Unless you’re an intellectual property attorney, trademarks are probably the furthest thing from your mind right now. More pressing concerns, like re-opening your business and finding essential items such as toilet paper, are likely at the forefront of your mind. And while that is understandable, neglecting your trademarks can unfortunately result in negative consequences down the road.
In times of crisis we see tremendous acts of kinds and self-sacrifice, as we are seeing now from health care workers, first responders, transit workers, grocery workers, teachers and others. But no matter how grave the crisis, there are always those who will look to take advantage of it for their own benefit. So if you decide that it is too expensive to maintain your trademarks registrations and allow them to lapse, it should not come as a surprise if a third party tries to use or register your mark.
We unfortunately speak from experience, as it happened to one of our clients in the aftermath of Hurricane Sandy. Our client bought a specialty soda brand in 2009. A couple of years after buying the brand, the client’s trademark registration lapsed due to an oversight before we were retained. In 2012, Hurricane Sandy flooded the client’s warehouse, inflicting great harm to the company by destroying virtually all inventory.
Our client subsequently resumed sales of a different brand of soda, and intended to resume sales of the specialty soda brand once its financial situation improved. Before it could do so, our client learned, to its surprise, that a competitor had filed a trademark application for our client’s mark. Our client tried to resolve the matter amicably, but its competitor insisted that it was entitled to the mark because our client had abandoned it. As a result, our client had no choice but to file an opposition to its competitor’s application.
The main issue in the case was whether our client had abandoned its rights in its mark by not selling soda under that mark in the years following Hurricane Sandy. Their competitor insisted that this was the case even though our client produced evidence of its sales running through Hurricane Sandy, and evidence that it had recommenced sales in late 2014. One of our client’s principals also testified about the damage our client suffered and how it had always intended to start using the brand again.
The Trademark Office ultimately ruled in favor of our client, explaining that our client’s non-use of its mark was excusable under the circumstances and that our client did not intend to abandon its trademark.
While the outcome of the above matter was favorable for our client, it is likely that it could have been avoided had our client maintained its trademark registration. Instead, it was faced with a proceeding in the Trademark Office that took over two and a half years to resolve and imposed costs in terms of time and money. Thus, while it may be tempting, in the short run, to save money by opting not to maintain trademark registrations, those decisions can have long-term consequences that can wind up costing you more in the long run.
How to Maintain Your Trademark During Lockdown
Under U.S. law, the key to maintaining a trademark is using it. Absent use of a mark, there are no rights in it, and a registration cannot be maintained. In certain circumstances, nonuse of a mark can be excused, meaning that nonuse will not result in the loss of trademark rights. Indeed, in our client’s case the Trademark Office remarked that “[a]bandonment does not result from a temporary forced withdrawal from the market due to causes beyond the trademark owner’s control” and observed that “[t]o prove excusable nonuse, the registrant must produce evidence showing that, under his particular circumstances, his activities are those that a reasonable businessman, who had a bond fide intent to use the mark in United States commerce, would have undertaken.”
Consequently, if you decide that you want to maintain to your trademark registration, the question of whether you can arises. Many businesses have moved their businesses online, from retail operations to increased use of telemedicine to teaching. Use of a trademark with the online operation of these businesses would likely qualify as use and, at a minimum, would serve to establish that there was no intent to abandon the mark.
Some businesses, like restaurants that have closed and are not serving take-out, or other establishments that are not able to conduct their business online, may not be able to prove use of their mark. Although we are not aware of any decisions finding that the current COVID19 situation would be a temporary forced withdrawal from the market that is beyond a trademark owner’s control, we think that it would likely be found to qualify, and that nonuse due to COVID19 would be excused. For the nonuse to be excused, the trademark owner would have to file a declaration with the Trademark Office at the appropriate time, specifying the date the use of the mark stopped, when use is expected to resume, and the facts establishing that the nonuse is excusable, such as state order(s) requiring the closure of “non-essential” businesses and the unprecedented health crisis.
These are uncertain times, and many businesses are struggling to survive. While it can be tempting to save money by not maintaining trademark registrations, it is best to consult with experienced trademark counsel to understand the consequences of doing so, since decisions made in haste today can have wide-ranging long-term effects.