January 18, 2021
On December 27, 2020, the “Consolidated Appropriations Act” was signed into law. Commonly referred to as the Coronavirus Relief Bill, most Americans will assume it is solely a stimulus package. However, it also included significant changes to intellectual property laws. The bill included the passage of the Trademark Modernization Act (“TM Act”) and the Copyright Alternative in Small-Claims Enforcement Act (“CASE Act”) — both of which will significantly impact intellectual property law in 2021 and beyond.
Trademark Modernization Act (2020)
The TM Act provides new tools for challenging trademark applications and registrations that are not in use, clears existing confusion about presumption of irreparable harm when seeking injunctions, and creates flexible deadlines for responding to an action from an Examining Attorney.
First, Trademark owners will now have several additional tools to challenge existing trademark applications and registrations. Specifically:
- First, the TM Act (under Section 16A) outlines new expungement procedures, through which a registration can be challenged on the basis it was never properly used in commerce. Any person may submit a petition identifying a registration and the specific goods or services for which the petitioner alleges that the trademark has never been used. The petitioner is required to supply certain evidence after reasonable investigation along with the petition. Upon a finding of a prima facie case by the trademark office, the US Patent and Trademark Office (“USPTO”) will initiate expungement proceedings and provide notice to the registrant. This expedited process provides an alternative to a cancellation action before the Trademark Trial and Appeal Board or district court action, which can be costly. The petition under this Section can only be filed three years after the registration of the trademark at issue.
- Second, the TM Act (under Section 16B) establishes similar reexamination proceedings. The difference under this Section is that registrations are challenged on the basis that the trademark was not used in commerce prior to the relevant registration date. As with Section 16A, any person can petition for reexamination under Section 16B, so long as they can provide evidence of a reasonable investigation that creates a prima facie case. Petitions under Section 16B must be filed within the first five years that a trademark is registered.
- Under both of the above Sections, the Director of the USPTO may initiate expungement or reexamination proceedings independent of a third-party filing.
The TM Act also changes the deadlines for responding to office actions issued by an Examining Attorney. Currently, applicants have six months to respond; following enactment, an Examining Attorney may flex this deadline between sixty days and six months. For shorter deadlines, extensions up to the six-month limit may be requested for a fee.
Finally, the TM Act strengthens remedies available to trademark owners that prevail in infringement suits by creating a statutory rebuttable presumption of irreparable harm. This will support the issuance of injunctive relief against infringers. These changes should resolve a split among the U.S. appellate courts as to whether irreparable harm should be presumed when trademark infringement has been proven. This is a significant change as this provision is likely to lead to an increase in the issuance of preliminary and permanent injunctions.
In addition to the significant changes under the TM Act, the Coronavirus Relief Bill also includes certain changes to copyright laws. The CASE Act creates a Copyright Claims Board to decide copyright disputes within the U.S. Copyright Office. The Board can award actual or statutory damages up to $30,000 for registered copyrights or $15,000 for non-registered copyrights. In cases with bad faith misconduct, $5,000 of attorneys’ fees may also be awarded. This will allow copyright owners, especially smaller creators, to have a more affordable means of enforcing their Copyright.
- The Board may hear copyright infringement claims, actions for declarations of noninfringement, claims that a party knowingly sent false takedown notices, and related counterclaims.
- Parties that agree to having their dispute heard by the Board forgo the right to a jury trial and to be heard by a court. Additionally, the Board’s final determination precludes relitigating claims in a court or to the Board. There are limited circumstances in which a party may challenge a final decision by the Board.
Lastly, the relief bill also resulted in the Protecting Lawful Streaming Act (“PLSA”) being signed into law. The PLSA increases criminal penalties for copyright infringement in commercial, for-profit online streaming from a misdemeanor to a felony punishable by up to 10 years in prison. The law is not intended to apply to individual internet users.
The Coronavirus Relief Bill also updated Section K of the Biologics Price Competition and Innovation Act (“BPCI”). The BPCI creates a shorter path to FDA approval for biological products that are biosimilar or interchangeable with an FDA approved product (the “Reference Product”). When compared to a Reference Product, a biosimilar product is one with only minor differences in clinically inactive components, and no clinically meaningful differences in safety, purity, and potency. An interchangeable product is a biosimilar product that can be expected to produce the same clinical result in patients. Under the Coronavirus Relief Bill, the FDA will now be required to maintain a searchable, public database of all licensed biological products. Further, the current holder of a Biologics License for a Reference Product will also be required to disclose all patents which they believe cover a drug to the FDA if a third party applies for approval of a biosimilar or interchangeable product. The FDA will also list these disclosed patents in the public database. Such changes to the BPCI will help improve public access to valuable information about FDA approved products and prevent delay of biosimilar or interchangeable products from reaching the market.
If you have questions about these changes, do not hesitate to contact Clint Cadwallader or Luke Holst.
Contact information for the complete McGrath North’s COVID-19 Response Team can be found here.
For information regarding additional business-related concerns centered around COVID-19, please visit our COVID-19 Resource Guide here.