Naked Licensing of Trademarks: Is your policing policy good enough to establish control?

Many trademark owners thinks that their job is done once, they have registered their trademarks.  However, trademark law rewards individuals that decrease the costs for consumers to find and identify products and services that they are looking to acquire.  In order to facilitate this policy and designation of a source of the quality and nature of the origin of the goods or services, the Lanham Act, the USPTO and Trademark Law protects the owners’ goodwill and marks.  But, the failure to properly monitor the mark and ensure that the marks are still able to serve these purposes may lead to a forfeiture or abandonment of the mark.

One of the ways, a trademark owner can lose or abandon his mark, is by engaging in naked licensing. If you have very lax or non-existent methods for ensuring that licensees that are using the mark are not required to meet your level of quality of the goods or services, then you may not be fulfilling the purposes of having your mark serve as an indicator of source, origin and/or quality.   If you have oral or implied licenses that do not require payment of royalties, then you may have difficulty enforcing your trademarks in the future.

You may be unable to count on your licensees use to establish continue commercial use of the mark to sell a product or service and may have gaps in your claimed years of use.  This may impact your priority rights, your rights to renew, your ability to make a mark incontestable, to sue counterfeiters and cyber squatters and maintain your low customer acquisition costs. Unfortunately, the old adage that if you do not own it you lose it is accurate with respect to trademark law.  Moreover, trademarks that are not controlled by their owners and licensees that are not monitored for how they use your trademarks can become more of a liability than an asset.

If you have any concerns or questions about your trademark rights, protecting your barriers to entry and low acquisition costs for consumers, then please feel free to contact a trademark attorney at VRP Law Group.

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s