Pandemic Puts Certain US Trademarks at New Risk

Gabriel Groisman | January 25, 2021

U.S. trademark law, which is ultimately in place to protect consumers, requires trademark holders to continuously use their trademarks or risk being challenged or cancelled for abandonment.

In addition to untold financial strain, business owners who have had to put  their business on hold in the COVID pandemic are struggling with another  unforeseen threat: losing their trademark rights. Without a doubt, taking the  right steps now is critical to protecting their business interests. 

U.S. trademark law, which is ultimately in place to protect consumers, requires  trademark holders to continuously use their trademarks or risk being  challenged or cancelled for abandonment. This “use it or lose it” rule of thumb 

becomes even more complex outside the United States, where nonuse  cancellation actions are rampant and proof of use is particularly difficult. But,  focusing on the United States, it’s critical to understand that according to 15  USC Section 1127, a mark is deemed abandoned if either of the following  occurs: when the mark’s use has been discontinued with an intent not to  resume such use; or when the owner’s course of conduct causes the mark to  become generic. And “intent not to resume” may be inferred from  circumstances. 

So, what should business owners facing these issues do now? Following is  some general guidance:

      • Document your intentions. If you plan on reopening your business, or to start reselling your products after the end of the pandemic, write an internal memorandum documenting that intent. Be optimistic and make  a re-opening plan. Consider sharing your plan with your customer base.  This, of course, is sound business advice as well. 
      • As much as possible, use the trademark! Even if you cannot use it in the same manner than you used it pre-pandemic, use is use. So long as the use is actual, and not nominal. If your retail channels are closed,  consider launching your sales through an e-commerce platform. If your  restaurant marketing business lost all of its clients, put out content to  your mailing list and to the general public. Remember to use your  trademark in connection with these efforts. The goal is to keep  customers and potential customers engaged and to keep your  trademark associated with the goods and services for which you  registered. 
      • If you are in a business that is completely shut down because of the pandemic, try to keep your brand marketing going. Let consumers know that you will be back 
      • Last, if you think it’s over, resist the urge to bid farewell on social media. A Facebook post from your business page telling your customers that the business is closing and you are moving in another  direction is strong evidence of abandonment. If there is a minimal  chance that you may relaunch the brand or trademark, resist the urge to  “say goodbye.” Of course, for legal advice that is right for your company,  and based on your unique situation, be sure to contact a trademark  attorney with the specialized knowledge to assist you.

 

Other than actual use in commerce, there is not one specific thing you can do  to guarantee your mark will not be cancelled—so you should do as much as  possible. U.S. trademark law gives companies the space and time needed to  pivot or retool. In simple terms, make sure you document well, both internally  and to the public, that your mark is not going anywhere. Instead, you are  doing what you have to do to keep yourself, your family, your employees, your  customers, and your community safe. Remember, U.S. trademark owners  cannot simply revive prior rights to marks which they previously abandoned.  And despite the fact that proving abandonment is a difficult mountain to climb,  whether in federal court or in the Trademark Trials and Appeal Board, as an  owner of a trademark, the last place you want to find yourself at the end of this  pandemic is on the receiving end of a cancellation action based on  abandonment. If you take the right steps, however, you will be able to protect  your intellectual property assets for the day the tides turn and business is  once again booming. 

Gabriel Groisman, partner and co-chair of the trade secrets and IP group  at Meland Budwick, may be reached at ggroisman@melandbudwick.com

Read more at: https://www.law.com/dailybusinessreview/2021/01/25/pandemic-puts-certain-us-trademarks-at-new-risk/