In this White Paper, we share observations on 2020's most significant developments in trademark law. This year, the U.S. Supreme Court penned three opinions concerning what constitutes a protectable trademark, available damages for infringement, and defenses available in litigation. This is the first time since the Lanham Act became effective that the Court has authored three trademark opinions in one year. The U.S. Patent and Trademark Office ("USPTO") was also busy, issuing new rules and guidance aimed at improving efficiency and quelling fraud. And, in response to challenges stemming from the COVID-19 pandemic, brand owners looked to various Lanham Act enforcement strategies to safeguard their reputations.
With 2020 coming to an end, we anticipate more changes in trademark law in 2021. The USPTO will be implementing new fee increases and monitoring the efficacy of its fraudprevention efforts. The new year may also usher in updates to federal trademark law if the Trademark Modernization Act is passed by Congress and is signed into law. As written, the Act is expected to change both the way applications and registrations are handled and the manner in which cases could be litigated.
Shelter-in-place orders did not slow U.S. trademark law in 2020. Amid a memorable year for other reasons, we saw three U.S. Supreme Court decisions involving trademark law and a lot of activity in the USPTO. This White Paper provides an overview of some of these recent developments and highlights what to expect in 2021.
THREE SUPREME COURT CASES IN 2020
Some years go by without a single Supreme Court decision on trademark law. In 2020, the Supreme Court resolved three trademark disputes—something not seen since 1924, 13 years before the Lanham (Trademark) Act came into effect.
Generic.com Terms May Be Eligible for Trademark Protection: USPTO v. Booking.com B.V., 140 S. Ct. 2298 (2020)
Of the three cases the Court decided in 2020, the holding in Booking.com is expected to have the most significant impact. The Court held that generic terms combined with generic toplevel domains ("gTLDs") are capable of trademark protection if consumers perceive the mark, as a whole, to be a source identifier. Writing for the majority, Justice Ginsburg wrote, "[w]hether any given 'generic.com' term is generic ... depends on whether consumers in fact perceive that term as the name of a class or, instead, as a term capable of distinguishing among members of the class."1 Finding that the whole of BOOKING.COM is greater than the sum of its parts, the Court held that BOOKING.COM was capable of trademark protection.
Since Booking.com was decided, applicants have filed more than 800 .COM-formative trademark applications. While applications consisting of generic terms coupled with gTLDs are expected to rise, brand owners should be aware that they will need substantial (and often costly) evidence of consumer perception that the mark, as a whole, is a source identifier to secure trademark protection.
Willfulness Not Required for Disgorgement of Profits: Romag Fasteners, Inc. v. Fossil Group, Inc., 140 S. Ct. 1492 (2020)
The decision in Romag settled a long-standing circuit split concerning whether a plaintiff in a trademark infringement suit is required to show willfulness as a precondition to disgorgement of a defendant's profits. The Court held that the plain language of the Lanham Act "ha[d] never required a showing of willfulness to win a defendant's profits."2 Willfulness is not irrelevant. According to the holding, a defendant's mental state remains a "highly important consideration" in determining whether an award of profits is appropriate.3 This decision is expected to impact profit disgorgement in false advertising claims since the same language is at issue.
U.S. Supreme Court Rejects Second Circuit's "Defense Preclusion" Test: Lucky Brand Dungarees, Inc. v. Marcel Fashions Group, Inc., 140 S. Ct. 1589 (2020)
In its third trademark decision of 2020, the Court reviewed the concept of "defense preclusion" in the context of a serial trademark infringement battle.4 The Court held unanimously that alleged trademark infringement defendant Lucky Brand was not precluded from raising a previously unlitigated defense from a prior infringement action involving the same parties. Although the notion of "raise it or lose it" defense preclusion was rejected under the circumstances because the two suits (at a minimum) did not share the same claim to relief, the case reminds litigants to raise defenses early and consistently when practicable to avoid years of costly court battles. On the plaintiff side, the long-running battle serves as a cautionary note to make sure that verdict forms clearly define the claims and issues, and that injunctions cover the full range of challenged activity, since missteps in both contributed to the plaintiff's inability to prevent the challenged conduct in contempt proceedings.
THE USPTO UPDATED ITS RULES OF PRACTICE
Effective February 15, 2020, the USPTO implemented new rules of practice to improve administrative efficiency and reduce processing errors. Three requirements are of note:
- Mandating electronic filing with limited exceptions;
- Requiring an email address for the applicant/registrant; and
- Updating requirements for specimens of use.5
Following public concern over the potential for misuse of publicly available email addresses, the USPTO masked personal identifiers in these email addresses on the trademark status page.
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1. USPTO v. Booking.com B.V., 140 S.Ct. 2298, 2307 (2020).
2. Romag Fasteners, Inc. v. Fossil Group, Inc., 140 S. Ct. 1492, 1495 (2020).
3. Id. at 1497
4. Lucky Brand Dungarees, Inc. v. Marcel Fashions Grp., Inc., 140 S. Ct. 1589 (2020).
5. U.S. Patent and Trademark Office, Examination Guide 1-20 (Revised) Mandatory Electronic Filing and Specimen Requirements 10 (Feb. 2020).
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.