Consequences for Failure to Use a Trademark

Once a trademark is properly established the holder owns the mark and all associated exclusive rights therein. However, in order to maintain the rights in a trademark, the owner must “use” the mark in commerce. The “use” must be a genuine use of the trademark in the ordinary course of trade and not merely for the purpose of reserving the right in the mark.

Failure to use a trademark could result in losing ownership rights, or “abandonment” of the mark. Once a trademark is abandoned, anyone may seize it immediately and acquire a right in the trademark superior to the right of the original owner.

Definition of a Trademark under the Lanham Act
Trademarks are governed by several laws including common law, state statutes and federal law. However, the federal Lanham Act (enacted 1946, amended 1996), is the main body of law and source of nationwide protection for trademarks. The Lanham Act defines trademark (“mark”) as a word, phrase, symbol or design, or any combination thereof, which identifies and distinguishes the source of a good or service of a manufacturer or seller from those of others.

Exclusive Rights in Trademarks
In general, trademark rights are established by actual use of the mark or filing a proper application to register the mark with the U.S. Patent and Trademark Office (PTO). Although it is not required, federal registration offers more security in trademark rights. A trademark owner retains the exclusive right to use that distinct mark on the goods or services which it was intended to identify.

Trademarks for goods (“TM”) typically appear on the product label or packaging while less common “service marks” (“SM”) typically appear in ads for services. A trademark will last indefinitely, provided the owner continues to use the mark and follows proper procedures for renewing its registration.

Losing Trademark Rights
Once trademark ownership is properly established, the owner must continue to use the mark in commerce to avoid losing their rights in it. There are several common methods of losing a trademark which may include:
Failing to prosecute infringements;
Improper licensing of the rights;
Improper assignment of the rights; and/or
Too significant of a change in quality or character of the goods or services.
Abandonment of Trademarks
A trademark owner will lose their rights to the mark if they abandon it. The Lanham Act defines “abandonment” as non-use of a mark with intent to not resume such use. A trademark shall be considered “abandoned” in the event of either of the following:
Its use has been discontinued with intent not to resume such use; or
An act or omission of the owner causes the mark to become a generic name for the goods or services for which it is used.
Discontinued Use of a Trademark
Where a trademark owner actually discontinues use of their mark in commerce, it is abandoned. However, the owner’s “intent not to resume” use also constitutes abandonment and such an intent may be inferred from circumstances. Non-use for three consecutive years is sufficient evidence to prove abandonment unless there is substantial contradictory evidence to the contrary.

For example, in 1993, a New York District Court ruled that the Los Angeles Dodgers had abandoned their rights to the “Brooklyn Dodgers” trademark since they had not used that name for a period of more than 20 years since they moved to L.A. in 1958. Despite an attempt to re-register the trademark in 1981, the court held that the Los Angeles Dodgers had already abandoned it, reasoning that they could not simply “warehouse” the trademark for over two decades.

Causing a Trademark to Become Generic
Another method of abandoning a trademark is through the acts or omissions of the owner which cause the mark to lose its distinctive character. Generic use of a word results when a substantial majority of the public associates that word with a broad type of good or service rather than a specific product or manufacturer. Once a trademark becomes generic, the owner loses protection of their rights in the trademark.

For example, the word “aspirin,” once trademarked to Bayer, Co., is now a generic word to consumers. To determine whether a trademarked word has been abandoned by becoming generic, courts may consider dictionary definitions, the use of the word in print media and/or any evidence that the owner affirmatively attempted to monitor its mark.

Consequences of Abandoning a Trademark
An abandoned trademark is canceled and the owner loses their rights in the mark. The consequences of an abandoned trademark are as follows:
The mark becomes available for seizure by the first person or business (including the prior owner) to properly register it and use it in commerce; and/or
Any business already infringing upon the mark may be permitted to use it.
The PTO will likely require proof of abandonment by an adverse party and offer the prior owner a chance to show that the mark was never abandoned.