COVID-19 Copyright and Trademark Relief
On December 27, 2020, the COVID-19 relief and government funding bill, which incorporated the Copyright Alternative in Small-Claims Enforcement Act of 2020 (“CASE Act”) and the Trademark Modernization Act of 2020 (“TMA”), was signed by President Trump. The CASE Act establishes a “small claims” court within the Copyright Office to adjudicate copyright infringement disputes valued under $30,000. The TMA makes it easier for trademark owners to obtain injunctions against infringers and creates new procedures for trademark owners to challenge fraudulent applications and registrations and for third parties to file evidence related to a trademark application.
COPYRIGHTS
The Case Act’s most notable change was to establish the Copyright Claims Board (“Board”) as an alternative forum where parties may voluntarily adjudicate infringement disputes valued at no more than $30,000, in other words a “small claims” court for copyright claims. The board is a quasi-judicial tribunal, as federal courts have exclusive jurisdiction over claims of copyright infringement, and is comprised of three “Copyright Claims Officers” who are empowered to hear claims of copyright infringement, misrepresentations of takedown notices and counter-notices, declarations of non infringement, and related counter-claims and defenses. Defendants can elect not to participate in the Board proceedings and damages are capped at $15,000 per claim or $30,000 for the entire matter.
The law includes a bad faith provision which allows the Board to award reasonable costs and attorney fees if it finds a party utilized the process to harass or other improper purposes. The CASE Act authorizes the Register of Copyrights to implement regulations for procedures before the Board. It is still unclear how proceedings before the Board will be conducted and how the Board will handle constitutional questions that often arise in copyright infringement actions, such as the fair use defense, or if the defendants will voluntarily consent to participate in a Board proceeding. Summarily, the idea is that the Case Act will provide a mechanism which will allow for the efficient and economical resolution of small claims of copyright infringement. Over the next year, we hope to see how this procedure evolves and if defendants will willing participate in such proceedings.
TRADEMARKS
To obtain an injunction against infringement, a trademark owner must prove, among other things, that the owner will suffer “irreparable harm” if the infringer is not enjoined from using the mark. “Irreparable harm” is harm that cannot be corrected by monetary compensation to the trademark owner. The TMA settles the long-standing debate of applying a rebuttable presumption of irreparable harm in favor of trademark owners that have proven infringement in favor of the trademark owners. This automatic application of a rebuttable presumption should make it more likely that trademark owners will be able to get an injection against infringement.
The United States Patent and Trademark Office (USPTO) has been authorized by the TMA to implement new procedures to cancel registrations for marks that have never been used in commerce. In the United States, a trademark must be used in commerce to qualify for registration on the Federal Trademark Register, with limited exceptions. Recently applicants have used fraudulent practices to obtain or maintain a registration for a trademark that has never been used in commerce. Rather than requiring a costly cancellation for marks that were never used in commerce, as is the current practice, the TMA provides for a shorter and faster “expungement” proceeding.
The TMA further amended certain procedures of the USPTO with respect to the examination of applications to register marks. The first amendment codifies a “Letter of Protest” procedure, which allows for third parties to provide evidence during the examination of a trademark application in attempting to convince an examining attorney that the application should not be approved for registration. Such evidence can tie to any reason for which an examining attorney can refuse registration, such as a conflicting senior registration or that the mark has not actually been used in commerce. The second amendment provides the Director of the USPTO with the authority to mandate response times to office actions that are shorter than the current term of six months.
These new procedures are not effective immediately. The USPTO has one year to adopt regulations to implement these procedures. When implemented, these procedures should provide trademark owners with a new cost effective mechanisms to seek to challenge problematic applications and registrations.
