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Logo Icon INTELLECTUAL PROPERTY: Trademarks Part IV

Editor’s Note: this article is the fourth installment in our series of Sidebar articles focused on trademarks and brand protection. In our Trademarks Part I article, Mr. John Shaffery addressed the important steps in choosing a trademark as well as the benefits of attaining federal trademark registration. In our Trademarks Part II article, Mr. Andrew Sevanian addressed the important steps in applying for federal trademark registration, securing trademark rights and maintaining trademark protection. In our Trademarks Part III article, Ms. M. Lisa Odom and Mr. Sevanian addressed matters of trademark “policing” and enforcement against third parties.

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In our trademark practice, we often experience situations in which individuals and/or entities have a registered trademark or service mark, but have either failed to observe renewal formalities with the United States Patent & Trademark Office (“USPTO”) or simply failed to continue “using” their mark over a certain period of time.

While this might seem like a relatively benign bit of oversight, it can have drastic consequences on the preservation of one’s trademark protection, including the abandonment of the trademark and thereby the loss of such intellectual property rights.

What this usually means is that someone put in valuable time, energy and money to obtain that coveted circle “R” symbol (®) only to see it all wither away based on, more often than not, avoidable actions (or inaction).

However, even if a trademark owner stops “using” their mark, not all is necessarily lost. With some prudent trademark management practices, the savvy brand owner should be able to maintain the benefits bestowed on a federally registered trademark and avoid, or at least mitigate, the risk of such rights becoming abandoned.

Trademark “Abandonment” – Use It or Lose It?

As a primer, trademark rights arise based on one’s “use” of a mark “in commerce.” See 15 U.S. Code § 1127. Once they have selected (and started to use) a mark, trademark owners might then consider applying for federal trademark registration in order to bolster such trademark rights. On this note, please refer to our Trademarks Part I article for some of the benefits of federal trademark registration.

To this end, once a mark is registered with the USPTO, the trademark owner should take all necessary steps to maintain such registration by following the renewal requirements of the USPTO. On a related note, our Trademarks Part II article addresses some of these steps.

That said, even a registered trademark that follows renewal formalities with the USPTO can still become invalidated based on “abandonment” (i.e., non-use of the mark).

The federal Lanham (Trademark) Act also addresses how a trademark might become “abandoned” when: “its use has been discontinued with intent not to resume such use. Intent not to resume may be inferred from circumstances… [and] nonuse for 3 consecutive years shall be prima facie evidence of abandonment...” 15 U.S.C. §1127 (emphases added).

NOTE: while the Trademark Act also addresses the abandonment of a mark when such mark becomes “generic,” the focus of this article will be abandonment based on non-use. We will soon present a separate article on the topic of trademark “genericization.”

As such, the central issues of whether or not a valid and registered trademark has become abandoned due to non-use are if: (1) the mark is discontinued or no longer in use; and (2) the trademark owner does not have an intent to resume such use. Failure to use alone is not necessarily enough to prove abandonment, as there must be an intent to abandon (i.e. an intent not to resume use). Here is where things get a little bit tricky. How does one counter the allegation that they had an “intent” not to resume such use of their mark? This sounds like a fairly subjective standard that might be difficult to prove, as it seemingly turns on one’s mindset.

Fortunately, common practice, statutory provisions and relevant case law provide some guidance on how to interpret these provisions of the Trademark Act.

First, in order to mitigate the presumption of abandonment one must understand that this presumption is based on non-use of a mark for three consecutive years. This means that there can be intervals of nonuse of a trademark, so long as they do not meet or exceed three consecutive years, in which the mark might not be presumed to be abandoned.

Second, even if such nonuse occurs, the presumption of abandonment is a rebuttable presumption. See Crash Dummy Movie, LLC v. Mattel, Inc., 601 F.3d 1387, 1391 (Fed. Cir. 2010); Silverman v. CBS, 870 F.2d 40, 45) (2d Cir. 1989). In other words, even if a mark owner has not used a mark for three consecutive years, that owner may rebut the presumption of abandonment with evidence of a continuing intent to use; or at the very least showing there is an “intent… to resume use within the reasonably foreseeable future[.]” See Silverman v. CBS, 870 F.2d at 46 (emphases added). Under certain circumstances, even active discussions about further use of a mark, without actual use, might be sufficient to negate the intent to abandon a mark. See, e.g., Zelinski v. Columbia 300 Inc., 335 F.3d 633 (7th Cir. 2003).

There is no definitive timeline in terms of what is a “reasonable” timeframe to resume use. Some cases have shown non-use for as long as seven (7) years does not necessarily mean abandonment of a trademark so long as there are reasonable grounds to rebut a presumption of non-use/abandonment.See Silverman v. CBS, 860 F.2d at 47 (citing Saratoga Vichy Spring Co. v. Lehman, 625 F.2d 1037, 1044 (2d Cir.1980) (“In Saratoga Vichy Spring Co. v. Lehman… we rejected a claim of abandonment based on seven years of non-use where the initial decision to cease use resulted from a decision of the state legislature and the state, which was the trademark owner, continuously sought to sell the mark along with the mineral water business to which it applied.”)

That being said, plans to resume use of a trademark cannot be indefinite and/or vague, as there needs to be some sort of a specific plan to resume use such as active discussions to resume use, market research and other factors. See, e.g., Silverman v. CBS, 870 F.2d at 46-49 (2d Cir. 1989) (CBS discontinued use of Amos and Andy because the TV show was controversial and CBS’ plan to possibly reinitiate use someday if social attitudes changed was too vague and contingent of an intent to avoid abandonment); see also Major League Baseball Properties, Inc. v. Sed Non Olet Denarius, Ltd., 817 F. Supp. 1103 (S.D.N.Y. 1993) (Los Angeles Dodgers had abandoned rights to the Brooklyn Dodgers trademark after the pro baseball team moved from Brooklyn to Los Angeles).

That said, if use of a mark will (or must) cease for a certain period of time, best practices would be to demonstrate reasonable grounds for suspending use and plans to resume use in the reasonably foreseeable future (i.e., when the grounds for suspending use abate). See, e.g., Star–Kist Foods, Inc. v. P.J. Rhodes & Co., 769 F.2d 1393 (9th Cir.1985); Chandon Champagne Corp. v. San Marino Wine Corp., 335 F.2d 531, 535 (2d Cir.1964).

In other words, there should be legitimate, nontrivial grounds to suspend use coupled with legitimate, nontrivial plans to resume use. However, be warned – if the reasons for suspending use of a mark cease to exist, and one fails to resume use with a reasonable timeframe thereafter, they risk losing their mark through abandonment because they would no longer have reasonable grounds to explain their nonuse.

Best Practices

Based on the foregoing, even if the use of a trademark has been halted for a certain period of time, not all is necessarily lost. With some prudent internal policies, and careful external practices, one can take steps to mitigate the risk that their mark is considered abandoned if/when they find themselves in the position of having to temporarily suspend use of their mark. Some simple steps to consider are as follows:

  1. If possible, try to not let three or more years go by in which the mark is not used;
  1. If use of the mark ceases, establish (and record) your intent to resume use by:
  1. Documenting the reasonable grounds for suspending use (e.g., market factors, increased costs, governmental actions, changes in laws, etc.); and
  1. Create a plan of action for resuming use in the reasonably foreseeable future (e.g., conduct research, perform internal investigations, configure the product/service and resume such use once such factors abate or as soon as practical thereafter).

A valid and registered trademark brings with it a panoply of intellectual property protections. In today’s ultra-competitive environment, establishing (and maintaining) one’s brand identity is paramount. Whether utilizing in-house talent and/or hiring seasoned outside counsel, the astute business owner can start to take proactive measures in order to stay ahead of the game by preserving their valuable trademark rights where others might see such rights become lost due to abandonment.

Legal Disclaimer

Legal advice is the application of law to an individual’s specific circumstances. Poole & Shaffery, LLP has prepared this article for general information purposes only. This handout is not legal advice, and is not to be acted on as such. Poole & Shaffery, LLP disclaims any intent to provide legal advice to, or to form an attorney-client relationship with, any person using this handout. Please consult a lawyer for information and advice that is particular to your situation.