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Stimulus Legislation Brings Substantial Changes to Trademark and Copyright Law



Congress tucked major trademark and copyright legislation into the almost 6,000 page COVID-relief stimulus package it passed in the waning days of 2020. Overall, these changes will make it easier for rightsholders to pursue infringement claims going forward.

On the trademark front, the stimulus bill contained the “Trademark Modernization Act of 2020.” The TMA formalizes the ability of third parties to submit relevant evidence regarding the registrability of a proposed trademark to the PTO via a Letter of Protest, and establishes an ex parte process for expunging trademark registrations when the mark is not actually used with the recited goods or services any time following the third-year anniversary of registration. The TMA now allows the Patent and Trademark Office to shorten the time for responding to an office action to as little as 60 days. The TMA also reaffirms that a “rebuttable presumption of irreparable harm” arises once trademark infringement is otherwise shown, which will make it easier for marks holders to obtain preliminary and permanent injunctions. This changes the prevailing law in the Ninth Circuit, and resolves a growing circuit split on whether that presumption remained good law after the Supreme Court’s Ebay decision (discussed previously here).

In the stimulus bill, Congress also enacted the Copyright Alternative in Small Claims Enforcement (“CASE”) Act. The CASE Act sets up for the first time what is essentially a small claims court for copyright. The CASE Act authorizes the creation of a Copyright Claims Board that will allow smaller infringement claims to be decided by a three-person panel without a jury. The panel can decide whether infringement occurred, but is limited to awarding $15,000 for an infringed work (or $7,500 for a work not timely registered), and not more than $30,000 total per case (not including attorneys fees and costs) no matter how many works were infringed. The panel can only award attorneys fees and costs against a party that engaged in “bad faith conduct” and can only issue injunctive relief if both parties agree. Accused infringers can opt out and proceed in federal court, but can also waive that right through inaction. It is expected that most CASE Act proceedings will take place through written submissions and video conferences to keep costs low, and formal rules of evidence do not apply. There is an administrative path for appeals, but very limited federal court review. Hence, the Board’s determination regarding infringement will generally preclude litigation of the same claims in federal court.

Finally, Congress also included legislation (the “Protect Lawful Streaming Act”) that increases the penalties for illegal streaming of copyrighted works from a misdemeanor to a felony, which makes the penalty for unlawfully streaming a work the same as for unlawfully reproducing or distributing the work.

The USPTO is still drafting rules surrounding these changes, but the takeaway is that 2021 should be a good year for rightsholders.

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