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Consolidated Appropriations Act of 2021 Contains Significant Changes for IP Owners

January 7, 2021

By Brian Gregg

On December 27, 2020, President Trump signed into law the Consolidated Appropriations Act, 2021 (CAA), which includes the Trademark Modernization Act of 2020 (TMA) amending various sections of the Lanham Act, and the Copyright Alternative in Small-Claims Enforcement Act of 2020 (CASE Act), which creates a Copyright Claims Board in the US Copyright Office as an alternative voluntary forum for certain copyright claims.

Effective as of its passing, the TMA will make it easier for trademark owners seeking injunctive relief by eliminating the plaintiff’s burden to prove “irreparable harm.” Prior to the enactment of the TMA, most federal courts required a trademark owner to prove that it would suffer irreparable harm to obtain injunctive relief in an infringement case.The TMA’s presumption of irreparable harm shifts the burden to the infringer to show why the injunction should not be granted.

The TMA also requires the Director of the US Patent and Trademark Office (USPTO) to implement regulations to establish:

  • Flexible office action response periods. Under new rules, trademark examiners will be allowed to set office actions response deadlines for less than six months from issuance of an office action, but not less than 60 days. Applicants may request extensions of time to respond to any deadline that is less than six months from issuance of the office action.
  • A process for third-party submission of evidence during trademark examination. Once effective, third parties will be able to submit evidence and arguments supporting refusal of others’ trademark applications. Within two months of a third-party submission, the Director will determine whether to include the evidence in the application file. The determination is final and non-reviewable.
  • Ex parte expungement and re-examination procedures for nonuse. Under these provisions, parties will be able to file petitions to the Director to
    • expunge a registration at any time between three and ten years after registration on the grounds that the registered mark was never used in connection with specified goods or services identified in the registration; and
    • re-examine a registration at any time before five years after registration on the grounds that the registrant was not using the registered mark on the relevant date that the registrant alleged use of the mark.

A party attempting expungement or re-examination must show that it has conducted a reasonable investigation of the registrant’s use and provide relevant supporting facts and evidence. The registrant may submit contrary evidence such as showing use of its mark or excusable non-use for marks registered under Section 44(e) or Section 66 of the Lanham Act. If the Director concludes that the petitioner sets out a prima facie case, the Director shall direct a USPTO examiner to determine if the registration should be cancelled in whole or in part (that decision can be appealed to the Trademark Trial and Appeal Board).

The CASE Act establishes a Copyright Claims Board (CCB) as part of the US Copyright Office by which parties may voluntarily seek to resolve certain copyright claims. Claims may include copyright infringement claims; declaratory judgment claims; misrepresentation claims in connection with the Digital Millennium Copyright Act (DMCA) notifications; and counterclaims for infringement or DMCA misrepresentations. These claims must be brought within three years of accrual. Unlike claims brought in federal court, the claimant need not have a copyright registration but may initiate a claim if it owns a registration or pending application (though the CCB will not decide the case until a registration issues). The total monetary recovery for a party in a single proceeding is limited to $30,000, exclusive of attorneys’ fees and costs.

The CAA also prohibits and creates penalties, including imprisonment, for unauthorized digital streaming.

© 2021 McNees Wallace & Nurick LLC
McNees Intellectual Property Client Update is presented with the understanding that the publisher does not render specific legal, accounting or other professional service to the reader. Due to the rapidly changing nature of the law, information contained in this publication may become outdated. Anyone using this material must always research original sources of authority and update this information to ensure accuracy and applicability to specific legal matters. In no event will the authors, the reviewers or the publisher be liable for any damage, whether direct, indirect or consequential, claimed to result from the use of this material.