Two recently enacted statutes, the Trademark Modernization Act of 2020 (TMA) and the Copyright Alternative in Small-Claims Enforcement (CASE) Act, significantly changed intellectual property law in the United States. The TMA revived an important presumption favoring trademark owners in infringement cases and made it significantly easier to remove unused trademarks from the Federal Register. The CASE Act creates an entirely new small claims court for certain copyright infringement disputes. Here are the key takeaways from both statutes:
The TMA reinstates a presumption that trademark infringement causes irreparable injury to the trademark owner, which had been eliminated by the US Supreme Court’s 2006 holding in eBay Inc. v. MercExchange LLC. Although the presumption is rebuttable, it places the burden on the defendant to introduce sufficient evidence to do so. While injunctions are never easy to obtain, restoring the presumption is a key benefit to trademark owners.
Additionally, the TMA makes it easier to remove fraudulent trademark registrations from the federal register. The statute was passed in response to a perceived “flood” of fraudulent trademark registrations, particularly from overseas, contributing to the “depletion” of available marks. According to a 2018 report by the Trademark Public Advisory Committee (“TPAC”) and the United States Patent and Trademark Office (“PTO”), there was a 1,100% increase in trademark applications from China between 2013 and 2017. A high percentage of them were fraudulent and used photoshopped evidence to support use on broad categories of goods. Prior to the TMA, a party seeking to challenge a fraudulent registration had to commence a formal contested proceeding before the PTO’s Trademark Trial and Appeal Board (“TTAB”) known as a Cancellation. Cancellations are similar to federal litigation and can be expensive and time-consuming.
The TMA alleviates this burden by creating two uncontested procedures that can lead to the cancellation of a trademark registration that has not been properly used. Both procedures require the submission of a verified statement to ensure that a reasonable investigation has been conducted to determine whether the trademark has been used correctly. Expungement (removal) of a registration targets trademarks that were never used in commerce and must be brought between three and ten years after registration. Re-examination targets trademarks that were not in use before the critical date, such as trademarks based on questionable specimens, and must be filed within five years from registration. The PTO can also initiate these proceedings on its own, without a third-party petition.
In addition, the TMA provides statutory authority for Letters of Protest, which previously were accepted on an informal basis. A Letter of Protest is a submission by a third party to the PTO objecting to someone else’s pending application before it issues. The TMA formalizes the process, institutes a $50 filing fee, and requires the PTO to act on these submissions within two months.
Lastly, the TMA allows the PTO to request that trademark applicants respond to preliminary rejections known as “office actions” within 60 days, rather than the usual 6 months. Applicants will be able to request the full six-month response period and the PTO can charge a fee for this additional time.
The TMA was signed into law on December 27, 2020, and will be implemented by December 27, 2021.
The CASE Act aims to make it feasible for copyright holders to recover for small copyright infringements where federal litigation is not practical. The Act accomplishes this by creating an alternative tribunal within the Copyright Office for certain types of disputes.
The CASE Act directs the Copyright Office to establish a Copyright Claims Board ("CCB"), a three-member administrative tribunal within the US Copyright Office. The CCB can hear three types of disputes: (a) claims for copyright infringement claims seeking up to $30,000, (b) claims seeking a declaration of non-infringement brought by an accused party, and (c) claims involving alleged misrepresentations in connection with notices and counter-notices under the Digital Millennium Copyright Act (“DMCA”).
Participation in a CCB dispute is voluntary. Claimants are not required to bring their case before the CCB, and responding parties can opt out of the proceeding. There are, however, incentives and benefits to resolving disputes before the CCB rather than in court. First, companies are not required to be represented by counsel in CCB proceedings, as they are in court; and individuals may find it easier to represent themselves before the CCB than before a court. Second, the proceedings are streamlined with limited discovery. Third, damages are capped at $15,000 for a single infringement and $30,000 for multiple infringements. In contrast, a federal court can award up to $150,000 in statutory damages per work infringed with no limit on multiple infringements, can award actual damages with no statutory limit, and can also award attorney’s fees to a prevailing party. The CCB cannot award attorney’s fees or costs unless a claim, counterclaim, or defense was brought in bad faith, and such awards are generally limited to $5,000.
The Copyright Office is in the process of developing the CCB and expects to begin hearing claims by December 27, 2021.
If you have questions or would like to know more about these new laws, please contact me at firstname.lastname@example.org