On December 27, 2020, the President signed into law the Consolidated Appropriations Act, 2021 (the “Act”). While much of the Act focuses on COVID-19 relief and other tax and appropriation provisions, included within the Act were important updates to the federal trademark and copyright laws.
The Trademark Modernization Act of 2020
First, the Trademark Modernization Act of 2020 (the “TMA,” Division Q, Title II, Subtitle B of the Act), introduces significant changes to the Lanham Act. The TMA includes various provisions that seek to modernize the trademark examination procedure and address fraudulent trademark applications. For example, it formalizes the process that third-parties can use to submit evidence to the USPTO challenging existing trademarks that are not being used in commerce. The goal of these changes is to strengthen the accuracy and integrity of the federal trademark register, and help businesses make better informed marketing and branding decisions regarding their trademarks. These changes become effective one year after the TMA was entered into law, on December 27, 2021.
Another equally important change is that the TMA clarifies the standard for obtaining injunctive relief when litigating under the Lanham Act. Section 6 of the TMA creates a uniform rule to be applied nationally regarding what a plaintiff must show in a Lanham Act case to establish it is entitled to injunctive relief. In the past, courts generally recognized a presumption that a plaintiff alleging trademark infringement under the Lanham Act would be irreparably harmed if the infringement was allowed to continue. However, approximately fifteen years ago, the Supreme Court eliminated a similar presumption of irreparable harm in the patent context. eBay Inc. v. MercExchange LLC, 547 U.S. 388 (2006). Since then, there has been inconsistency across lower federal courts regarding whether the presumption of irreparable harm still applies under the Lanham Act. The TMA codifies the existence of the presumption of irreparable harm and will restore consistency across federal courts when plaintiffs seek injunctive relief related to trademark infringement. By restoring the presumption of irreparable harm, this portion of the TMA will increase the likelihood that plaintiffs seeking injunctive relief related to trademark infringement will be successful. This standard is effective as of the date the TMA was signed into law, December 27, 2020.
The Copyright Alternative in Small-Claims Enforcement Act of 2019
Second, the Copyright Alternative in Small-Claims Enforcement Act of 2019 (the “CASE Act,” Division Q, Title II, Subtitle A of the Act) creates a new Copyright Claims Board within the United States Copyright Office to handle certain copyright claims. Prior to the CASE Act, federal district courts had exclusive jurisdiction over all copyright claims, which posed obstacles to creators who may have wished to enforce their copyrights, but did not want to undergo the expense and burden of federal litigation. The goal of the Copyright Claims Board is to act as something akin to a “small claims court,” or a voluntary, affordable alternative to bringing smaller copyright claims in federal court (damages are capped at $30,000). Reasons a party may wish to adjudicate before the Copyright Claims Board rather than in federal court include (a) low filing fees; (b) limited discovery; (c) no formal motion practice; (d) no adherence to the Federal Rules of Evidence; (e) all proceedings are remote; and (f) limited recovery of attorneys’ fees and costs. Parties that receive notice of claims brought against them in front of the Copyright Claims Board have the ability to opt out, so that the claim can be heard by a federal district court. While it is expected that the CASE Act will undoubtedly increase the number of copyright infringement claims that are brought, critics of the CASE Act worry that it will also increase copyright trolling and frivolous claims, given the much lower barrier to entry.
Over the coming months, the Copyright Office will take steps to make the Copyright Claims Board operational, which includes conducting rulemaking proceedings and implementing regulations.
Liz leads the firm’s litigation practice.
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