By Yekun Ding & Cynthia Rivas
California Western School of Law
The Consolidated Appropriations Act of 2021, signed into law on December 27, 2020, introduces new changes to trademark, copyright, and patent law.
Trademark Law
Part of the Consolidated Appropriations Act, the Trademark Modernization Act (TMA) combats the rise of fraudulent trademark applications and registrations by introducing faster, cost-effective means to challenge trademarks not used in commerce.
As an expedited alternative to a cancellation action before the Trademark Trial and Appeal Board or a district court, the new ex parte expungement and reexamination proceedings allow the United States Patent and Trademark Office (USPTO) Director or an interested party to initiate a proceeding to challenge the validity of a registered mark, if a prima facie case based on non-use can be established and a reasonable investigation is completed. An ex parte expungement proceeding can be initiated between three and ten years after the trademark’s registration date, while reexamination proceedings can be initiated any time within the first five years of registration. Congress did not define a “reasonable investigation” or “prima facie case” and did not specify whether the registrant is obligated to prove use or merely produce evidence of use. However, the Act gives the USPTO Director authority to create regulations outlining more specific requirements within one year of the Act’s effective date.
The TMA also allows third parties to formally submit letters of protest against a trademark before it is registered, while the application is still pending. The Director has two months from the filing of the evidence to decide whether to include the evidence in the examination record of the application. The Director’s decision is final and non-reviewable but does not prejudice any party’s right to raise any issue or rely on any evidence again in subsequent proceedings.
Additionally, the TMA has restored the traditional presumption of irreparable harm for injunction proceedings where the trademark plaintiff establishes a likelihood of success on the merits. Across all civil cases, a plaintiff seeking an injunction must typically establish both irreparable harm and likelihood of success on the merits. Traditionally, courts ruling on trademark injunctions have applied a presumption that irreparable harm is satisfied where consumer confusion is likely, but since 2006, some courts have strayed from that presumption, leading to a circuit split. The TMA resolves the circuit split but does not specify whether the restored presumption shifts the burden of proof to the defendant, or if it merely shifts the burden of production under the default federal rules.
Copyright Law
The Consolidated Appropriations Act also includes the Protecting Lawful Streaming Act and the Copyright Alternative in Small-Claims (CASE) Act. Under the Protecting Lawful Streaming Act, those who offer or provide illegal streaming of copyrighted works can now face felony charges instead of just misdemeanor charges. Meanwhile, the CASE Act creates the Copyright Claims Board, a voluntary, opt-out tribunal for small copyright claims.
Per the CASE Act, the Copyright Claims Board (“the Board”), which will begin operating no later than mid-2022, is designed for smaller copyright claims—there is a cap of $15,000 damages per work for timely registered works and a cap of $7,500 for works that were not timely registered with the U.S. Copyright Office. No single proceeding can award more than $30,000 total, and each party is responsible for their own attorney’s fees absent bad faith conduct. The Board will largely utilize remote proceedings. Parties do not need to be represented, but if parties want representation, they can be represented by attorneys or legally qualified law students providing their services for free. The defendant has the right to opt out of the proceeding and elect for federal district court litigation.
The Board’s final determination will preclude relitigation with respect to the parties of the determination and to the claims and counterclaims asserted and finally determined by the Board. Parties can request the Board’s reconsideration of a final determination; if the Board denies a request for reconsideration, parties can request review by Register of Copyrights.
Generally, these matters are not appealable to a federal district court. However, a district court can get involved if a party does not pay damages or comply with the relief awarded by the Board. A federal district court may also intervene when a party challenges the final determination for misconduct, the Board exceeding its authority, or that a party’s default or failure to prosecute determination was because of excusable neglect.
Patent Law
The Consolidated Appropriations Act also requires the FDA to update its Purple Book (database of licensed biological products) to make it more searchable online. The Purple Book will list biological products that are licensed at the time of enactment. The list will state when the underlying marketing application for each licensed biological product became a license. The licensure status and marketing status will also be available. Lastly, the list will include exclusivity periods. The list will be updated every 30 days to reflect new licensures within that time.
The Purple Book will also publish a biological product’s patent list, which enumerates patents that the reference product sponsor believes will be infringed by a biosimilar, i.e. a newer biological product that is highly similar to the reference product and does not have clinically meaningful differences. These changes are designed to increase transparency within biological products and biosimilars.