Intellectual Property Update


The Consolidated Appropriations Act, 2021, signed December 27, 2020, included several provisions changing copyright and trademark law. It will now be easier: to sue for copyright infringement involving smaller damages amounts; to register trademarks despite existing trademark registrations for marks that are not actually being used in the US; and to enforce trademarks by court ordered injunctions.

The Copyright Alternative in Small-Claims Enforcement (CASE) Act established the Copyright Claims Board, a small claims program for copyrights within the US Copyright Office. The Board can award damages up to $15,000 per work infringed and $30,000 per proceeding. A respondent has 60 days to “opt out”, otherwise a final decision by the Board will fully determine the claims asserted. Grounds for an appeal are very limited (basically fraud or misconduct — similar to a binding arbitration).

Small businesses and individuals owning copyrights are expected to find this option attractive due to the low cost compared to suit in federal court. Copyright owners will be more likely to sue for infringement for material not independently created or properly licensed. Critics are concerned the reduced cost of these proceedings could have unintended consequences — enabling litigation of minor matters by copyright trolls.

Litigants are permitted to represent themselves, but I strongly recommend obtaining the advice of an attorney. Without legal advice, small businesses and individuals accused of infringement could fail to consider their “opt out” rights or all available defenses and wind up facing a decision imposing liability with very limited appeal rights.

A separate provision in the Consolidated Appropriations Act makes it a felony to provide commercial streaming services that have no “commercially significant purpose” other than streaming copyrighted material without permission for financial gain. The Justice Department will handle enforcement.

Copyright owners should evaluate with counsel how these procedures can be used in an overall copyright enforcement strategy.

The Trademark Modernization Act established new procedures to address registered trademarks that are not in use. These procedures do not take effect until the end of 2021. The USPTO will promulgate regulations regarding these procedures before they become available. Two procedures require a reasonable investigation (to be further defined in the regulations) indicating nonuse of a mark already registered before initiating the proceeding.

First, an ex parte petition for expungement can be filed with the USPTO at least 3 years, but not more than 10 years, after the registration issued. The 3 year delay is to allow the registrant to begin using the mark during that 3 year period. This proceeding can lead to cancelation of a registration (entirely or in part) based on petitioner’s evidence of nonuse of the mark. The registrant can present evidence to establish use or excusable nonuse.

Second, an ex parte petition for reexamination can be filed with the USPTO within 5 years after the registration issued. This procedure is similar to expungement, but must assert nonuse of marks claiming use prior to registration.

A decision in either expungement or reexamination proceedings can be appealed to the Trademark Trials and Appeals Board and then to the Federal Circuit Court of Appeals.

A third procedure will allow a letter of protest to be submitted to the USPTO during the registration process based on evidence of nonuse.

These procedures are intended to make it easier and less expensive to remove “deadwood” (marks that are not in use) from the trademark registers and facilitate registration of marks in use

Trademark enforcement rights were also strengthened by a provision making it easier to obtain an injunction to stop infringement by creating a presumption of irreparable harm.

Again trademark owners should evaluate with counsel how these procedures can be used in an overall enforcement strategy.

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