Thursday, July 16, 2009

Near-Dead, Abandoned and Zombie Trademarks

Dear Rich: I'm interested in using a trademark that was registered in 1999 by a low-end department store that has since gone bankrupt. Post-bankruptcy, the mark has been assigned six times.  The current owner appears to be in the business of acquiring trademarks from defunct entities and currently holds approximately 50 marks. I have searched the web for current product use for the brand in the specific class and have found only one very old garment on eBay. If the current owner has not been producing garments using the mark for the past several years, what is my best strategy for using the mark? And for dealing with the registered owner and the USPTO?  How detailed is the USPTO when it comes to proving actual use if the use is disputed? The short answer is that you should probably stay away from trademarks owned by  trademark speculators. These companies usually acquire trademarks at bargain basement prices from bankrupt or defunct companies. Sometimes, the marks are still functioning; sometimes they are zombie trademarks -- abandoned marks that still have brand name recognition (no, we're not talking about Rob Zombie's trademark.) Legally, you may have a strong argument that a particular mark has been abandoned. But if it is still 'Live' on the Principal Register, you will have an expensive and uphill battle prying the mark away from a speculator. 
Burden of Proving Abandonment
Your challenge is proving the registered mark is abandoned. Federal law states that abandonment occurs when:   
use has been discontinued with intent not to resume such use. Intent not to resume may be inferred from circumstances. Nonuse for 3 consecutive years shall be prima facie evidence of abandonment.

Essentially, in order to succeed, you must come up with documented evidence that the owner has no intent to resume use. Have you ever tried to prove someone isn't doing something? One court stated that you need evidence that "leaves no room for doubt or speculation." Other courts have described it as a "heavy burden." Essentially, making a claim of abandonment is a risky strategy. (For example, you might think that Chevrolet abandoned the Malibu trademark brand in 1983. But 14 years later they returned with a new model.)

Typically, a company that brokers and collects trademarks has a legal team that is prepared to defend and protect its stash of marks. If you begin using the mark without first challenging the mark, the registered owner may pursue you for infringement. You may attempt a Reverse Pac-Man by proving the owner abandoned the mark, but your merchandise will be in limbo during the proceedings. Alternatively, you could try taking the speculator on directly, either in a proceeding at the USPTO or in a court battle.  The Dear Rich staff wants you to have a litigation-free future and for that reason, we advise you to pick your fights carefully.