[House Report 116-645]
[From the U.S. Government Publishing Office]
116th Congress } { Report
HOUSE OF REPRESENTATIVES
2d Session } { 116-645
======================================================================
TRADEMARK MODERNIZATION ACT OF 2020
_______
December 14, 2020.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
_______
Mr. Nadler, from the Committee on the Judiciary, submitted the
following
R E P O R T
[To accompany H.R. 6196]
The Committee on the Judiciary, to whom was referred the
bill (H.R. 6196) to amend the Trademark Act of 1946 to provide
for third-party submission of evidence relating to a trademark
application, to establish expungement and ex parte proceedings
relating to the validity of marks, to provide for a rebuttal
presumption of irreparable harm in certain proceedings, and for
other purposes, having considered the same, report favorably
thereon with amendments and recommend that the bill as amended
do pass.
CONTENTS
Page
Purpose and Summary...............................................8
Background and Need for the Legislation...........................8
Hearings.........................................................22
Committee Consideration..........................................22
Vote of the Committee............................................22
Committee Oversight Findings.....................................22
New Budget Authority and Tax Expenditures and Congressional Budget
Office Cost Estimate.............................................22
Duplication of Federal Programs..................................23
Performance Goals and Objectives.................................23
Advisory on Earmarks.............................................23
Section-by-Section Analysis......................................23
Changes in Existing Law Made by the Bill, as Reported............27
The amendments are as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Trademark
Modernization Act of 2020'' or the ``TM Act of 2020''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
Sec. 3. Providing for third-party submission of evidence during
examination.
Sec. 4. Providing for flexible response periods.
Sec. 5. Ex parte expungement; Ex parte reexamination; new grounds for
cancellation.
Sec. 6. Rebuttable presumption of irreparable harm.
Sec. 7. Report on decluttering initiatives.
Sec. 8. Amendments to confirm authority of the Director.
SEC. 2. DEFINITIONS.
In this Act:
(1) Director.--The term ``Director'' means the Under
Secretary of Commerce for Intellectual Property and Director of
the United States Patent and Trademark Office.
(2) Trademark act of 1946.--The term ``Trademark Act of
1946'' means the Act entitled ``An Act to provide for the
registration and protection of trademarks used in commerce, to
carry out the provisions of certain international conventions,
and for other purposes'', approved July 5, 1946, as amended (15
U.S.C. 1051, et. seq) (commonly referred to as the ``Trademark
Act of 1946'' or the ``Lanham Act'').
SEC. 3. PROVIDING FOR THIRD-PARTY SUBMISSION OF EVIDENCE DURING
EXAMINATION.
(a) Amendment.--Section 1 of the Trademark Act of 1946 (15 U.S.C.
1051) is amended by inserting at the end the following new subsection:
``(f) A third party may submit for consideration for inclusion in the
record of an application evidence relevant to a ground for refusal of
registration. The third-party submission shall identify the ground for
refusal and include a concise description of each piece of evidence
submitted in support of each identified ground for refusal. Within two
months after the date on which the submission is filed, the Director
shall determine whether the evidence should be included in the record
of the application. The Director shall establish by regulation
appropriate procedures for the consideration of evidence submitted by a
third party under this subsection and may prescribe a fee to accompany
the submission. If the Director determines that the third-party
evidence should be included in the record of the application, only the
evidence and the ground for refusal to which the evidence relates may
be so included. Any determination by the Director whether or not to
include evidence in the record of an application shall be final and
non-reviewable, and a determination to include or to not include
evidence in the record shall not prejudice any party's right to raise
any issue and rely on any evidence in any other proceeding.''.
(b) Deadline for Procedures.--Not later than one year after the date
of the enactment of this Act, the Director shall establish the
appropriate procedures described in section 1(f) of the Trademark Act
of 1946, as added by subsection (a).
(c) Effective Date.--The amendment made by subsection (a) shall take
effect one year after the date of the enactment of this Act.
SEC. 4. PROVIDING FOR FLEXIBLE RESPONSE PERIODS.
Section 12(b) of the Trademark Act of 1946 (15 U.S.C. 1062(b)) is
amended to read as follows:
``(b)(1) If the applicant is found not entitled to registration, the
examiner shall notify the applicant thereof and of the reasons
therefor. The applicant may reply or amend the application, which shall
then be reexamined. This procedure may be repeated until the examiner
finally refuses registration of the mark or the application is
abandoned as described in paragraph (2).
``(2) After notification under paragraph (1), the applicant shall
have a period of six months in which to reply or amend the application,
or such shorter time that is not less than sixty days, as prescribed by
the Director by regulation. If the applicant fails to reply or amend or
appeal within the relevant time period, including any extension under
paragraph (3), the application shall be deemed to have been abandoned,
unless it can be shown to the satisfaction of the Director that the
delay in responding was unintentional, in which case the application
may be revived and such time may be extended. The Director may
prescribe a fee to accompany any request to revive.
``(3) The Director shall provide, by regulation, for extensions of
time to respond to the examiner for any time period under paragraph (2)
that is less than six months. The Director must allow the applicant to
obtain extensions of time to reply or amend aggregating six months from
the date of notification under paragraph (1) when the applicant so
requests. However, the Director may set by regulation the time for
individual periods of extension, and prescribe a fee, by regulation,
for any extension request. Any request for extension must be filed on
or before the date on which a reply or amendment is due under paragraph
(1).''.
SEC. 5. EX PARTE EXPUNGEMENT; EX PARTE REEXAMINATION; NEW GROUNDS FOR
CANCELLATION.
(a) Ex Parte Expungement.--The Trademark Act of 1946 (15 U.S.C. 1066)
is amended by inserting after section 16, the following new section:
``SEC. 16A. EX PARTE EXPUNGEMENT.
``(a) Petition.--Notwithstanding sections 7(b) and 22, and
subsections (a) and (b) of section 33, any person may file a petition
to expunge a registration of a mark on the basis that the mark has
never been used in commerce on or in connection with some or all of the
goods or services recited in the registration.
``(b) Contents of Petition.--The petition, together with any
supporting documents, shall--
``(1) identify the registration that is the subject of the
petition;
``(2) identify each good or service recited in the
registration for which it is alleged that the mark has never
been used in commerce;
``(3) include a verified statement that sets forth the
elements of the reasonable investigation the petitioner
conducted to determine that the mark has never been used in
commerce on or in connection with the goods and services
identified in the petition, and any additional facts that
support the allegation that the mark has never been used in
commerce on or in connection with the identified goods and
services;
``(4) include any supporting evidence on which the petitioner
relies; and
``(5) be accompanied by the fee prescribed by the Director.
``(c) Initial Determination; Institution.--
``(1) Prima facie case determination, institution, and
notification.--The Director shall, for each good or service
identified under subsection (b)(2), determine whether the
petition sets forth a prima facie case of the mark having never
been used in commerce on or in connection with each such good
or service, institute an ex parte expungement proceeding for
each good or service for which the Director determines that a
prima facie case has been set forth, and provide a notice to
the registrant and petitioner of the determination of whether
or not the proceeding was instituted. Such notice should
include a copy of the petition and any supporting documents and
evidence that were included with the petition.
``(2) Reasonable investigation guidance.--The Director shall
promulgate regulations regarding what constitutes a reasonable
investigation under subsection (b)(3) and the general types of
evidence that could support a prima facie case that a mark has
never been used in commerce, but the Director shall retain the
discretion to determine whether a prima facie case is set out
in a particular proceeding.
``(3) Determination by director.--Any determination by the
Director whether or not to institute a proceeding under this
section shall be final and non-reviewable, and shall not
prejudice any party's right to raise any issue and rely on any
evidence in any other proceeding, except as provided by
subsection (j).
``(d) Ex Parte Expungement Procedures.--The procedures for ex parte
expungement shall be the same as those for examination under section
12(b), except that the Director shall promulgate regulations
establishing and governing a proceeding under this section, which may
include regulations that set response and extension times particular to
this type of proceeding, which, notwithstanding section 12(b)(3) need
not be extendable to six months, set limits governing the timing and
number of petitions filed for a particular registration or by a
particular petitioner or real parties in interest, and defining the
relation of a proceeding under this section to other proceedings
concerning the mark.
``(e) Registrant's Evidence of Use.--A registrant's documentary
evidence of use must be consistent with when `a mark shall be deemed to
be in use in commerce' as defined in section 45, but shall not be
limited in form to that of specimens as provided in section 1(a).
``(f) Excusable Nonuse.--During an ex parte expungement proceeding,
for a mark registered under section 44(e) or an extension of protection
under section 66, the registrant may offer evidence showing that any
nonuse is due to special circumstances that excuse such nonuse. In such
a case, the examiner shall determine whether the facts and evidence
demonstrate excusable nonuse and shall not find that the registration
should be cancelled under subsection (g) for any good or service for
which excusable nonuse is demonstrated.
``(g) Examiner's Decision; Order to Cancel.--For each good or service
for which it is determined that a mark has never been used in commerce,
and for which the provisions of subsection (f) do not apply, the
examiner shall find that the registration should be cancelled for each
such good or service. A mark may not be found to have never been used
in commerce if there is evidence of use in commerce by the registrant
that temporally would have supported registration at the time the
application was filed or the relevant allegation of use was made, or
after registration, but before the petition to expunge was filed under
subsection (a), or an ex parte expungement proceeding was instituted by
the Director under subsection (h). Unless overturned on review of the
examiner's decision, the Director shall issue an order cancelling the
registration, in whole or in part, after the time for appeal has
expired or any appeal proceeding has terminated.
``(h) Ex Parte Expungement by the Director.--
``(1) In general.--The Director may, on the Director's own
initiative, institute an ex parte expungement proceeding if the
Director discovers information that supports a prima facie case
of a mark having never been used in commerce on or in
connection with any good or service covered by a registration.
The Director shall promptly notify the registrant of such
determination, at which time the ex parte expungement
proceeding shall proceed according to the same procedures for
ex parte expungement established pursuant to subsection (d). If
the Director determines, based on the Director's own
initiative, to institute an expungement proceeding, the
Director shall transmit or make available the information that
formed the basis for that determination as part of the
institution notice sent to the registrant.
``(2) Rule of construction.--Nothing in this subsection may
be construed to limit any other authority of the Director.
``(i) Time for Institution.--
``(1) When petition may be filed, ex parte expungement
proceeding instituted.--A petition for ex parte expungement of
a registration under subsection (a) may be filed, or the
Director may institute on the Director's own initiative an ex
parte expungement proceeding of a registration under subsection
(h), at any time following the expiration of three years after
the date of registration and before the expiration of ten years
following the date of registration.
``(2) Exception.--Notwithstanding paragraph (1), for a period
of three years after the date of enactment of this Act, a
petition for expungement of a registration under subsection (a)
may be filed, or the Director may institute on the Director's
own initiative an ex parte expungement proceeding of a
registration under subsection (h), at any time following the
expiration of three years after the date of registration.
``(j) Limitation on Later Ex Parte Expungement Proceedings.--
``(1) No co-pending proceedings.--With respect to a
particular registration, while an ex parte expungement
proceeding is pending, no later ex parte expungement proceeding
can be instituted with respect to the same goods or services
that are the subject of a pending ex parte expungement
proceeding.
``(2) Estoppel.--With respect to a particular registration,
for goods or services previously subject to an instituted
expungement proceeding for which, in that proceeding, it was
determined that the registrant had used the mark for particular
goods or services, as relevant, and the registration was not
cancelled as to those goods or services, no further ex parte
expungement proceedings may be initiated as to those goods or
services, regardless of the identity of the petitioner.
``(k) Use in Commerce Requirement Not Altered.--Nothing in this
section shall affect the requirement for use in commerce of a mark
registered under section 1(a) or section 23.''.
(b) New Grounds for Cancellation.--Section 14 of the Trademark Act of
1946 (15 U.S.C. 1064) is amended--
(1) by striking the colon at the end of paragraph (5) and
inserting a period;
(2) by adding after paragraph (5) the following:
``(6) At any time after the three-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 recited in the registration:''; and
(3) in the flush left text, by inserting ``Nothing in
paragraph (6) shall be construed to limit the timing applicable
to any other ground for cancellation. A registration under
sections 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.'' after
``identical certification mark is applied.''.
(c) Ex Parte Reexamination.--The Trademark Act of 1946 (15 U.S.C.
1066), as amended by subsection (a), is further amended by inserting
after section 16A, the following new section:
``SEC. 16B. EX PARTE REEXAMINATION.
``(a) Petition for Reexamination.--Any person may file a petition to
reexamine a registration of a mark on the basis that the mark was not
in use in commerce on or in connection with some or all of the goods or
services recited in the registration on or before the relevant date.
``(b) Relevant Date.--In this section, the term `relevant date'
means, with respect to an application for the registration of a mark
with an initial filing basis of--
``(1) section 1(a) and not amended at any point to be filed
pursuant to section 1(b), the date on which the application was
initially filed; or
``(2) section 1(b) or amended at any point to be filed
pursuant to section 1(b), the date on which--
``(A) an amendment to allege use under section 1(c)
was filed; or
``(B) the period for filing a statement of use under
section 1(d) expired, including all approved extensions
thereof.
``(c) Requirements for the Petition.--The petition, together with any
supporting documents, shall--
``(1) identify the registration that is the subject of the
petition;
``(2) identify each good and service recited in the
registration for which it is alleged that the mark was not in
use in commerce on or in connection with on or before the
relevant date;
``(3) include a verified statement that sets forth the
elements of the reasonable investigation the petitioner
conducted to determine that the mark was not in use in commerce
on or in connection with the goods and services identified in
the petition on or before the relevant date, and any additional
facts that support the allegation that the mark was not in use
in commerce on or before the relevant date on or in connection
with the identified goods and services;
``(4) include supporting evidence on which the petitioner
relies; and
``(5) be accompanied by the fee prescribed by the Director.
``(d) Initial Determination; Institution.--
``(1) Prima facie case determination, institution, and
notification.--The Director shall, for each good or service
identified under subsection (c)(2), determine whether the
petition sets forth a prima facie case of the mark having not
been in use in commerce on or in connection with each such good
or service, institute an ex parte reexamination proceeding for
each good or service for which the Director determines that the
prima facie case has been set forth, and provide a notice to
the registrant and petitioner of the determination of whether
or not the proceeding was instituted. Such notice should
include a copy of the petition and any supporting documents and
evidence that were included with the petition.
``(2) Reasonable investigation guidance.--The Director shall
promulgate regulations regarding what constitutes a reasonable
investigation under subsection (c)(3) and the general types of
evidence that could support a prima facie case that the mark
was not in use in commerce on or in connection with a good or
service on or before the relevant date, but the Director shall
retain discretion to determine whether a prima facie case is
set out in a particular proceeding.
``(3) Determination by director.--Any determination by the
Director whether or not to institute a reexamination proceeding
under this section shall be final and non-reviewable, and shall
not prejudice any party's right to raise any issue and rely on
any evidence in any other proceeding, except as provided by
subsection (j).
``(e) Reexamination Procedures.--The procedures for reexamination
shall be the same as those established under section 12(b) except that
the Director shall promulgate regulations establishing and governing a
proceeding under this section, which may include regulations that set
response and extension times particular to this type of proceeding,
which, notwithstanding section 12(b)(3) need not be extendable to six
months; set limits governing the timing and number of petitions filed
for a particular registration or by a particular petitioner or real
parties in interest; and define the relation of a reexamination
proceeding under this section to other proceedings concerning the mark.
``(f) Registrant's Evidence of Use.--A registrant's documentary
evidence of use must be consistent with when `a mark shall be deemed to
be in use in commerce' as defined in section 45, but shall not be
limited in form to that of specimens as provided in section 1(a).
``(g) Examiner's Decision; Order to Cancel.--For each good or service
for which it is determined that the registration should not have issued
because the mark was not in use in commerce on or before the relevant
date, the examiner shall find that the registration should be cancelled
for each such good or service. Unless overturned on review of the
examiner's decision, the Director shall issue an order cancelling the
registration, in whole or in part, after the time for appeal has
expired or any appeal proceeding has terminated.
``(h) Reexamination by Director.--
``(1) In general.--The Director may, on the Director's own
initiative, institute an ex parte reexamination proceeding if
the Director discovers information that supports a prima facie
case of the mark having not been used in commerce on or in
connection with some or all of the goods or services covered by
the registration on or before the relevant date. The Director
shall promptly notify the registrant of such determination, at
which time reexamination shall proceed according to the same
procedures established pursuant to subsection (e). If the
Director determines, based on the Director's own initiative, to
institute an ex parte reexamination proceeding, the Director
shall transmit or make available the information that formed
the basis for that determination as part of the institution
notice.
``(2) Rule of construction.--Nothing in this subsection may
be construed to limit any other authority of the Director.
``(i) Time for Institution.--A petition for ex parte reexamination
may be filed, or the Director may institute on the Director's own
initiative an ex parte reexamination proceeding, at any time not later
than five years after the date of registration of a mark registered
based on use in commerce.
``(j) Limitation on Later Ex Parte Reexamination Proceedings.--
``(1) No co-pending proceedings.--With respect to a
particular registration, while an ex parte reexamination
proceeding is pending, no later ex parte reexamination
proceeding can be instituted with respect to the same goods or
services that are the subject of a pending ex parte
reexamination proceeding.
``(2) Estoppel.--With respect to a particular registration,
for any goods or services previously subject to an instituted
ex parte reexamination proceeding for which, in that
proceeding, it was determined that the registrant had used the
mark for particular goods or services before the relevant date,
and the registration was not cancelled as to those goods or
services, no further ex parte reexamination proceedings may be
initiated as to those goods or services, regardless of the
identity of the petitioner.
``(k) Supplemental Register.--The provisions of subsection (b) apply,
as appropriate, to registrations under section 23. Nothing in this
section shall be construed to limit the timing of a cancellation action
under section 24 of the Act.''.
(d) Appeal.--
(1) Appeal to trademark trial and appeal board.--Section 20
of the Trademark Act of 1946 (15 U.S.C. 1070) is amended by
inserting ``or a final decision by an examiner in an ex parte
expungement proceeding or ex parte reexamination proceeding''
after ``registration of marks''.
(2) Appeal to courts.--
(A) Expungement or ex parte reexamination.--Section
21(a)(1) of the Trademark Act of 1946 (15 U.S.C.
1071(a)(1)) is amended by striking ``or an applicant
for renewal'' and inserting the following: ``an
applicant for renewal, or a registrant subject to an ex
parte expungement proceeding or an ex parte
reexamination proceeding''.
(B) Exception.--Section 21(b)(1) of the Trademark Act
of 1946 (15 U.S.C. 1071(b)(1)) is amended by inserting
``except for a registrant subject to an ex parte
expungement proceeding or an ex parte reexamination
proceeding'' before ``is dissatisfied''.
(e) Technical and Conforming Amendments.--The Trademark Act of 1946
(15 U.S.C. 1051 et seq.) is amended--
(1) in section 15, by striking ``paragraphs (3) and (5)'' and
inserting ``paragraphs (3), (5) and (6)''; and
(2) in section 26, by adding at the end the following:
``Registrations on the supplemental register are subject to ex
parte expungement and ex parte reexamination under sections 16A
and 16B, respectively.''.
(f) Deadline for Procedures.--Not later than one year after the date
of the enactment of this Act, the Director shall issue regulations to
carry out sections 16A and 16B of the Trademark Act of 1946, as added
by subsections (a) and (c).
(g) Effective Date.--The amendments made by this section shall take
effect upon the expiration of the one year period beginning on the date
of enactment of this Act, and shall apply to any mark registered
before, on, or after that effective date.
SEC. 6. REBUTTABLE PRESUMPTION OF IRREPARABLE HARM.
(a) Amendment.--Section 34 of the Trademark Act of 1946 (15 U.S.C.
1116) is amended in subsection (a) by inserting after the first
sentence the following new sentence: ``A plaintiff seeking any such
injunction shall be entitled to a rebuttable presumption of irreparable
harm upon a finding of a violation identified in this subsection in the
case of a motion for a permanent injunction or upon a finding of
likelihood of success on the merits for a violation identified in this
subsection in the case of a motion for a preliminary injunction or
temporary restraining order.''.
(b) Rule of Construction.--The amendment made by subsection (a) shall
not be construed to mean that a plaintiff seeking an injunction was not
entitled to a presumption of irreparable harm before the date of the
enactment of this Act.
SEC. 7. REPORT ON DECLUTTERING INITIATIVES.
(a) Study.--The Comptroller General of the United States shall
consult with the Director to conduct a study on the efforts of the
Director during the period beginning 12 months after the date of the
enactment of this Act and ending 30 months after the date of the
enactment of this Act to address inaccurate and false claims of use in
trademark applications and registrations. Inaccurate and false claims
of use include any declaration of use by a trademark applicant or
registrant that cannot be supported by use in commerce as defined in
section 45 of the Trademark Act of 1946 (15 U.S.C. 1127) or the
regulations relevant to the definition of specimens under section 1 of
the Trademark Act of 1946 (15 U.S.C. 1051), as applicable.
(b) Contents of Study.--In conducting the study under subsection (a),
the Comptroller General shall assess the following:
(1) With respect to sections 16A and 16B of the Trademark Act
of 1946, as added by section 5--
(A) the number of petitions filed under each such
section for which a decision not to institute was
issued;
(B) the number of petitions filed under each such
section for which a decision to institute was issued;
(C) the number of in-process and completed
proceedings instituted under each such section,
including any proceedings instituted by the Director's
own initiative;
(D) the average time taken to resolve proceedings
instituted under each such section, including the
average time between--
(i) the filing of a petition under each such
section and an examiner's final decision under
section 16A(g) and 16B(g), or the last decision
issued by the examiner if the registrant failed
to respond to the latest-in-time decision by
the examiner; and
(ii) the institution of a proceeding under
each such section, including any proceedings
instituted by the Director's own initiative,
and an examiner's final decision under section
16A(g) and 16B(g), or the last decision issued
by the examiner if the registrant fails to
respond to the latest-in-time decision by the
examiner;
(E) the number of appeals of decisions of examiners
to the Trademark Trial and Appeal Board and to the
courts for each such proceeding; and
(F) an accounting of the final outcome of each such
proceeding instituted by identifying the number of
goods or services for which such proceedings were
instituted, and the number of goods or services for
each involved registration that were cancelled pursuant
to such proceedings.
(2) With respect to section 1(f) of the Trademark Act of
1946, as added by section 3--
(A) the number of third-party submissions filed under
such section for which the third-party asserts in the
submission that the mark has not been used in commerce;
and
(B) of those applications identified in paragraph (A)
above, the number of applications in which the third-
party submission evidence is included in the
application; and
(C) of those applications identified in paragraph (B)
above, the number of applications--
(i) refused registration based on an
assertion by the examiner that the mark has not
been used in commerce; and
(ii) for which the examiner requested
additional information from the applicant
related to claims of use.
(3) The effectiveness of--
(A) the proceedings under sections 16A and 16B of the
Trademark Act of 1946, as added by section 5, in
addressing inaccurate and false claims of use in
trademark registrations; and
(B) any additional programs conducted by the Director
designed to address inaccurate and false claims of use
in trademark applications and registrations, including
the post-registration use audit, as implemented at the
date of enactment of this Act under sections 2.161(h)
and 7.37(h) of title 37, Code of Federal Regulations.
(c) Report to Congress.--Not later than three years after the date of
enactment of this Act, the Comptroller General of the United States
shall submit to the Committee on the Judiciary of the House of
Representatives and the Committee on the Judiciary of the Senate a
report--
(1) on the results of the study conducted under this section;
and
(2) that includes any recommendations, based on the results
of the study, for any changes to laws or regulations that will
improve the integrity of the trademark register or reduce
inaccurate or false claims of use.
SEC. 8. AMENDMENTS TO CONFIRM AUTHORITY OF THE DIRECTOR.
(a) Amendments.--
(1) Section 18 of the Trademark Act of 1946 (15 U.S.C. 1068)
is amended by inserting after ``established in the
proceedings'' the following: ``. The authority of the Director
under this section includes the authority to reconsider, and
modify or set aside, a decision of the Trademark Trial and
Appeal Board''.
(2) Section 20 of the Trademark Act of 1946 (15 U.S.C. 1070)
is amended by inserting at the end the following: ``The
Director may reconsider, and modify or set aside, a decision of
the Trademark Trial and Appeal Board under this section.''.
(3) Section 24 of the Trademark Act of 1946 (15 U.S.C. 1092)
is amended by inserting after ``shall be canceled by the
Director'' the following: ``, unless the Director reconsiders
the decision of the Board, and modifies or sets aside, such
decision''.
(b) Rules of Construction.--
(1) Authority before date of enactment.--The amendments made
by subsection (a) may not be construed to mean that the
Director lacked the authority to reconsider, and modify or set
aside, a decision of the Trademark Trial and Appeal Board
before the date of the enactment of this Act.
(2) Authority with respect to particular decisions.--The
amendments made by subsection (a) may not be construed to
require the Director to reconsider, modify, or set aside any
particular decision of the Trademark Trial and Appeal Board.
Amend the title so as to read:
A bill to amend the Trademark Act of 1946 to provide for
third-party submission of evidence relating to a trademark
application, to establish expungement and ex parte proceedings
relating to the validity of marks, to provide for a rebuttable
presumption of irreparable harm in certain proceedings, and for
other purposes.
Purpose and Summary
H.R. 6196, the ``Trademark Modernization Act of 2020'' or
the ``TM Act of 2020,'' updates the Trademark Act of 1946\1\ by
modernizing trademark examination procedures, establishing new,
more efficient proceedings to clear registrations from the
trademark register for marks for which proper use in commerce
was not made, clarifying the standard for injunctive review in
trademark infringement cases, and confirming the authority of
the Director of the U.S. Patent and Trademark Office (USPTO) to
reconsider decisions of the Trademark Trial and Appeal Board
(TTAB).
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\1\In this report, the Trademark Act of 1946 is referred to by its
more commonly used name, the Lanham Act.
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Background and Need for the Legislation
A. TRADEMARK LAW AND REGISTRATION GENERALLY
Trademarks are at the foundation of a successful commercial
marketplace. Trademarks allow companies to identify their goods
and services, and they ensure that consumers know whose product
they are buying. ``The theory underlying trademark law is that
producers will invest in product quality only if they can
benefit from the reputation-related rewards of that investment.
Trademarks enable producers to build goodwill, and trademark
protection prevents others from trading on that goodwill.''\2\
By guarding against deception in the marketplace, trademarks
also serve an important consumer protection role.\3\
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\2\Barton Beebe & Jeanne C. Fromer, Are We Running Out of
Trademarks? An Empirical Study of Trademark Depletion and Congestion,
131 Harv. L. Rev. 945, 954 (2018).
\3\Connie Davis Powell, We All Know It's a Knock-Off! Re-Evaluating
the Need for the Post-Sale Confusion Doctrine in Trademark Law, 14 N.C.
J. L. & Tech. 1, 9 (2012).
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A trademark is any word, symbol, or device that identifies
the source of a product or service. Trademarks serve two
principal roles: to facilitate legitimate businesses and to
protect consumers.\4\ Trademark rights are based upon common
law; such rights begin to exist when a mark starts to be used
in commerce for particular goods or services. Trademark
protection enables consumers to rely on the presence of a
trademark as an indicator of the quality of the products or
services to which the mark is attached or with which the mark
is used.
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\4\S. Rep. No. 1333, 79th Cong., 2d Sess. 3 (1946).
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In addition to rights that exist at common law, the Lanham
Act provides important federal protections for trademarks,
including a registration system that helps to ensure that
trademarks are fully protected, supporting the free flow of
commerce.\5\ Federal registration ``confers important legal
rights and benefits on trademark owners who register their
marks.''\6\ Registration on the ``principal register'' of the
USPTO serves as ``constructive notice of the registrant's claim
of ownership'' of the mark.\7\ Once a trademark is registered,
the trademark owner can claim nationwide rights in the mark,
even if it is not yet being used throughout the country.
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\5\Matal v. Tam, 137 S. Ct. 1744, 1752 (2017).
\6\B & B Hardware, Inc. v. Hargis Indus., Inc., 135 S. Ct. 1293,
1300 (2015) (internal quotation marks omitted).
\7\15 U.S.C. Sec. 1072.
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B. THREATS TO THE PROPER FUNCTIONING OF THE REGISTRATION SYSTEM
To have a well-functioning trademark system, the federal
trademark register needs to accurately reflect the trademarks
currently in use. Having marks that are not currently in use on
the U.S. register makes it more difficult for legitimate
businesses to clear and register their own marks.\8\ In recent
years, it has become clear that whether purposeful or not,
registrations are being maintained for marks that are not
properly in use in commerce.\9\
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\8\Matthew D. Asbell, Evaluating the USPTO's Efforts to Clean up
the U.S. Register, Ladas & Parry (Feb. 14, 2017), https://ladas.com/
education-center/5658-2/.
\9\Counterfeits and Cluttering: Emerging Threats to the Integrity
of the Trademark System and the Impact on American Consumers and
Businesses: Hearing Before the Subcomm. on Cts., Intell. Prop., and the
Internet of the H. Comm. on the Judiciary, 116th Cong. (2019) (written
statement of Mary Boney Denison, Commissioner for Trademarks, U.S.
Patent and Trademark Office at 4); Department of Commerce, Changes in
Requirements for Affidavits or Declarations of Use, Continued Use, or
Excusable Nonuse in Trademark Cases, 81 Fed. Reg. 40590 (June 22, 2016)
(discussing a post-registration audit pilot program in which in 51% of
the 500 registrations selected for the pilot, the registrants failed to
supply additional verified proof of use on specific goods/services for
which use was initially claimed).
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This so-called ``cluttering'' has real-world consequences,
which become particularly acute as the availability of marks is
depleted. Testimony before the Subcommittee on Courts,
Intellectual Property, and the Internet highlighted the problem
of depletion of effective trademarks. Professors Barton Beebe
and Jeanne Fromer explained:
Trademark depletion is a problem because it undermines
trademark law's goals of promoting efficient and fair
competition and minimizing consumer search costs. In
particular, as depletion worsens, entrants face higher costs
than incumbents had faced earlier in locating or devising a
mark that is not confusingly similar with already registered
marks and that is competitively effective. Moreover, entrants
are generally constrained to settle for less effective marks,
such as longer and more complex marks, that minimize the
advertising power of these marks.\10\
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\10\Counterfeits and Cluttering: Emerging Threats to the Integrity
of the Trademark System and the Impact on American Consumers and
Businesses: Hearing Before the Subcomm. on Cts., Intell. Prop., and the
Internet of the H. Comm. on the Judiciary, 116th Cong. (2019) (written
statement of Professors Barton Beebe and Jeanne Fromer, New York
University School of Law at 16).
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Their research found that in 2016, 23.5% of the most
frequently used words in American English, which also account
for 74% of all word usage, had already been claimed as single-
word marks.\11\ They further estimated that 97.1% of the most
frequently used words in American English, which account for
89.1% of all word usage in the language, are confusingly
similar with a mark already registered.\12\
---------------------------------------------------------------------------
\11\Id. at 8.
\12\Id. at 10.
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Trademark law is meant to encourage competition. But that
competition is ``difficult to achieve if people are having to
settle for something other than their preferred ways to mark
their brands. The problem is only made worse if people end up
having to spend money creating new trademarks over and over
again and go through the process of rebranding, since these
efforts may end up just confusing consumers and hurting the
brand even further.''\13\
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\13\Shivani Patel, The IP of IPAs: A Look into Trademark
Infringement in the Craft Beer Industry, 26 J. Intell. Prop. L. 249,
252 (2019).
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A recent rise in fraudulent trademark applications has put
further strain on the accuracy of the federal register. As
Stephen Lee, the Chief Intellectual Property Counsel for Target
explained in testimony before the Senate Subcommittee on
Intellectual Property: ``When the United States Patent and
Trademark Office (USPTO) approves a fraudulent trademark
application, it can effectively block our legitimate efforts to
trademark our owned brand products that we develop within our
teams at Target. It is imperative to maintain the integrity of
our U.S. trademark system and not allow bad actors to gain
valid trademarks in the largest, most developed market in the
world.''\14\
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\14\Fraudulent Trademarks: How They Undermine the Trademark System
and Harm American Consumers and Businesses: Hearing Before the Subcomm.
on Intell. Prop. of the S. Comm. on the Judiciary, 116th Cong. (2019)
(written statement of Stephen Lee, Chief Intellectual Property Counsel,
Target at 2).
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One apparent source of fraudulent applications has been
China. Although there has been an increase in foreign filings
more generally,\15\ as of September 2018, there had been more
than an 1,100 percent increase in trademark applications
originating from China over the previous six years, far
outpacing growth from any other country.\16\ Through various
investigations, it has become clear that a significant number
have fraudulent claims of use with suspicious and/or fake
specimens. One investigation reviewed 10,000 trademark
applications filed with the USPTO the first week of May 2019
and found ``a significant number of suspicious specimens from
applications originating from China,'' and an ``evolution in
tactics being used when submitting such illegitimate
specimens.''\17\
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\15\Jacob Gershman, Flood of Trademark Applications From China
Alarms U.S. Officials, Wall Street J. (May 5, 2018), https://
www.wsj.com/articles/flood-of-trademark-applications-fromchinaalarms-u-
s-officials-1525521600.
\16\U.S. Patent and Trademark Office, Trademark Public Advisory
Committee Annual Report, at 5 (2018), https://www.uspto.gov/sites/
default/files/documents/TPAC_2018_Annual_Report.pdf. One potential
cause of the significant increase in trademark applications from China
may be local Chinese government subsidies to applicants. Gershman,
supra note 15.
\17\Tim Lince, Fraudulent Specimens at the USPTO: Five Takeaways
from Our Investigation--Share Your Experience, World Trademark Rev.
(June 19, 2019), https://www.worldtrademarkreview.com/brand-management/
fraudulent-specimens-uspto-five-takeaways -our-investigation-share-
your; see also Christina Frangiosa, USPTO's Recently Announced Pilot
Program on Fraudulent Specimens, Privacy and IP Law Blog (June 12,
2018), http://privacyandiplawblog.com/2018/06/uspto-pilot-program-
fraudulent-specimens/#more-611.
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Although trademark applications go through an examination
process, some of these forms of fraud are difficult to detect
in individual applications (even if patterns of fraud can be
seen across multiple applications), leading to illegitimate
registrations.\18\ Although the USPTO can try to develop better
systems to detect fraud during the examination process, its
authority to reconsider applications after registration is
currently limited. Under existing law, there is no mechanism by
which the USPTO can cancel a registration through a formal ex
parte process (i.e., a process resembling the initial
examination process, which is solely between the Office and the
trademark holder after the proceeding begins, instead of a
process between two parties as in district court or in the
TTAB's inter partes cancellation proceedings). The only avenue
for agency review is through an inter partes cancellation
process in which interested third parties can petition to
cancel a registration before the TTAB.\19\ However, because in
many respects cancellation proceedings resemble district court
litigation,\20\ they are often expensive and time
consuming.\21\ For small- and medium-sized businesses, the cost
of filing and the uncertainty of the result is often a
deterrent in filing a cancellation action.\22\
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\18\For a recent study of likely fraudulent applications that
matured to registration, see Barton Beebe & Jeanne C. Fromer, Fake
Trademark Specimens: An Empirical Analysis, 120 Colum. L. Rev. F. 217
(2020).
\19\15 U.S.C. Sec. 1064.
\20\See B & B Hardware, Inc. v. Hargis Indus., Inc., 575 U.S. 138,
143 (2015).
\21\Beebe and Fromer Statement, supra note 10, at 19 (citing
studies finding that the average cost of a trademark opposition or
cancellation in the United States ranges between $95,000 to $500,000).
\22\Steve Brachmann, Taking on Trademark Trolls and Frivolous
Marks, Trademark Watch Dawgs Wades Into Divisive Waters, IP Watchdog
(Apr. 11, 2019), https://www.ipwatchdog.com/2019/04/11/trademark-watch-
dawgs-wades-into-divisive-waters-trademark-trolls/id=108151/;
Fraudulent Trademarks: How They Undermine the Trademark System and Harm
American Consumers and Businesses: Hearing Before Subcomm. on Intell.
Prop. of the S. Comm. on the Judiciary, 116th Cong. (2019) (written
statement of Thomas Williams, Lecturing Fellow, Duke Law School at 3).
---------------------------------------------------------------------------
H.R. 6196 creates two new ex parte processes that allow the
Director or a third party to initiate a challenge to the
propriety of trademark's use that can allow the Office to
cancel a registration when the covered trademark was not
properly used.
H.R. 6196 also includes two sections that provide
improvements to the trademark examination process. These
improvements will make examination more efficient, and more
effective at clearing applications that may block later-filed
applications from proceeding to registration.
C. OPERATION OF NEW EXAMINATION AND CANCELLATION PROVISIONS
1. Providing for third-party submission of evidence during examination
(Section 3)
Current USPTO practice permits the informal submission of
evidence by third parties during the examination process.\23\
This informal process allows third parties to bring to the
attention of the Office evidence bearing on the registrability
of the mark. Because this process is informal, and is not
currently codified, the Office's practices regarding it are
similarly informal. Under the current informal practice, there
is no time limit for when the evidence must reach an examiner,
and it is possible that evidence reaches an examiner after an
application has been initially approved to proceed to
registration. The delay in evidence reaching an examiner makes
for an inefficient and uncertain examination process that H.R.
6196 seeks to solve. Historically, the USPTO also has not
charged a fee for the submission despite there being a cost to
process the informal submissions of evidence.
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\23\Trademark Manual of Examining Procedure Sec. 1715 (Oct. 2018),
https://tmep.uspto.gov/RDMS/TMEP/current#/Oct2018/TMEP-1700d1e853.html.
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Section 3 of the bill amends section 1 of the Lanham Act by
adding a new subsection (f), which expressly allows third
parties to submit evidence that may be relevant to the
examination of an application for trademark registration,
consistent with the current USPTO informal practice. Evidence
submitted must relate to a relevant ground for refusal.
Submissions are to be accompanied by a concise description of
the evidence and should identify the ground of refusal to which
the evidence relates. Extensive legal argument should not be
provided with the submission. A party that submits evidence
under this new provision does not have a right to review of a
decision not to accept evidence submitted.
To improve the functioning and efficiency of the third-
party submission process, section 3 of the bill provides
express statutory authority for the USPTO to charge a fee for
the submission. It also provides a two-month time limit by
which the Office must act on a third-party submission. The time
limit helps ensure that relevant evidence is put before a
trademark examiner before he or she takes initial action on an
application.
2. Providing for flexible response periods (Section 4)
Currently, section 12(b) of the Lanham Act,\24\ requires
that the USPTO provide an applicant six months to respond to
actions issued during examination, a vestige of the original
1946 Act.\25\ The six-month period reflects a time when all
correspondence was done by mail. Today, the USPTO mandates
electronic filing for most trademark papers.\26\ In most cases,
applicants are notified instantly when an examiner issues an
action requesting a response.
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\24\15 U.S.C. Sec. 1062(b).
\25\Act of July 5, 1946, ch. 540, Title I, Sec. 12, 60 Stat. 432.
\26\37 C.F.R. Sec. 2.23.
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H.R. 6196 amends section 12(b) of the Trademark Act to
allow the Office to set response periods, by regulation, for a
time period between 60 days and six months, with the option for
an applicant to request extensions to a full six-month period.
The flexibility in setting response times will promote
efficiency in examination, and allow applications that would
otherwise be abandoned, to be abandoned earlier. This earlier
abandonment can be important for other trademark applicants,
because an earlier-filed application can delay examination of a
later-filed application if the marks are similar.
It is expected that the Director will consider input of
stakeholders in any process to set response times at less than
six months and will, in setting any particular response times,
assess the need for longer or shorter periods based on
information provided by stakeholders in the rulemaking process.
Additionally, it is intended that response time periods should
be set categorically (e.g., substantive office action
responses, administrative revisions, designation of counsel) by
regulation such that different response times will not be set
on an application-by-application basis for the same type or
category of response.
3. Creating new ex parte cancellation proceedings and new non-use
ground for cancellation before the TTAB (Section 5)
Section 5 of H.R. 6196 adds two ex parte cancellation
proceeding options to allow third parties to request, or the
Director to initiate at the Director's own initiative, ex parte
cancellation of a registration when proper use of a mark in
commerce has not been made.\27\ It also adds a new non-use
ground for cancellation that allows a petitioner to allege that
a mark has never been used in commerce as a basis for
cancellation before the TTAB.
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\27\A registration can be challenged for fewer than all the goods
or services covered by it. Cancellation of a registration of a mark, as
discussed in this report, refers to the particular goods or services
with which a mark is alleged to have not been used, and does not refer
to the cancellation of an entire registration unless it is alleged that
the mark was properly used for none of the goods or services covered by
the registration.
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Section 5's additions to the Lanham Act respond to concerns
that registrations persist on the trademark register despite a
registrant not having made proper use of the mark covered by
the registration. In particular, the new ex parte proceedings
allow for more efficient, and less costly and time consuming
alternatives to inter partes cancellation. New section 16A of
the Lanham Act provides for ex parte expungement of a
registration of a mark that has never been used in commerce.
New section 16B of the Lanham Act provides for ex parte
reexamination of registration of a mark that was not in use in
commerce at the time the application or the allegation of use
was filed before registration.
Sections 16A and 16B complement each other. For technical
clarity, ex parte expungement and ex parte reexamination are
separated into two sections of the Lanham Act. The statutory
separation should not be interpreted to prohibit the
combination of particular proceedings under 16A and 16B if such
combination could create administrative efficiencies, e.g.,
when facts and evidence support petitions both for ex parte
expungement and ex parte reexamination, and the timing permits
both types of proceedings to be initiated.
a. Ex parte expungement
Ex parte expungement under new section 16A of the Lanham
Act provides for proceedings that examine a mark that is
alleged to have never been used in commerce. ``It is not
federal registration, but use of a designation as a mark that
creates trademark rights in a designation.''\28\ Ex parte
expungement provides a mechanism to cancel a registration for a
mark that never had the necessary underlying use to confer
trademark rights.
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\28\2 Mccarthy on Trademarks and Unfair Competition Sec. 16:18
(5th ed. 2020); see also Allard Enterprises, Inc. v. Adv. Programming
Resources, Inc., 146 F.3d 350, 356 (6th Cir. 1998) (``One of the
bedrock principles of trademark law is that trademark or service mark
ownership is not acquired by federal or state registration. Rather,
ownership rights flow only from prior appropriation and actual use in
the market.'') (internal quotation marks omitted).
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The timing provisions for an ex parte expungement permit a
proceeding to be initiated, by petition or by the Director's
own initiative, three years following the date of registration.
The three-year period provides post-registration repose for all
registrations, including those filed pursuant to an
international agreement that permits registration in the United
States without demonstrating use at the time of application or
registration.\29\ With a limited exception for the three years
following enactment, an expungement proceeding must be
initiated before the expiration of ten years following the date
of registration.
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\29\15 U.S.C. Sec. Sec. 1126, 1141f.
---------------------------------------------------------------------------
b. Ex parte reexamination
Ex parte reexamination under new section 16B of the Lanham
Act provides for review of whether a mark covered by a
registration for which use was claimed at the time of
registration was, in fact, in use in commerce at the time the
application or the allegation of use was filed before
registration.
The timing provisions for ex parte reexamination permit a
proceeding to be initiated, by petition or by the Director's
own initiative, in the first five years following the date of
registration.
c. Shared procedures for ex parte expungement and ex parte
reexamination
Both sections 16A and 16B set out procedural requirements
for the new proceedings, and give the Director authority to
promulgate regulations consistent with the requirements set
forth in the bill. The procedures for both proceedings are
identical in many respects.
Both ex parte expungement and reexamination evaluate ``use
in commerce.'' ``Use in commerce'' has a single definition in
the Lanham Act.\30\ Thus, ``use in commerce'' in the bill
follows that definition, and a registrant's evidence of use
must be consistent with that definition, including the case law
interpreting the term. Sections 16A and 16B do not refer to
``specimens.'' Thus, if the documentary evidence of use
presented by the registrant is consistent with the definition
of ``use in commerce'' in section 45 of the Lanham Act, the
form of evidence need not follow the rules or practices of the
USPTO for specimens under section 1(a) of the Lanham Act.\31\
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\30\15 U.S.C. Sec. 1127.
\31\The use of the term ``documentary'' in 16A(e) and 16B(f) in
intended to indicate that testimonial evidence alone is insufficient
and must be supported by additional corroborating evidence, e.g.,
examples of product packaging, labels, point of sale displays,
advertising (for services).
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A proceeding under section 16A or 16B may be initiated by
third-party request under the petition process detailed in
section 16A(b)-(c) and section 16B(c)-(d). A petition must
include a verified statement setting forth the reasonable
investigation undertaken by the petitioner to determine that
the mark was and/or is not in proper use as relevant for the
proceeding under 16A or 16B. Additional facts, if any, on which
the petitioner relies must also be verified.
The Director is authorized to promulgate rules that
establish procedures for the new proceedings. As a general
matter, the conduct of these new proceedings follows the
procedures for examination under subsection (b) of section 12
of the Lanham Act. In establishing procedures for the new
proceedings, the Director may consider the need for efficiency,
the need to allow sufficient process for a trademark registrant
to respond, and the need to guard against abuse of the new
proceedings. In considering how long to set the time for
response to an initial institution, the Director should take
into account the need for a registrant to research and collect
evidence sufficient to show use of the mark in commerce. Any
timing consideration should take into account that in some
proceedings the number of goods or services at issue may be
numerous, and that the collection of evidence may take some
time. This concern should be balanced against an expectation
that the proceedings be expeditious, and that undue delay could
prejudice a petitioner who legitimately seeks to clear unused
marks from the register.
In addition to requiring the Director to promulgate general
procedures for the new proceedings, H.R. 6196 also requires the
Director to promulgate rules that provide guidance on what
constitutes a reasonable investigation under 16A(b)(3) and
16B(c)(3). It is understood that what constitutes a reasonable
investigation may vary across industry and by types of goods
and services. For example, evidence of sales of a large,
specialized commercial product may not be returned by the
results of internet searches, and may require additional
efforts to satisfy the showing needed to support a prima facie
case. Without foreclosing the possibility that there may be
some exceptions, it is not expected that the results of a
single internet search-engine search would be sufficient to
support a prima facie case in either ex parte expungement or ex
parte reexamination.
Whether initiated by petition, or on the Director's own
initiative, institution of an ex parte expungement proceeding
or ex parte reexamination proceeding requires that a prima
facie case be set forth. The meaning of ``prima facie case'' in
the context of the bill is intended to have the same
``reasonable predicate'' meaning that that term has been given
in the context of trademark examination.\32\ If a prima facie
case is set out, rebuttal evidence and argument are the
registrant's province.\33\ If a registrant offers rebuttal
evidence or argument, the examiner must consider all evidence
and arguments for and against cancellation before making a
final determination.\34\
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\32\In re Pacer Tech., 338 F.3d 1348, 1351 (Fed. Cir. 2003); In re
Loew's Theatres, Inc., 769 F.2d 764, 768 (Fed. Cir. 1985); see also In
re Etter, 756 F.2d 852, 855-59 (Fed. Cir. 1985) (explaining that the
same burden shifting procedure applicable to initial examination is
applicable to reexamination in the patent context).
\33\Pacer Tech, 338 F.3d. at 1352; In re Gyulay, 820 F.2d 1216,
1217 (Fed. Cir. 1987).
\34\In re Kumar, 418 F.3d 1361, 1366 (Fed. Cir. 2005) (``When
rebuttal evidence is provided, the prima facie case dissolves, and the
decision is made on the entirety of the evidence.''); accord Pacer
Tech., 338 F.3d at 1352.
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The filing of a petition under section 16A or 16B should be
understood to fall within the meaning of ``proceeding'' under
37 C.F.R Sec. Sec. 2.11 and 2.17(a). It is expected,
therefore, that a petitioner that is not domiciled within the
United States or its territories would be represented by an
attorney in the filing of a petition for ex parte expungement
or ex parte reexamination consistent with those provisions.
Finally, consistent with examination practice, the Director
may permit the suspension of ex parte expungement and ex parte
reexamination procedures under terms similar to those currently
set forth in 37 C.F.R. Sec. 2.67, which provides that action
by the USPTO may be suspended for a reasonable time for good
and sufficient cause, including when a proceeding is pending
before the Office or a court.
d. New non-use ground for cancellation
Subsection (b) of section 5 of the bill creates a new
ground for cancellation under section 14 of the Lanham Act.
This ground for cancellation follows substantively the ``never
used'' construct that applies in ex parte expungement. Unlike
the ex parte procedure, the new ground for cancellation before
the TTAB is not limited to proceedings brought within the first
ten years post-registration. The ground is available for
cancellation any time after the first three years post-
registration.
D. PRESUMPTION OF IRREPARABLE HARM IN TRADEMARK CASES
1. Restoring the presumption
The Lanham Act serves the dual purpose of both protecting
rights holders from damage to their goodwill and reputation and
protecting consumers from confusion or deception when those
rights are violated. One of the hallmarks of the Lanham Act's
protections is the consideration of whether one party's use of
a trademark is likely to cause confusion with another party's
trademark.\35\ Because harm based on confusion is unique and
not easily quantifiable, rights holders often seek remedy
through injunctive relief.\36\
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\35\See Federal Exp. Corp. v. Federal Espresso, Inc., 201 F.3d 168,
174 (2d Cir. 2000).
\36\Anne Gilson LaLonde & Jerome Gilson, Adios! To the Irreparable
Harm Presumption in Trademark Law, 107 Trademark Rep. 913, 921 (2017)
(``The classic presumption also assumed that injury to reputation or
goodwill cannot easily be quantified or adequately compensated with
money damages. It is often next to impossible to prove such evanescent
injury at the preliminary injunction stage. Consumer confusion,
particularly that generated by intentional infringement, would
doubtlessly erode market share to an unquantifiable degree.'').
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Generally, to obtain an injunction, a plaintiff must
establish liability, or in the case of a preliminary
injunction, a likelihood of success on the merits, and
demonstrate that (1) absent relief, the plaintiff will suffer
irreparable harm, (2) remedies available at law, such as
monetary damages, are inadequate to compensate for that injury,
(3) the balance of equities tips in the plaintiff's favor, and
(4) an injunction is in the public interest.\37\ The issuance
of an injunction means, for example, that two products with
confusingly similar marks do not both remain on the market,
providing forward-looking relief to the prevailing party's
brand and goodwill and ensuring that consumers cease to be
confused or misled about whose products they are purchasing.
---------------------------------------------------------------------------
\37\Weinberger v. Romero-Barcelo, 456 U.S. 305, 311-12 (1982); see
also eBay Inc., v. MercExchange, LLC, 547 U.S. 388, 391 (2006)
(summarizing the requirements for a permanent injunction that flow from
``well established principles of equity'').
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Historically, federal courts considering injunctive relief
for trademark infringement claims had nearly uniformly held
that success on the merits of a trademark claim in the context
of a permanent injunction--or a showing of likely success on
the merits in the context of a preliminary injunction--created
a rebuttable presumption of irreparable harm that was
sufficient to satisfy that prerequisite for relief.\38\ In the
courts' view, ``the damages occasioned by trademark
infringement are by their very nature irreparable and not
susceptible of adequate measurement for remedy at law.''\39\
For the trademark system to function properly, appropriate
relief must be available when a company's trademark is
infringed.
---------------------------------------------------------------------------
\38\See, e.g., Ty, Inc. v. Jones Grp., Inc., 237 F.3d 891, 902-03
(7th Cir. 2001); Societe Des Produits Nestle, S.A. v. Casa Helvetia,
Inc., 982 F.2d 633, 640 (1st Cir. 1992); see also Fraudulent
Trademarks: How They Undermine the Trademark System and Harm American
Consumers and Businesses: Hearing Before the Subcomm. on Intell. Prop.
of the S. Comm. on the Judiciary, 116th Cong. (2019) (written statement
of Douglas A. Rettew, Partner, Finnegan, Henderson, Farabow, Garrett &
Dunner, LLP at 8-10); Counterfeits and Cluttering: Emerging Threats to
the Integrity of the Trademark System and the Impact on American
Consumers and Businesses: Hearing Before the Subcomm. on Cts., Intell.
Prop., and the Internet of the H. Comm. on the Judiciary, 116th Cong.
(2019) (written statement of Peter M. Brody, Partner, Ropes & Gray LLP
at 6).
\39\Processed Plastic Co. v. Warner Commc'ns, 675 F.2d 852, 858
(7th Cir. 1982).
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Another justification for the issuance of injunctions is
that it is typically difficult to obtain monetary relief in
Lanham Act cases--``[a] plaintiff that can prove identifiable
lost sales from trademark infringement can generally recover
the losses occasioned by those sales, though a significant
majority of successful trademark cases nonetheless deny an
award of damages,'' and an award of profits ``is traditionally
limited to cases in which the defendant is adjudged a willful
infringer.''\40\ Indeed, ``it is not only possible but common
to win your case and still not be awarded money,''\41\ leaving
injunctive relief as some plaintiffs' only recourse. This is
different than in the patent law context, where damages in the
form of a ``reasonable royalty'' or ``lost profits''' have a
long history of being awarded to compensate a patent owner for
infringement.\42\
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\40\Mark A. Lemley, Did eBay Irreparably Injure Trademark Law?, 92
Notre Dame L. Rev. 1795, 1807 (2017).
\41\Id. at 1808.
\42\See, e.g., Lucent Techs., Inc. v. Gateway, Inc., 580 F.3d 1301,
1324 (Fed. Cir. 2009) (``Two alternative categories of infringement
compensation are the patentee's lost profits and the reasonable royalty
he would have received through arms-length bargaining.''); 35 U.S.C.
Sec. 284 (damages to be awarded are ``in no event less than a
reasonable royalty for the use made of the invention by the
infringer.'').
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In 2006, the Supreme Court decided eBay, Inc. v.
MercExchange LLC,\43\ a patent infringement case in which it
held irreparable harm could not be presumed upon a showing of
patent infringement, requiring a plaintiff to affirmatively
demonstrate the elements of the Court's four-factor test for
injunctive relief, including the irreparable harm factor.\44\
Although the Court did not mention trademark claims or the
Lanham Act in its opinion, some courts have since extended eBay
to trademark disputes, departing from the long-standing
presumption of irreparable harm.\45\ Other courts continue to
apply the presumption in trademark disputes, creating a circuit
split.\46\ The Supreme Court has not clarified whether eBay is
intended to apply to trademark disputes and has twice denied
certiorari on the issue.\47\
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\43\547 U.S. 388 (2006).
\44\Id. at 391.
\45\E.g., Ferring Pharm., Inc. v. Watson Pharm., Inc., 765 F.3d
205, 206 (3d Cir. 2014) (``[In] light of the Supreme Court's decisions
in eBay . . . a party bringing a claim under the Lanham Act is not
entitled to a presumption of irreparable harm when seeking a
preliminary injunction . . . .''); See, e.g., Herb Reed Enters. LLC v.
Florida Entm't Mgmt., 736 F.3d 1239, 1249 (9th Cir. 2013), cert.
denied, 135 S. Ct. 57 (2014).
\46\Rettew Statement, supra note 38, at 13; Brody Statement, supra
note 38, at 2.
\47\Herb Reed Enters., LLC v. Florida Entm't Mgmt., Inc., 135 S.
Ct. 57 (2014) (denying cert); Abraham v. Alpha Chi Omega, 134 S. Ct. 88
(2013) (denying cert).
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The Third, Ninth, and Eleventh Circuits have extended eBay
to trademark cases and rejected the rebuttable presumption of
irreparable harm, pointing to the similarities between the
Lanham Act's and the Patent Act's injunctive relief statutory
provisions and their premise on the same ``principles of
equity.''\48\ These courts overlook the differences between
these areas of intellectual property and base their rationale
on a broad application of the Supreme Court's statement in eBay
that ``[equitable] discretion must be exercised consistent with
traditional principles of equity, in patent disputes no less
than in other cases governed by such standards.''\49\ Other
courts, including the Fifth and Eighth Circuits, acknowledge
the eBay standard but continue to apply the presumption of
irreparable harm upon a successful showing of liability in
trademark disputes.\50\ The emerging confusion is further
evidenced by decisions like those of the Sixth Circuit that
have applied the principles of eBay while still applying some
form of the presumption.\51\
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\48\Compare 15 U.S.C. Sec. 1116(a) (``The several courts vested
with jurisdiction of civil actions arising under this chapter shall
have power to grant injunctions, according to the principles of equity
and upon such terms as the court may deem reasonable . . . .''), with
35 U.S.C. Sec. 283 (``The several courts having jurisdiction of cases
under this title may grant injunctions in accordance with the
principles of equity to prevent the violation of any right secured by
patent, on such terms as the court deems reasonable.'').
\49\eBay, 547 U.S. at 394; see e.g., Ferring, 765 F.3d at 214 (``We
hold that although eBay in particular arose in the patent context, its
rationale is equally applicable in other contexts, including cases
arising under the Lanham Act . . .''); Herb Reed, 736 F.3d at 1249 (The
[eBay] principle applies to trademark infringement under the Lanham
Act. Just as `[n]othing in the Patent Act indicates that Congress
intended such a departure,' so too nothing in the Lanham Act indicates
that Congress intended a departure for trademark infringement
cases.''); Commodores Entm't Corp. v. McClary, 648 Fed. Appx. 771, 777
(11th Cir. 2016) (per curiam) (unpublished) (``In light of the Supreme
Court's holding in eBay, a presumption of irreparable harm cannot
survive.'').
\50\Abraham v. Alpha Chi Omega, 708 F.3d 614, 627 (5th Cir. 2013);
Phyllis Schlafly Revocable Trust v. Cori, 924 F.3d 1004, 1009 (8th Cir.
2019) (citing eBay, ``It is unclear whether the traditional presumption
of irreparable harm in trademark cases has survived more recent Supreme
Court opinions emphasizing the movant's burden to show that
`irreparable injury is likely in the absence of an injunction.''')
(citations omitted).
\51\Audi AG v. D'Amato, 469 F.3d 534, 550 (6th Cir. 2006) (citing
the eBay test while holding that ``Audi would be irreparably harmed''
by the defendant's trademark infringement).
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Since eBay, a number of courts have denied plaintiffs
injunctive relief despite compelling cases on the merits. For
example, in Adidas Am., Inc. v. Skechers USA, Inc., the Ninth
Circuit reversed the district court's preliminary injunction on
both trademark infringement and dilution claims,
notwithstanding that the district court found--and the
appellate court agreed--that plaintiff adidas had shown a
likelihood of success on the merits, namely that there was both
customer confusion and harm to its brand.\52\ The dissent
disputed that there was not sufficient evidence of irreparable
harm, but also called into question discarding the presumption
that irreparable harm should flow from the finding of a
likelihood of success on the merits:
---------------------------------------------------------------------------
\52\890 F.3d 747, 759 (9th Cir. 2018); see also, e.g., Pom
Wonderful LLC v. Pur Beverages LLC, No. 2:13-cv-06917, 2015 WL
10433693, at *18 (C.D. Cal. Aug. 6, 2015) (denying preliminary
injunction due to failure to show irreparable harm despite likelihood
of success on its claim).
---------------------------------------------------------------------------
It is not hard to understand how the presumption arose. If
a plaintiff can demonstrate a likelihood that it will succeed
on the merits of its trademark claim--as adidas succeeded in
establishing that Skechers's Cross Court shoe infringed and
diluted adidas's famous Three-Stripe mark, a conclusion we
affirm--it is not a big leap to conclude that adidas would be
injured by that action.\53\
---------------------------------------------------------------------------
\53\Adidas, 890 F.3d 747, 762-63.
---------------------------------------------------------------------------
In Adidas and similar cases, it is unclear what additional
evidence could or should be provided to establish irreparable
harm given the evidence of record already demonstrating
consumer confusion or loss of control over the brand. Thus,
while the Ninth Circuit, for instance, states that ``[e]vidence
of loss of control over business reputation and damage to
goodwill could constitute irreparable harm,''\54\ when
presented with evidence of actual consumer confusion, a
district court nonetheless concluded that it ``simply
underscores customer confusion, not irreparable harm''--
demonstrating an unwillingness to conclude that such confusion
is the sort of irreparable harm typically addressed by
equitable relief.\55\ In sum, trademark litigants in courts
adopting eBay are faced with uncertainty over what constitutes
sufficient evidence of irreparable injury.
---------------------------------------------------------------------------
\54\Herb Reed, 736 F.3d at 1250 (emphasis added).
\55\Id.; Williams v. Green Valley RV, Inc., No. 8:15-cv-01010, 2015
WL 4694075, at *2 (C.D. Cal. Aug. 6, 2015) (``Plaintiff's evidence of
irreparable harm is nothing more than a regurgitation of consumer
confusion evidence . . . . Irreparable harm is no longer presumed or
proven by a mere showing of consumer confusion.'').
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Compounding the evidentiary issue, some courts have
declined to even assess all the factors relevant to granting an
injunction if they do not find an initial showing of
irreparable harm,\56\ which means that in these cases, courts
may not be fully considering the merits of plaintiffs'
infringement claims and discounting or ignoring evidence of
consumer harm or confusion as a result.
---------------------------------------------------------------------------
\56\Spiraledge v. Seaworld, No. 13-cv-296, 2013 WL 3467435, at *6
(S.D. Cal. July 9, 2013) (``Because Spiraledge has failed to meet its
burden of demonstrating that irreparable injury is likely in the
absence of an injunction, the Court need not decide whether
[Spiraledge] is likely to succeed on the merits.'') (quotation marks
omitted); see also Lemley, supra note 40, at 1808.
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The inconsistent and unpredictable approaches courts have
taken in the post-eBay landscape have led to inequitable
outcomes for trademark owners, created uncertainty, and
increased the burden on trademark owners who seek injunctive
relief, making enforcement against infringement a greater and
more burdensome task.\57\ To rectify this circuit split and
resulting confusion, H.R. 6196 confirms that the historical
practice of applying a rebuttable presumption of irreparable
harm is the appropriate course for claims under the Lanham Act
(while still requiring plaintiffs to meet the burden of
production on other elements necessary to establish entitlement
to an injunction).\58\
---------------------------------------------------------------------------
\57\See Rettew Statement, supra note 38, at 17.
\58\The Committee recognizes that there are key differences between
trademarks and patents, including those discussed in this report. The
Committee is not, at this time, taking a position with regard to the
decision in eBay in the patent context.
---------------------------------------------------------------------------
2. Balancing First Amendment concerns
In providing that a plaintiff is entitled to a rebuttable
presumption of irreparable harm following a court's finding of
trademark infringement, or upon a finding of likelihood of
success on the merits in the case of a motion for preliminary
injunction or temporary restraining order, the Committee
acknowledges the need to take special care to ensure that the
interests protected by the Lanham Act do not encroach on the
rights to free speech and expression enshrined in the First
Amendment. Courts have long been appropriately circumspect in
applying the Lanham Act so as not to interfere with the First
Amendment rights of creators and distributors of ``artistic
works'' (sometimes called ``expressive works''), including
without limitation movies, television programs, songs, books,
plays, video games, and the like, which may depict or reference
third-party marks within such artistic works or in such
artistic works' titles.\59\ It is the intent of the Committee
that this legislation will not in any way affect that
jurisprudence.
---------------------------------------------------------------------------
\59\Courts have extended this principle to advertising and
promotional activities that use a protected title or term. Twentieth
Cent. Fox TV a division of Twentieth Cent. Fox Film Corp. v. Empire
Distrib., Inc., 875 F.3d 1192, 1196-97 (9th Cir. 2017) (``Although it
is true that these promotional efforts technically fall outside the
title or body of an expressive work, it requires only a minor logical
extension of the reasoning of Rogers to hold that works protected under
its test may be advertised and marketed by name, and we so hold.'');
Fortres Grand Corp. v. Warner Bros. Ent. Inc., 947 F. Supp. 2d 922,
933, aff'd on other grounds, 763 F.3d 696 (7th Cir. 2014) (applying
Rogers to promotional websites for a film as ``creative, fictional
extensions of the film'').
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The standard for accommodating First Amendment interests in
the Lanham Act context for infringement and unfair competition
claims was first articulated in Rogers v. Grimaldi,\60\ which
has been widely adopted by courts across the nation in the
subsequent three decades. As a threshold matter under the
Rogers test, a plaintiff cannot state a viable trademark claim
in the context of an artistic work (1) unless the defendant's
use of the mark ``has no artistic relevance to the underlying
work whatsoever,'' or (2) ``if it has some artistic relevance,
unless the [use of the mark] explicitly misleads as to the
source or the content of the work.''\61\ The ``no artistic
relevance . . . whatsoever'' standard sets an extremely low
bar, requiring only that ``the level of relevance must merely
be above zero.''\62\ ``This black-and-white rule has the
benefit of limiting [the court's] need to engage in artistic
analysis in this context.''\63\ When that bar is met and any
level of artistic relevance to the underlying work is present,
the use may be actionable only where the creator explicitly
misleads consumers. This test appropriately recognizes the
primacy of constitutional protections for free expression,
while respecting a trademark owner's right to prevent
unauthorized use of its mark and the public's interest in
avoiding confusion.
---------------------------------------------------------------------------
\60\875 F.2d 994 (2d Cir. 1989).
\61\Id. at 999.
\62\E.S.S. Entm't 2000, Inc. v. Rock Star Videos, Inc., 547 F.3d
1095, 1100 (9th Cir. 2020).
\63\Brown v. Electronic Arts, Inc., 724 F.3d 1235, 1243 (9th Cir.
2013).
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In enacting this legislation, the Committee intends and
expects that courts will continue to apply the Rogers standard
to cabin the reach of the Lanham Act in cases involving
expressive works. The Committee believes that the adoption by a
court of a test that departs from Rogers, including any that
might require a court to engage in fact-intensive inquiries and
pass judgment on a creator's ``artistic motives'' in order to
evaluate Lanham Act claims in the expressive-works context
would be contrary to the Congressional understanding of how the
Lanham Act should properly operate to protect important First
Amendment considerations, and upon which the Committee is
relying in clarifying the standard for assessing irreparable
harm when considering injunctive relief.
E. CONFIRMING THE AUTHORITY OF THE DIRECTOR OVER TTAB DECISIONS
The TTAB is an administrative tribunal within the USPTO
that hears ex parte appeals of final decisions by examining
attorneys and conducts inter partes trial proceedings.\64\ The
TTAB is composed of statutory members--the Director, the Deputy
Director, the Commissioner for Patents, the Commissioner for
Trademarks--and administrative trademark judges appointed by
the Secretary of Commerce in consultation with the
Director.\65\ The USPTO also houses an administrative body that
handles patent matters, the Patent Trial and Appeal Board
(PTAB), which is likewise composed of the same statutory
members, as well as administrative patent judges appointed by
the Secretary in consultation with the Director.\66\
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\64\15 U.S.C. Sec. Sec. 1070, 1067.
\65\15 U.S.C. Sec. 1067(b).
\66\35 U.S.C. Sec. 6(a).
---------------------------------------------------------------------------
A recent decision of the Federal Circuit, Arthrex, Inc. v.
Smith & Nephew, Inc.,\67\ found that the administrative patent
judges comprising the PTAB were operating as ``principal
officers,'' which require Senate confirmation, and were thus
appointed in violation of the Appointments Clause of the
Constitution. In Arthrex, the appellant appealed a PTAB inter
partes review decision, and in doing so contended that the
administrative patent judges that presided over the proceeding
were unconstitutionally appointed because they ``were principal
officers who must be, but were not, appointed by the President
with the advice and consent of the Senate.''\68\ The court
concluded that as currently constituted, administrative patent
judges were principal officers, and that ``[a]s such, they must
be appointed by the President and confirmed by the Senate;
because they are not, the current structure of the Board
violates the Appointments Clause.''\69\ To correct this
perceived defect, the court stripped PTAB judges of their civil
service protections.\70\ It also remanded the case, and
subsequent cases that have raised an Appointments Clause
challenge, for rehearing by a new PTAB panel. The Supreme Court
recently granted certiorari in the case.\71\
---------------------------------------------------------------------------
\67\941 F.3d 1320 (Fed. Cir. 2019).
\68\Id. at 1327.
\69\Id. at 1335. As witnesses discussed in a hearing before the
Subcommittee on Courts, Intellectual Property, and the Internet, there
are a number of ways to address this apparent defect on the patent
side. The Patent Trial and Appeal Board and the Appointments Clause:
Implications of Recent Court Decisions: Hearing Before the Subcomm. on
Cts., Intell. Prop., and the Internet of the H. Comm. on the Judiciary,
116th Cong. (2019). It is important that any changes made to the patent
system reflect the unique practices and needs of that area of
intellectual property.
\70\941 F.3d at 1337-38.
\71\Arthrex, Inc. v. Smith & Nephew, Inc., 19-1458, 2020 WL
6037208, at *1 (U.S. Oct. 13, 2020).
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No similar finding has been made with respect to the TTAB's
administrative trademark judges, and the issue is being
actively litigated. Structural differences between the PTAB and
the TTAB, as well as greater existing statutory authority for
the Director over the conduct of trademark proceedings, suggest
that the outcome on the trademark side may well be different.
Notably, section 18 of the Lanham Act provides that ultimate
relief in inter partes trademark proceedings rests in the
Director's discretion:
In such proceedings the Director may refuse to register the
opposed mark, may cancel the registration, in whole or in part,
may modify the application or registration by limiting the
goods or services specified therein, may otherwise restrict or
rectify with respect to the register the registration of a
registered mark, may refuse to register any or all of several
interfering marks, or may register the mark or marks for the
person or persons entitled thereto, as the rights of the
parties under this chapter may be established in the
proceedings . . . . \72\
---------------------------------------------------------------------------
\72\15 U.S.C. Sec. 1068.
---------------------------------------------------------------------------
To clarify the historical understanding of the Director's
role and preempt additional challenges, H.R. 6196 includes
language expressly confirming the authority of the Director to
reconsider TTAB decisions. The purpose of the new language is
to state even more explicitly the existing authority of the
Director. Because it is understood that this authority already
exists in the trademark context, the statutory additions should
be understood to be confirmatory only.\73\
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\73\The Committee has not taken position on whether the Federal
Circuit's decision in Arthrex was correct or reflects the intent of
Congress with respect to PTAB. Nor has the committee taken a position
on whether the authority of the Director with respect to TTAB is or
should be the same as, or similar to, the Director's authority with
respect to PTAB.
---------------------------------------------------------------------------
Hearings
The Committee on the Judiciary held no hearings on H.R.
6196, but the Subcommittee on Courts, Intellectual Property,
and the Internet held a hearing on July 18, 2019 on
``Counterfeits and Cluttering: Emerging Threats to the
Integrity of the Trademark System and the Impact on American
Consumers and Businesses,'' which helped develop this
legislation. The Committee also held an oversight hearing with
the Director of the U.S. Patent and Trademark Office, Andrei
Iancu, on May 9, 2019, at which issues relevant to this
legislation were discussed.
Committee Consideration
On September 9, 2020, the Committee met in open session and
ordered the bill, H.R. 6196, favorably reported as amended, by
a voice vote, a quorum being present.
Vote of the Committee
In compliance with clause 3(b) of rule XIII of the Rules of
the House of Representatives, the Committee advises that no
rollcall votes occurred during the Committee's consideration of
H.R. 6196.
Committee Oversight Findings
In compliance with clause 3(c)(1) of rule XIII of the Rules
of the House of Representatives, the Committee advises that the
findings and recommendations of the Committee, based on
oversight activities under clause 2(b)(1) of rule X of the
Rules of the House of Representatives, are incorporated in the
descriptive portions of this report.
New Budget Authority and Tax Expenditures and Congressional Budget
Office Cost Estimate
With respect to the requirements of clause 3(c)(2) of rule
XIII of the Rules of the House of Representatives and section
308(a) of the Congressional Budget Act of 1974 and with respect
to requirements of clause (3)(c)(3) of rule XIII of the Rules
of the House of Representatives and section 402 of the
Congressional Budget Act of 1974, the Committee has requested
but not received a cost estimate for this bill from the
Director of Congressional Budget Office (CBO). The Committee
has requested but not received from the Director of the CBO a
statement as to whether this bill contains any new budget
authority, spending authority, credit authority, or an increase
or decrease in revenues or tax expenditures.
Duplication of Federal Programs
No provision of H.R. 6196 establishes or reauthorizes a
program of the Federal government known to be duplicative of
another Federal program, a program that was included in any
report from the Government Accountability Office to Congress
pursuant to section 21 of Public Law 111-139, or a program
related to a program identified in the most recent Catalog of
Federal Domestic Assistance.
Performance Goals and Objectives
Pursuant to clause 3(c)(4) of rule XIII of the Rules of the
House of Representatives, the Committee states that H.R. 6196
is designed to update the nation's trademark laws by
modernizing trademark examination procedures, establishing new,
more efficient proceedings to clear registrations from the
trademark register for marks for which proper use in commerce
was not made, clarifying the standard for injunctive review in
trademark infringement cases, and confirming the authority of
the Director of the U.S. Patent and Trademark Office (USPTO) to
reconsider decisions of the Trademark Trial and Appeal Board
(TTAB).
Advisory on Earmarks
In accordance with clause 9 of rule XXI of the Rules of the
House of Representatives, H.R. 6196 does not contain any
congressional earmarks, limited tax benefits, or limited tariff
benefits as defined in clause 9(e), 9(f), or 9(g) of rule XXI.
Section-by-Section Analysis
The following discussion describes the bill as reported by
the Committee:
Sec. 1. Short title. Section 1 sets forth the short title
of the bill as the ``Trademark Modernization Act of 2020'' or
the ``TM Act of 2020.''
Sec. 2. Definitions. Section 2 provides the following
definitions:
(1) Director.--The term ``Director'' means the Under
Secretary of Commerce for Intellectual Property and Director of
the United States Patent and Trademark Office.
(2) Trademark Act of 1946.--The term ``Trademark Act of
1946'' means the Act entitled ``An Act to provide for the
registration and protection of trademarks used in commerce, to
carry out the provisions of certain international conventions,
and for other purposes'', approved July 5, 1946, as amended (15
U.S.C. 1051, et seq.) (commonly referred to as the ``Trademark
Act of 1946'' or the ``Lanham Act'').
Sec. 3. Providing for third-party submission of evidence
during examination. Section 3 amends section 1 of the Lanham
Act (15 U.S.C. 1051) to codify an existing practice of the
USPTO to accept evidence offered by third parties during
examination.
Subsection (a) adds new subsection (f) to section 1 of the
Lanham Act. It provides a time-limited process by which a third
party can submit to the USPTO evidence relevant to the
examination of a trademark application for consideration in
deciding whether a trademark registration should issue.
Evidence can relate to any ground on which an examiner could
refuse registration, including that the mark has not been used
in commerce, and as such, does not qualify for registration.
Subsections (b) and (c) provide a one-year period for
implementation.
Sec. 4. Providing for flexible response periods. Section 4
amends section 12(b) of the Lanham Act (15 U.S.C. 1062(b)) to
provide the USPTO flexibility in setting times for response to
office actions issued during examination. Currently, the
statute requires that the USPTO allow six months to respond.
The new provision would allow the Office to set response
periods, by regulation, for a time period between 60 days and
six months, with the option for an applicant to request
extensions to a full six-month period.
Sec. 5. Ex parte expungement; ex parte reexamination; new
grounds for cancellation. Section 5 adds two new ex parte
cancellation procedures to the Lanham Act. Current law provides
that a third party can only request cancellation of a trademark
registration through an inter partes procedure before the
Trademark Trial and Appeal Board or in a lawsuit in district
court. The new procedures provide an expedited process by which
a third party can request cancellation of a registration when
the registrant had not used the trademark in commerce as
required for federal registration.
Subsection (a). Ex parte expungement. Subsection (a)
creates a new section 16A of the Lanham Act, which provides
procedures for ex parte expungement of trademark registrations
for marks that have never been used in commerce. Because
federal registration requires a ``mark'' to be used in U.S.
commerce, the premise of an expungement proceeding is that, if
the subject of the registration was never used in commerce for
the particular goods or services identified, the subject
registration is not actually a ``mark'' within the meaning of
the Lanham Act.
New section 16A provides the following filing requirements
and procedures:
(a) Petition. A petition can be filed by any person and
must allege that the mark covered by a registration was never
used for some or all of the goods or services recited in the
registration certificate.
(b) Contents of the petition. The Act details the filing
requirements for the petition, which include a requirement that
an investigation be undertaken to determine whether or not the
mark was ever used.
(c) Initial determination; institution. The Act provides
for a final, and non-reviewable institution process before an
expungement proceeding is instituted. To institute, the
Director must find that a prima facie case of the mark having
never been in use in commerce has been demonstrated by the
petition.
(d) Ex parte expungement procedures. Generally, the
procedures will follow the same procedures for initial
examination. The Act authorizes the Director to establish
timing specific to the ex parte expungement proceedings, and to
promulgate rules to mitigate efforts to misuse the procedure to
harass trademark registrants.
(e) Registrant's evidence of use. If a proceeding is
instituted, a registrant must come forward with evidence
demonstrating, effectively, that it has ever used its mark in
commerce. For any goods or services for which the registrant
demonstrates use, the registration will not be cancelled.
(f) Excusable nonuse. Registrants who filed their
applications under the benefits of a treaty (sections 44(e) and
66 of the Lanham Act) can respond to a petition for expungement
with a showing of excusable nonuse. The circumstances that
satisfy excusable nonuse are limited and must be due to special
circumstance beyond the registrant's control (e.g., trade
embargo, fire or other catastrophe).
(g) Examiner's decision; order to cancel. The examiner will
find that a registration should be cancelled if a registrant
cannot show use of its mark ever, or cannot demonstrate
excusable nonuse (as applicable). The final order to cancel
shall not issue until all appeals have been exhausted or the
time for appeal has expired.
(h) Ex parte expungement by the Director. The Director, on
his own initiative, may institute an ex parte expungement
proceeding. Once instituted, the proceeding procedures are the
same as those for proceedings instituted by petition.
(i) Time for institution. A petition can be filed, or a
proceeding can be instituted by the Director on his own
initiative, beginning three years after registration through
ten years after registration.
(j) Limitation on later expungement proceedings. The Act
includes a prohibition on two co-pending expungement
proceedings for the same registration covering the same goods
and services. Additionally, if an expungement proceeding is
instituted, but the registrant demonstrates use, no further
expungement proceedings can be brought against the same
registration for the same goods or services considered but not
cancelled.
(k) Use in commerce showing. The use sufficient to defeat
an ex parte expungement proceeding can be use any time up until
the date of the petition or the Director's order to institute
for Director-ordered proceedings. This temporal showing is
relevant only for expungement proceedings, and does not
immunize a registration against other challenges when use was
not made before registration and such use was required.
Subsection (b). New grounds for cancellation. Amends
section 14 of the Lanham Act (15 U.S.C. 1064) to make a mark
having never been used a ground for cancellation before the
Trademark Trial and Appeal Board that is available at any time
after the three-year period following registration.
Subsection (c). Ex parte reexamination. Creates a new
section 16B of the Lanham Act, which provides procedures for ex
parte reexamination of trademark registrations covering marks
for which improper use claims were made during the examination
process before registration. Procedurally, ex parte
reexamination operates nearly identically to ex parte
expungement. The substantive difference between the two
proceedings is the time period for relevant use. For ex parte
reexamination, the registrant must show use during the time
before the registration issued, with the particulars of timing
spelled out in the Act.
New section 16B provides the following filing requirements
and procedures:
(a) Petition. A petition can be filed by any person. It
must allege that the mark was not used on or before the
relevant date for some or all of the goods or services
identified in the registration certificate.
(b) Relevant date. The Act defines the ``relevant date'' to
mean, with respect to an application for the registration of a
mark with an initial filing basis of--
(1) section 1(a) and not amended at any point to be filed
pursuant to section 1(b), the date on which the application was
initially filed; or
(2) section 1(b) or amended at any point to be filed
pursuant to section 1(b), the date on which--
(A) an amendment to allege use under section 1(c) was
filed; or
(B) the period for filing a statement of use under section
1(d) expired, including all extensions thereof.
(c) Contents of the petition. The Act details the filing
requirements for the petition, which include a requirement that
an investigation be undertaken to determine whether or not the
mark was in use on or before the relevant date.
(d) Initial determination; institution. The Act provides
for a final, and non-reviewable institution process before an
ex parte reexamination proceeding is instituted. To institute,
the Director must find that a prima facie case of the mark
having not been in use in commerce on or before the relevant
date has been demonstrated by the petition.
(e) Ex parte reexamination procedures. Generally, the
procedures will follow the same procedures for initial
examination. The Act authorizes the Director to establish
timing specific to the ex parte reexamination proceedings, and
to promulgate rules to mitigate efforts to use the procedure to
harass trademark registrants.
(f) Registrant's evidence of use. If a proceeding is
instituted, a registrant must come forward with evidence
demonstrating that it used its mark in commerce on or before
the relevant date.
(g) Examiner's decision; order to cancel. Generally, the
examiner will find that a registration should be cancelled if a
registrant cannot show use of its mark on or before the
relevant date in connection with the goods and/or services
covered by the institution order. The final order to cancel
shall not issue until all appeals have been exhausted or the
time for appeal has expired.
(h) Reexamination by the Director. The Director, on his own
initiative, may institute an ex parte reexamination proceeding.
(i) Time for institution. A petition can be filed, or the
Director may institute under subsection (h), within the first
five years after the registration date.
(j) Limitation on later reexamination proceedings. The Act
includes a prohibition on two co-pending ex parte reexamination
proceedings for the same registration covering the same goods
and services. Additionally, if a reexamination proceeding is
instituted but the registrant demonstrates use of the mark on
or before the relevant date, no further reexamination
proceedings can be brought against the same registration for
the same goods or services.
(k) Supplemental register. Ex parte reexamination applies
to supplemental register registrations. It also makes clear
that the Act does not affect the timing of cancellation actions
under section 24 of the Lanham Act.
Subsection (d). Appeal. A registrant subject to an ex parte
expungement proceeding or reexamination may appeal the decision
to the Trademark Trial and Appeal Board and then to the Court
of Appeals for the Federal Circuit.
Subsections (e)-(g). Technical and conforming amendments;
Deadline for procedures; Effective date. These subsections
provide technical and conforming amendments and a one-year
post-enactment effective date.
Sec. 6. Rebuttable presumption of irreparable harm. Section
6 codifies the rule that a plaintiff seeking an injunction to
remedy a trademark violation is entitled to a rebuttable
presumption of irreparable harm.
Sec. 7. Report on decluttering initiatives. Section 7
provides for a GAO study and report on efforts to declutter the
trademark register, including the new procedures provided by
the Act as well as other efforts undertaken by the USPTO.
Sec. 8. Amendments to confirm authority of the Director. To
preempt a potential court challenge and confirm the historical
understanding and current practice of the Director's authority,
subsection 8(a) of H.R 6196 amends sections 18, 20, and 24 of
the Lanham Act\74\ to make explicit that the Director has the
authority to reconsider, modify, or set aside TTAB decisions.
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\74\15 U.S.C. Sec. Sec. 1068, 1070, 1092.
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Subsection 8(b) provides two rules of construction that
cement current practice. The first clarifies that these
amendments should not to be construed to suggest that the
Director previously lacked the authority to reconsider, modify,
or set aside TTAB decisions. The second clarifies that the
amendments should not be construed to suggest that the Director
is required to reconsider, modify, or set aside any particular
TTAB decision. Rather, this provision confirms the Director's
ability to reconsider a decision sua sponte. The USPTO is not
expected to promulgate rules that permit third parties to
request reconsideration under these provisions.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, and existing law in which no
change is proposed is shown in roman):
ACT OF JULY 5, 1946
AN ACT To provide for the registration and protection of trademarks
used in commerce, to carry out the provisions of certain international
conventions, and for other purposes.
TITLE I--THE PRINCIPAL REGISTER
Section 1. (a)(1) The owner of a trademark used in commerce
may request registration of its trademark on the principal
register hereby established by paying the prescribed fee and
filing in the Patent and Trademark Office an application and a
verified statement, in such form as may be prescribed by the
Director, and such number of specimens or facsimiles of the
mark as used as may be required by the Director.
(2) The application shall include specification of the
applicant's domicile and citizenship, the date of the
applicant's first use of the mark, the date of the applicant's
first use of the mark in commerce, the goods in connection with
which the mark is used, and a drawing of the mark.
(3) The statement shall be verified by the applicant and
specify that--
(A) the person making the verification believes that
he or she, or the juristic person in whose behalf he or
she makes the verification, to be the owner of the mark
sought to be registered;
(B) to the best of the verifier's knowledge and
belief, the facts recited in the application are
accurate;
(C) the mark is in use in commerce; and
(D) to the best of the verifier's knowledge and
belief, no other person has the right to use such mark
in commerce either in the identical form thereof or in
such near resemblance thereto as to be likely, when
used on or in connection with the goods of such other
person, to cause confusion, or to cause mistake, or to
deceive, except that, in the case of every application
claiming concurrent use, the applicant shall--
(i) state exceptions to the claim of
exclusive use; and
(ii) shall specify, to the extent of the
verifier's knowledge--
(I) any concurrent use by others;
(II) the goods on or in connection
with which and the areas in which each
concurrent use exists;
(III) the periods of each use; and
(IV) the goods and area for which the
applicant desires registration.
(4) The applicant shall comply with such rules or regulations
as may be prescribed by the Director. The Director shall
promulgate rules prescribing the requirements for the
application and for obtaining a filing date herein.
(b)(1) A person who has a bona fide intention, under
circumstances showing the good faith of such person, to use a
trademark in commerce may request registration of its trademark
on the principal register hereby established by paying the
prescribed fee and filing in the Patent and Trademark Office an
application and a verified statement, in such form as may be
prescribed by the Director.
(2) The application shall include specification of the
applicant's domicile and citizenship, the goods in connection
with which the applicant has a bona fide intention to use the
mark, and a drawing of the mark.
(3) The statement shall be verified by the applicant and
specify--
(A) that the person making the verification believes
that he or she, or the juristic person in whose behalf
he or she makes the verification, to be entitled to use
the mark in commerce;
(B) the applicant's bona fide intention to use the
mark in commerce;
(C) that, to the best of the verifier's knowledge and
belief, the facts recited in the application are
accurate; and
(D) that, to the best of the verifier's knowledge and
belief, no other person has the right to use such mark
in commerce either in the identical form thereof or in
such near resemblance thereto as to be likely, when
used on or in connection with the goods of such other
person, to cause confusion, or to cause mistake, or to
deceive.
Except for applications filed pursuant to section 44, no mark
shall be registered until the applicant has met the
requirements of subsections (c) and (d) of this section.
(4) The applicant shall comply with such rules or regulations
as may be prescribed by the Director. The Director shall
promulgate rules prescribing the requirements for the
application and for obtaining a filing date herein.
(c) At any time during examination of an application filed
under subsection (b), an applicant who has made use of the mark
in commerce may claim the benefits of such use for purposes of
this Act, by amending his or her application to bring it into
conformity with the requirements of subsection (a).
(d)(1) Within six months after the date on which the notice
of allowance with respect to a mark is issued under section
13(b)(2) to an applicant under subsection (b) of this section,
the applicant shall file in the Patent and Trademark Office,
together with such number of specimens or facsimiles of the
mark as used in commerce as may be required by the Director and
payment of the prescribed fee, a verified statement that the
mark is in use in commerce and specifying the date of the
applicant's first use of the mark in commerce and those goods
or services specified in the notice of allowance on or in
connection with which the mark is used in commerce. Subject to
examination and acceptance of the statement of use, the mark
shall be registered in the Patent and Trademark Office, a
certificate of registration shall be issued for those goods or
services recited in the statement of use for which the mark is
entitled to registration, and notice of registration shall be
published in the Official Gazette of the Patent and Trademark
Office. Such examination may include an examination of the
factors set forth in subsections (a) through (e) of section 2.
The notice of registration shall specify the goods or services
for which the mark is registered.
(2) The Director shall extend, for one additional 6-month
period, the time for filing the statement of use under
paragraph (1), upon written request of the applicant before the
expiration of the 6-month period provided in paragraph (1). In
addition to an extension under the preceding sentence, the
Director may, upon a showing of good cause by the applicant,
further extend the time for filing the statement of use under
paragraph (1) for periods aggregating not more than 24 months,
pursuant to written request of the applicant made before the
expiration of the last extension granted under this paragraph.
Any request for an extension under this paragraph shall be
accompanied by a verified statement that the applicant has a
continued bona fide intention to use the mark in commerce and
specifying those goods or services identified in the notice of
allowance on or in connection with which the applicant has a
continued bona fide intention to use the mark in commerce. Any
request for an extension under this paragraph shall be
accompanied by payment of the prescribed fee. The Director
shall issue regulations setting forth guidelines for
determining what constitutes good cause for purposes of this
paragraph.
(3) The Director shall notify any applicant who files a
statement of use of the acceptance or refusal thereof and, if
the statement of use is refused, the reasons for the refusal.
An applicant may amend the statement of use.
(4) The failure to timely file a verified statement of use
under paragraph (1) or an extension request under paragraph (2)
shall result in abandonment of the application, unless it can
be shown to the satisfaction of the Director that the delay in
responding was unintentional, in which case the time for filing
may be extended, but for a period not to exceed the period
specified in paragraphs (1) and (2) for filing a statement of
use.
(e) If the applicant is not domiciled in the United States
the applicant may designate, by a document filed in the United
States Patent and Trademark Office, the name and address of a
person resident in the United States on whom may be served
notices or process in proceedings affecting the mark. Such
notices or process may be served upon the person so designated
by leaving with that person or mailing to that person a copy
thereof at the address specified in the last designation so
filed. If the person so designated cannot be found at the
address given in the last designation, or if the registrant
does not designate by a document filed in the United States
Patent and Trademark Office the name and address of a person
resident in the United States on whom may be served notices or
process in proceedings affecting the mark, such notices or
process may be served on the Director.
(f) A third party may submit for consideration for inclusion
in the record of an application evidence relevant to a ground
for refusal of registration. The third-party submission shall
identify the ground for refusal and include a concise
description of each piece of evidence submitted in support of
each identified ground for refusal. Within two months after the
date on which the submission is filed, the Director shall
determine whether the evidence should be included in the record
of the application. The Director shall establish by regulation
appropriate procedures for the consideration of evidence
submitted by a third party under this subsection and may
prescribe a fee to accompany the submission. If the Director
determines that the third-party evidence should be included in
the record of the application, only the evidence and the ground
for refusal to which the evidence relates may be so included.
Any determination by the Director whether or not to include
evidence in the record of an application shall be final and
non-reviewable, and a determination to include or to not
include evidence in the record shall not prejudice any party's
right to raise any issue and rely on any evidence in any other
proceeding.
* * * * * * *
publication
Sec. 12. (a) Upon the filing of an application for
registration and payment of the prescribed fee, the Director
shall refer the application to the examiner in charge of the
registration of marks, who shall cause an examination to be
made and, if on such examination it shall appear that the
applicant is entitled to registration, or would be entitled to
registration upon the acceptance of the statement of use
required by section 1(d) of this Act, the Director shall cause
the mark to be published in the Official Gazette of the Patent
and Trademark Office: Provided, That in the case of an
applicant claiming concurrent use, or in the case of an
application to be placed in an interference as provided for in
section 16 of this Act, the mark, if otherwise registrable, may
be published subject to the determination of the rights of the
parties to such proceedings.
[(b) If the applicant is found not entitled to registration,
the examiner shall advise the applicant thereof and of the
reasons therefor. The applicant shall have a period of six
months in which to reply or amend his application, which shall
then be reexamined. This procedure may be repeated until (1)
the examiner finally refuses registration of the mark or (2)
the applicant fails for a period of six months to reply or
amend or appeal, whereupon the application shall be deemed to
have been abandoned, unless it can be shown to the satisfaction
of the Director that the delay in responding was unintentional,
whereupon such time may be extended.]
(b)(1) If the applicant is found not entitled to
registration, the examiner shall notify the applicant thereof
and of the reasons therefor. The applicant may reply or amend
the application, which shall then be reexamined. This procedure
may be repeated until the examiner finally refuses registration
of the mark or the application is abandoned as described in
paragraph (2).
(2) After notification under paragraph (1), the applicant
shall have a period of six months in which to reply or amend
the application, or such shorter time that is not less than
sixty days, as prescribed by the Director by regulation. If the
applicant fails to reply or amend or appeal within the relevant
time period, including any extension under paragraph (3), the
application shall be deemed to have been abandoned, unless it
can be shown to the satisfaction of the Director that the delay
in responding was unintentional, in which case the application
may be revived and such time may be extended. The Director may
prescribe a fee to accompany any request to revive.
(3) The Director shall provide, by regulation, for extensions
of time to respond to the examiner for any time period under
paragraph (2) that is less than six months. The Director must
allow the applicant to obtain extensions of time to reply or
amend aggregating six months from the date of notification
under paragraph (1) when the applicant so requests. However,
the Director may set by regulation the time for individual
periods of extension, and prescribe a fee, by regulation, for
any extension request. Any request for extension must be filed
on or before the date on which a reply or amendment is due
under paragraph (1).
(c) A registrant of a mark registered under the provisions of
the Act of March 3, 1881, or the Act of February 20, 1905, may,
at any time prior to the expiration of the registration
thereof, upon the payment of the prescribed fee file with the
Director an affidavit setting forth those goods stated in the
registration on which said mark is in use in commerce and that
the registrant claims the benefits of this Act for said mark.
The Director shall publish notice thereof with a reproduction
of said mark in the Official Gazette, and notify the registrant
of such publication and of the requirement for the affidavit of
use or nonuse as provided for in subsection (b) of section 8 of
this Act. Marks published under this subsection shall not be
subject to the provisions of section 13 of this Act.
* * * * * * *
Sec. 14. A petition to cancel a registration of a mark,
stating the grounds relied upon, may, upon payment of the
prescribed fee, be filed as follows by any person who believes
that he is or will be damaged, including as a result of a
likelihood of dilution by blurring or dilution by tarnishment
under section 43(c), by the registration of a mark on the
principal register established by this Act, or under the Act of
March 3, 1881, or the Act of February 20, 1905:
(1) Within five years from the date of the
registration of the mark under this Act.
(2) Within five years from the date of publication
under section 12(c) hereof of a mark registered under
the Act of March 3, 1881, or the Act of February 20,
1905.
(3) At any time if the registered mark becomes the
generic name for the goods or services, or a portion
thereof, for which it is registered, or is functional,
or has been abandoned, or its registration was obtained
fraudulently or contrary to the provisions of section 4
or of subsection (a), (b), or (c) of section 2 for a
registration under this Act, or contrary to similar
prohibitory provisions of such prior Acts for a
registration under such Acts, or if the registered mark
is being used by, or with the permission of, the
registrant so as to misrepresent the source of the
goods or services on or in connection with which the
mark is used. If the registered mark becomes the
generic name for less than all of the goods or services
for which it is registered, a petition to cancel the
registration for only those goods or services may be
filed. A registered mark shall not be deemed to be the
generic name of goods or services solely because such
mark is also used as a name of or to identify a unique
product or service. The primary significance of the
registered mark to the relevant public rather than
purchaser motivation shall be the test for determining
whether the registered mark has become the generic name
of goods or services on or in connection with which it
has been used.
(4) At any time if the mark is registered under the
Act of March 3, 1881, or the Act of February 20, 1905,
and has not been published under the provisions of
subsection (c) of section 12 of this Act.
(5) At any time in the case of a certification mark
on the ground that the registrant (A) does not control,
or is not able legitimately to exercise control over,
the use of such mark, or (B) engages in the production
or marketing of any goods or services to which the
certification mark is applied, or (C) permits the use
of the certification mark for purposes other than to
certify or (D) discriminately refuses to certify or to
continue to certify the goods or services of any person
who maintains the standards or conditions which such
mark certifies[:].
(6) At any time after the three-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 recited in the
registration:
Provided, That the Federal Trade Commission may apply to
cancel on the grounds specified in paragraphs (3) and (5) of
this section any mark registered on the principal register
established by this Act, and the prescribed fee shall not be
required. Nothing in paragraph (5) shall be deemed to prohibit
the registrant from using its certification mark in advertising
or promoting recognition of the certification program or of the
goods or services meeting the certification standards of the
registrant. Such uses of the certification mark shall not be
grounds for cancellation under paragraph (5), so long as the
registrant does not itself produce, manufacture, or sell any of
the certified goods or services to which its identical
certification mark is applied. Nothing in paragraph (6) shall
be construed to limit the timing applicable to any other ground
for cancellation. A registration under sections 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.
Sec. 15. Except on a ground for which application to cancel
may be filed at any time under [paragraphs (3) and (5)]
paragraphs (3), (5) and (6) of section 14 of this Act, and
except to the extent, if any, to which the use of a mark
registered on the principal register infringes a valid right
acquired under the law of any State or Territory by use of a
mark or trade name continuing from a date prior to the date of
registration under this Act of such registered mark, the right
of the owner to use such registered mark in commerce for the
goods or services on or in connection with which such
registered mark has been in continuous use for five consecutive
years subsequent to the date of such registration and is still
in use in commerce, shall be incontestable: Provided, That--
(1) there has been no final decision adverse to the
owner's claim of ownership of such mark for such goods
or services, or to the owner's right to register the
same or to keep the same on the register; and
(2) there is no proceeding involving said rights
pending in the United States Patent and Trademark
Office or in a court and not finally disposed of; and
(3) an affidavit is filed with the Director within
one year after the expiration of any such five-year
period setting forth those goods or services stated in
the registration on or in connection with which such
mark has been in continuous use for such five
consecutive years and is still in use in commerce, and
the other matters specified in paragraphs (1) and (2)
of this section; and
(4) no incontestable right shall be acquired in a
mark which is the generic name for the goods or
services or a portion thereof, for which it is
registered.
Subject to the conditions above specified in this section,
the incontestable right with reference to a mark registered
under this Act shall apply to a mark registered under the Act
of March 3, 1881, or the Act of February 20, 1905, upon the
filing of the required affidavit with the Director within one
year after the expiration of any period of five consecutive
years after the date of publication of a mark under the
provisions of subsection (c) of section 12 of this Act.
The Director shall notify any registrant who files the above-
prescribed affidavit of the filing thereof.
* * * * * * *
SEC. 16A. EX PARTE EXPUNGEMENT.
(a) Petition.--Notwithstanding sections 7(b) and 22, and
subsections (a) and (b) of section 33, any person may file a
petition to expunge a registration of a mark on the basis that
the mark has never been used in commerce on or in connection
with some or all of the goods or services recited in the
registration.
(b) Contents of Petition.--The petition, together with any
supporting documents, shall--
(1) identify the registration that is the subject of
the petition;
(2) identify each good or service recited in the
registration for which it is alleged that the mark has
never been used in commerce;
(3) include a verified statement that sets forth the
elements of the reasonable investigation the petitioner
conducted to determine that the mark has never been
used in commerce on or in connection with the goods and
services identified in the petition, and any additional
facts that support the allegation that the mark has
never been used in commerce on or in connection with
the identified goods and services;
(4) include any supporting evidence on which the
petitioner relies; and
(5) be accompanied by the fee prescribed by the
Director.
(c) Initial Determination; Institution.--
(1) Prima facie case determination, institution, and
notification.--The Director shall, for each good or
service identified under subsection (b)(2), determine
whether the petition sets forth a prima facie case of
the mark having never been used in commerce on or in
connection with each such good or service, institute an
ex parte expungement proceeding for each good or
service for which the Director determines that a prima
facie case has been set forth, and provide a notice to
the registrant and petitioner of the determination of
whether or not the proceeding was instituted. Such
notice should include a copy of the petition and any
supporting documents and evidence that were included
with the petition.
(2) Reasonable investigation guidance.--The Director
shall promulgate regulations regarding what constitutes
a reasonable investigation under subsection (b)(3) and
the general types of evidence that could support a
prima facie case that a mark has never been used in
commerce, but the Director shall retain the discretion
to determine whether a prima facie case is set out in a
particular proceeding.
(3) Determination by director.--Any determination by
the Director whether or not to institute a proceeding
under this section shall be final and non-reviewable,
and shall not prejudice any party's right to raise any
issue and rely on any evidence in any other proceeding,
except as provided by subsection (j).
(d) Ex Parte Expungement Procedures.--The procedures for ex
parte expungement shall be the same as those for examination
under section 12(b), except that the Director shall promulgate
regulations establishing and governing a proceeding under this
section, which may include regulations that set response and
extension times particular to this type of proceeding, which,
notwithstanding section 12(b)(3) need not be extendable to six
months, set limits governing the timing and number of petitions
filed for a particular registration or by a particular
petitioner or real parties in interest, and defining the
relation of a proceeding under this section to other
proceedings concerning the mark.
(e) Registrant's Evidence of Use.--A registrant's documentary
evidence of use must be consistent with when ``a mark shall be
deemed to be in use in commerce'' as defined in section 45, but
shall not be limited in form to that of specimens as provided
in section 1(a).
(f) Excusable Nonuse.--During an ex parte expungement
proceeding, for a mark registered under section 44(e) or an
extension of protection under section 66, the registrant may
offer evidence showing that any nonuse is due to special
circumstances that excuse such nonuse. In such a case, the
examiner shall determine whether the facts and evidence
demonstrate excusable nonuse and shall not find that the
registration should be cancelled under subsection (g) for any
good or service for which excusable nonuse is demonstrated.
(g) Examiner's Decision; Order to Cancel.--For each good or
service for which it is determined that a mark has never been
used in commerce, and for which the provisions of subsection
(f) do not apply, the examiner shall find that the registration
should be cancelled for each such good or service. A mark may
not be found to have never been used in commerce if there is
evidence of use in commerce by the registrant that temporally
would have supported registration at the time the application
was filed or the relevant allegation of use was made, or after
registration, but before the petition to expunge was filed
under subsection (a), or an ex parte expungement proceeding was
instituted by the Director under subsection (h). Unless
overturned on review of the examiner's decision, the Director
shall issue an order cancelling the registration, in whole or
in part, after the time for appeal has expired or any appeal
proceeding has terminated.
(h) Ex Parte Expungement by the Director.--
(1) In general.--The Director may, on the Director's
own initiative, institute an ex parte expungement
proceeding if the Director discovers information that
supports a prima facie case of a mark having never been
used in commerce on or in connection with any good or
service covered by a registration. The Director shall
promptly notify the registrant of such determination,
at which time the ex parte expungement proceeding shall
proceed according to the same procedures for ex parte
expungement established pursuant to subsection (d). If
the Director determines, based on the Director's own
initiative, to institute an expungement proceeding, the
Director shall transmit or make available the
information that formed the basis for that
determination as part of the institution notice sent to
the registrant.
(2) Rule of construction.--Nothing in this subsection
may be construed to limit any other authority of the
Director.
(i) Time for Institution.--
(1) When petition may be filed, ex parte expungement
proceeding instituted.--A petition for ex parte
expungement of a registration under subsection (a) may
be filed, or the Director may institute on the
Director's own initiative an ex parte expungement
proceeding of a registration under subsection (h), at
any time following the expiration of three years after
the date of registration and before the expiration of
ten years following the date of registration.
(2) Exception.--Notwithstanding paragraph (1), for a
period of three years after the date of enactment of
this Act, a petition for expungement of a registration
under subsection (a) may be filed, or the Director may
institute on the Director's own initiative an ex parte
expungement proceeding of a registration under
subsection (h), at any time following the expiration of
three years after the date of registration.
(j) Limitation on Later Ex Parte Expungement Proceedings.--
(1) No co-pending proceedings.--With respect to a
particular registration, while an ex parte expungement
proceeding is pending, no later ex parte expungement
proceeding can be instituted with respect to the same
goods or services that are the subject of a pending ex
parte expungement proceeding.
(2) Estoppel.--With respect to a particular
registration, for goods or services previously subject
to an instituted expungement proceeding for which, in
that proceeding, it was determined that the registrant
had used the mark for particular goods or services, as
relevant, and the registration was not cancelled as to
those goods or services, no further ex parte
expungement proceedings may be initiated as to those
goods or services, regardless of the identity of the
petitioner.
(k) Use in Commerce Requirement Not Altered.--Nothing in this
section shall affect the requirement for use in commerce of a
mark registered under section 1(a) or section 23.
SEC. 16B. EX PARTE REEXAMINATION.
(a) Petition for Reexamination.--Any person may file a
petition to reexamine a registration of a mark on the basis
that the mark was not in use in commerce on or in connection
with some or all of the goods or services recited in the
registration on or before the relevant date.
(b) Relevant Date.--In this section, the term ``relevant
date'' means, with respect to an application for the
registration of a mark with an initial filing basis of--
(1) section 1(a) and not amended at any point to be
filed pursuant to section 1(b), the date on which the
application was initially filed; or
(2) section 1(b) or amended at any point to be filed
pursuant to section 1(b), the date on which--
(A) an amendment to allege use under section
1(c) was filed; or
(B) the period for filing a statement of use
under section 1(d) expired, including all
approved extensions thereof.
(c) Requirements for the Petition.--The petition, together
with any supporting documents, shall--
(1) identify the registration that is the subject of
the petition;
(2) identify each good and service recited in the
registration for which it is alleged that the mark was
not in use in commerce on or in connection with on or
before the relevant date;
(3) include a verified statement that sets forth the
elements of the reasonable investigation the petitioner
conducted to determine that the mark was not in use in
commerce on or in connection with the goods and
services identified in the petition on or before the
relevant date, and any additional facts that support
the allegation that the mark was not in use in commerce
on or before the relevant date on or in connection with
the identified goods and services;
(4) include supporting evidence on which the
petitioner relies; and
(5) be accompanied by the fee prescribed by the
Director.
(d) Initial Determination; Institution.--
(1) Prima facie case determination, institution, and
notification.--The Director shall, for each good or
service identified under subsection (c)(2), determine
whether the petition sets forth a prima facie case of
the mark having not been in use in commerce on or in
connection with each such good or service, institute an
ex parte reexamination proceeding for each good or
service for which the Director determines that the
prima facie case has been set forth, and provide a
notice to the registrant and petitioner of the
determination of whether or not the proceeding was
instituted. Such notice should include a copy of the
petition and any supporting documents and evidence that
were included with the petition.
(2) Reasonable investigation guidance.--The Director
shall promulgate regulations regarding what constitutes
a reasonable investigation under subsection (c)(3) and
the general types of evidence that could support a
prima facie case that the mark was not in use in
commerce on or in connection with a good or service on
or before the relevant date, but the Director shall
retain discretion to determine whether a prima facie
case is set out in a particular proceeding.
(3) Determination by director.--Any determination by
the Director whether or not to institute a
reexamination proceeding under this section shall be
final and non-reviewable, and shall not prejudice any
party's right to raise any issue and rely on any
evidence in any other proceeding, except as provided by
subsection (j).
(e) Reexamination Procedures.--The procedures for
reexamination shall be the same as those established under
section 12(b) except that the Director shall promulgate
regulations establishing and governing a proceeding under this
section, which may include regulations that set response and
extension times particular to this type of proceeding, which,
notwithstanding section 12(b)(3) need not be extendable to six
months; set limits governing the timing and number of petitions
filed for a particular registration or by a particular
petitioner or real parties in interest; and define the relation
of a reexamination proceeding under this section to other
proceedings concerning the mark.
(f) Registrant's Evidence of Use.--A registrant's documentary
evidence of use must be consistent with when ``a mark shall be
deemed to be in use in commerce'' as defined in section 45, but
shall not be limited in form to that of specimens as provided
in section 1(a).
(g) Examiner's Decision; Order to Cancel.--For each good or
service for which it is determined that the registration should
not have issued because the mark was not in use in commerce on
or before the relevant date, the examiner shall find that the
registration should be cancelled for each such good or service.
Unless overturned on review of the examiner's decision, the
Director shall issue an order cancelling the registration, in
whole or in part, after the time for appeal has expired or any
appeal proceeding has terminated.
(h) Reexamination by Director.--
(1) In general.--The Director may, on the Director's
own initiative, institute an ex parte reexamination
proceeding if the Director discovers information that
supports a prima facie case of the mark having not been
used in commerce on or in connection with some or all
of the goods or services covered by the registration on
or before the relevant date. The Director shall
promptly notify the registrant of such determination,
at which time reexamination shall proceed according to
the same procedures established pursuant to subsection
(e). If the Director determines, based on the
Director's own initiative, to institute an ex parte
reexamination proceeding, the Director shall transmit
or make available the information that formed the basis
for that determination as part of the institution
notice.
(2) Rule of construction.--Nothing in this subsection
may be construed to limit any other authority of the
Director.
(i) Time for Institution.--A petition for ex parte
reexamination may be filed, or the Director may institute on
the Director's own initiative an ex parte reexamination
proceeding, at any time not later than five years after the
date of registration of a mark registered based on use in
commerce.
(j) Limitation on Later Ex Parte Reexamination Proceedings.--
(1) No co-pending proceedings.--With respect to a
particular registration, while an ex parte
reexamination proceeding is pending, no later ex parte
reexamination proceeding can be instituted with respect
to the same goods or services that are the subject of a
pending ex parte reexamination proceeding.
(2) Estoppel.--With respect to a particular
registration, for any goods or services previously
subject to an instituted ex parte reexamination
proceeding for which, in that proceeding, it was
determined that the registrant had used the mark for
particular goods or services before the relevant date,
and the registration was not cancelled as to those
goods or services, no further ex parte reexamination
proceedings may be initiated as to those goods or
services, regardless of the identity of the petitioner.
(k) Supplemental Register.--The provisions of subsection (b)
apply, as appropriate, to registrations under section 23.
Nothing in this section shall be construed to limit the timing
of a cancellation action under section 24 of the Act.
* * * * * * *
Sec. 18. In such proceedings the Director may refuse to
register the opposed mark, may cancel the registration, in
whole or in part, may modify the application or registration by
limiting the goods or services specified therein, may otherwise
restrict or rectify with respect to the register the
registration of a registered mark, may refuse to register any
or all of several interfering marks, or may register the mark
or marks for the person or persons entitled thereto, as the
rights of the parties hereunder may be established in the
proceedings. The authority of the Director under this section
includes the authority to reconsider, and modify or set aside,
a decision of the Trademark Trial and Appeal Board; Provided,
That in the case of the registration of any mark based on
concurrent use, the Director shall determine and fix the
conditions and limitations provided for in subsection (d) of
section 2 of this Act. However, no final judgment shall be
entered in favor of an applicant under section 1(b) before the
mark is registered, if such applicant cannot prevail without
establishing constructive use pursuant to section 7(c).
* * * * * * *
Sec. 20. 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. The Director
may reconsider, and modify or set aside, a decision of the
Trademark Trial and Appeal Board under this section.
Sec. 21. (a)(1) An applicant for registration of a mark,
party to an interference proceeding, party to an opposition
proceeding, party to an application to register as a lawful
concurrent user, party to a cancellation proceeding, a
registrant who has filed an affidavit as provided in section 8
or section 71, [or an applicant for renewal] an applicant for
renewal, or a registrant subject to an ex parte expungement
proceeding or an ex parte reexamination proceeding, who is
dissatisfied with the decision of the Director or Trademark
Trial and Appeal Board, may appeal to the United States Court
of Appeals for the Federal Circuit thereby waiving his right to
proceed under subsection (b) of this section: Provided, That
such appeal shall be dismissed if any adverse party to the
proceeding, other than the Director, shall, within twenty days
after the appellant has filed notice of appeal according to
paragraph (2) of this subsection, files notice with the
Director that he elects to have all further proceedings
conducted as provided in subsection (b) of this section.
Thereupon the appellant shall have thirty days thereafter
within which to file a civil action under subsection (b) of
this section, in default of which the decision appealed from
shall govern the further proceedings in the case.
(2) When an appeal is taken to the United States Court of
Appeals for the Federal Circuit, the appellant shall file in
the United States Patent and Trademark Office a written notice
of appeal directed to the Director, within such time after the
date of the decision from which the appeal is taken as the
Director prescribes, but in no case less than 60 days after
that date.
(3) The Director shall transmit to the United States Court of
Appeals for the Federal Circuit a certified list of the
documents comprising the record in the United States Patent and
Trademark Office. The court may request that the Director
forward the original or certified copies of such documents
during pendency of the appeal. In an ex parte case, the
Director shall submit to that court a brief explaining the
grounds for the decision of the United States Patent and
Trademark Office, addressing all the issues involved in the
appeal. The court shall, before hearing an appeal give notice
of the time and place of the hearing to the Director and the
parties in the appeal.
(4) The United States Court of Appeals for the Federal
Circuit shall review the decision from which the appeal is
taken on the record before the United States Patent and
Trademark Office. Upon its determination the court shall issue
its mandate and opinion to the Director, which shall be entered
of record in the United States Patent and Trademark Office and
shall govern the further proceedings in the case. However, no
final judgment shall be entered in favor of an applicant under
section 1(b) before the mark is registered, if such applicant
cannot prevail without establishing constructive use pursuant
to section 7(c).
(b)(1) Whenever a person authorized by subsection (a) of this
section to appeal to the United States Court of Appeals for the
Federal Circuit except for a registrant subject to an ex parte
expungement proceeding or an ex parte reexamination proceeding
is dissatisfied with the decision of the Director or Trademark
Trial and Appeal Board, said person may, unless appeal has been
taken to said United States Court of Appeals for the Federal
Circuit, have remedy by a civil action if commenced within such
time after such decision, not less than sixty days, as the
Director appoints or as provided in subsection (a) of this
section. The court may adjudge that an applicant is entitled to
a registration upon the application involved, that a
registration involved should be canceled, or such other matter
as the issues in the proceeding require, as the facts in the
case may appear. Such adjudication shall authorize the Director
to take any necessary action, upon compliance with the
requirements of law. However, no final judgment shall be
entered in favor of an applicant under section 1(b) before the
mark is registered, if such applicant cannot prevail without
establishing constructive use pursuant to section 7(c).
(2) The Director shall not be made a party to an inter partes
proceeding under this subsection, but he shall be notified of
the filing of the complaint by the clerk of the court in which
it is filed and shall have the right to intervene in the
action.
(3) In any case where there is no adverse party, a copy of
the complaint shall be served on the Director, and, unless the
court finds the expenses to be unreasonable, all the expenses
of the proceeding shall be paid by the party bringing the case,
whether the final decision is in favor of such party or not. In
suits brought hereunder, the record in the United States Patent
and Trademark Office shall be admitted on motion of any party,
upon such terms and conditions as to costs, expenses, and the
further cross-examination of the witnesses as the court
imposes, without prejudice to the right of any party to take
further testimony. The testimony and exhibits of the record in
the United States Patent and Trademark Office, when admitted,
shall have the same effect as if originally taken and produced
in the suit.
(4) Where there is an adverse party, such suit may be
instituted against the party in interest as shown by the
records of the United States Patent and Trademark Office at the
time of the decision complained of, but any party in interest
may become a party to the action. If there are adverse parties
residing in a plurality of districts not embraced within the
same State, or an adverse party residing in a foreign country,
the United States District Court for the Eastern District of
Virginia shall have jurisdiction and may issue summons against
the adverse parties directed to the marshal of any district in
which any adverse party resides. Summons against adverse
parties residing in foreign countries may be served by
publication or otherwise as the court directs.
* * * * * * *
TITLE II--THE SUPPLEMENTAL REGISTER
* * * * * * *
cancelation
Sec. 24. Marks for the supplemental register shall not be
published for or be subject to opposition, but shall be
published on registration in the Official Gazette of the Patent
and Trademark Office. Whenever any person believes that such
person is or will be damaged by the registration of a mark on
the supplemental register--
(1) for which the effective filing date is after the
date on which such person's mark became famous and
which would be likely to cause dilution by blurring or
dilution by tarnishment under section 43(c); or
(2) on grounds other than dilution by blurring or
dilution by tarnishment, such person may at any time,
upon payment of the prescribed fee and the filing of a
petition stating the ground therefor, apply to the
Director to cancel such registration.
The Director shall refer such application to the Trademark
Trial and Appeal Board, which shall give notice thereof to the
registrant. If it is found after a hearing before the Board
which that the registrant is not entitled to registration, or
that the mark has been abandoned, the registration shall be
canceled by the Director, unless the Director reconsiders the
decision of the Board, and modifies or sets aside, such
decision. However, no final judgment shall be entered in favor
of an applicant under section (1)(b) before the mark is
registered, if such applicant cannot prevail without
establishing constructive use pursuant to section 7(c).
* * * * * * *
general provisions
Sec. 26. The provisions of this Act shall govern so far as
applicable applications for registration and registrations on
the supplemental register as well as those on the principal
register, but applications for and registrations on the
supplemental register shall not be subject to or receive the
advantages of sections 1(b), 2(e), 2(f), 7(b), 7(c), 12(a), 13
to 18, inclusive, 22, 33, and 42 of this Act. Registrations on
the supplemental register are subject to ex parte expungement
and ex parte reexamination under sections 16A and 16B,
respectively.
* * * * * * *
TITLE VI--REMEDIES
* * * * * * *
Sec. 34. (a) The several courts vested with jurisdiction of
civil actions arising under this Act shall have power to grant
injunctions, according to the principles of equity and upon
such terms as the court may deem reasonable, to prevent the
violation of any right of the registrant of a mark registered
in the Patent and Trademark Office or to prevent a violation
under subsection (a), (c), or (d) of section 43. A plaintiff
seeking any such injunction shall be entitled to a rebuttable
presumption of irreparable harm upon a finding of a violation
identified in this subsection in the case of a motion for a
permanent injunction or upon a finding of likelihood of success
on the merits for a violation identified in this subsection in
the case of a motion for a preliminary injunction or temporary
restraining order. Any such injunction may include a provision
directing the defendant to file with the court and serve on the
plaintiff within thirty days after the service on the defendant
of such injunction, or such extended period as the court may
direct, a report in writing under oath setting forth in detail
the manner and form in which the defendant has complied with
the injunction. Any such injunction granted upon hearing, after
notice to the defendant, by any district court of the United
States, may be served on the parties against whom such
injunction is granted anywhere in the United States where they
may be found, and shall be operative and may be enforced by
proceedings to punish for contempt, or otherwise, by the court
by which such injunction was granted, or by any other United
States district court in whose jurisdiction the defendant may
be found.
(b) The said courts shall have jurisdiction to enforce said
injunction, as herein provided, as fully as if the injunction
had been granted by the district court in which it is sought to
be enforced. The clerk of the court or judge granting the
injunction shall, when required to do so by the court before
which application to enforce said injunction is made, transfer
without delay to said court a certified copy of all papers on
file in his office upon which said injunction was granted.
(c) It shall be the duty of the clerks of such courts within
one month after the filing of any action, suit, or proceeding
involving a mark registered under the provisions of this Act to
give notice thereof in writing to the Director setting forth in
order so far as known the names and addresses of the litigants
and the designating number or numbers of the registration or
registrations upon which the action, suit, or proceeding has
been brought, and in the event any other registration be
subsequently included in the action, suit, or proceeding by
amendment, answer, or other pleading, the clerk shall give like
notice thereof to the Director, and within one month after the
judgment is entered or an appeal is taken the clerk of the
court shall give notice thereof to the Director, and it shall
be the duty of the Director on receipt of such notice forthwith
to endorse the same upon the file wrapper of the said
registration or registrations and to incorporate the same as a
part of the contents of said file wrapper.
(d)(1)(A) In the case of a civil action arising under section
32(1)(a) of this Act (15 U.S.C. 1114) or section 220506 of
title 36, United States Code, with respect to a violation that
consists of using a counterfeit mark in connection with the
sale, offering for sale, or distribution of goods or services,
the court may, upon ex parte application, grant an order under
subsection (a) of this section pursuant to this subsection
providing for the seizure of goods and counterfeit marks
involved in such violation and the means of making such marks,
and records documenting the manufacture, sale, or receipt of
things involved in such violation.
(B) As used in this subsection the term ``counterfeit mark''
means--
(i) a counterfeit of a mark that is registered on the
principal register in the United States Patent and
Trademark Office for such goods or services sold,
offered for sale, or distributed and that is in use,
whether or not the person against whom relief is sought
knew such mark was so registered; or
(ii) a spurious designation that is identical with,
or substantially indistinguishable from, a designation
as to which the remedies of this Act are made available
by reason of section 220506 of title 36, United States
Code;
but such term does not include any mark or designation used on
or in connection with goods or services of which the
manufacture or producer was, at the time of the manufacture or
production in question authorized to use the mark or
designation for the type of goods or services so manufactured
or produced, by the holder of the right to use such mark or
designation.
(2) The court shall not receive an application under this
subsection unless the applicant has given such notice of the
application as is reasonable under the circumstances to the
United States attorney for the judicial district in which such
order is sought. Such attorney may participate in the
proceedings arising under such application if such proceedings
may affect evidence of an offense against the United States.
The court may deny such application if the court determines
that the public interest in a potential prosecution so
requires.
(3) The application for an order under this subsection
shall--
(A) be based on an affidavit or the verified
complaint establishing facts sufficient to support the
findings of fact and conclusions of law required for
such order; and
(B) contain the additional information required by
paragraph (5) of this subsection to be set forth in
such order.
(4) The court shall not grant such an application unless--
(A) the person obtaining an order under this
subsection provides the security determined adequate by
the court for the payment of such damages as any person
may be entitled to recover as a result of a wrongful
seizure or wrongful attempted seizure under this
subsection; and
(B) the court finds that it clearly appears from
specific facts that--
(i) an order other than an ex parte seizure
order is not adequate to achieve the purposes
of section 32 of this Act (15 U.S.C. 1114);
(ii) the applicant has not publicized the
requested seizure;
(iii) the applicant is likely to succeed in
showing that the person against whom seizure
would be ordered used a counterfeit mark in
connection with the sale, offering for sale, or
distribution of goods or services;
(iv) an immediate and irreparable injury will
occur if such seizure is not ordered;
(v) the matter to the seized will be located
at the place identified in the application;
(vi) the harm to the applicant of denying the
application outweighs the harm to the
legitimate interests of the person against whom
seizure would be ordered of granting the
application; and
(vii) the person against whom seizure would
be ordered, or persons acting in concert with
such person, would destroy, move, hide, or
otherwise make such matter inaccessible to the
court, if the applicant were to proceed on
notice to such person.
(5) An order under this subsection shall set forth--
(A) the findings of fact and conclusions of law
required for the order;
(B) a particular description of the matter to be
seized, and a description of each place at which such
matter is to be seized;
(C) the time period, which shall end not later than
seven days after the date on which such order is
issued, during which the seizure is to be made;
(D) the amount of security required to be provided
under this subsection; and
(E) a date for the hearing required under paragraph
(10) of this subsection.
(6) The court shall take appropriate action to protect the
person against whom an order under this subsection is directed
from publicity, by or at the behest of the plaintiff, about
such order and any seizure under such order.
(7) Any materials seized under this subsection shall
be taken into the custody of the court. For seizures
made under this section, the court shall enter an
appropriate protective order with respect to discovery
and use of any records or information that has been
seized. The protective order shall provide for
appropriate procedures to ensure that confidential,
private, proprietary, or privileged information
contained in such records is not improperly disclosed
or used.
(8) An order under this subsection, together with the
supporting documents, shall be sealed until the person against
whom the order is directed has an opportunity to contest such
order, except that any person against whom such order is issued
shall have access to such order and supporting documents after
the seizure has been carried out.
(9) The court shall order that service of a copy of the order
under this subsection shall be made by a Federal law
enforcement officer (such as a United States marshal or an
officer or agent of the United States Customs Service, Secret
Service, Federal Bureau of Investigation, or Post Office) or
may be made by a State or local law enforcement officer, who,
upon making service, shall carry out the seizure under the
order. The court shall issue orders, when appropriate, to
protect the defendant from undue damage from the disclosure of
trade secrets or other confidential information during the
course of the seizure, including, when appropriate, orders
restricting the access of the applicant (or any agent or
employee of the applicant) to such secrets or information.
(10)(A) The court shall hold a hearing, unless waived by all
the parties, on the date set by the court in the order of
seizure. That date shall be not sooner than ten days after the
order is issued and not later than fifteen days after the order
is issued, unless the applicant for the order shows good cause
for another date or unless the party against whom such order is
directed consents to another date for such hearing. At such
hearing the party obtaining the order shall have the burden to
prove that the facts supporting findings of fact and
conclusions of law necessary to support such order are still in
effect. If that party fails to meet that burden, the seizure
order shall be dissolved or modified appropriately.
(B) In connection with a hearing under this paragraph, the
court may make such orders modifying the time limits for
discovery under the Rules of Civil Procedure as may be
necessary to prevent the frustration of the purposes of such
hearing.
(11) A person who suffers damage by reason of a wrongful
seizure under this subsection has a cause of action against the
applicant for the order under which such seizure was made, and
shall be entitled to recover such relief as may be appropriate,
including damages for lost profits, cost of materials, loss of
good will, and punitive damages in instances where the seizure
was sought in bad faith, and, unless the court finds
extenuating circumstances, to recover a reasonable attorney's
fee. The court in its discretion may award prejudgment interest
on relief recovered under this paragraph, at an annual interest
rate established under section 6621(a)(2) of the Internal
Revenue Code of 1986, commencing on the date of service of the
claimant's pleadings setting forth the claim under this
paragraph and ending on the date such recovery is granted, or
for such shorter time as the court deems appropriate.
* * * * * * *