PROTECTING YOUR TRADEMARK Registration is not the Finish Line
Trademark owners (referred to in this article as "Owners") often invest substantial time and money in creating and designing their proposed trademarks. After all, the Owners must craft the name or image that will signify their unique brands to the public and distinguish their products from those of the competition. The trademark defines the Owner's commercial image and must be appealing to the target market. After the proposed trademark has been created, it should be registered with the appropriate authority. For successful registration, the Owner must ensure that the proposed trademark is not confusingly similar to any existing trademark.
After the proposed trademark has been created and registered, some Owners feel as if their duties with regard to their trademarks are complete. They are not. Registration does not ensure that a trademark will be protected from unauthorized use. Rather, registration is simply a means to that end. Registration only affords the Owner the legal right under state or federal law to prosecute unauthorized use of the trademark. There is still work to do to maintain the Owner's exclusive right to use the trademark.
Policing the Use of the Trademark
Even after a trademark has been properly registered, the Owner has continuing duties to police the use of the trademark, to watch for confusingly similar trademarks, and to take action quickly against infringing parties. Once the Owner becomes aware that another party is using a confusingly similar trademark, or worse, the identical trademark, the Owner's failure to take action to stop such use within a reasonable time can preclude the Owner from stopping the infringing use later.
In lawsuits alleging infringement, infringing parties often assert the legal defense of "waiver" or its equitable counterpart called "laches." Under these doctrines, courts may determine that an Owner has forfeited, or "waived," the right to prevent the unauthorized use of the Owner's trademark by failing to take action against the infringing party within a reasonable length of time. The length of the delay necessary to result in a court finding there is a "waiver" of the Owner's exclusive right to use the trademark is determined by the courts on a case-by-case basis.
In order to satisfy the duty to police the use of a trademark, an Owner should monitor advertising media and new businesses in the Owner's geographic region for the use of names or designs that are confusingly similar to the Owner's trademark. All employees should be encouraged to do the same. In addition, Owners may consider subscribing to a "trademark watch service." For a fee, these services monitor applications for trademarks which may be confusingly similar to marks owned by their subscribers. An experienced trademark attorney can recommend a reputable trademark watch service.
If use of a confusingly similar trademark or unauthorized use of the Owner's trademark is discovered, the Owner should promptly issue a written demand that the infringing party cease the offending activity. If the written demand is ignored or refused, the Owner must take further action, up to and including the initiation of a lawsuit, to prevent the offending activity.
Abandonment of the Trademark
In addition to the duty to police unauthorized use of a trademark, the Owner also must use the trademark regularly in the Owner's business. If the Owner fails to make commercial use of the trademark for a substantial period of time, a court may find that the trademark has been "abandoned." A finding of abandonment eliminates the Owner's exclusive right to use, and to prevent others from using, the trademark. Courts have reasoned that if an Owner has failed to make commercial use of a trademark for an unreasonably long period of time, such nonuse is indicative of the Owner's intent not to resume commercial use of the trademark.
Like waiver, the principle of abandonment may be used by an infringing party as a defense to a lawsuit brought by an Owner to prevent an infringing use of the Owner's trademark. Similarly, the length of the period of nonuse required to support a finding of abandonment of the trademark is in the discretion of the court hearing the matter and will be based on the facts determined by the court in that particular case. However, failure to make commercial use of a trademark each and every year probably will not result in a finding of abandonment. More likely, a finding by the court of at least several years of nonuse will be required. Under federal law, the risk of abandonment substantially increases after three consecutive years of nonuse. Additionally, only "commercial" use of a trademark will eliminate the risk of abandonment. Inter-office or other internal uses of a trademark are not sufficient. However, the granting of licenses to others allowing them to make commercial use of a trademark would be considered commercial use by the Owner.
Ultimately, courts are hesitant to find that a trademark has been abandoned and generally find abandonment only after a substantial period of nonuse. Nonetheless, Owners should be aware of the continuing duty to make commercial use of their trademarks and the potential risk of nonuse.
Read the Fine Print
Before authorizing an advertisement featuring a trademark (whether on television, on the Internet, in a magazine, in a telephone directory, or in any other medium), an Owner likely will be required to sign a contract with the publisher. These contracts often contain provisions, sometimes buried in fine print, by which the Owner "agrees" to grant the publisher a "license" to use the Owner's trademark. A "license" is simply a grant of permission from the Owner to another person ("licensee") to use the Owner's trademark in the way described in the license agreement. Use of a trademark by a licensee in a way that exceeds the scope of the license agreement constitutes infringement by the licensee.
Publishers include "license provisions" in their contracts for legitimate purposes, including the use of a trademark in the publisher's own marketing materials. Nonetheless, the language describing the scope of the license is often broad and ultimately may insulate a publisher from liability for unauthorized use of the trademark. Additionally, the license provision may provide for an irrevocable license, which arguably authorizes the publisher's perpetual use of the trademark. Such a broad license provision may authorize use of the trademark in ways not contemplated by the Owner and may preempt any trademark infringement claims against the publisher which otherwise would be available to the Owner. Of course, license provisions are not limited to advertising contracts. Any contract an Owner may encounter in any aspect of the Owner's business may contain a trademark licensing term or condition. Thus, Owners should read and become comfortable with the scope of any license provision contained in any contract executed by the Owner for advertising or for any other purpose.
Conclusion
Even after the creation and registration of their trademarks, Owners still have work to do to protect their exclusive right to use their trademarks. Owners have a continuing duty to take action swiftly against those parties who make infringing use of the Owners' trademarks or of confusingly similar trademarks.
An Owner who treats registration as the finish line does so at the Owner's peril. The failure to take the actions described in this article well may cause an Owner to lose rights in the Owner's trademark altogether.
For further information regarding the issues described above, please contact Michael J. Parrish .
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This article is not intended to give, and should not be relied upon for, legal advice in any particular circumstance or fact situation. No action should be taken in reliance upon the information contained in this article without obtaining the advice of an attorney.