Lex Indicium

COVID Stimulus Act Impacts U.S. Intellectual Property Laws

January 5, 2021


With the President’s signing of the Consolidated Appropriations Act for 2021 on December 27, 2020, several important updates to U.S. intellectual property law have been adopted.

Trademark Act Amended

The Trademark Modernization Act (“TMA”) makes significant amendments to the Lanham Act, which will become effective December 27, 2021. The TMA generally aims to reduce deadwood on the register of trademarks by providing for summary expungement. But the Act also made some noteworthy amendments to trademark prosecution and enforcement procedures.  A summary of some of the highlights include:

  • New Ex Parte Expungement Proceeding. A third party, or the Trademark Office, may petition to expunge a registration on the basis that the mark has never been used in commerce on or in connection with some or all of the goods or services recited in the registration. The proceeding is only available for registrations that have been registered for more than three years but less than 10 years.
  • Response Deadlines for Trademark Office Actions May be Shortened. The current response time for all Office Actions is six months. The TMA allows the response period to be shortened to a period that is at least sixty days, provided extensions of time to respond are available for up to the full six month response period. The Trademark Office is permitted to require fees for any extension request.
  • Restoration of a Rebuttable Presumption of Irreparable Harm. The TMA provides plaintiffs seeking a preliminary injunction or temporary restraining order with a rebuttable presumption of irreparable harm upon proof of trademark infringement.

It remains to be seen how these and other changes will impact filing, prosecution, and enforcement strategies, but certainly, trademark owners and trademark counsel should review changes before they become effective.

Copyright “Small Claims” Proceeding Established

The Copyright Alternative in Small-Claims Enforcement Act (“CASE Act”) establishes an administrative tribunal within the Copyright Office as an alternative to pursuing claims in federal district court.

A few interesting aspects of the Case Act are:

  • The tribunal is empowered to award damages up to $15,000 per work and $30,000 per claim for infringement based on registered copyrights and $7,500 per work and $15,000 per claim for infringement based on copyrights not registered at the time the proceeding commences. Attorneys’ fees and costs are not available under the proceeding and the CASE Act requires the parties to bear their own attorneys’ fees and costs.
  • The proceeding is entirely voluntary. Once a claim has been made with the tribunal, the defendant has 60 days to reject the administrative proceeding and force it to be heard in federal court.
  • Decisions of the tribunal are non-precedential and will be preclusive only to the parties and the claims asserted in the proceeding.
  • Decisions are appealable to a federal court, but the bases for appeal are extremely limited and require the appellant to show either: that the decision was based on fraud/misconduct, or that the tribunal exceeded its authority, or that the decision was rendered only after default.
  • In an attempt to curb “troll” behavior, CASE allows the tribunal to award damages to a defendant that can show that the complaint was initiated to ‘harass’ or for another improper purpose. Furthermore, if a party can show a pattern or practice of bad faith, the tribunal may award attorneys’ fees and costs, and repeat offender scans be barred from using the tribunal for 12 months.
  • While CASE sets out some of the details of how a proceeding will commence and unfold, the Copyright Office is given authority to develop further regulations necessary to its implementation, which is scheduled for December 2021.

Felony Criminal Penalties for Illegal Streaming Services

The Protecting Lawful Streaming Act (“PLSA”) increases criminal penalties for copyright infringement based on online streaming from a misdemeanor to a felony punishable by up to 10 years in prison. This new law (and penalties) only apply to commercial, for-profit streaming piracy services, as opposed to individual internet users. In general, the goal of PLSA was to give copyright owners a larger sword with which to threaten serial institutional streamers of commercial content.

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