About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

22 IPL Newsl. 1 (2003-2004)

handle is hein.journals/iprolane22 and id is 1 raw text is: A PUBLICATION OF THE AMERICAN BAR ASSOCIATION SECTION OF INTELLECTUAL PROPERTY LAW NEWSLTTER VOLUME 22, NUMBER 1 FALL 2003 The Fallacy of Trademark Residual Goodwill BY DAVID S. RUDER I. Introduction When a trademark owner ahan- dons his trademark, what legal rights does lie retain to prevent someone else from acqutiring and usitg that inark? A commo flawed belief among trademark owners and Irade- 1 7 mark lawyers is that the owner retains David S. Ruder residual goodwill-ltat is, the for- mer trademark owner asserts thal lie has the power to bar someone else's use of his old mark dtie to a lingering association consumers may continue to have between the mark and the forner owner. The theory behind residual goodwill is itat because con- sumers may associate a discontinued trademark with the producer of a discontinued product, any new user of the trademark would be improperly trading off of the residual goodwill that still exists from when the trademark was used in the marketplace. According to this argument, a new user ertld employ a discontinued trademark only after con- stners have ceased to associate the trademark with the orig- inal owner and residual goodwill has dissipated. There is almost no support whatsoever for the residual goodwill theory in trademark law or practice. Once a trade- mark is abandoned, it reverts to the public domain and is then available Int new users. An innovalor may use an aban- dotted tradeutark in its original class of goods or services, provided that no false connection is made to the original producer. Residual goodwill, if it evea exists, does not give the previous trademark owner atty right to prevent the new user's acquisi tion and employment of the itark. 1i. What Is (he Current Abandonment System? Once a trademark is abatdoned under the trademark laws, no goodwill remains in the trademark, residualor otherwise. The abandoned status allows new users ol a trademark to launch a new product or service, and itipor- tantly can serve as a defense to t trademark infringement suit. In discussing trademark abandonment, there are two important issues to understand: (I) how exactly a David S. Ruder is an attorney and chief executive oJicer oJ River West Brands LLC in Chicago. trademark becomes abandoned under (ie Irademark laws and (2) the impact of abandonment on the trademark, A. lTe Abandomnent'Prcess Wlhenever a trademark is discontinued, there is a very real risk that the trademark will be deemed abandoned under tie trademark laws. There is ;n explicit provision in the Lanham Act (tile federal trademark statute) describ- ing how a trademark becomes abandoned: A mark shall he deemed 1o be abandoned... when its use has been discontinued with inleni ol itt restune such use. Intent not to resune nmay be inferred from circumstances. Nonuse for three consecutive years shall be prima facie evi- dence of :bandonmilent. IIse of a mark iicans the bona tide use of such mark made in the ordinary course of trade, and not made merely to reserve a right in a mark.' This means that if a marketer stops using a trademark for three years and has not done anything substantial within that time to reintroduce the trademark into commerce, the trademark becomes abandoned. 'ro keep trademark rights alive, marketers must use the trademark in commerce. It used to be that marketers would attempt to make token shipments of products in order to keep trade- marks in commerce and not risk a trademark becoming abandoned and possibly falling into a new competitor's hands. Procter & Gamble went as far as to create a Minor Trademarks Program that was designed to rebut aty stch inference of abandonment by shipping Iitly units bearing a discontinued trademark name to tell (coititmel oil age 5) .@ Ofl ~ I Keeping Current with the Chair ................... 2 Fron the Editors ............................... 3 Tie i flh Anicndiiell Takiug Clause aid Iatellectual Property .................................. ... Negotiation Ethics: No an 0iynurouii ............. 16 2003 Expen Update: Kumnho-Wre.llin ............ 22 Recent Developnent.s in Intellectual Prpqry Law ...30 Chi Appoints Sr t'ion Nt'lninatig C01uniftee, ..... 42 11 Graup News' ............................,. 43 -.N. VISIT6 TH0ETO E13IEX'W %VA SNI.R/N11,'t I n T h ii s U

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline.

Purchase Access

Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most