Trademark Modernization Act of 2020: Part 4

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The fourth blog post in our continuing series on The Trademark Modernization Act of 2020 (TMA) comes on the heels of the July 19, 2021, deadline for the public to submit comments on the proposed rules. As discussed by our TCAM blog here, here, and here, the majority of the TMA is to take effect on December 27, 2021, with the flexible response period provisions following in 2022. This blog post highlights some of the proposed rules relating to attorney recognition, revocation, and withdrawal.

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Trademark Modernization Act of 2020: Part 3

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The new ex parte expungement and reexamination proceedings, introduced by the Trademark Modernization Act, are intended to be efficient ways of removing improper trademark registrations from the register.

But will expungement or reexamination always be the best strategy for challenging a trademark registration?

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Trademark Modernization Act of 2020: Part 2

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Before a mark can become registered in the United States, a trademark applicant must usually provide evidence that its mark is in use. Furthermore, to maintain the trademark registration the registrant must periodically show it is still using the mark in commerce. Unfortunately, the federal trademark registers are cluttered with marks that are not actually in use, and which potentially block legitimate trademarks from becoming registered. To address these issues, Congress enacted The Trademark Modernization Act of 2020 (TMA) as part of the coronavirus relief bill. See our discussion here. The TMA is to take effect on December 27, 2021, and the U.S. Patent and Trademark Office (USPTO) published its proposed rules to implement provisions of the TMA on May 18, 2021. The USPTO is accepting comments about the proposed rules until July 19, 2021.

Some of the proposed new procedures to streamline the removal of unused trademarks from the register are discussed here. The TMA also provides for flexible office action response periods during the prosecution of a trademark application, which the USPTO expects to go into effect on June 27, 2022. Currently, if an office action issues during the examination of a trademark application, an applicant must file a response within six months. ‎The TMA, however, allows the Examiner to set a response period between 60 days and 6 months, with extensions available. For example, an Examiner may set a shortened period to respond to formalities such as amendments to identifications of goods and services or mark descriptions. To respond, however, to a more complex issue such as a likelihood of confusion refusal, an Examiner may set a longer response period to allow an applicant to investigate and gather evidence.

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Trademark Modernization Act of 2020: Part 1

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The Nuts and Bolts of Expungement and Reexamination

You may remember our blog post here, discussing the Trademark Modernization Act of 2020, which became law at the end of last year.  To implement the Trademark Modernization Act, the United States Patent and Trademark Office (USPTO) has proposed changes to the trademark rules of practice, which we begin to explore in the following post.  Over the coming weeks and months, stay tuned for further commentary, insights and practice tips on these proposed changes!

According to Commissioner for Trademarks David Gooder, during a recent USPTO virtual roundtable event, “protecting the integrity of the US trademark register is, and will remain for some time, one of our top priorities.”  Keeping the register clear of improperly obtained trademark registrations helps ensure that legitimate businesses can register their marks with the USPTO, and enforce those rights against infringers.

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USPTO Embracing New Possibilities with AI

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While the legal industry is typically not known as being cutting edge when it comes to adopting innovative technologies, the U.S. Patent and Trademark Office (USPTO) is taking big steps forward on seeing whether artificial intelligence (AI) may be used during patent and trademark examination to create greater efficiency and consistency with respect to certain routine, high-volume tasks. AI, a technology that refers to “smart” machines that simulate human intelligence, is being examined in many industries to potentially eliminate redundant and routine tasks, and the USPTO is trying to determine whether AI is right for it. Does this mean that future USPTO examiners will be more like C3PO? No. But AI could handle more-routine tasks, which would allow examiners to focus on more-substantive matters related to the examination of trademark and patent filings.

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Counterfeiting: Why Crime Doesn’t Pay

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Based on a recent restitution submission prepared by Faegre Drinker, a federal judge in Harrisburg, Pa. awarded Eli Lilly and Company $1.9 million in restitution from an individual convicted of trafficking in drugs bearing counterfeit trademarks of Lilly and other pharmaceutical companies. The defendant in this matter was sentenced to 70 months in prison and ordered to pay $3.6 million in restitution, the remainder split between the other companies based on the defendant’s conduct involving their trademarks.  In this instance, crime clearly didn’t pay for the defendant and success was achieved by partnering with our client to fight counterfeiting and illegal importing.  So how does this work?

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ABCs of NFTs: A Bright Future for the Arts or Just a Flash in the Pan?

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Ever since the artist known as Beeple1 sold an NFT of a digital collage for over $69 million at Christie’s mid-March 2021 auction, everyone in the art world — and in other communities — has been talking about NFTs. Depending on whom you listen to, NFTs are the future of art and will bring long-hoped-for transparency and accountability to the art market. Or they are a dangerous fad. Or they are “nothing sandwiches” that provide something to purchase with cryptocurrency that otherwise just sits unused in digital wallets.

So what the heck is an NFT? NFT is short for “nonfungible token”; an NFT has been defined as a digital certificate of ownership or a digital record of a transaction. The record is “minted”, i.e. created, using blockchain technology that is stored over a decentralized computer network rather than in a centralized registry. And NFTs are purchased using cryptocurrency, most often Ethereum.

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Cross-Class Confusion: Your Rights are Stronger than You Might Think!

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You’ve done the work of securing a federal trademark registration and now face the matter of enforcement against a potential infringer. Are the classes and goods specified in that registration now a double-edged sword?

Say your business, Company A, sells a premium line of clothing for chefs, widely recognized in the restaurant industry for both its durability and stylish design. You’ve worked hard to build the brand and made sure to protect its reputation by registering Company A’s trademarks with the USPTO—in particular, Class 25 for clothing. Much to your dismay, however, a customer has brought to your attention Company B’s new line of kitchen utensils that uses a conspicuously similar name and logo. While initially sold at retail outlets, this new line of cutlery has grown in popularity with some of the nation’s top restaurants. When you reach out to Company B for an explanation, they direct you to your own now-glaring lack of any registration for goods in Class 21 for household utensils. Your brand, despite taking the cooking world by storm, is not quite famous enough to pursue a dilution claim. Are you out of luck in pursuing a claim for infringement?

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Environmental Marketing Claims – It’s Not Easy Being Green

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It’s April, which means it’s time for Earth Day.  But for so many consumers, sustainability is top of mind all year.  Consumers are constantly seeking out products and services that they can feel good about using and purchasing.  And marketers want to tout what their company is doing to be good to the environment.  As a result, the marketplace is flooded with claims that our household cleaners are “non-toxic” and our packaging is “recyclable” along with many other environmental benefit statements for products and services.

To avoid what’s commonly known as “greenwashing,” marketers need to ensure that statements made about the environmental benefit of their products or services are clear, truthful, and evidence-based.  A top resource in this area is the Federal Trade Commission’s “Green Guides,” which can help companies avoid making environmental benefit claims that can attract regulators and mislead consumers.  While the Green Guides are not FTC regulations, they provide detailed guidance on the types of claims that the FTC considers deceptive under Section 5 of the FTC Act, which broadly prohibits “unfair or deceptive acts or practices in or affecting commerce.” (15 U.S.C. § 45(a)(1).)  Although these Guides have not been updated in almost 10 years, they remain instructive when it comes to a review of environmental benefit claims.

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Healthy Choices: The Power and Perils of Health and Wellness Claims in Advertising

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Even before COVID-19 had turned each of us into an amateur epidemiologist, companies in nearly every industry had begun to recognize the magnetic appeal of health and wellness claims in consumer advertising.  Marketers of everything from cleaning products to apparel to furniture to homes were suddenly making claims touting the health and wellness benefits of their products. It wasn’t just better, it was better for you and your family.  It will surprise no one to learn that the pandemic year of 2020 only intensified this trend, as consumers focused as never before on the ways that their purchases might not only help them live better lives, but perhaps even keep them alive.

Predictably, competitors, regulators and the plaintiff’s bar have all taken notice of this trend, and moved aggressively in response.  In 2020, for example, the BBB National Programs’ National Advertising Division (NAD), the nation’s premier forum for competitor initiated advertising challenges, recorded an extraordinary 50% uptick in challenges to health-related advertising.  Similarly, the Federal Trade Commission (FTC), Food and Drug Administration (FDA), Environmental Protection Agency (EPA), and state regulators across the country have focused intense scrutiny on companies claiming to offer health benefits to consumers often desperate for help.  It is natural to predict that class actions and Lanham Act activity will soon reflect these trends as well.

So with the undeniable power of these claims balanced alongside the risks of a misstep, how should brand messaging communicate the health and wellness benefits of a product in the “right” way?  And what are the red flags to look for in the advertising of your competitors?  Here are a few hints:

  1. Identify the Claims. Advertisement and marketing claims are intended to communicate characteristics of a good or service designed to entice a purchase.  Claims are present in all forms of branded communication, from TV commercials, to print ads, radio announcements, pop-up ads, and social media influencer posts.  Keep in mind it isn’t just about what you are saying, but what can be implied from the images, graphics and pictures.So whether looking to substantiate your own claims, or to challenge the claims of a competitor, the first step is to systematically identify the statements that actually qualify as a “claim.” For many marketers this can seem daunting, but in fact this initial analysis involves asking just a simple question:  what exactly are you promising?  Claims are promises and comparisons presented as facts:  you should buy this product because it will improve your memory.  You should buy this chair because it will reduce your back pain.  You should use this cleaning product because (unlike the products sold by our competitors) it does not contain toxic chemicals.  Performance claims, superiority claims, comparative claims – all of them are, in the end, statements which are either true or false, accurate or misleading.  And it isn’t enough to say “everybody knows X is true” – all claims must be substantiated before you make them.  And remember, it isn’t just what you say directly:  you can be held accountable for what your spokesperson or influencer says, too.
  2. Substantiation. What kind of evidence would substantiate the claim?  How much data is necessary?  Do I need a clinical trial?  Is my evidence enough?The simple answer is…it depends.  The level of scientific evidence necessary to support a claim always depends on the claim that is being made.  Moreover, specific regulatory requirements may apply depending on the claim.  If the product claims to ‘sanitize,’ for example, then it is possible that EPA approval may be necessary or it must meet certain FDA requirements.  Of course, if the product is not regulated, the standard may differ.  This is where talking things through with your counsel is most critical:  the same type of claim on a different kind of product may not be subject to the same requirements.  In any event, the science must closely match the requirements of the claim language.  Don’t let your claim outpace the science – anecdotes from happy customers, or enthusiasm for your product, can never substitute for systematic evidence.
  3. Magic Language. We all love puffery – and we all think we know it when we see it.  But, that isn’t always the case.  Statements that are specific, quantifiable or purport to describe objective facts may not constitute puffery, regardless of how over the top the language may seem.  Claims about the ‘safest’, ‘best’, ‘highest quality,’ can all require substantiation under certain circumstances.  Perhaps it is just enough to merely offer the “finest” of all puffery….
  4. Is this a Regulated Claim?  Is it possible that the product “sanitizes”, has “antimicrobial” properties, or somehow prevents or reduces the likelihood of contracting COVID-19?These statements are important ones as they may transform the product from an ordinary consumer product to a regulated product.  Sanitizing and antimicrobial properties may trigger EPA review and treatment or prevention of a disease may render a product a ‘drug’ regulated by the FDA.  Of course, the FTC may also assert its authority particularly if these statements are disseminated on a product website or in other forms of advertisement.  It is possible that the mere existence of these words invite enforcement activity.
  5. Is this a Comparative Claim? The most, the best, the mostest, the bestest, the… mostest bestest?  We all want to be on top, but sometimes that means a “head-to-head” comparison is necessary to substantiate the claim.  Even then, it is necessary to understand that an unqualified comparison may trigger a greater level of substantiation because consumers may understand it to mean “as compared to all leading products nationwide.”  Our advice: “Think before you compare” and determine the basis for your comparison – don’t just assume that everyone will understand it in the same way.

While health and wellness claims are subject to an increasingly intense level of scrutiny by competitors and regulators alike, there is little question that consumers want to know whether the products they buy are in alignment with the health and wellness goals they have set for themselves and their family.  A well-crafted campaign supported by properly substantiated claims is not only a way to stay out of trouble, but a way of building deeper and more lasting engagement with educated consumers.