Expungement Under The Trademark Modernization Act
The rise in spurious and “dead wood” trademark registrations, with many originating from international applicants, led Congress to pass The Trademark Modernization Act of 2020 (TMA) which went into effect on December 18, 2021.¹ The TMA has opened a new avenue for individuals and the USPTO itself to cancel trademarks via ex parte expungement proceedings. Ex parte expungement proceedings allow petitioners and the USPTO Director to remove trademarks which have never been used in commerce. Expungement proceedings provide a unique alternative to inter partes cancellation proceedings through the Trademark Trial and Appeals Board (TTAB), which can be costly. By creating an efficient method for invalidating unused registrations, the TMA has removed roadblocks to new brand registration, provided new methods for combating fraudulent registrations, and introduced new considerations for domestic and international rightsholders looking to maintain their potentially-vulnerable registrations.
Use in commerce or the “bonda fide intent to use” is a fundamental requirement of registering a trademark with the USPTO as set forth by the Lanham Act.² However, a combination of market and non-market factors, such as China’s subsidies on foreign trademark applications, have led to an explosion of trademark applications which are submitted fraudulently, in bad-faith, or with no intent to use the mark in commerce.³ As a method of lowering total pendency of applications and clearing the way for legitimate rightsholders, Congress, in concert with the USPTO and brand owners, introduced the TMA which was bundled into the Consolidated Appropriations Act of 2021.4 Within the TMA, the introduction of the Petition for Expungement has been one of the most significant new tools for challenging registrations that are not used commercially inside the U.S.
Understanding Ex Parte Proceeding in Trademarks
Any party, including the USPTO Director, can file a petition for an ex parte proceeding to cancel a mark on the basis of expungement. “…if the mark is registered under sections 1, 44, or 66 of the Act and has never been used in commerce on or in connection with some or all of the goods and/or services recited in the registration.”5 This petition for expungement can be filed between 3 and 10 years after the mark’s registration and applies to both domestic registrations and registration filed by foreign entities under the Madrid protocol or Paris Convention.6 To file initial proceedings, the petitioner must pay a filing fee, identify each good and/or service listed in the registration targeted for the non-use, provide a statement detailing a “reasonable investigation” of nonuse of the mark in U.S. commerce, and provide prima facie evidence of non-use that supports the statement.7 A “reasonable investigation” can include but is not limited to: websites or any media owned by the registrant, records of litigation relating to the mark in question, and State or Federal trademark records,8 For any element missing from the petition, the USPTO will notify the petitioner to correct the omission within 30 days.
Post-Determination Actions from the USPTO
Upon making a determination of non-use based on the petition, the USPTO will provide notice to both the petitioner and the registrant through an Office action. The registrant has three months to either file a Section 7 request to delete goods/services at issue from the registration or submit a verified statement of fact, and documentary evidence or specimens of use to “show that the use occurred before the filing date of the petition to expunge under 37 C.F.R. §2.91(a).”9 If the registrant fails to respond or to establish use of the mark, the USPTO will issue a final decision that “the registration should be cancelled for each good or service challenged in the petition…”10 If use of the registered mark is established by the registrant, further ex parte expungement proceedings are barred from being directed at the goods or services at issue.11
The TMA’s passage and the recent introduction of ex parte expungement proceedings have caused established domestic and international brand owners, as well as emerging brands, to consider new practical and strategic challenges. For emerging brand owners blocked by “dead wood” registrations, ex parte proceedings can provide a more streamlined and cost-effective alternative to trademark cancellation proceedings. For well-established brand owners, ensure that your registration reflects accurately the current covered goods and services that are being sold in commerce, and that use of those goods is supported with thorough documentation. Finally, considering the new Director-led expungement proceedings, foreign trademark owners and applicants should be particularly careful in reviewing their registrations and responding to office actions in a timely manner.
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- The Trademark Modernization Act of 2020 as incorporated in Consolidated Appropriations Act, 2021 (Public Law 116-260, Subtitle B, Section 221).
- 15 U.S. Code § 1051(a)(1); § 1051 (b)(2).
- https://www.uspto.gov/sites/default/files/documents/USPTO-TrademarkPatentsInChina.pdf
- Consolidated Appropriations Act of 2021, Pub. L. No. 116-260 (2020)
- 37 C.F.R. §2.91(a)(1).
- 37 C.F.R. §2.91(b)(1)
- TMEP § 1716.02(b)
- TMEP § 1716.02(c)(ii)
- TMEP § 1716.04(c)
- TMEP § 1716.04(e)
- TMEP § 1716.04(g)