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Trademarks: Use Them (Properly) or Lose Them
Practical Law Legal Update 7-525-2683 (Approx. 4 pages)
Trademarks: Use Them (Properly) or Lose Them
by PLC Intellectual Property & Technology
| Published on 09 Apr 2013 • USA (National/Federal) |
A discussion of trademark use and the consequences of nonuse and misuse of trademarks. This Legal Update includes links to relevant resources that examine these issues.
Trademarks can be some of a company's most important and valuable assets. To acquire and maintain rights, trademarks must be used both:
- In commerce.
- Properly to reinforce their brand name significance.
When a company does not use its marks, or uses them incorrectly, rights in the marks may be weakened or lost, resulting in potentially significant adverse financial and competitive consequences. It is critical for companies to take steps to ensure that their marks are used correctly.
Acquiring Trademark Rights through Use
In the US, trademark rights are acquired through bona fide use of the mark in commerce and not use merely to reserve rights in a mark. For more information on the use requirement, see Practice Note, Acquiring Trademark Rights and Registrations: Use in Commerce. Use is also necessary to obtain a federal registration for a mark. For more federal registration process, see Registering a Trademark Checklist.
Abandonment from Nonuse
Trademarks must be used to maintain rights. Abandonment through nonuse can occur when a brand owner stops using the mark with the intent not to resume use of the mark. Under the Lanham Act, nonuse of a mark for three consecutive years creates a rebuttable presumption of abandonment (15 U.S.C. § 1127). For more on abandonment through nonuse, see Practice Note, Loss of Trademark Rights: Abandonment through Nonuse of the Mark.
Proper Trademark Use
The Importance of Proper Use
While trademark rights may be lost through nonuse, they may also be weakened or lost through misuse of the mark. Along with proper trademark enforcement, proper trademark use is critical for preventing a mark from becoming generic or otherwise losing its brand name significance. When a trademark owner misuses its mark it can erode the mark's ability to function as a source identifier for the trademark owner's goods or services. In a worst-case scenario, trademark rights may be lost if the mark loses it's source-identifying significance, including through becoming a generic term for the relevant goods or services.
Rights are typically lost when a brand owner attempts to assert the mark against an alleged infringer who counterclaims to invalidate the mark (and cancel any registration for the mark) on the ground that the mark is generic or otherwise no longer functions as a source identifier.
There are many examples of formerly protected trademarks becoming generic terms, including:
- Escalator.
- Zipper.
- Pilates.
Best Practices for Proper Use
Best practices for proper trademark use are designed to reinforce the brand name significance of the mark to the consuming public. These include:
- Using the trademark as a proper adjective followed by a generic term.
- Making the trademark stand out from surrounding copy.
- Using proper trademark notice symbols.
- Avoiding use of the trademark in the possessive form (unless the mark is possessive).
- Avoiding use of the trademark in the plural form (unless the mark is plural).
Educating Employees and the Public on Proper Use
To help ensure that their marks are used correctly, and lower the risk that the marks will be weakened or lost because of misuse, companies should educate their employees and the public on the proper use of their marks. Ways to accomplish this include:
- Developing internal and external trademark usage guidelines.
- Developing brand identity standards.
- Conducting a public educational advertising campaign highlighting the mark's brand name significance.
For sample internal guidelines for use in educating employees on how to use and protect company trademarks, see Standard Document, Trademark Use and Protection Guidelines (Internal Distribution).