See Smith Int`l. Inc. v. Olin Corp., 209 USPQ 1033, 1044 (TTAB 1981) (“Section 5 of the Articles provides that a trademark may be lawfully used by affiliates and if such companies are controlled with respect to the nature and quality of the products on which the trademark is used by the affiliates, such use will benefit the plaintiff`s owner.” If an entity other than the licensee uses and controls only the use of the mark, the parties must assume that there should be a licensing agreement between them to ensure that the use of the contested mark is in favour of the trademark owner. Michael Hall is a Senior Partner at Kacvinsky Daisak Bluni, PLLC, specializing in U.S. and international trademark certification, law enforcement, litigation before the USPTO`s First Instance and Trademark Appeals Board, licensing, portfolio management, and general trademark counsel. Specifically, Mr. Hall has extensive experience in the prosecution and practice of U.S. trademarks after beginning his career at the USPTO as a trademark control expert, where he reviewed thousands of trademark applications and helped review USPTO training materials for new lawyers. Mr. Hall left the USPTO to practice with Knobbe Martens in California and later with Venable LLP in Washington, D.C. If the parent company is the proprietor of the trade mark, the use of the trade mark by the subsidiary or a closely related undertaking does not necessarily benefit the parent company because of the relationship between them. If a problem arises with respect to ownership, it must be demonstrated that the parent company that owns the trademark retains quality control over the goods and services associated with the trademark.

Only then can the use of the trademark by the subsidiary benefit the trademark owner or the parent company. In general, from a brand perspective, the parent company may be advised to own all trademarks. This will result in successful property challenges that will be minimized in the U.S. and perhaps other countries. And while owning a single business is beyond the scope of this article, it will also tend to avoid some related issues, such as.B. block the filing of a subsidiary by registering another subsidiary in a country whose trademark office is not as permissive as the USPTO in terms of proof of “unity of control” in order to overcome such refusals. In this sense, a well-formulated license agreement can be used in the event of cancellation, opposition or infringement proceedings to reduce the risk of cancellation of the trademark. A license agreement between the owner and user of the trademark can be advantageous if properly prepared. However, the licence agreement must guarantee the nature and extent of the control of the owner, whether the parent company or the subsidiary, the nature and quality of the goods or services provided. Such an agreement must include the following: Basically, the fundamental purpose of a trademark is to identify the source. If the alleged owner does not use the trademark itself or control the nature and quality of the goods/services offered by its affiliates under the trademark, the trademark does not identify the “owner” as the source of the goods and services.

As a result, use by affiliates does not support the alleged owner`s claimed property. Practitioners need to anticipate these issues and strongly consider that the parent company at the top of the client`s organizational structure owns all the brands. If for any reason this is not feasible or undesirable, trademark licenses – from owner to user – should be put in place for any user who is not a subsidiary of the owner. If a company has a complicated ownership structure – perhaps hundreds, if not thousands, of legal entities ultimately under the control of a single parent company – the brand practitioner may colloquially refer to all of these companies together as “the customer.” However, when determining ownership of trademarks within this business structure by the client, careful consideration should be given to which legal entity owns or will own the new trademark, especially if the owner is not to be the parent company within the company`s organizational structure. While the company naturally has its own ideas about which company should own the trademark, the practitioner`s job is to ensure that the decision is made in accordance with the restrictions imposed by trademark law. In that context, a parent company cannot rely on the registration of a wholly-owned subsidiary in adversarial proceedings with the USPTO, although it may rely on the use by that subsidiary. The subsidiary should be a party to the proceedings in order to be able to rely on the rights conferred by a registration belonging to it. Similarly, a subsidiary cannot rely on the registration of a parent company in adversarial proceedings before the USPTO if the parent company is not a party to the proceedings. See Hunt Control Systems Inc.c.

Koninklijke Philips Electronics N.V., 98 USPQ2d 1558 (TTAB 2011). The correct identification of the person who should be the owner of the trademark becomes an important aspect of trademark registration. Correctly identifying who owns the trademark becomes an important aspect of trademark registration. If a company has a complex organizational structure with multiple legal entities, brand ownership must be carefully weighed. Although as a business you may have your own preference for trademark ownership, you need to make sure that the decision complies with the required trademark law. This is important to minimize the risks associated with intellectual property rights. For more information about trademark licensing, please contact a member of our company`s trademark group. Section 5 of the Trademarks Act states in part that “[t]. a registered trademark or trademark whose registration is or may be lawfully used by affiliates, such use is for the benefit of the applicant and such use does not affect the validity of that trademark or its registration. One might think that the use of a trademark owned by a wholly-owned subsidiary of a parent company is appropriate, the recent decision of the Trial and Trademark Appeal Board in noble House Home Furnishings, LLC v. Floorco Enterprises, LLC, 118 U.S.2d 1413 (T.T.A.B 2016), illustrates the problem that can arise when a trademark is used by the parent company of the trademark owner. and that no trademark license or other Control measures are taken to control the nature and quality of the goods/services on which the trademark is used.

An important priority is to identify the party that controls this type and the quality of the goods and services used under the trademark. Article 5 of the Law on Trade Marks provides, in part, that `[w]here a registered trade mark or a trade mark which wishes to be registered is or may be lawfully used by affiliated undertakings, such use shall benefit the declarant or applicant for registration and such use shall not affect the validity of that trade mark or its registration …` (Emphasis added). While it may be believed that the use of a trademark owned by a wholly-owned subsidiary by a parent company is appropriate under this provision, the recent decision of the Trademarks Trial and Appeal Board in Noble House Home Furnishings, LLC v. . . .