With all of the legislation about COVID-19, the attack on the U.S. Capitol, the Inauguration, and the NFL playoffs, you might have missed the passing of the Trademark Modernization Act of 2020 into law (TMA 2020). And although many portions of the TMA 2020 won't become effective until Dec. 27, 2021, it is the most significant trademark legislation since the landmark Trademark Law Revision Act of 1988. Several of its provisions will be of great interest to the franchise community, and one in particular will have a significant impact in trademark infringement matters.

Perhaps most significant for franchisors who seek to enforce their trademarks, is that the TMA 2020 restores or confirms (depending on the jurisdiction) the presumption of irreparable harm in trademark cases where injunctive relief is sought. The reinstatement of the presumption reverses what has been a refusal by many courts to apply the presumption in trademark cases after 2006 based on the U.S. Supreme Court's decisions in eBay v. MercExchange, 547 U.S. 388 (2006) and Winter v. Natural Resources Defense Counsel, 555 U.S. 7 (2008), which eliminated similar presumptions in litigation brought under patent and environmental law.

Franchisors and franchisees frequently litigate over trademarks in cases arising from "holdover scenarios" where a franchisee continues to use the franchisor's trademarks after expiration or termination of the franchise relationship in connection with a competing venture, often from the same location as the former franchised business. The Lanham Act, which is the federal statute governing trademark law in the United States, provides franchisors with a significant weapon to secure preliminary and ultimately permanent injunctive relief to address these scenarios. It also revives the preliminary injunction as a weapon for franchisors to stop third parties from infringing the franchised trademarks and protect the investment of their franchisees in the brand.