Should I purchase an abandoned trademark?
Should I purchase an abandoned trademark?
Trademarks are symbols on products that tell consumers who produced the product. The purpose of a trademark is to prevent consumer confusion between similar goods. Companies are granted exclusive rights to brand their products with a trademark if the company follows certain rules. Trademark law in the United States is an interesting combination of state and federal law. Using a trademark in commerce is the key to being granted rights to a trademark in the United States. A company that uses a trademark can register their trademark with the United States Patent and Trademark Office to be granted additional benefits. Registration of a trademark with the United State Patent and Trademark Office is not required to use a trademark, but it can be a good investment.
Sometimes companies register trademark with the United States Patent and Trademark Office and fail to complete the application process or fail to maintain a trademark after it has been registered. When a trademark application is no longer moving forward in the application process, the trademark application is considered abandoned. Also if a company fails to pay maintenance fees, a registered trademark will be marked as abandoned. There are many circumstances that may cause a company to abandon a trademark. The company may not exist anymore, the company may have changed its plans and doesn’t want the trademark anymore, or the attorney working for the company may have forgotten about the trademark completely. No matter the reason, if a trademark is marked as abandoned, it will not be used as a reason to deny future applications for the same trademark.
This situation may seem ideal to a new company that wants to use the same trademark. If an abandoned trademark is discovered when a new company does a trademark search the company may think there is no problem. But there might actually be a large problem on the horizon.
Even though the United States Patent and Trademark Office will not use an abandoned trademark as a reason to deny a new trademark application, that does not mean the company that filed the abandoned trademark has given up their claim to the trademark. The United States Patent and Trademark Office does not actively search for evidence of trademark use in commerce, if an applicant does not communicate with the United States Patent and Trademark Office for a period of time the registered trademark will be marked as abandoned. The rights to a trademark are based on the use of a trademark, the company could have abandoned the trademark registration process but they could still be using the trademark in commerce, which would give them a superior right to the trademark.
At this point the new company needs to decide how to proceed. The new company can give up and decide to use a different trademark for their products or the new company could try to register the trademark. The decision should be based on objective economic reasons but frequently people, especially in small companies, develop emotional attachments to trademarks.
Factors to consider are:
- How much money has been invested in the trademark – If the new company has been using the trademark in commerce for a long time and has invested significant money in the trademark it might be worth it to proceed. Otherwise it is probably cheaper to choose a new trademark.
- Why was the trademark abandoned – Did the old company go out of business? Is the trademark considered generic now? Did the old company just forget to pay a maintenance fee?
- Is the trademark still being used – If the old company is still actively using the trademark, it is probably better to choose a new trademark. But if the old company doesn’t seem to be using the trademark they might be willing to sell any right they had to the trademark.
Should you purchase an abandoned trademark? If the original owner of the trademark can be found and they are willing to sell the abandoned trademark at a reasonable price, Yes, it is a good idea to avoid future problems.
Whether or not you should purchase or sell an abandoned trademark is a complicated analysis. It is best to contract an experienced trademark attorney to guide you through the process.
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