The correct identification of who owns the trademark becomes an important aspect of trademark registration. When a company has a complex organizational structure involving multiple legal entities, brand ownership must be carefully considered. While as a company, you may have your own preference for brand ownership, you need to make sure that the decision complies with the required trademark law. This is important to minimize property rights risks. For more information on the brand license, please contact a member of our company`s brand group. Section 5 of the Trademark Act states in part that “[d]. a registered trademark or trademark sought for registration is or may be used legally by related companies, this use is made for the benefit of the filer, and this use has no bearing on the validity of that trademark or its registration.” (Added highlight) One might think that the use of a brand owned by a wholly owned subsidiary by a parent company is appropriate, the recent decision of the Trademark Trial and 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 may arise when a trademark is used by the trademark owner`s parent company and no trademark licenses or other control measures are introduced to control the nature and quality of the products/services on which the trademark is used. An important priority is the identification of the party that controls this type and the quality of the goods and services used under the brand.
See Smith Int`l. Inc. v. Olin Corp., 209 USPQ 1033, 1044 (TTAB 1981) (“Section 5 of the statute provides that a trademark can be used legally by related companies and if these companies are controlled with respect to the nature and quality of the products on which the mark is used by the related companies, that use benefits the applicant`s owner.” If a company other than the licensee exclusively uses and controls the use of the trademark, the parties must consider that there should be a licensing agreement between them to ensure that the use of the disputed mark is made for the benefit of the trademark holder. Michael Hall is a senior partner at Kacvinsky Daisak Bluni, PLLC, with a focus on U.S. and international brand certification, criminal prosecutions, litigation before the USPTO Trademark Trial and Appeal Board, licensing, portfolio management and general brand advice. In particular, Mr. Hall has extensive experience in the pursuit 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`s training materials for new lawyers. Mr. Hall left the USPTO to practice at knobbe Martens in California and later at Venable LLP in Washington, D.C.
He has supported brand portfolios by clients of all sizes, individuals with just over a business plan for two of the world`s most famous consumer electronics companies, as well as a leading Hollywood production company and one of the world`s largest financial services companies. For more information or to contact Mr. Hall, please visit his company profile page. In a situation where you have sister companies or other common ownership between two companies, it should be noted that these companies are not considered to have the same financial interest in another business whose only relationship is joint ownership. In other words, a company cannot be empowered to object to the use of a trademark by third parties, owned by another company whose only relationship is joint ownership.