On December 27, 2020, the U.S. President Donald Trump signed into law the coronavirus spending and relief package bill entitled the “Consolidated Appropriations Act of 2021”.
Notably, the coronavirus relief legislation also includes a few significant amendments to the U.S. trademark and copyright laws which we summarize as follows:
- The Trademark Modernization Act of 2020:
- This Act formalizes the process for third parties to challenge fraudulent filings at the trademark examination stage and establishes new expedited procedures to remove the already registered marks that are not actually used in the U.S.
- Further, in the context of trademark litigation, the Act clarifies that a statutory presumption of “irreparable harm” will apply upon a court finding of trademark infringement (or upon a court finding of likelihood of success on the merits when the trademark owner is seeking a preliminary injunction). Brand owners will now have better chances of obtaining injunctions in federal courts to remedy trademark violations.
- The Copyright Alternative in Small-Claims Enforcement Act of 2019 (the CASE Act): As an alternative to litigate their cases in federal courts, copyright owners will have the option to resolve their disputes at the “Copyright Claim Board”, an alternative forum within the U.S. Copyright Office to adjudicate small-claim copyright disputes.
- Protecting Lawful Streaming Act of 2020: This amendment concerns the criminal enforcement of copyright. Unauthorized streaming of copyrighted material for profit, formerly a misdemeanor, could now subject one to felony criminal liability, punishable by up to 10 years in prison.
Below we discuss the trademark and copyright legislations in more details.
A. THE TRADEMARK MODERNIZATION ACT
This Act provides new mechanisms for opposing and canceling trademark registrations at the U.S. Patent and Trademark Office (USPTO) and makes it procedurally easier for brand owners to secure an injunction in trademark infringement cases.
Trademark Opposition and Cancellation Procedures
- For pending applications: a third party may formally submit proof that constitutes any ground for refusal of registration to the USPTO to oppose an application for a federal trademark registration.
- For marks that have already been registered: the Act provides two ex parte procedures which allow mark owners to challenge (specifically, to expunge or reexamine) the marks on non-use grounds. This is said to be a less time-consuming and less costly alternative to the cancellation proceeding before the Trademark Trial and Appeal Board.
Trademark Litigation and the Presumption of “Irreparable Harm”
Before the enactment of the Act, U.S. courts have disagreed with respect to whether “irreparable harm” should be a prerequisite for entry of injunctive relief. As such, brand owner’s chances of success in obtaining injunctive relief in trademark infringement cases tend to vary depending on which court they are in.
The Act now clarifies the standard for injunctive relief in trademark infringement cases. A plaintiff will be entitled to a rebuttable presumption of irreparable harm in seeking injunctive relief. Specifically, the presumption applies
- upon a court finding of trademark infringement (if the plaintiff is seeking a permanent injunction); or
- upon a court finding that the plaintiff is likely to succeed on the merits of the case (if the plaintiff is seeking a permanent injunction).
B. THE CASE ACT
This Act provides a more efficient and affordable option to small copyright owners to resolve copyright disputes.
Specifically, the Act creates an alternative forum to federal courts within the U.S. Copyright Office to adjudicate copyright disputes, the “Copyright Claims Board”, where copyright owners may seek monetary damages for up to $15,000 for each work infringed or $30,000 for the entire case.
Participation in the board proceedings will be voluntary. A defendant of copyright infringement has certain time to opt out.
If parties decide to have their dispute adjudicated by the board, they may do so remotely with written submissions.
C. THE PROTECTING LAWFUL STREAMING ACT
This Act authorizes the Department of Justice to bring felony charges against commercial, for-profit streaming services that willfully offer to the public streaming services concerning copyrighted material without the permission of the copyright owners.
Copyright infringement under this Act may subject one to a criminal penalty of up to 10 years in prison as well as fines.
Importantly, this Act is not intended to target individuals who might use pirate streaming services.
Among the IP legislations described above, we expect the Trademark Modernization Act, which reforms the trademark registration process as well as the remedies for trademark infringement, to have the most significant impact.
While some brand owners may benefit from the newly created procedures to challenge problematic trademark applications and registrations, others may not. Foreign registrants, for example, may have greater risks having their registered trademarks expunged, if their marks are not actually used in the U.S. in connection with the goods and services identified in their registrations. Moreover, applications that are based on false information may also have a harder time being successfully registered with the USPTO.