February 1, 2021

In the waning days of 2020, the United States Congress enacted and President Trump signed into law the Trademark Modernization Act of 2020 (“TMA”).  The legislation establishes a new category of administrative proceeding within the U.S. Patent and Trademark Office (“USPTO”) and may significantly impact the way non-U.S. firearms companies and other clients approach their United States trademark portfolios.


Historically, United States trademark law has differed from that of other countries on the question of how trademark rights are acquired.  In many countries, trademark rights stem from the act of registering a mark with the country’s national trademark office. Under U.S. law, however, trademark rights ultimately derive from use of a given trademark in the course of trade.  Without use, there are no “rights” to speak of and there can be no registration.
As a result of the United States’ treaty obligations, a somewhat different set of rules govern the way in which entities from outside the United States can acquire trademark rights in this country. 

Thus, Sections 66(a) and 44(e) of the Lanham Trademark Act authorize entities from outside the United States to register trademarks with the USPTO without having to demonstrate actual use of the mark within the U.S.  Generally, to register a given trademark for a particular set of goods or services, an applicant from outside the United States need only (1) file a declaration with the USPTO affirming that applicant has a “bona fide intention to use” the mark in the United States and (2) submit evidence to the USPTO that applicant already owns a registration of the same mark for the same goods/services issued either by its home country’s trademark office (national registration) or the World Intellectual Property Organization (International Registration). 
Registrations issued under Section 66(a) or 44(e) are subject to the same maintenance requirements that apply to registrations that are issued under the Lanham Act’s other provisions.  In the 12-month period between a registration’s fifth- and sixth-year anniversary dates, the registration’s owner must file proof with the USPTO that it has started to use the registered mark in the United States. If the owner does not file such proof by the end of registration’s sixth-year anniversary (plus a sixth month statutory “grace period”), the registration lapses.
Despite this limitation, businesses from outside the United States often rely on Section 66(a) or 44(e) to obtain U.S. trademark registrations.  Under these provisions, companies from outside the United States are able to claim the benefits of owning a U.S. trademark registration for at least six and a half years without having to launch a new product line or otherwise use the registered mark in the United States. 

The Newly Established USPTO “Expungement” Proceeding

The TMA, which became effective on December 27, 2020, represents the most significant change to United States trademark law in the past 20 years. We focus here on the newly created “Expungement” proceeding before the USPTO and the impact it will have on owners of U.S. trademark registrations issued under Section 66(a) or 44(e). 
The TMA’s expungement provisions were put into place in response to concerns that the U.S. trademark register contains too much “deadwood” – that is, trademarks that are registered, but whose owners have never used them in the United States.  Any person may now petition the USPTO to “expunge” (in practical effect, to cancel) an existing trademark registration on the ground that the registration’s owner has never used the mark in the United States.  When a petition is filed the USPTO will forward it to the registrant, who then will have an opportunity to respond before the USPTO decides whether to delete the registered mark from the trademark register. 

With respect to registrations issued under Section 66(a) or 44(e) of the Lanham Act, the TMA specifically authorizes third parties – or the USPTO itself, on its own initiative – to seek expungement “following the expiration of three years after the date or registration.”  In practical terms, a  registration under Section 66(a) or 44(e) is safe from attack for the first three years of its life, even if its owner makes no use of the mark in the United States.  However, the registration becomes vulnerable to expungement/cancellation at the end of three years. This represents a significant departure from existing law, under which  registrations based on Section 66(a) or 44(e) remain in force for at least five full years regardless of whether the underlying marks are used in the United States or not.  

The TMA provides a defense of “excusable nonuse” to the owners of Section 66(a) or 44(e) registrations that would otherwise be expunged.  The statute itself is quite vague.  It states only that “the registrant may offer evidence showing that any nonuse is due to special circumstances that excuse such nonuse.”  The USPTO will need to issue implementing regulations that flesh out the meaning of the statutory language “special circumstances.”

We will watch for the USPTO’s implementing regulations and will report again when they are finalized.  We also are interested to see if one or more groups decide to mount a legal challenge the TMA’s expungement provisions on the ground that, as applied to non-U.S. companies that own registrations under Section 66(a) or 44(e), the expungement provisions are inconsistent with the United States’ treaty obligations.  For now, however, the take-away for clients and others is that the guaranteed “shelf life” of U.S. registrations issued under Section 66(a) or 44(e) is only three years.  

The IP-Trademark Team at Renzulli Law Firm carefully follows developments in intellectual property law.  If you have questions about how this or other legal developments may affect you, your products, or your brand, please contact John F. Renzulli.