COVID-19 Relief Bill Includes Major Intellectual Property Changes

Dec 29, 2020 | James T. Nikolai

Important modifications to U.S. copyright and trademark law are included in the omnibus spending and COVID-19 relief bill (“the Act”) President Trump signed the bill into law on December 27, 2020.  Here are some of the highlights.

New Copyright Claims Board

A Copyright Claims Board (“Board”) is created.  The Board will be a body within the U.S. Copyright Office made up of lawyers having both copyright and alternative dispute resolution experience.  The Board is authorized to hear copyright infringement claims, actions for a declaration of noninfringement, claims that a party knowingly sent false takedown notices, and related counterclaims.  Participation in Board proceedings is voluntary.  Defendants can opt out.

The Parties who agree to proceed before the Board forego the right to be heard before a court and the right to a jury trial.  Discovery and appeal rights will be limited.  Parties may challenge a Board decision in federal district court only if (1) the decision was a result of fraud, corruption, or other misconduct; (2) the Board exceeded its authority or failed to render a final determination; or (3) in a default ruling or failure to prosecute, the default or failure was excusable.

The Board may issue monetary awards based on actual or statutory damages.  Awards, however, are capped at $30,000.00.  Also, the parties bear their own attorney fees and costs except where there is bad faith misconduct.

New Felonies for Content Streaming

New crimes are created making it unlawful to “willfully, and for purposes of commercial advantage or private financial gain, offer or provide to the public a digital transmission service” that—

  1. is primarily designed or provided for the purpose of publicly performing works protected under the Copyright Act by means of a digital transmission without the authority of the copyright owner or the law;
  2. has no commercially significant purpose or use other than to publicly perform works protected under the Copyright Act by means of a digital transmission without the authority of the copyright owner or the law; or
  3. is intentionally marketed by or at the direction of that person to promote its use in publicly performing works protected under the Copyright Act by means of a digital transmission without the authority of the copyright owner or the law.

Penalties include fines and imprisonment for up to ten years.

New Presumptions in Trademark Infringement Disputes

The Act makes changes to the Trademark Laws designed to make it easier to secure injunctions against trademark infringers.  One of the elements for securing an injunction in nearly all cases is proof of irreparable harm if the wrongful act continues.  The new law changes this both for preliminary and permanent injunctions in trademark infringement cases.

Specifically, the Act provides that a trademark plaintiff seeking a preliminary injunction is entitled to a presumption that the plaintiff will suffer irreparable harm upon a court finding that the plaintiff is likely to succeed on the merits of the case. Further, if a plaintiff asserting certain trademark rights has prevailed in court, that plaintiff will be entitled to a presumption that the plaintiff will suffer irreparable harm for purposes of determining whether the plaintiff is entitled to a permanent injunction.

New Right to Submit Evidence Against Pending Trademark Applications

The Act allows third parties to submit evidence they believe to be relevant to a ground for refusal of a trademark registration. The third-party submission must identify the ground for refusal and include a concise description of each piece of evidence submitted in support of each identified ground for refusal. 

Within two months after the date on which the submission is filed, the Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office (“Director”) shall determine whether the evidence should be included in the record of the application.  Any determination by the Director shall be final and non-reviewable, and a determination to include or to not include evidence in the record shall not prejudice any party’s right to raise any issue and rely on any evidence in any other proceedings.  Of course, the Applicant will be permitted to respond to any evidence entered into the record through this process.

New Rules Related to Deadlines

Traditionally, trademark applicants have been given six months to respond to any issues raised related to an application for registration.  Under the Act, applicants may be given a shorter period (not less than sixty days) to respond.  The Director, however, must allow the applicant an opportunity to obtain extensions of time to respond aggregating up to six months when the applicant so requests.  The Director can impose a fee for such extensions.

New Ex Parte Expungement Procedure

The Act creates, for the first time, an ex parte expungement procedure.  Specifically, a third party may file a petition to expunge a registration of a mark on the basis that the mark has never been used in commerce on or in connection with some or all goods or services recited in the registration.  The petition must be filed no sooner than three years after the date of registration and no later than ten years after the registration date. 

The petitioner must (a) identify the registration that is the subject of the petition, (b) identify each good or service recited in the registration for which it is alleged that the mark has never been used in commerce, (c) include a verified statement that sets forth the elements of the reasonable investigation the petitioner conducted to determine that the mark has never been used in commerce on or in connection with the goods and services identified in the petition, (d) recite any additional facts that support the allegation that the mark has never been used in commerce on or in connection with the identified goods and services; and (e) include any supporting evidence on which the petitioner relies.

Upon receipt of such a petition, the Director shall determine whether the petition sets forth a prima facie case of the mark having never been used in commerce on or in connection with each such good or service, institute an ex parte expungement proceeding for each good or service for which the Director determines that a prima facie case has been set forth, and provide a notice to the registrant and petitioner of the determination. If the proceeding is instituted by the Director, the registrant is given the opportunity to produce evidence of use or excusable non-use.  Based on such evidence, the Director then determines whether or not to expunge the registration for some or all goods or services listed therein.

New Ex Parte Reexamination Procedure

The Act also creates a new ex parte reexamination procedure.  This procedure is very similar to the ex parte expungement procedure described above.  The focus is slightly different, however.  In ex parte expungement the question is whether the goods or services have ever been offered under the mark.  In ex parte reexamination the question is whether the goods or services listed in the registration were offered under the mark before the “relevant date.”  In the case of a use-based application, the relevant date is the filing date of the application.  In the case of an intent-to-use application, the relevant date is the statement of use date.

The window for filing a petition for ex parte reexamination is also different than for filing a petition for ex parte expungement. While a petition for ex parte expungement may be filed between the third and tenth anniversary date of the registration, ex parte reexamination may be filed any time between the registration date and the fifth anniversary of the registration date.

The decisions reached in either an ex parte expungement or an ex parte reexamination can be appealed to the Trademark Trial and Appeal Board, and then to the courts.

These new trademark procedures make it very important to (1) accurately describe the goods and services being offered under the mark as of the “relevant date,” and (2) preserve evidence of such use for as much as ten years in the event it is needed in either an ex parte expungement or ex parte reexamination proceeding.

We expect that both the U.S. Patent and Trademark Office and the U.S. Copyright Office will be implementing regulations related to the new proceedings described above.  Look for further information on our website, or contact any member of DeWitt’s intellectual property team if you have questions.

About The Author

Image of James T. Nikolai

Jim is a partner in the firm's Minneapolis office. He guides clients through Business, Computer and Software Litigation, Copyright Litigation, Copyrights, Intellectual Property, Licensing, Licensing Litigation, Litigation, Major Business Litigation, Patent Litigation, Patents, Software Protection, Trade Secret Litigation, Trade Secretes, Trademark Litigation, and Trademarks Clearance and Protection. Jim can be reached at 612-305-1518.

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