A Nutshell of USPTO’s Proposed New Rules to Implement the Trademark Modernization Act

On May 18, 2021, the United States Patent and Trademark Office (“USPTO”) issued a Notice^[1]of Proposed Rulemaking to implement the Trademark Modernization Act of 2020 (TMA).  The public is invited to provide comments on the proposed new rules by July 19, 2021 through www.regulations.gov. 

The Notice proposes that the USPTO implement the following new procedures:

• Two (2) new ex parte proceedings to cancel trademark registrations for non-use, their timing, standing, content, and fee requirements.
• A new ground for cancellation of a trademark registration before the Trademark Trial and Appeal Board (“TTAB”).
• Expanded Letter of Protest practice.
• Shorter response times for office actions.

The Notice proposes to formalize ground rules on the following issues:

• Attorney recognition until revocation or withdrawal.
• Court orders concerning trademark registrations.

New Ex Parte Proceedings

The USPTO proposes to add 2 types of ex parte proceedings, namely expungement and reexamination proceedings to allow a third party, or the Director, to cancel, either in whole or in part, registered marks for which the required use in commerce was not made.  Accordingly, the USPTO proposes to revise the rules in 37 CFR parts 2 and 7 to implement the TMA’s provisions and set fees for the new ex parte expungement and reexamination proceedings.  The proposed rule will also clarify that the new expungement and reexamination proceedings are subject to suspension or consolidation in appropriate cases and to ensure that the rules reflect existing practice regarding suspension of proceedings before the USPTO and the TTAB.

In an expungement proceeding, the USPTO must determine whether the evidence of record supports a finding that the registered mark has never been used in commerce on or in connection with some or all of the goods and/or services recited in the registration.

In a reexamination proceeding, the USPTO must determine whether the evidence of record supports a finding that the mark registered under section 1 of the Act was not in use in commerce on or in connection with some or all of the goods and/or services as of the filing date of the application or amendment to allege use, or before the deadline for filing a statement of use, as applicable.  

While the authority for the expungement and reexamination proceedings is set forth in separate subsections of the TMA, the USPTO confirms that procedures for instituting these proceedings, the nature of the evidence required, and the process for evaluating evidence and corresponding with the registrant will be essentially the same.  Thus, if the required use is not found for the goods or services at issue in these proceedings, and that the USPTO determination is not overturned on review, the registration will be cancelled in whole or in part.  The USPTO has further expressed its intention in the Notice to consolidate these proceedings if they affect the same registration, whenever appropriate.

We summarize below the proposed requirements for petitioning for these proceedings, including the timing, standing, content, and fee requirements for their institution:

• Timing for Request for Expungement and/or Reexamination:
  • Between 3 and 10 years following the date of registration, with exceptions:
    • Institution of an expungement proceeding will be allowed for a registration that is at least 3 years old, regardless of the 10-year limit, if instituted before December 27, 2023.
    • Institution of a reexamination proceeding during the first 5 years following the date of registration, if instituted before December 27, 2023.

• Standing for Requesting Expungement and/or Reexamination:
  • The TMA and the USPTO does not anticipate requiring real-party-in-interest information from the petitioner.
  • The USPTO is seeking comments on whether and when the Director should require a petitioner to identify the name of the real party in interest on whose behalf the request is filed.

• Content in Petitions for Expungement and/or Reexamination:
  • A petitioner is required to file a complete Notice of Petition through the USPTO’s Trademark Electronic Application System (TEAS).
  • If the petitioner is not domiciled in the U.S., they are required to file the petition through a U.S. attorney.
  • The petitioner is required to specify the to-be-affected registration number, their basis for the request, and elements of reasonable investigation conducted in the Notice of Petition.
  • The petitioner is required to provide clear and legible copy of all documentary evidence supporting a prima facie case of nonuse of the mark in commerce and an itemized index of such evidence.
  • The petitioner is required to pay $600, per class, for a petition for expungement or reexamination.

If the petitioner fails to include any of these contents in the Petition, the USPTO will allow a 30-day period for the petitioner to perfect the Notice of Petition.

New Non-Use Ground for Cancellation

The TMA allows a party to allege that a mark has never been used in commerce as a basis for cancellation before the TTAB.  This ground will be available at any time after the first 3 years from the registration date.

Expanded Letter of Protest

The TMA provides express statutory authority for the USPTO’s existing letter-of-protest procedure, which allows third parties to submit to the USPTO for consideration and entry into the record evidence bearing on the registrability of a mark.

However, the Director of the USPTO will have discretion to decide whether to include letter-of-protest evidence in the record of an application, and that decision shall be final, nonreviewable, but not prejudice any party’s right to raise any issue and rely on any evidence in any other proceedings. 

The USPTO is not planning to change the current $50 per Letter-of-Protest fee requirement.

3-Month Office Action Response Periods

The TMA also authorizes the USPTO to promulgate regulations to set flexible Office action response periods between 60 days and 6 months, with an option for applicants to extend the deadline up to a maximum of 6 months from the Office action issue date.

Accordingly, the USPTO proposes to set a response period of 3 months for responses to Office actions in applications.  Applicants may request a single 3-month extension of this 3-month deadline, subject to payment of $125 for an extension request filed through TEAS and $225 for a permitted paper-filed request.  

However, the USPTO is seeking comments on two alternatives to the procedures described above. One alternative under consideration is a 2-phase examination system, with each phase having separate shortened, but extendable, response periods. The other alternative under consideration is to set the initial period for responding to an Office action at two months but to allow applicants to file a response in the third, fourth, fifth, or sixth month after issuance of the Office action by submitting an extension request and fee payment along with the response.

Attorney Recognition

The USPTO further proposes to amend the rules regarding attorney recognition and correspondence to allow recognition of an attorney as the applicant’s or registrant’s representative to continue until it is revoked or the attorney withdraws. Thus, attorney recognition will continue when a change of ownership occurs, an application abandons, post-registration documents are filed and accepted, or a registration expires or is cancelled.  This change is intended to facilitate implementation of a role-based access control system for improving USPTO database security and integrity. This change is also designed to track and combat misleading solicitations sent to trademark applicants and registrants.

Accordingly, to end attorney recognition by the USPTO under the proposed rule, owners and attorneys will be required to proactively file an appropriate revocation or withdrawal document. 

Court Order

Finally, the USPTO proposes to add a new rule formalizing the USPTO’s longstanding procedures concerning action on court orders cancelling or affecting a trademark registration.  These practices are currently provided under § 1610 of the Trademark Manual of Examining Procedure, where the USPTO requires submission of a certified copy of the court order and normally does not act on such orders until the case is finally determined.

^[1]https://public-inspection.federalregister.gov/2021-10116.pdf