike a cancellation, the mark owner may be given up to six months to defend and offer a response[15]. The director then has discretion to cancel a registration after a response is given by the registrant and the time to appeal has expired or any appeal proceeding has terminated[16].
It is important to note that a petitioner must provide evidence demonstrating nonuse before and up to a “relevant date,” which is defined as the ultimate date of use in the United States under Section 1(a) or the date that an application based on Section 1(b) converted to 1(a)[17]. Reexamination will generally follow the same procedures as initial examination, and the director’s decision to cancel a mark can be appealed to the TTAB and then to the Court of Appeals for the Federal Circuit[18].
Report of Decluttering Initiatives
Another positive feature of the new law is its requirement that the director of the PTO report on ex parte expungement and ex parte reexaminations to Congress. The director is authorized to declutter the registry of foreign marks not in use on their own initiative and to sua sponte initiate these expungements without a third party request[19]. The PTO and the comptroller general of the United States are further asked to initiate a study and issue a report on the decluttering of the registry to Congress by late 2023[20]. The report must include recommendations to reduce “inaccurate or false claims of use.”[21]
In sum, under the new provisions, trademark applicants are provided with new tools to fight registrations for marks that are not, or indeed were never, in use. In addition, applicants seeking broad “defensive” registrations will face new roadblocks to obtaining and keeping such registrations, where in fact, they cannot demonstrate use in commerce as required under the amended Lanham Act.
For More Information
If you have any questions about this Alert, please contact Alain Villeneuve, Mark Lerner, any of the attorneys in our Intellectual Property Practice Group or the attorney in the firm with whom you are regularly in contact.
Notes
[1] H.R. 133 – 996: Sections 16A & 16B.
[2] 15 U.S.C. § 1051 et seq.
[3] Section 225(b).
[4] Section 225(d).
[5] 15 U.S.C. § 1141h(a)(3).
[6] 15 U.S.C. § 1126(e).
[7] 15 U.S.C. § 1141f(a).
[8] Section 225, Sec. 16A(a). It is unclear if use is a national requirement or an international requirement.
[9] Section 225, Sec. 16A(f).
[10] Section 225, Sec. 16A(i)(1). This delay is designed to avoid Article 19 of TRIPS, which reads: “If use is required to maintain a registration, the registration may be cancelled only after an uninterrupted period of at least three years of non-use, unless valid reasons based on the existence of obstacles to such use are shown by the trademark owner. Circumstances arising independently of the will of the owner of the trademark which constitute an obstacle to the use of the trademark, such as import restrictions on or other government requirements for goods or services protected by the trademark, shall be recognized as valid reasons for non-use.” (Emphasis added.) However, for the first three years once the rules are in place, an expungement proceeding may be initiated against any registration, even if it is more than 10 years old. Sec. 16A(i)(2).
[11] The authors note that the PTO has begun to challenge specimens comprised of obvious artist mock-ups (sometimes to the detriment of applicants using professional digital photography of its products).
[12] Section 225, Sec. 16B(c)(3).
[13] Section 225, Sec. 16B(a).
[14] Section 225, Sec. 16B(d)(1).
[15] Section 225, Sec. 16B(e)(1).
[16] Section 225, Sec. 16B(g).
[17] Section 225, Sec. 16B(b).
[18] Section 225(d).
[19] Section 225, Sec. 16A(i).
[20] Section 227.
[21] Section 227(c)(2).
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