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House IP Leader Floats Proposal to Fight Fraudulent Trademarks

Nov. 29, 2019, 9:56 PM

The chair of the House Judiciary Committee’s intellectual property panel is considering legislation to stem the tide of fraudulent trademarks and phony trademark applications he says are clogging the U.S. Patent and Trademark Office’s registration system.

The Nov. 27 announcement by Rep. Hank Johnson (D-Ga.) reflects frustrations among trademark attorneys, companies, and the PTO itself with the sharp rise in questionable foreign trademark applications and registrations, especially from China. The clutter hurts legitimate businesses by limiting the number of effective trademarks available, according to academic research cited by Johnson.

Measures to fix the problem could include a new, accelerated challenge process for the trademark office to expunge registered trademarks if the owner can’t rebut allegations that it never used its mark, Johnson said in the statement. It would make challenges faster and cheaper than current cancellation proceedings before the agency’s Trademark Trial and Appeal Board, he said.

Other measures would direct courts to presume that continued infringement would cause irreparable harm when considering whether to grant preliminary injunctions during trademark litigation, said Johnson, who chairs Judiciary’s Courts, Intellectual Property, and the Internet Subcommittee.

The Supreme Court in 2016 said courts can’t presume irreparable harm in patent cases, and some courts have extended the ruling into trademark law. Trademark law practitioners say the difficulty of establishing monetary damages from infringement and calculating infringement’s damage to brand reputation separates trademark law from patent law.

Johnson said he’s also considering proposals to codify the current practice of allowing third parties to submit evidence of an application’s shortcomings to trademark examiners. Potential legislation also could give the PTO more freedom to shorten the six-month deadline established in the 1940s for parties to respond to trademark office actions such as an examiner’s requests for more information or an initial refusal.

“Legitimate trademarks allow consumers to have confidence that they can trust the source of the products they buy,” Johnson said in the statement. “Particularly from a consumer protection standpoint, the trademark system does not work if enforcement of those rights does not result in enjoining bad actors.”

To contact the reporter on this story: Kyle Jahner in Washington at kjahner@bloomberglaw.com

To contact the editors responsible for this story: Rebecca Baker at rbaker@bloomberglaw.com; Keith Perine at kperine@bloomberglaw.com

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