The 5,593-page coronavirus relief and government spending bill passed by Congress without much discussion in the final days of 2020 contains several pieces of intellectual property legislation worth noting.
The Trademark Modernization Act of 2020
The Trademark Modernization Act of 2020 “amends 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.”
The legislation makes several substantive changes to how third parties may oppose and cancel trademark registrations at the U. S. Patent and Trademark Office (PTO). First, the bill allows third parties to submit evidence to the PTO to oppose an application for a federal trademark registration. Historically, a third party would have to wait on the sidelines until a trademark application was approved by the Trademark Examiner and published for opposition before presenting evidence that the mark should not be registered. This administrative process generally delays the denial of a registration by several months – often months that can be critical to a legitimate trademark user.
One high-profile example of how this Act might come into play is the current situation of the Washington Football Team (formerly the Washington Redskins), as they look to select a new name for the franchise. The rebranding process is unavoidably complex because of the many uses of the team name – from large stadium signage to small key rings, a range of apparel and even its fight song. Add to that disparate stakeholders, including their decades-long fan base wedded to the burgundy and gold. Contrast that with the need to attract a new generation of fans and the social activists closely monitoring how the team distances itself from its history of using the widely perceived racially offensive name. The legal process has also been complicated by dozens of third-party applications for potential marks betting on options for the team’s rebranding in the years and weeks leading up to the name change announcement in July 2020. Many of these applications still have not been assigned to a Trademark Examiner. This legislation could open another pathway for the Washington Football Team to argue that these applications were not filed in good faith or with the intent to actually use the marks for the services listed in the applications, but rather solely to hold the names ransom in the hopes of the franchise paying them for their use.
The legislation attempts in a number of ways to stymie the efforts of these and other “trademark trolls” trying to profit from trademarks they never plan to use. First, it allows any third party to petition the PTO to expunge a trademark registration that has not been used in commerce, as well as to reexamine any such trademark registration for nonuse. The PTO may also initiate such action on its own accord. This would increase the likelihood of “deadwood” registrations being removed outside of the existing requirements for Section 8 Declarations of Use due every ten years, as well as decrease the incentives for these bad faith applications.
Moreover, under the Act, a plaintiff in a trademark case, upon a finding of likelihood to succeed on the merits, is entitled to a presumption of irreparable harm for purposes of determining whether the plaintiff is entitled to a permanent injunction. Under current law, a plaintiff must establish irreparable harm to secure an injunction, an often challenging and expensive burden.
Two administrative provisions are also worth mentioning. The PTO Director will have the authority to reconsider, modify or set aside certain decisions made by the Trademark Trial and Appeal Board (TTAB). And a final provision requires that the Government Accountability Office (GAO) report to Congress on the PTO’s efforts to address false and inaccurate claims in trademark registrations and applications.
The Protecting Lawful Streaming Act: Felony DMCA Violations
The omnibus spending bill includes a provision to make unauthorized commercial streaming of copyrighted material a felony offense, rather than a misdemeanor as currently classified under the Digital Millennium Copyright Act (DMCA). The prospects of up to 10 years of prison time for a copyright offense certainly raised eyebrows, but the final legislation is more limited. The Act does not apply to individual infringers, such as gamers or DJs on Twitch, or YouTube and its users. Rather, it only targets commercial, for-profit streaming services whose business model is to profit from the use of pirated content. In fact, the definition of a copyright infringement is unchanged by the legislation. Moreover, such criminal cases would have to be brought by the U.S. Department of Justice, thus making such cases very rare. Therefore, it remains to be seen how much impact this Act will actually have on copyright infringements.
The Copyright Alternative in Small-Claims Enforcement Act of 2020 (CASE Act)
The third intellectual property provision establishes a quasi-judicial small claims court within the Copyright Office to hear disputes over infringement cases valued under $30,000. This legislation pits copyright holders ranging from the major industry associations to individual content creators, including photographers, authors and musicians, against the concerns of encouraging frivolous lawsuits, often initiated by copyright trolls.
Given the relevance of this legislation to many of Lutzker & Lutzker’s clients in the creative arts, we will be exploring the opportunities presented via this more inexpensive avenue to protect copyright interests in a follow-up blog in the coming days.
In the coming months, we will explore how these Acts are enforced and how related legislation on the horizon fares in the new Congress. In the interim, please contact Lutzker & Lutzker if we can be of help in understanding how these developments may affect your own intellectual property activities.