Trademark Modernization Act: new fast and efficient procedures to challenge non-used U.S. registered trademarks.
The United States Trademark system is based on use. This means that U.S. trademark holders are required to use their trademarks in relation to the goods and services designated in the trademark registration.
Contrary to the EU Trademark system, this use requirement applies both before and after the registration of U.S. trademarks. The U.S. system requires trademarks to be used before their actual filing. As regards foreign trademark registrations, an intent to use the trademark in the U.S is required.
The U.S. system traditionally provides two cancellation procedures to challenge non-used trademarks: the cancellation procedure based on ‘abandonment’ and the cancellation procedure based on ‘non-use’. While the former procedure requires a lack of use and a lack of intent to re-use it, the latter requires an asserted non-use within 5 years of its registration.
These two cancellation procedures still apply today.
However, the problem is that they are relatively expensive, time-consuming and not necessarily effective. For trademark holders, it is fairly easy to win these procedures as they simply need to show their intention to start or to resume the use of their trademarks.
Nonetheless, the Trademark Modernization Act changed this system.
The Trademark Modernization Act came into effect on December 18, 2020 and has an important impact on U.S. trademark owners and future applicants. It regards both national (U.S.) trademarks and international registered trademarks designating the United States.
This act adds two new procedures regarding non-used U.S. trademarks.
A first important new procedure is the so-called ex parte expungement petition.
The ex parte expungement petition is a new and relatively simple procedure to cancel U.S. registered trademarks for lack of use. It regards national and international trademarks (designating the U.S.) that have never been used in the U.S. in commerce and/or in connection with the goods and/or services after their registration.
The petition can be filed by anyone – contrary to traditional cancellation proceedings – and does not require a lack of intent to resume use.
Until February 27, 2023, the petition can be filed against any non-used U.S. trademark that is older than 3 years.
After this date, the expungement petition will only be opened within 3 to 10 years after the registration of the non-used trademark in question.
The trademark holder has three months following the action to provide proof of use. The burden of proof, which is strictly interpreted, is thus put entirely on the latter. In case of insufficient proof of use, the trademark registration will be partly/fully cancelled.
A second important new procedure is the so-called ex parte reexamination petition.
This procedure makes it possible to obtain a reexamination of trademarks registered via a national or international trademark filing (designating the U.S.) that have not been used in commerce or in connection with goods and services on a certain date. This petition can also be filed by anyone.
When the underlying application was initially filed based on use of the trademark in commerce, the relevant date will be the filing date of the application.
When the underlying application was filed with an intent-to-use basis, the relevant date will be the later of the date that an amendment to allege use was filed or the date that the deadline to file a statement of use expired.
The reexamination petition can only be filed within 5 years of the registration of the trademark.
The trademark holder will need to provide sufficient proof of use for all of the challenged goods and services. Should the trademark holder fail to do so, the trademark registration would risk cancellation.
Firstly, these new procedures make it possible to challenge non-used U.S. registered trademarks more quickly and efficiently. Contrary to the traditional cancellation procedure, these new procedures do not require the element of abandonment. It only requires non-use. The fact that a trademark holder has the intent to resume use is irrelevant in this regard.
Secondly, this new procedure makes it easier to get rid of ‘dead wood’ (non-used trademarks), and consequently, to register (non-used) trademarks faster and cheaper. Before the Trademark Modernization Act, it was generally burdensome to apply for a trademark registration when an older similar/identical non-used trademark prevented the application. In this context, cancellation procedures could take several years and bring forth substantial costs.
Thanks to the new expungement and reexamination procedures, it is more flexible and less time-consuming (it doesn’t require briefs, motions, etc.) to act against non-used trademarks and to try to register a non-used trademark yourself at a later stage.
Moreover, the new procedures require U.S. trademark holders to be (more) careful. They need to really use their trademarks and they should constantly keep evidence to prove, when needed, the actual use of trademarks in the U.S., in relation to goods and services, before and after the registration. The less evidence of use, the higher the risk of losing a U.S. trademark, and the easier it becomes for competitors to register similar and even identical U.S. trademarks.
The new procedures make it possible to challenge non-used U.S. registered trademarks more quickly and efficiently.
Therefore, we recommend you to audit your trademark rights in the United States, in order to avoid the risk of cancellation or reexamination.
As regards your trademark registrations that are currently under review, we invite you to contact us so that we can discuss and develop the best strategy to adapt your registrations to this new regulation.
We can also accompany you in the assessment of your trademarks in order to identify the products and/or services that would be likely to weaken them.