Loss of Trademark Rights
Updated, March 2016
1. How can trademark rights be lost?
Rights in a trademark can be lost through the action or inaction of the trademark’s owner. The most common way to lose rights in a mark is to stop using the mark with no intention to use it again. This is called “abandonment.”
However, trademark rights can also be lost unintentionally. For example, in some countries, it is possible to lose rights in a mark by allowing third parties to use the mark without controlling how it is used. This can include failing to control the nature and quality of the goods and/or services offered under the mark by the third party. Such failure to control often is referred to as “naked licensing.” Rights may also be lost if the trademark owner or third parties use the mark improperly, so that it ceases to indicate the source of goods or services and becomes a generic term. For example, escalator and cellophane originally were trademarks in the United States but, as a result of improper use, eventually they became generic names of the products for which they had been used as brands. The determination of whether a mark has become generic can vary from country to country; such is the case with aspirin, which is a generic term in the United States but a protectable trademark in Canada and Germany.
2. How can trademark rights be lost, or deemed abandoned, as a result of non-use?
In the United States, if a trademark owner stops using a mark without intending to resume using it in the future, the mark will be deemed abandoned. Under U.S. trademark law, non-use of a trademark for three consecutive years creates a rebuttable presumption of abandonment of the mark (whether or not it is registered). Temporary or seasonal non-use of a trademark, particularly when such cyclical use is typical in an industry or market, generally does not constitute grounds for abandonment under U.S. law. Rather, periods of non-use must be accompanied by the “intent not to resume use.”
In many other countries, grounds for abandonment depend solely on whether the mark at issue has been in use, without regard to the trademark owner’s intent. The period of non-use required to show abandonment of a mark typically ranges from three years (e.g., in Australia, Japan, South Korea, Canada, China, Russia and many Latin American countries) to five years (e.g., in various European countries, such as Ireland and Norway).
In many countries, non-use in connection with certain goods or services associated with a mark may be considered abandonment with respect to those goods or services, despite continued use of the mark in connection with other goods and/or services. For example, the United States requires a periodic Declaration of Use for registered trademarks in which the trademark owner must declare use for each of the goods and services listed in the mark’s registration and delete any goods and services for which there is no longer use.
3. How can a trademark owner rebut an allegation of non-use?
A showing that a mark has not been used for three years is prima facie evidence of abandonment under U.S. law. Under these circumstances, the trademark owner then has the burden to introduce documentary evidence or credible testimony of use, or an intent to resume use, of the mark. Examples of evidence relied on to rebut the presumption of abandonment include evidence showing that the trademark owner has (a) sought regulatory approval for the goods and use cannot begin until the same is granted; (b) approached distributors for the goods; (c) purchased advertising for the goods that features the trademark; (d) produced internal “story boards” or presentations referring to goods bearing the trademark; or (e) retained an outside licensing agency.
In addition, the trademark owner must show an intent to resume use during the initial three-year period of non-use. This can be shown through documentation of and testimony as to the owner’s activities outside of that period. If the trademark owner is able to produce evidence of use or intent to resume use, the ultimate burden of proof will remain with the party alleging abandonment.
In many countries, the owner of a challenged trademark has the burden of proof in a non-use cancellation action. The nature and type of evidence vary from country to country. Token use and use by licensees may be permissible in some countries, but in others, genuine use on packaging or in connection with rendering services will be required. Manufacturing goods bearing the mark in a country usually is not sufficient; rather, advertising or sales showing the mark’s use in commerce is required. In some countries, use in connection with fewer than all the goods and/or services listed in a particular registration may be sufficient to preserve rights in connection with the entire listing of goods and services.
4. How is abandonment proven?
In the United States, typically, courts analyze a wide range of objective evidence when considering whether a mark has been abandoned. The standard of proof for abandonment is “clear and convincing” evidence of abandonment without an intent to resume use. Objective evidence, such as the length and cause of non-use, outweighs self-serving testimony that a trademark owner never had the intent to abandon the mark or to not resume use. Evidence of an intent not to resume use may also be inferred from public statements in marketing or other media that a company is changing its name or that its products will be discontinued or be produced and sold under another mark. Intent to resume use requires that the trademark owner have concrete plans to resume commercial use of the mark, such as proffering negotiations with a new buyer or distributor. It is not sufficient to show such efforts after the mark has been abandoned.
In other countries, intent also plays an important role in abandonment determinations.
5. Is there excusable non-use?
Non-use that occurs because of circumstances outside the trademark owner’s control may be considered excusable non-use that avoids abandonment of trademark rights. U.S. courts generally are receptive to the contention that an owner has not abandoned its trademark as a result of excusable non-use. A number of other countries also recognize excusable non-use.
Examples of circumstances deemed to be outside the trademark owner’s control include (1) legal restrictions on the continued sale of goods under the mark, (2) labor strikes, (3) the need to retool equipment, (4) the bankruptcy or insolvency of the trademark owner and (5) the lack of demand for the underlying goods and services.
In the United States, if a trademark owner holds a federal registration for its mark on the Principal Register, non-use of the mark in particular areas of the country is not considered abandonment in those areas. Similarly, owners of European Union Trade Mark (EUTM) (formerly Community Trade Mark) registrations retain rights in all of the European Union (EU), even if an EUTM is used only in a single EU member state.
6. How can improper trademark licenses or assignments result in abandonment of a trademark?
As mentioned above (see FAQ #1), a trademark may be deemed abandoned if the trademark owner licenses or authorizes other parties to use its mark without exercising adequate control over the use of the mark, which can include inadequate control over the quality of the goods and/or services offered under the mark.
See also Trademark Licensing Fact Sheet
In addition, a trademark may be deemed abandoned if the trademark owner purports to assign its mark separate and apart from the goodwill represented by the mark. Under U.S. trademark law, this often is referred to as an “assignment in gross” of the mark. Other countries may recognize assignments without the associated goodwill. Always check with local counsel in the country in which an assignment is contemplated.
See also Assignments Fact Sheet
7. How else may trademark rights be lost?
Just as the owner’s failure to use a trademark may result in abandonment of that mark, improper use by a trademark owner or third parties also may result in the loss of trademark rights. A trademark should not be used in a manner that strips its significance as an indicator of the source of goods and/or services. For instance, the trademark should be distinguished from the surrounding text and should be used as an adjective followed by a generic noun for the goods or services—for example, KLEENEX facial tissues rather than Kleenex or Kleenexes. Trademarks should never be used as nouns, pluralized or used in the possessive form.
The trademark owner should monitor third-party use of its trademark, including by distributors and customers, for proper use as well as for quality control.
Trademark Use Fact Sheet
Proper Use Presentation
A Guide to Proper Trademark Use for Media, Internet and Publishing Professionals
Genericide occurs when a trademark has been judicially determined to have lost its distinctiveness as a source identifier, such that the public considers the former trademark to represent a general category of products or services rather than a particular standard of quality and single source of such products or services. Famous examples of formerly registered trademarks that have been invalidated, in the United States, on the ground of genericide include aspirin, cellophane, escalator and thermos (as applied to vacuum flasks). To help avoid a judicial determination that a trademark has lost its distinctiveness, trademark owners should carefully craft strategies to educate the public and police their marks. In addition, they should be aware that although a trademark may be held to be a generic term in one country, valid rights in the mark may still exist in other countries. As noted above (see FAQ #1), aspirin has become a generic term in the United States but is still protected as a trademark in Canada and Germany.
Trademarks vs. Generic Terms Fact Sheet
Funeral for a Brand: How Trademarks Become Generic Presentation
Failure to Police
Trademark rights may also be lost when a trademark owner fails effectively to police its mark against eroded distinctiveness, which may occur as a result of the presence of confusingly similar third-party marks in the market. For example, if many third parties subsequently begin using the same or a similar mark in commerce in connection with goods and/or services similar to the trademark owner’s after the owner has already begun to use its trademark, and the owner does little or nothing to police its mark, the mark is likely to lose some or all of its value as a source identifier in the marketplace. As a result, the trademark will become weaker, and in some cases it may lose its distinctiveness entirely.
To help avoid such adverse consequences, the trademark owner should police its mark by enforcing its trademark rights through various legal means, such as (a) sending demand letters, (b) initiating opposition or cancellation proceedings with administrative entities, (c) proceeding with litigation in the courts and/or (d) entering into licensing and/or other agreements with third parties, as may be appropriate under the circumstances. While some courts have determined that a trademark owner need not necessarily prosecute every infringing third-party use of its mark, such third-party uses can still affect the distinctiveness of the mark in the mind of the public. The optimal policing and enforcement efforts for particular marks may vary with the particular circumstances involved, such as the nature and importance of the mark, the nature of the trademark owner and the size of its legal budget, and the number and nature of the potential third-party trademark infringements.
8. Can abandonment result when either the format of a mark or the goods or services sold under the mark change?
Material alteration of a mark or the goods or services offered under the mark may result in the mark’s abandonment. If, however, the original mark and the revised mark create the same continuing commercial impression and the marks are used on or in connection with the same or substantially similar goods or services, the owner may retain its rights in the mark. Minor modifications to the original mark, such as font, pluralization or color, may be permissible, but the addition or deletion of key words, or the substantial change of a design, can lead to abandonment. For the owner to avoid abandonment, consumers must consider the original and later versions of the mark as virtually indistinguishable.
Courts and administrative agencies often are faced with determining whether changes to a trademark or its associated goods or services are negligible (resulting in preservation of trademark rights) or material (resulting in loss of trademark rights). Although a trademark owner may develop new trademark rights in a materially altered mark or in the use of a mark with materially different goods or services, the owner will have lost the benefit of the priority date of the prior trademark use.
Additional INTA Resources
Country Guides: Essential Information on Trademark Protection Worldwide
Searchable database of basic information on trademark filing, prosecution, registration, maintenance and enforcement in more than 100 jurisdictions. INTA membership required.